filings.toolsItem 1. Financial Statements
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Item 1. Financial Statements
VERTEX PHARMACEUTICALS INCORPORATED
Condensed Consolidated Statements of Income (Loss)
(unaudited; in millions, except per share amounts)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||
| Product revenues, net | $ | 3,076.4 | $ | 2,771.9 | $ | 8,780.6 | $ | 8,108.1 | |||||||||||||||
| Other revenues | — | — | 30.7 | — | |||||||||||||||||||
| Total revenues | 3,076.4 | 2,771.9 | 8,811.3 | 8,108.1 | |||||||||||||||||||
| Costs and expenses: | |||||||||||||||||||||||
| Cost of sales | 414.8 | 392.6 | 1,185.3 | 1,107.1 | |||||||||||||||||||
| Research and development expenses | 977.7 | 875.9 | 2,935.8 | 2,631.6 | |||||||||||||||||||
| Acquired in-process research and development expenses | 54.5 | 15.0 | 76.5 | 4,540.9 | |||||||||||||||||||
| Selling, general and administrative expenses | 445.1 | 371.8 | 1,266.1 | 1,086.7 | |||||||||||||||||||
| Intangible asset impairment charge | — | — | 379.0 | — | |||||||||||||||||||
| Change in fair value of contingent consideration | (1.9) | 0.3 | 1.2 | 0.7 | |||||||||||||||||||
| Total costs and expenses | 1,890.2 | 1,655.6 | 5,843.9 | 9,367.0 | |||||||||||||||||||
| Income (loss) from operations | 1,186.2 | 1,116.3 | 2,967.4 | (1,258.9) | |||||||||||||||||||
| Interest income | 125.7 | 132.2 | 369.0 | 469.9 | |||||||||||||||||||
| Interest expense | (3.3) | (7.5) | (10.0) | (27.8) | |||||||||||||||||||
| Other expense, net | (9.8) | (16.9) | (14.2) | (71.2) | |||||||||||||||||||
| Income (loss) before provision for income taxes | 1,298.8 | 1,224.1 | 3,312.2 | (888.0) | |||||||||||||||||||
| Provision for income taxes | 215.9 | 178.7 | 550.1 | 560.6 | |||||||||||||||||||
| Net income (loss) | $ | 1,082.9 | $ | 1,045.4 | $ | 2,762.1 | $ | (1,448.6) | |||||||||||||||
| Net income (loss) per common share: | |||||||||||||||||||||||
| Basic | $ | 4.24 | $ | 4.05 | $ | 10.77 | $ | (5.61) | |||||||||||||||
| Diluted | $ | 4.20 | $ | 4.01 | $ | 10.68 | $ | (5.61) | |||||||||||||||
| Shares used in per share calculations: | |||||||||||||||||||||||
| Basic | 255.6 | 258.0 | 256.4 | 258.1 | |||||||||||||||||||
| Diluted | 257.6 | 261.0 | 258.6 | 258.1 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
VERTEX PHARMACEUTICALS INCORPORATED
Condensed Consolidated Statements of Comprehensive Income (Loss)
(unaudited; in millions)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Net income (loss) | $ | 1,082.9 | $ | 1,045.4 | $ | 2,762.1 | $ | (1,448.6) | |||||||||||||||
| Other comprehensive income (loss): | |||||||||||||||||||||||
| Unrealized holding gains on available-for-sale debt securities, net of tax of $(1.0), $(18.3), $(7.7) and $(11.4), respectively | 3.5 | 66.7 | 27.4 | 41.6 | |||||||||||||||||||
| Unrealized gains (losses) on foreign currency forward contracts, net of tax of $(9.4), $17.3, $70.3 and $1.8, respectively | 33.5 | (63.0) | (248.7) | (6.7) | |||||||||||||||||||
| Foreign currency translation adjustment | (0.4) | 2.6 | 29.0 | 8.2 | |||||||||||||||||||
| Total other comprehensive income (loss) | 36.6 | 6.3 | (192.3) | 43.1 | |||||||||||||||||||
| Comprehensive income (loss) | $ | 1,119.5 | $ | 1,051.7 | $ | 2,569.8 | $ | (1,405.5) |
The accompanying notes are an integral part of these condensed consolidated financial statements.
VERTEX PHARMACEUTICALS INCORPORATED
Condensed Consolidated Balance Sheets
(unaudited; in millions, except share and per share data)
| September 30, 2025 | December 31, 2024 | ||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 4,939.6 | $ | 4,569.6 | |||||||
| Marketable securities | 1,347.4 | 1,546.3 | |||||||||
| Accounts receivable, net | 1,946.4 | 1,609.4 | |||||||||
| Inventories | 1,626.8 | 1,205.4 | |||||||||
| Prepaid expenses and other current assets | 709.4 | 665.7 | |||||||||
| Total current assets | 10,569.6 | 9,596.4 | |||||||||
| Property and equipment, net | 1,425.1 | 1,227.8 | |||||||||
| Goodwill | 1,088.0 | 1,088.0 | |||||||||
| Other intangible assets, net | 429.8 | 825.9 | |||||||||
| Deferred tax assets | 2,937.2 | 2,331.1 | |||||||||
| Operating lease assets | 1,591.8 | 1,356.8 | |||||||||
| Long-term marketable securities | 5,722.8 | 5,107.9 | |||||||||
| Other assets | 1,098.0 | 999.3 | |||||||||
| Total assets | $ | 24,862.3 | $ | 22,533.2 | |||||||
| Liabilities and Shareholders’ Equity | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 420.3 | $ | 413.0 | |||||||
| Accrued expenses | 3,613.5 | 2,788.6 | |||||||||
| Other current liabilities | 441.5 | 363.0 | |||||||||
| Total current liabilities | 4,475.3 | 3,564.6 | |||||||||
| Long-term operating lease liabilities | 1,834.8 | 1,544.4 | |||||||||
| Other long-term liabilities | 1,233.4 | 1,014.6 | |||||||||
| Total liabilities | 7,543.5 | 6,123.6 | |||||||||
| Commitments and contingencies (Note L) | |||||||||||
| Shareholders’ equity: | |||||||||||
| Preferred stock, $0.01 par value; 1,000,000 shares authorized; none issued | — | — | |||||||||
| Common stock, $0.01 par value; 500,000,000 shares authorized, 253,951,475 and 256,940,382 shares issued and outstanding, respectively | 2.5 | 2.6 | |||||||||
| Additional paid-in capital | 5,011.9 | 6,672.4 | |||||||||
| Accumulated other comprehensive (loss) income | (64.5) | 127.8 | |||||||||
| Retained earnings | 12,368.9 | 9,606.8 | |||||||||
| Total shareholders’ equity | 17,318.8 | 16,409.6 | |||||||||
| Total liabilities and shareholders’ equity | $ | 24,862.3 | $ | 22,533.2 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
VERTEX PHARMACEUTICALS INCORPORATED
Condensed Consolidated Statements of Shareholders’ Equity
(unaudited; in millions)
| Three Months Ended | |||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Total Shareholders’ Equity | |||||||||||||||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||||||||||||||
| Balance at June 30, 2024 | 258.0 | $ | 2.6 | $ | 7,101.2 | $ | 22.5 | $ | 7,648.4 | $ | 14,774.7 | ||||||||||||||||||||||||
| Other comprehensive income, net of tax | — | — | — | 6.3 | — | 6.3 | |||||||||||||||||||||||||||||
| Net income | — | — | — | — | 1,045.4 | 1,045.4 | |||||||||||||||||||||||||||||
| Repurchases of common stock | (0.6) | — | (307.6) | — | — | (307.6) | |||||||||||||||||||||||||||||
| Common stock withheld for employee tax obligations | (0.2) | — | (83.7) | — | — | (83.7) | |||||||||||||||||||||||||||||
| Issuance of common stock under benefit plans | 0.5 | — | 7.6 | — | — | 7.6 | |||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | 188.2 | — | — | 188.2 | |||||||||||||||||||||||||||||
| Balance at September 30, 2024 | 257.7 | $ | 2.6 | $ | 6,905.7 | $ | 28.8 | $ | 8,693.8 | $ | 15,630.9 | ||||||||||||||||||||||||
| Balance at June 30, 2025 | 256.3 | $ | 2.6 | $ | 5,987.9 | $ | (101.1) | $ | 11,286.0 | $ | 17,175.4 | ||||||||||||||||||||||||
| Other comprehensive income, net of tax | — | — | — | 36.6 | — | 36.6 | |||||||||||||||||||||||||||||
| Net income | — | — | — | — | 1,082.9 | 1,082.9 | |||||||||||||||||||||||||||||
| Repurchases of common stock | (2.7) | (0.1) | (1,092.4) | — | — | (1,092.5) | |||||||||||||||||||||||||||||
| Common stock withheld for employee tax obligations | (0.2) | — | (91.0) | — | — | (91.0) | |||||||||||||||||||||||||||||
| Issuance of common stock under benefit plans | 0.6 | — | 8.1 | — | — | 8.1 | |||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | 199.3 | — | — | 199.3 | |||||||||||||||||||||||||||||
| Balance at September 30, 2025 | 254.0 | $ | 2.5 | $ | 5,011.9 | $ | (64.5) | $ | 12,368.9 | $ | 17,318.8 | ||||||||||||||||||||||||
| Nine Months Ended | |||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Total Shareholders’ Equity | |||||||||||||||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||||||||||||||
| Balance at December 31, 2023 | 257.7 | $ | 2.6 | $ | 7,449.7 | $ | (14.3) | $ | 10,142.4 | $ | 17,580.4 | ||||||||||||||||||||||||
| Other comprehensive income, net of tax | — | — | — | 43.1 | — | 43.1 | |||||||||||||||||||||||||||||
| Net loss | — | — | — | — | (1,448.6) | (1,448.6) | |||||||||||||||||||||||||||||
| Repurchases of common stock | (1.7) | — | (763.8) | — | — | (763.8) | |||||||||||||||||||||||||||||
| Common stock withheld for employee tax obligations | (0.9) | — | (397.7) | — | — | (397.7) | |||||||||||||||||||||||||||||
| Issuance of common stock under benefit plans | 2.6 | — | 79.3 | — | — | 79.3 | |||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | 538.2 | — | — | 538.2 | |||||||||||||||||||||||||||||
| Balance at September 30, 2024 | 257.7 | $ | 2.6 | $ | 6,905.7 | $ | 28.8 | $ | 8,693.8 | $ | 15,630.9 | ||||||||||||||||||||||||
| Balance at December 31, 2024 | 256.9 | $ | 2.6 | $ | 6,672.4 | $ | 127.8 | $ | 9,606.8 | $ | 16,409.6 | ||||||||||||||||||||||||
| Other comprehensive loss, net of tax | — | — | — | (192.3) | — | (192.3) | |||||||||||||||||||||||||||||
| Net income | — | — | — | — | 2,762.1 | 2,762.1 | |||||||||||||||||||||||||||||
| Repurchases of common stock | (4.5) | (0.1) | (1,906.6) | — | — | (1,906.7) | |||||||||||||||||||||||||||||
| Common stock withheld for employee tax obligations | (0.8) | — | (367.4) | — | — | (367.4) | |||||||||||||||||||||||||||||
| Issuance of common stock under benefit plans | 2.4 | — | 74.0 | — | — | 74.0 | |||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | 539.5 | — | — | 539.5 | |||||||||||||||||||||||||||||
| Balance at September 30, 2025 | 254.0 | $ | 2.5 | $ | 5,011.9 | $ | (64.5) | $ | 12,368.9 | $ | 17,318.8 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
VERTEX PHARMACEUTICALS INCORPORATED
Condensed Consolidated Statements of Cash Flows
(unaudited; in millions)
| Nine Months Ended September 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income (loss) | $ | 2,762.1 | $ | (1,448.6) | |||||||
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||||||||
| Stock-based compensation expense | 528.3 | 530.7 | |||||||||
| Depreciation and amortization expense | 154.1 | 160.7 | |||||||||
| Intangible asset impairment charge | 379.0 | — | |||||||||
| Deferred income taxes | (541.3) | (400.4) | |||||||||
| Losses on equity securities | 12.2 | 50.5 | |||||||||
| Other non-cash items, net | 90.3 | (15.5) | |||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Accounts receivable | (247.9) | (168.3) | |||||||||
| Inventories | (446.8) | (369.8) | |||||||||
| Prepaid expenses and other assets | (145.4) | (35.7) | |||||||||
| Accounts payable | (1.5) | 41.1 | |||||||||
| Accrued expenses | 547.6 | 533.0 | |||||||||
| Other liabilities | 42.7 | 45.1 | |||||||||
| Net cash provided by (used in) operating activities | 3,133.4 | (1,077.2) | |||||||||
| Cash flows from investing activities: | |||||||||||
| Purchases of available-for-sale debt securities | (5,165.9) | (5,279.6) | |||||||||
| Sales and maturities of available-for-sale debt securities | 4,805.6 | 3,005.4 | |||||||||
| Acquisition of available-for-sale debt securities from Alpine Immune Sciences, Inc. | — | (258.0) | |||||||||
| Purchases of property and equipment | (288.2) | (205.1) | |||||||||
| Net payments related to finite-lived intangible assets | — | (187.7) | |||||||||
| Other investing activities | (8.8) | (23.1) | |||||||||
| Net cash used in investing activities | (657.3) | (2,948.1) | |||||||||
| Cash flows from financing activities: | |||||||||||
| Issuances of common stock under benefit plans | 73.7 | 80.3 | |||||||||
| Repurchases of common stock | (1,889.0) | (759.2) | |||||||||
| Payments in connection with common stock withheld for employee tax obligations | (367.4) | (397.7) | |||||||||
| Payments on finance leases | (4.0) | (32.3) | |||||||||
| Other financing activities | 2.6 | 5.3 | |||||||||
| Net cash used in financing activities | (2,184.1) | (1,103.6) | |||||||||
| Effect of changes in exchange rates on cash | 83.6 | 4.7 | |||||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | 375.6 | (5,124.2) | |||||||||
| Cash, cash equivalents and restricted cash—beginning of period | 4,572.2 | 10,372.3 | |||||||||
| Cash, cash equivalents and restricted cash—end of period | $ | 4,947.8 | $ | 5,248.1 | |||||||
| Supplemental disclosure of cash flow information: | |||||||||||
| Cash paid for income taxes | $ | 1,177.3 | $ | 810.3 | |||||||
| Cash paid for interest | $ | 9.4 | $ | 27.8 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
VERTEX PHARMACEUTICALS INCORPORATED
Notes to Condensed Consolidated Financial Statements (unaudited)
**A.**Basis of Presentation and Accounting Policies
Basis of Presentation
The accompanying condensed consolidated financial statements are unaudited and have been prepared by Vertex Pharmaceuticals Incorporated (“Vertex,” “we,” “us” or “our”) in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
The condensed consolidated financial statements reflect the operations of Vertex and our wholly-owned subsidiaries. All material intercompany balances and transactions have been eliminated. We operate in one segment, pharmaceuticals.
Certain information and footnote disclosures normally included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (the “2024 Annual Report on Form 10-K”) have been condensed or omitted. These interim financial statements, in the opinion of management, reflect all normal recurring adjustments necessary for a fair presentation of the financial position and results of income for the interim periods ended September 30, 2025 and 2024.
The results of operations for the interim period are not necessarily indicative of the results of operations to be expected for the full fiscal year. These interim financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2024, which are contained in our 2024 Annual Report on Form 10-K.
Use of Estimates
The preparation of condensed consolidated financial statements in accordance with U.S. GAAP requires us to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of our condensed consolidated financial statements, and the amounts of revenues and expenses during the reported periods. We base our estimates on historical experience and various other assumptions, including in certain circumstances future projections that we believe to be reasonable under the circumstances. Actual results could differ from those estimates. Changes in estimates are reflected in reported results in the period in which they become known.
Recently Adopted Accounting Standards
Segment Reporting
As noted in Note A, “Nature of Business and Accounting Policies,” in our 2024 Annual Report on Form 10-K, we adopted Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”) for our annual period ended December 31, 2024. ASU 2023-07 requires public entities to disclose significant segment expenses and other segment items for both interim and annual periods. For interim periods, ASU 2023-07 also requires all disclosures about a reportable segment’s profit or loss and assets that were previously required annually. These disclosures are included in Note M, “Segment Information.”
Recently Issued Accounting Standards
Income Tax Disclosures
In 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which requires public entities to disclose in their rate reconciliation table additional categories of information about federal, state and foreign income taxes and to provide more details about the reconciling items in some categories if items meet a quantitative threshold. ASU 2023-09 becomes effective for the annual period starting on January 1, 2025. We anticipate that the adoption of ASU 2023-09 will expand our income tax footnote disclosures, including a more detailed effective tax rate reconciliation.
Disaggregation of Income Statement Expenses
In 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires public entities, among other items, to disclose in a tabular format, on an annual and interim basis, purchases of inventory, employee compensation, depreciation, intangible asset amortization and depletion for each income statement line item that contains those expenses. ASU 2024-03 becomes effective for the annual period starting on January 1, 2027 and interim periods starting on January 1, 2028. We are in the process of analyzing the impact that the adoption of ASU 2024-03 will have on our disclosures.
VERTEX PHARMACEUTICALS INCORPORATED
Notes to Condensed Consolidated Financial Statements (unaudited)
Summary of Significant Accounting Policies
Our significant accounting policies are described in Note A, “Nature of Business and Accounting Policies,” in our 2024 Annual Report on Form 10-K.
**B.**Collaboration, License and Other Arrangements
Acquired In-Process Research and Development
We have entered into numerous business development agreements with third parties to collaborate on research, development and commercialization programs, license technologies, or acquire assets. Our “Acquired in-process research and development expenses” (“AIPR&D”) included $54.5 million and $76.5 million in the three and nine months ended September 30, 2025, respectively, related to upfront, contingent milestone, or other payments pursuant to our business development transactions. Our AIPR&D included $15.0 million and $4.5 billion in the three and nine months ended September 30, 2024, respectively. Our AIPR&D in the nine months ended September 30, 2024, primarily included $4.4 billion associated with our acquisition of Alpine Immune Sciences, Inc. (“Alpine”) as discussed below.
Our collaboration, licensing and asset acquisition agreements that had a significant impact on our financial statements for the three and nine months ended September 30, 2025 and 2024 or were new or materially revised during the three and nine months ended September 30, 2025, are described below. Additional agreements are described in Note B, “Collaboration, License and Other Arrangements,” of our 2024 Annual Report on Form 10-K.
Asset Acquisition
Alpine Immune Sciences, Inc. - povetacicept
On May 20, 2024, we acquired all of the issued and outstanding shares of common stock of Alpine, a publicly traded biotechnology company focused on discovering and developing innovative, protein-based immunotherapies for approximately $5.0 billion. We funded the Alpine acquisition with our cash and cash equivalents.
Alpine’s lead molecule, povetacicept, is a highly potent and effective dual inhibitor of B cell activating factor (“BAFF”) and a proliferation inducing ligand (“APRIL”). As of the acquisition date, povetacicept was in Phase 2 development and had shown potential best-in-class efficacy in IgA nephropathy (“IgAN”), a serious, progressive, autoimmune disease of the kidney that can lead to end-stage-renal disease. Due to its mechanism of action as a dual BAFF/APRIL inhibitor, povetacicept also holds the potential to benefit patients with other serious autoimmune diseases of the kidney, such as primary membranous nephropathy and lupus nephritis. We accounted for the Alpine transaction as an asset acquisition because povetacicept represented substantially all of the fair value of the gross assets that we acquired. As a result, $4.4 billion of fair value attributed to povetacicept was expensed to AIPR&D in the nine months ended September 30, 2024.
We paid total cash of $5.0 billion at the acquisition date, which included $4.8 billion to acquire Alpine and $197.6 million for cash-settled unvested Alpine equity awards. The $197.6 million represented post-acquisition expense, which was recorded as $165.0 million of “Research and development expenses” and $32.6 million of “Selling, general and administrative expenses” in the nine months ended September 30, 2024.
VERTEX PHARMACEUTICALS INCORPORATED
Notes to Condensed Consolidated Financial Statements (unaudited)
The total cash paid to acquire Alpine, allocation of consideration to the assets acquired and liabilities assumed and AIPR&D was as follows:
| (in millions) | ||||||||
| Cash consideration to acquire Alpine’s outstanding common stock | $ | 4,536.9 | ||||||
| Cash consideration for Alpine’s vested and unvested equity awards | 420.6 | |||||||
| Total cash consideration paid to Alpine | 4,957.5 | |||||||
| Less: Expense related to unvested equity awards | (197.6) | |||||||
| Transaction costs | 40.7 | |||||||
| Total consideration allocated | $ | 4,800.6 | ||||||
| Cash and cash equivalents | $ | 31.9 | ||||||
| Current marketable securities | 209.5 | |||||||
| Long-term marketable securities | 48.5 | |||||||
| Deferred tax asset | 105.5 | |||||||
| Total other assets | 19.5 | |||||||
| Total liabilities | (37.5) | |||||||
| Total identifiable assets acquired, net | 377.4 | |||||||
| Acquired in-process research and development expense | 4,423.2 | |||||||
| Total consideration allocated | $ | 4,800.6 |
In-license Agreements
CRISPR Therapeutics AG
CRISPR-Cas9 Gene-editing Therapies Agreements
In 2015, we entered into a strategic collaboration, option, and license agreement (the “CRISPR Agreement”) with CRISPR Therapeutics AG and its affiliates (“CRISPR”) to collaborate on the discovery and development of potential new treatments aimed at the underlying genetic causes of human diseases using CRISPR-Cas9 gene-editing technology. We had the exclusive right to license certain targets. In 2019, we elected to exclusively license three targets, including cystic fibrosis (“CF”), pursuant to the CRISPR Agreement. For each of the three targets that we elected to license, CRISPR has the potential to receive up to an additional $410.0 million in development, regulatory and commercial milestones as well as royalties on resulting net product sales.
In 2017, we entered into a joint development and commercialization agreement with CRISPR (the “CRISPR JDCA”), which we amended and restated in 2021, pursuant to the terms of the CRISPR Agreement. Under the CRISPR JDCA, we and CRISPR were co-developing and preparing to co-commercialize CASGEVY for the treatment of hemoglobinopathies, including treatments for severe sickle cell disease (“SCD”) and transfusion-dependent beta thalassemia.
Pursuant to the CRISPR JDCA, we lead global development, manufacturing and commercialization of CASGEVY, with support from CRISPR. We also conduct all research, development, manufacturing, and commercialization activities relating to other product candidates and products under the CRISPR JDCA throughout the world subject to CRISPR’s reserved right to conduct certain activities.
CASGEVY was approved by the U.S. Food and Drug Administration in December 2023 for the treatment of SCD. In connection with this approval, we made a $200.0 million milestone payment to CRISPR in January 2024. Subsequent to receiving marketing approval for CASGEVY, we continue to lead the research and development activities under the CRISPR JDCA, subject to CRISPR’s reserved right to conduct certain activities. We are reimbursed by CRISPR for its 40% share of these research and development activities, subject to certain adjustments, and we record this reimbursement from CRISPR as a credit within “Research and development expenses.” We also share with CRISPR 40% of the net commercial profits or losses incurred with respect to CASGEVY, subject to certain adjustments, which is recorded to “Cost of sales.” The net commercial profits or losses equal the sum of the product revenues, cost of sales and selling, general and administrative expenses that we have recognized related to the CRISPR JDCA.
VERTEX PHARMACEUTICALS INCORPORATED
Notes to Condensed Consolidated Financial Statements (unaudited)
During the first quarter of 2025, we received $12.5 million from CRISPR, pursuant to the CRISPR JDCA, for its share of our upfront payment paid to Orna Therapeutics in December 2024, which we recorded as a credit to AIPR&D in the nine months ended September 30, 2025.
During the three and nine months ended September 30, 2025 and 2024, the credits recognized in our condensed consolidated statements of income (loss) for CRISPR’s share of CRISPR JDCA activities were as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||
| Cost of sales | $ | 43.3 | $ | 15.8 | $ | 109.6 | $ | 47.5 | |||||||||||||||
| Research and development expenses | $ | 14.3 | $ | 11.7 | $ | 45.4 | $ | 35.0 | |||||||||||||||
| Acquired in-process research and development expenses | $ | — | $ | — | $ | 12.5 | $ | — |
Entrada Therapeutics, Inc.
In 2023, we entered into a strategic collaboration and license agreement (the “Entrada Agreement”) with Entrada Therapeutics, Inc. (“Entrada”) focused on discovering and developing intracellular therapeutics for myotonic dystrophy type 1 (“DM1”). In the first quarter of 2024, Entrada earned a $75.0 million milestone, which we recorded to AIPR&D in the nine months ended September 30, 2024 because we determined that substantially all the fair value of the milestone payment was attributable to in-process research and development, for which there is no alternative future use. Entrada is eligible to receive up to an additional $335.0 million in development, regulatory and commercial milestones for any products that may result from the Entrada Agreement, as well as royalties on resulting net product sales.
Out-license Agreements
Zai Lab Limited
In January 2025, we entered into an agreement with Zai Lab Limited (“Zai”) for the development and commercialization of povetacicept in mainland China, Hong Kong SAR, Macau SAR, Taiwan region and Singapore. Under the agreement, Zai is responsible for the povetacicept clinical trials and regulatory submissions in the licensed territories. Zai will also be responsible for commercialization activities in the licensed territories, if povetacicept becomes an approved product. Under the terms of the agreement, we received a $10.0 million upfront payment in the first quarter of 2025, which was recorded as “Other revenues” in the nine months ended September 30, 2025. We are eligible to receive from Zai certain regulatory milestone payments and tiered royalties on future net sales of povetacicept in the region of focus.
Ono Pharmaceuticals Co., Ltd.
In June 2025, we entered into an agreement with Ono Pharmaceuticals Co., Ltd. (“Ono”) for the development and commercialization of povetacicept in Japan and South Korea. Under the agreement, Ono is responsible for the povetacicept clinical trials and regulatory submissions in Japan and South Korea. Ono will also be responsible for commercialization activities in Japan and South Korea, if povetacicept becomes an approved product. Under the terms of the agreement, we received a $20.6 million upfront payment in the second quarter of 2025, which was recorded as “Other revenues” in the nine months ended September 30, 2025. We are eligible to receive from Ono certain regulatory milestone payments and tiered royalties on future net sales of povetacicept in Japan and South Korea.
Cystic Fibrosis Foundation
In 2004, we entered into an agreement with the Cystic Fibrosis Foundation (the “CFF”), as successor in interest to the Cystic Fibrosis Foundation Therapeutics, Inc., to support research and development activities. Pursuant to the agreement, as amended, we have agreed to pay tiered royalties ranging from single digits to sub-teens on covered compounds first synthesized and/or tested during a research term on or before February 28, 2014, including ivacaftor, lumacaftor and tezacaftor, and royalties ranging from low-single digits to mid-single digits on net sales of certain compounds first synthesized and/or tested between March 1, 2014 and August 31, 2016, including elexacaftor. We do not have any royalty obligations on compounds first synthesized and tested on or after September 1, 2016. For combination products, such as ORKAMBI, SYMDEKO/SYMKEVI, TRIKAFTA/KAFTRIO, and ALYFTREK, sales are allocated equally to each of the active pharmaceutical ingredients in the combination product, and royalties are then paid for any royalty-bearing components included in the combination. We record expenses related to these royalty obligations to “Cost of sales.”
VERTEX PHARMACEUTICALS INCORPORATED
Notes to Condensed Consolidated Financial Statements (unaudited)
**C.**Earnings Per Share
The following table sets forth the computation of basic and diluted net income (loss) per common share for the periods ended:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| (in millions, except per share amounts) | |||||||||||||||||||||||
| Net income (loss) | $ | 1,082.9 | $ | 1,045.4 | $ | 2,762.1 | $ | (1,448.6) | |||||||||||||||
| Basic weighted-average common shares outstanding | 255.6 | 258.0 | 256.4 | 258.1 | |||||||||||||||||||
| Effect of potentially dilutive securities: | |||||||||||||||||||||||
| Restricted stock units (including performance-based restricted stock units (“PSUs”)) | 1.1 | 1.9 | 1.3 | — | |||||||||||||||||||
| Stock options | 0.9 | 1.1 | 0.9 | — | |||||||||||||||||||
| Diluted weighted-average common shares outstanding | 257.6 | 261.0 | 258.6 | 258.1 | |||||||||||||||||||
| Basic net income (loss) per common share | $ | 4.24 | $ | 4.05 | $ | 10.77 | $ | (5.61) | |||||||||||||||
| Diluted net income (loss) per common share | $ | 4.20 | $ | 4.01 | $ | 10.68 | $ | (5.61) |
During the three and nine months ended September 30, 2025 and 2024, the number of anti-dilutive securities that were excluded from the computation of our diluted net income per common share were as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||
| Unvested restricted stock units (including PSUs) | 0.7 | — | 0.2 | 1.1 | |||||||||||||||||||
| Stock options | — | — | — | 0.6 |
**D.**Fair Value Measurements
The following fair value hierarchy is used to classify assets and liabilities based on observable inputs and unobservable inputs used to determine the fair value of our financial assets and liabilities:
| Level 1: | Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. | ||||
| Level 2: | Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. | ||||
| Level 3: | Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability. |
VERTEX PHARMACEUTICALS INCORPORATED
Notes to Condensed Consolidated Financial Statements (unaudited)
The following table sets forth our financial assets and liabilities subject to fair value measurements by level within the fair value hierarchy:
| As of September 30, 2025 | As of December 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value Hierarchy | Fair Value Hierarchy | ||||||||||||||||||||||||||||||||||||||||||||||
| Total | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||||||||||||||||||||
| Financial instruments carried at fair value (asset positions): | |||||||||||||||||||||||||||||||||||||||||||||||
| Cash equivalents | $ | 1,216.6 | $ | 505.5 | $ | 711.1 | $ | — | $ | 1,687.1 | $ | 613.3 | $ | 1,073.8 | $ | — | |||||||||||||||||||||||||||||||
| Marketable securities: | |||||||||||||||||||||||||||||||||||||||||||||||
| Corporate equity securities | 9.4 | 9.4 | — | — | 36.6 | 36.6 | — | — | |||||||||||||||||||||||||||||||||||||||
| U.S. Treasury securities | 1,937.7 | 1,937.7 | — | — | 1,602.0 | 1,566.8 | 35.2 | — | |||||||||||||||||||||||||||||||||||||||
| U.S. government agency securities | 190.6 | — | 190.6 | — | 240.5 | — | 240.5 | — | |||||||||||||||||||||||||||||||||||||||
| Asset-backed securities | 1,361.0 | — | 1,361.0 | — | 1,244.2 | — | 1,244.2 | — | |||||||||||||||||||||||||||||||||||||||
| Certificates of deposit | 24.4 | — | 24.4 | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Corporate debt securities | 3,538.4 | — | 3,538.4 | — | 3,525.9 | — | 3,525.9 | — | |||||||||||||||||||||||||||||||||||||||
| Commercial paper | 8.7 | — | 8.7 | — | 5.0 | — | 5.0 | — | |||||||||||||||||||||||||||||||||||||||
| Prepaid expenses and other current assets: | |||||||||||||||||||||||||||||||||||||||||||||||
| Foreign currency forward contracts | 6.7 | — | 6.7 | — | 130.1 | — | 130.1 | — | |||||||||||||||||||||||||||||||||||||||
| Other assets: | |||||||||||||||||||||||||||||||||||||||||||||||
| Foreign currency forward contracts | 9.4 | — | 9.4 | — | 12.4 | — | 12.4 | — | |||||||||||||||||||||||||||||||||||||||
| Total financial assets | $ | 8,302.9 | $ | 2,452.6 | $ | 5,850.3 | $ | — | $ | 8,483.8 | $ | 2,216.7 | $ | 6,267.1 | $ | — | |||||||||||||||||||||||||||||||
| Financial instruments carried at fair value (liability positions): | |||||||||||||||||||||||||||||||||||||||||||||||
| Other current liabilities: | |||||||||||||||||||||||||||||||||||||||||||||||
| Foreign currency forward contracts | $ | (114.3) | $ | — | $ | (114.3) | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||||||||||||
| Other long-term liabilities: | |||||||||||||||||||||||||||||||||||||||||||||||
| Foreign currency forward contracts | (78.3) | — | (78.3) | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Contingent consideration | (78.1) | — | — | (78.1) | (76.9) | — | — | (76.9) | |||||||||||||||||||||||||||||||||||||||
| Total financial liabilities | $ | (270.7) | $ | — | $ | (192.6) | $ | (78.1) | $ | (76.9) | $ | — | $ | — | $ | (76.9) |
Please refer to Note E, “Marketable Securities and Equity Investments,” for the carrying amount and related unrealized gains (losses) by type of investment. Our cash equivalents primarily include money market funds and time deposits.
Fair Value of Corporate Equity Securities
We classify our investments in publicly traded corporate equity securities as “Marketable securities” on our condensed consolidated balance sheets. Generally, our investments in the common stock of publicly traded companies are valued based on Level 1 inputs because they have readily determinable fair values. However, certain of our investments in publicly traded companies have been or continue to be valued based on Level 2 inputs due to transfer restrictions associated with these investments.
Please refer to Note E, “Marketable Securities and Equity Investments,” for further information on these investments.
Fair Value of Contingent Consideration
Our Level 3 contingent consideration liabilities are related to $678.3 million of development and regulatory milestones potentially payable to former equity holders of Exonics Therapeutics, Inc., a privately-held company we acquired in 2019. We base our estimates of the probability of achieving the milestones relevant to the fair value of contingent payments on industry data attributable to gene therapies and our knowledge of the progress and viability of the associated Duchenne muscular dystrophy programs. The discount rates used in the valuation model for contingent payments, which were between 4.2% and 4.5% as of September 30, 2025, represent a measure of credit risk and market risk associated with settling the liabilities. Significant judgment is used in determining the appropriateness of these assumptions at each reporting period.
VERTEX PHARMACEUTICALS INCORPORATED
Notes to Condensed Consolidated Financial Statements (unaudited)
The following table represents a rollforward of the fair value of our contingent consideration liabilities:
| Nine Months Ended September 30, 2025 | |||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||
| Balance at December 31, 2024 | $ | 76.9 | |||||||||||||||||||||
| Increase in fair value of contingent payments | 1.2 | ||||||||||||||||||||||
| Balance at September 30, 2025 | $ | 78.1 |
**E.**Marketable Securities and Equity Investments
A summary of our cash equivalents and marketable debt and equity securities, which are recorded at fair value, is shown below:
| As of September 30, 2025 | As of December 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||
| Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||||||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||||||||||||||||||||
| Cash equivalents | $ | 1,216.6 | $ | — | $ | — | $ | 1,216.6 | $ | 1,687.1 | $ | — | $ | — | $ | 1,687.1 | |||||||||||||||||||||||||||||||
| Marketable securities: | |||||||||||||||||||||||||||||||||||||||||||||||
| U.S. Treasury securities | 1,926.0 | 11.9 | (0.2) | 1,937.7 | 1,603.9 | 3.6 | (5.5) | 1,602.0 | |||||||||||||||||||||||||||||||||||||||
| U.S. government agency securities | 189.6 | 1.1 | (0.1) | 190.6 | 240.5 | 0.5 | (0.5) | 240.5 | |||||||||||||||||||||||||||||||||||||||
| Asset-backed securities | 1,354.6 | 6.6 | (0.2) | 1,361.0 | 1,239.6 | 5.1 | (0.5) | 1,244.2 | |||||||||||||||||||||||||||||||||||||||
| Certificates of deposit | 24.4 | — | — | 24.4 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Corporate debt securities | 3,513.2 | 25.5 | (0.3) | 3,538.4 | 3,519.4 | 10.6 | (4.1) | 3,525.9 | |||||||||||||||||||||||||||||||||||||||
| Commercial paper | 8.7 | — | — | 8.7 | 5.0 | — | — | 5.0 | |||||||||||||||||||||||||||||||||||||||
| Total marketable available-for-sale debt securities | 7,016.5 | 45.1 | (0.8) | 7,060.8 | 6,608.4 | 19.8 | (10.6) | 6,617.6 | |||||||||||||||||||||||||||||||||||||||
| Corporate equity securities | 25.0 | — | (15.6) | 9.4 | 72.1 | 3.0 | (38.5) | 36.6 | |||||||||||||||||||||||||||||||||||||||
| Total marketable securities | 7,041.5 | 45.1 | (16.4) | 7,070.2 | 6,680.5 | 22.8 | (49.1) | 6,654.2 | |||||||||||||||||||||||||||||||||||||||
| Total cash equivalents and marketable securities | $ | 8,258.1 | $ | 45.1 | $ | (16.4) | $ | 8,286.8 | $ | 8,367.6 | $ | 22.8 | $ | (49.1) | $ | 8,341.3 |
Amounts in the table above at fair value were classified on our condensed consolidated balance sheets as follows:
| As of September 30, 2025 | As of December 31, 2024 | ||||||||||
| (in millions) | |||||||||||
| Cash and cash equivalents | $ | 1,216.6 | $ | 1,687.1 | |||||||
| Marketable securities | 1,347.4 | 1,546.3 | |||||||||
| Long-term marketable securities | 5,722.8 | 5,107.9 | |||||||||
| Total | $ | 8,286.8 | $ | 8,341.3 |
Marketable available-for-sale debt securities by contractual maturity were as follows:
| As of September 30, 2025 | As of December 31, 2024 | ||||||||||
| (in millions) | |||||||||||
| Matures within one year | $ | 1,338.0 | $ | 1,509.7 | |||||||
| Matures after one year through five years | 5,633.2 | 5,034.4 | |||||||||
| Matures after five years | 89.6 | 73.5 | |||||||||
| Total | $ | 7,060.8 | $ | 6,617.6 |
VERTEX PHARMACEUTICALS INCORPORATED
Notes to Condensed Consolidated Financial Statements (unaudited)
We did not record any allowances for credit losses to adjust the fair value of our marketable available-for-sale debt securities during the three and nine months ended September 30, 2025 and 2024. Additionally, we did not record any realized gains or losses that were material to our condensed consolidated statements of income (loss) during the three and nine months ended September 30, 2025 and 2024. As of September 30, 2025, we held marketable available-for-sale debt securities with a total fair value of $463.1 million that were in unrealized loss positions totaling $0.8 million. Included in this amount were marketable available-for sale debt securities with a total fair value of $9.9 million and total unrealized loss of $0.1 million that had been in unrealized loss positions for greater than twelve months. We intend to hold these investments until maturity and do not expect to incur realized losses on these investments when they mature.
We record changes in the fair value of our investments in corporate equity securities to “Other expense, net” in our condensed consolidated statements of income (loss). During the three and nine months ended September 30, 2025 and 2024, our net unrealized (losses) gains on corporate equity securities with readily determinable fair values held at the conclusion of each period were as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||
| Net unrealized (losses) gains | $ | (1.5) | $ | 2.8 | $ | (18.6) | $ | (12.6) |
As of September 30, 2025, the carrying value of our equity investments without readily determinable fair values, which are recorded in “Other assets” on our condensed consolidated balance sheets, was $81.5 million. During the three and nine months ended September 30, 2024, we reduced the carrying value of one of our equity investments without a readily determinable fair value by $13.3 million and $37.6 million, respectively, based on an observable change in price.
**F.**Accumulated Other Comprehensive Income (Loss)
The following table summarizes the changes in accumulated other comprehensive income (loss) by component:
| Unrealized Holding Gains (Losses), Net of Tax | |||||||||||||||||||||||
| Foreign Currency Translation Adjustment | On Available-For-Sale Debt Securities | On Foreign Currency Forward Contracts | Total | ||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||
| Balance at December 31, 2024 | $ | 9.7 | $ | 7.1 | $ | 111.0 | $ | 127.8 | |||||||||||||||
| Other comprehensive income (loss) before reclassifications | 29.0 | 32.9 | (276.9) | (215.0) | |||||||||||||||||||
| Amounts reclassified from accumulated other comprehensive income (loss) | — | (5.5) | 28.2 | 22.7 | |||||||||||||||||||
| Net current period other comprehensive income (loss) | 29.0 | 27.4 | (248.7) | (192.3) | |||||||||||||||||||
| Balance at September 30, 2025 | $ | 38.7 | $ | 34.5 | $ | (137.7) | $ | (64.5) | |||||||||||||||
| Balance at December 31, 2023 | $ | 1.1 | $ | 9.6 | $ | (25.0) | $ | (14.3) | |||||||||||||||
| Other comprehensive income before reclassifications | 8.2 | 39.2 | 2.1 | 49.5 | |||||||||||||||||||
| Amounts reclassified from accumulated other comprehensive income (loss) | — | 2.4 | (8.8) | (6.4) | |||||||||||||||||||
| Net current period other comprehensive income (loss) | 8.2 | 41.6 | (6.7) | 43.1 | |||||||||||||||||||
| Balance at September 30, 2024 | $ | 9.3 | $ | 51.2 | $ | (31.7) | $ | 28.8 |
VERTEX PHARMACEUTICALS INCORPORATED
Notes to Condensed Consolidated Financial Statements (unaudited)
**G.**Hedging
Foreign currency forward contracts - Designated as hedging instruments
We maintain a hedging program intended to mitigate the effect of changes in foreign exchange rates for a portion of our forecasted product revenues denominated in certain foreign currencies. The program includes foreign currency forward contracts that are designated as cash flow hedges under U.S. GAAP having contractual durations from one to 36 months. We recognize realized gains and losses for the effective portion of such contracts in “Product revenues, net” in our condensed consolidated statements of income (loss) in the same period that we recognize the product revenues that were impacted by the hedged foreign exchange rate changes.
We formally document the relationship between foreign currency forward contracts (hedging instruments) and forecasted product revenues (hedged items), as well as our risk management objective and strategy for undertaking various hedging activities, which includes matching all foreign currency forward contracts that are designated as cash flow hedges to forecasted transactions. Using regression analysis, we assess, both at the hedge’s inception and on an ongoing basis, whether the foreign currency forward contracts are highly effective in offsetting changes in cash flows of hedged items on a prospective and retrospective basis. As of September 30, 2025, all hedges were determined to be highly effective.
We consider the impact of our counterparties’ credit risk on the fair value of the foreign currency forward contracts. As of September 30, 2025 and December 31, 2024, credit risk did not change the fair value of our foreign currency forward contracts.
The following table summarizes the notional amount in U.S. dollars of our outstanding foreign currency forward contracts designated as cash flow hedges under U.S. GAAP:
| As of September 30, 2025 | As of December 31, 2024 | ||||||||||
| Foreign Currency | (in millions) | ||||||||||
| Euro | $ | 5,249.4 | $ | 1,977.4 | |||||||
| Canadian dollar | 570.4 | 322.0 | |||||||||
| British pound sterling | 545.2 | 301.7 | |||||||||
| Australian dollar | 296.1 | 179.2 | |||||||||
| Swiss franc | 139.5 | 79.7 | |||||||||
| Total foreign currency forward contracts | $ | 6,800.6 | $ | 2,860.0 |
Foreign currency forward contracts - Not designated as hedging instruments
We enter into foreign currency forward contracts, typically with contractual maturities of approximately one month, which are designed to mitigate the effect of changes in foreign exchange rates on monetary assets and liabilities, including intercompany balances. These contracts are not designated as hedging instruments under U.S. GAAP. We recognize realized gains and losses for such contracts in “Other expense, net” in our condensed consolidated statements of income (loss) each period. As of September 30, 2025 and December 31, 2024, the notional amount of our outstanding foreign currency forward contracts where hedge accounting under U.S. GAAP was not applied was $619.3 million and $367.0 million, respectively.
VERTEX PHARMACEUTICALS INCORPORATED
Notes to Condensed Consolidated Financial Statements (unaudited)
During the three and nine months ended September 30, 2025 and 2024, we recognized the following related to foreign currency forward contracts in our condensed consolidated statements of income (loss):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||
| Designated as hedging instruments - Reclassified from AOCI | |||||||||||||||||||||||
| Product revenues, net | $ | (39.0) | $ | (3.1) | $ | (36.2) | $ | 11.2 | |||||||||||||||
| Not designated as hedging instruments | |||||||||||||||||||||||
| Other expense, net | $ | (22.9) | $ | 0.1 | $ | (27.2) | $ | (15.7) | |||||||||||||||
| Total reported in the Condensed Consolidated Statements of Income (Loss) | |||||||||||||||||||||||
| Product revenues, net | $ | 3,076.4 | $ | 2,771.9 | $ | 8,780.6 | $ | 8,108.1 | |||||||||||||||
| Other expense, net | $ | (9.8) | $ | (16.9) | $ | (14.2) | $ | (71.2) |
The following table summarizes the fair value of our outstanding foreign currency forward contracts designated as cash flow hedges under U.S. GAAP included on our condensed consolidated balance sheets:
| As of September 30, 2025 | ||||||||||||||||||||
| Assets | Liabilities | |||||||||||||||||||
| Classification | Fair Value | Classification | Fair Value | |||||||||||||||||
| (in millions) | ||||||||||||||||||||
| Prepaid expenses and other current assets | $ | 6.7 | Other current liabilities | $ | (114.3) | |||||||||||||||
| Other assets | 9.4 | Other long-term liabilities | (78.3) | |||||||||||||||||
| Total assets | $ | 16.1 | Total liabilities | $ | (192.6) |
| As of December 31, 2024 | ||||||||||||||||||||
| Assets | Liabilities | |||||||||||||||||||
| Classification | Fair Value | Classification | Fair Value | |||||||||||||||||
| (in millions) | ||||||||||||||||||||
| Prepaid expenses and other current assets | $ | 130.1 | Other current liabilities | $ | — | |||||||||||||||
| Other assets | 12.4 | Other long-term liabilities | — | |||||||||||||||||
| Total assets | $ | 142.5 | Total liabilities | $ | — |
As of September 30, 2025, we expect the amounts that are related to foreign currency forward contracts designated as cash flow hedges under U.S. GAAP recorded in “Prepaid expenses and other current assets” and “Other current liabilities” to be reclassified to earnings within twelve months.
We present the fair value of our foreign currency forward contracts on a gross basis within our condensed consolidated balance sheets. The following table summarizes the potential effect of offsetting derivatives by type of financial instrument designated as cash flow hedges under U.S. GAAP on our condensed consolidated balance sheets:
| As of September 30, 2025 | |||||||||||||||||||||||||||||
| Gross Amounts Recognized | Gross Amounts Offset | Gross Amounts Presented | Gross Amounts Not Offset | Legal Offset | |||||||||||||||||||||||||
| Foreign currency forward contracts | (in millions) | ||||||||||||||||||||||||||||
| Total assets | $ | 16.1 | $ | — | $ | 16.1 | $ | (16.1) | $ | — | |||||||||||||||||||
| Total liabilities | (192.6) | — | (192.6) | 16.1 | (176.5) |
VERTEX PHARMACEUTICALS INCORPORATED
Notes to Condensed Consolidated Financial Statements (unaudited)
| As of December 31, 2024 | |||||||||||||||||||||||||||||
| Gross Amounts Recognized | Gross Amounts Offset | Gross Amounts Presented | Gross Amounts Not Offset | Legal Offset | |||||||||||||||||||||||||
| Foreign currency forward contracts | (in millions) | ||||||||||||||||||||||||||||
| Total assets | $ | 142.5 | $ | — | $ | 142.5 | $ | — | $ | 142.5 | |||||||||||||||||||
| Total liabilities | — | — | — | — | — |
**H.**Inventories
“Inventories” consisted of the following:
| As of September 30, 2025 | As of December 31, 2024 | ||||||||||
| (in millions) | |||||||||||
| Raw materials | $ | 278.6 | $ | 252.0 | |||||||
| Work-in-process | 1,096.2 | 768.8 | |||||||||
| Finished goods | 252.0 | 184.6 | |||||||||
| Total | $ | 1,626.8 | $ | 1,205.4 |
**I.**Intangible Assets
“Other intangible assets, net” consisted of the following:
| As of September 30, 2025 | As of December 31, 2024 | ||||||||||||||||||||||||||||||||||||||||
| Estimated Useful Lives | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||||||||||||||||||||||||
| (in millions, except useful lives) | |||||||||||||||||||||||||||||||||||||||||
| In-process research and development | Indefinite | $ | 224.6 | $ | — | $ | 224.6 | $ | 603.6 | $ | — | $ | 603.6 | ||||||||||||||||||||||||||||
| Finite-lived intangible assets - marketed products | 10 to 12 years | 238.0 | (37.0) | 201.0 | 238.0 | (21.9) | 216.1 | ||||||||||||||||||||||||||||||||||
| Finite-lived intangible assets - assembled workforce | 3 years | 7.7 | (3.5) | 4.2 | 7.7 | (1.5) | 6.2 | ||||||||||||||||||||||||||||||||||
| Total other intangible assets, net | $ | 470.3 | $ | (40.5) | $ | 429.8 | $ | 849.3 | $ | (23.4) | $ | 825.9 |
In March 2025, based on results from a Phase 1/2 clinical trial evaluating our VX-264 clinical program in patients with type 1 diabetes (“T1D”), we concluded that VX-264 will not be advancing further in clinical development. Based on this event, we performed an interim impairment test on the fair value of our VX-264 indefinite-lived in-process research and development asset that we acquired from Semma Therapeutics, Inc. in 2019. As a result, using the multi period earnings method of the income approach, we recorded a full intangible asset impairment charge of $379.0 million in the first quarter of 2025. As of September 30, 2025, our remaining indefinite-lived in-process research and development assets were associated with our T1D program.
VERTEX PHARMACEUTICALS INCORPORATED
Notes to Condensed Consolidated Financial Statements (unaudited)
**J.**Stock-based Compensation Expense and Share Repurchase Programs
Stock-based compensation expense
During the three and nine months ended September 30, 2025 and 2024, we recognized the following stock-based compensation expense:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||
| Stock-based compensation expense by type of award: | |||||||||||||||||||||||
| Restricted stock units (including PSUs) | $ | 190.8 | $ | 184.8 | $ | 517.1 | $ | 522.7 | |||||||||||||||
| ESPP share issuances | 8.5 | 3.4 | 21.2 | 13.7 | |||||||||||||||||||
| Stock options | — | — | 1.2 | 1.8 | |||||||||||||||||||
| Stock-based compensation expense related to inventories | (4.4) | (3.6) | (11.2) | (7.5) | |||||||||||||||||||
| Total stock-based compensation expense included in “Total costs and expenses” | $ | 194.9 | $ | 184.6 | $ | 528.3 | $ | 530.7 | |||||||||||||||
| Stock-based compensation expense by line item: | |||||||||||||||||||||||
| Cost of sales | $ | 2.8 | $ | 1.9 | $ | 7.9 | $ | 5.5 | |||||||||||||||
| Research and development expenses | 116.0 | 111.0 | 315.7 | 327.5 | |||||||||||||||||||
| Selling, general and administrative expenses | 76.1 | 71.7 | 204.7 | 197.7 | |||||||||||||||||||
| Total stock-based compensation expense included in “Total costs and expenses” | 194.9 | 184.6 | 528.3 | 530.7 | |||||||||||||||||||
| Income tax effect | (47.5) | (64.6) | (159.2) | (224.3) | |||||||||||||||||||
| Total stock-based compensation expense, net of tax | $ | 147.4 | $ | 120.0 | $ | 369.1 | $ | 306.4 |
Share repurchase program
In February 2023, our Board of Directors approved a share repurchase program (the “2023 Share Repurchase Program”), pursuant to which we were authorized to repurchase up to $3.0 billion of our common stock. As of September 30, 2025, we had repurchased the full amount authorized under the 2023 Share Repurchase Program.
In May 2025, our Board of Directors approved an additional share repurchase program (the “2025 Share Repurchase Program”), pursuant to which we are authorized to repurchase up to $4.0 billion of our common stock. The 2025 Share Repurchase Program does not have an expiration date and can be discontinued at any time.
During the nine months ended September 30, 2025 and 2024, we repurchased 4.5 million and 1.7 million shares of our common stock under our share repurchase programs, respectively, for aggregate repurchases of $1.9 billion and $763.8 million, respectively. As of September 30, 2025, we had remaining authorization of $3.5 billion under the 2025 Share Repurchase Program.
**K.**Income Taxes
We are subject to U.S. federal, state, and foreign income taxes. During the three and nine months ended September 30, 2025 and 2024, we recorded the following provisions for income taxes and effective tax rates as compared to our income (loss) before provision for income taxes.
VERTEX PHARMACEUTICALS INCORPORATED
Notes to Condensed Consolidated Financial Statements (unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| (in millions, except percentages) | |||||||||||||||||||||||
| Income (loss) before provision for income taxes | $ | 1,298.8 | $ | 1,224.1 | $ | 3,312.2 | $ | (888.0) | |||||||||||||||
| Provision for income taxes | $ | 215.9 | $ | 178.7 | $ | 550.1 | $ | 560.6 |
| Effective tax rate | 16.6 | % | 14.6 | % | 16.6 | % | (63.1) | % |
Our effective tax rates for the three and nine months ended September 30, 2025 were lower than the U.S. statutory rate primarily due to a benefit from a research and development tax credit study that was completed in the third quarter of 2025, excess tax benefits related to stock-based compensation, and increased utilization of foreign tax credits, partially offset by changes in uncertain tax positions.
Our effective tax rate for the three months ended September 30, 2024 was lower than the U.S. statutory rate primarily due to a benefit from a research and development tax credit study that was completed in the third quarter of 2024 and excess tax benefits related to stock-based compensation, partially offset by changes in uncertain tax positions.
Our effective tax rate for the nine months ended September 30, 2024 was materially different than the U.S. statutory rate primarily due to the $4.4 billion of non-deductible AIPR&D resulting from our acquisition of Alpine, which drove our pre-tax loss for the nine months ended September 30, 2024.
We have reviewed the tax positions taken, or to be taken, in our tax returns for all tax years currently open to examination by a taxing authority. As of September 30, 2025 and December 31, 2024, we had $421.6 million and $341.4 million, respectively, of net unrecognized tax benefits, which would affect our tax rate if recognized.
We file U.S. federal income tax returns and income tax returns in various state, local and foreign jurisdictions. We have various income tax audits ongoing at any time throughout the world. Except for jurisdictions where we have net operating losses or tax credit carryforwards, we are no longer subject to any tax assessment from tax authorities for years prior to 2014 in jurisdictions that have a material impact on our consolidated financial statements. In 2023, we came to settlement with the United Kingdom’s HM Revenue & Customs (“HMRC”) with respect to our tax positions for 2015 through 2020 and subsequently received Closure Notices for those periods during the three months ended March 31, 2024. Due to the nature of the adjustments, we are asserting our rights under the U.S./U.K. Income Tax Convention pursuant to the mutual agreement procedures for the relief of double taxation for these matters.
In December 2022, European Union member states reached an agreement to implement the minimum tax component (“Pillar Two”) of the Organization for Economic Co-operation and Development’s (the “OECD’s”), global international tax reform initiative with effective dates of January 1, 2024 and 2025. In July 2023, the OECD published Administrative Guidance proposing certain safe harbors that effectively extend certain effective dates to January 1, 2027. The assessment of our potential 2025 exposure for the global per-country minimum tax of 15%, based on our forecasted 2025 results, is immaterial to our condensed consolidated financial statements as the effective tax rates in most of the jurisdictions in which we operate are above 15%.
In July 2025, the U.S. enacted H.R.1, which includes significant provisions modifying the U.S. tax framework, including the ability for companies to immediately deduct research and development expenditures for 2025 and provisions for deducting previously capitalized amounts. We continue to assess the impact that H.R.1. has on us and will review guidance as it becomes available. These legislative changes could have an impact on our future effective tax rates, tax liabilities, and cash taxes.
**L.**Commitments and Contingencies
2022 Credit Facility
In July 2022, Vertex and certain of its subsidiaries entered into a $500.0 million unsecured revolving facility (the “Credit Agreement”) with Bank of America, N.A., as administrative agent and the lenders referred to therein (the “Lenders”), which matures on July 1, 2027. The Credit Agreement was not drawn upon at closing and we have not drawn upon it to date. Amounts drawn pursuant to the Credit Agreement, if any, will be used for general corporate purposes. Subject to satisfaction
VERTEX PHARMACEUTICALS INCORPORATED
Notes to Condensed Consolidated Financial Statements (unaudited)
of certain conditions, we may request that the borrowing capacity for the Credit Agreement be increased by an additional $500.0 million. Additionally, the Credit Agreement provides a sublimit of $100.0 million for letters of credit.
Any amounts borrowed under the Credit Agreement will bear interest, at our option, at either a base rate or a Secured Overnight Financing Rate (“SOFR”), in each case plus an applicable margin. Under the Credit Agreement, the applicable margins on base rate loans range from 0.000% to 0.500% and the applicable margins on SOFR loans range from 1.000% to 1.500%, in each case based on our consolidated leverage ratio (the ratio of our total consolidated funded indebtedness to our consolidated EBITDA for the most recently completed four fiscal quarter period).
Any amounts borrowed pursuant to the Credit Agreement are guaranteed by certain of our existing and future domestic subsidiaries, subject to certain exceptions.
The Credit Agreement contains customary representations and warranties and affirmative and negative covenants, including a financial covenant to maintain subject to certain limited exceptions, a consolidated leverage ratio of 3.50 to 1.00, subject to an increase to 4.00 to 1.00 following a material acquisition. As of September 30, 2025, we were in compliance with the covenants described above. The Credit Agreement also contains customary events of default. In the case of a continuing event of default, the administrative agent would be entitled to exercise various remedies, including the acceleration of amounts due under outstanding loans.
Direct costs related to the Credit Agreement are recorded over its term and are not material to our financial statements.
Guaranties and Indemnifications
As permitted under Massachusetts law, our Articles of Organization and By-laws provide that we will indemnify certain of our officers and directors for certain claims asserted against them in connection with their service as an officer or director. The maximum potential amount of future payments that we could be required to make under these indemnification provisions is unlimited. However, we have purchased directors’ and officers’ liability insurance policies that could reduce our monetary exposure and enable us to recover a portion of any future amounts paid. No indemnification claims currently are outstanding, and we believe the estimated fair value of these indemnification arrangements is minimal.
We customarily agree in the ordinary course of our business to indemnification provisions in agreements with clinical trial investigators and sites in our product development programs, sponsored research agreements with academic and not-for-profit institutions, various comparable agreements involving parties performing services for us, and our real estate leases. We also customarily agree to certain indemnification provisions in our drug discovery, development and commercialization collaboration agreements. With respect to our clinical trials and sponsored research agreements, these indemnification provisions typically apply to any claim asserted against the investigator or the investigator’s institution relating to personal injury or property damage, violations of law or certain breaches of our contractual obligations arising out of the research or clinical testing of our compounds or product candidates. With respect to lease agreements, the indemnification provisions typically apply to claims asserted against the landlord relating to personal injury or property damage caused by us, to violations of law by us or to certain breaches of our contractual obligations. The indemnification provisions appearing in our collaboration agreements are similar to those for the other agreements discussed above, but in addition provide some limited indemnification for our collaborator in the event of third-party claims alleging infringement of intellectual property rights. In each of the cases above, the indemnification obligation generally survives the termination of the agreement for some extended period, although we believe the obligation typically has the most relevance during the contract term and for a short period of time thereafter. The maximum potential amount of future payments that we could be required to make under these provisions is generally unlimited. We have purchased insurance policies covering personal injury, property damage and general liability that reduce our exposure for indemnification and would enable us in many cases to recover all or a portion of any future amounts paid. We have never paid any material amounts to defend lawsuits or settle claims related to these indemnification provisions. Accordingly, we believe the estimated fair value of these indemnification arrangements is minimal.
Legal Matters and Other Contingencies
We are and may become subject to claims and legal proceedings in the ordinary course of our business activities. If we determine that it is probable that future expenditures will be made for a particular matter and such expenditures can be reasonably estimated, we accrue a loss contingency based on our best estimate of the probable range of loss. We accrue the minimum amount within the probable range of loss if no amount within the range is more likely than another. If we determine that future expenditures are not probable, or probable but not reasonably estimated, we do not accrue a loss contingency. If we determine that a material loss is reasonably possible and the range of loss can be estimated, we disclose the possible range of loss.
VERTEX PHARMACEUTICALS INCORPORATED
Notes to Condensed Consolidated Financial Statements (unaudited)
As described in Note B, “Collaboration, License and Other Arrangements,” we have an agreement with the CFF (the “CFF Agreement”) pursuant to which we owe third party royalties payable on net sales of certain CF products, including ALYFTREK. Since inception, our ALYFTREK net product revenues total $457.7 million. Based on the CFF Agreement, our position is that the royalty burden associated with ALYFTREK is 4%. On October 10, 2025, Royalty Pharma plc (“RP”), the third party to whom the CFF assigned its rights (and the CFF, which remains a party to the CFF Agreement), initiated a confidential arbitration alleging the royalty burden on ALYFTREK is approximately 8%. RP is seeking a declaratory judgment regarding the royalty burden on ALYFTREK as well as alleged unpaid royalties and other alleged damages available under the CFF Agreement or applicable law, costs, expenses, attorneys’ fees, and interest. We believe RP’s position is contrary to the plain terms of the CFF Agreement and intend to vigorously defend our position under the CFF Agreement.
On a quarterly basis, we evaluate developments with claims, whether asserted or unasserted, and legal proceedings that could result in a loss contingency accrual, or an increase or decrease to a previously accrued loss contingency. There were no material loss contingencies accrued as of September 30, 2025 or December 31, 2024.
We also have certain contingent liabilities that arise in the ordinary course of our business activities. We accrue for such contingent liabilities when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. Other than our contingent consideration liabilities discussed in Note D, “Fair Value Measurements,” there were no significant contingent liabilities accrued as of September 30, 2025 or December 31, 2024.
**M.**Segment Information
Revenues by Product
“Product revenues, net” consisted of the following:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||
| TRIKAFTA/KAFTRIO | $ | 2,653.6 | $ | 2,585.0 | $ | 7,740.2 | $ | 7,517.8 | |||||||||||||||
| ALYFTREK | 247.0 | — | 457.7 | — | |||||||||||||||||||
| Other product revenues | 175.8 | 186.9 | 582.7 | 590.3 | |||||||||||||||||||
| Total product revenues, net | $ | 3,076.4 | $ | 2,771.9 | $ | 8,780.6 | $ | 8,108.1 |
In the three and nine months ended September 30, 2025, "Other product revenues" included $16.9 million and $61.5 million, respectively, from CASGEVY, and $19.6 million and $32.9 million, respectively, from JOURNAVX. In the three and nine months ended September 30, 2024, “Other product revenues” were $2.0 million from CASGEVY and there were no revenues from JOURNAVX. The remaining “Other product revenues” are related to KALYDECO, ORKAMBI, and SYMDEKO/SYMKEVI, our other CF products.
Product Revenues by Geographic Location
“Product revenues, net” by geographic region, based on the location of the customer, consisted of the following:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||
| United States | $ | 1,976.3 | $ | 1,713.5 | $ | 5,457.3 | $ | 4,847.7 | |||||||||||||||
| Outside of the United States | |||||||||||||||||||||||
| Europe | 836.9 | 847.7 | 2,574.4 | 2,621.9 | |||||||||||||||||||
| Other | 263.2 | 210.7 | 748.9 | 638.5 | |||||||||||||||||||
| Total product revenues outside of the United States | 1,100.1 | 1,058.4 | 3,323.3 | 3,260.4 | |||||||||||||||||||
| Total product revenues, net | $ | 3,076.4 | $ | 2,771.9 | $ | 8,780.6 | $ | 8,108.1 |
VERTEX PHARMACEUTICALS INCORPORATED
Notes to Condensed Consolidated Financial Statements (unaudited)
Significant Segment Expenses
Significant segment expenses are set forth in the following table:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||
| Total revenues | $ | 3,076.4 | $ | 2,771.9 | $ | 8,811.3 | $ | 8,108.1 | |||||||||||||||
| Costs and expenses: | |||||||||||||||||||||||
| Cost of sales - products | 139.6 | 131.6 | 410.7 | 363.9 | |||||||||||||||||||
| Cost of sales - royalty | 275.2 | 261.0 | 774.6 | 743.2 | |||||||||||||||||||
| Research expenses | 210.0 | 193.8 | 625.4 | 597.2 | |||||||||||||||||||
| Development expenses | 767.7 | 682.1 | 2,310.4 | 2,034.4 | |||||||||||||||||||
| Acquired in-process research and development expenses | 54.5 | 15.0 | 76.5 | 4,540.9 | |||||||||||||||||||
| Selling and other commercial expenses | 278.3 | 216.9 | 784.0 | 604.9 | |||||||||||||||||||
| General and administrative expenses | 166.8 | 154.9 | 482.1 | 481.8 | |||||||||||||||||||
| Intangible asset impairment charge | — | — | 379.0 | — | |||||||||||||||||||
| Interest income | (125.7) | (132.2) | (369.0) | (469.9) | |||||||||||||||||||
| Other segment items (1) | 11.2 | 24.7 | 25.4 | 99.7 | |||||||||||||||||||
| Provision for income taxes | 215.9 | 178.7 | 550.1 | 560.6 | |||||||||||||||||||
| Net income (loss) | $ | 1,082.9 | $ | 1,045.4 | $ | 2,762.1 | $ | (1,448.6) |
(1)Other segment items included in “Net income (loss)” primarily include changes in the fair value of contingent consideration, interest expense and changes in the fair value of equity investments.
Additional Segment Information
During the three and nine months ended September 30, 2025, we recorded total depreciation and amortization expense of $54.0 million and $154.1 million, respectively. During the three and nine months ended September 30, 2024, we recorded total depreciation and amortization expense of $53.2 million and $160.7 million, respectively.
**N.**Additional Balance Sheet & Cash Flow Information
Contract Liabilities
We had contract liabilities of $182.0 million and $206.8 million as of September 30, 2025 and December 31, 2024, respectively, primarily related to annual contracts with government-owned and supported customers in international markets that limit the amount of annual reimbursement we can receive for our CF products. Upon exceeding the annual reimbursement amount provided by the customer’s contract with us, our CF products are provided free of charge, which is a material right. These contracts include upfront payments and fees. If we estimate that we will exceed the annual reimbursement amount under a contract, we defer a portion of the consideration received for shipments made up to the annual reimbursement limit as a portion of “Other current liabilities.” Once the reimbursement limit has been reached, we recognize the deferred amount as revenue when we ship the free products. Our CF product revenue contracts include performance obligations that are one year or less.
Our contract liabilities at the end of each fiscal year relate to contracts with CF annual reimbursement limits in international markets in which the annual period associated with the contract is not the same as our fiscal year. In these markets, we recognize revenues related to performance obligations satisfied in previous years; however, these revenues do not relate to any performance obligations that were satisfied more than 12 months prior to the beginning of the current year.
Operating Lease Assets and Liabilities
In 2024, we entered into a lease agreement for a second building (“Leiden II”) at our Jeffrey Leiden Center for Biologics, Cell and Genetic Therapies Campus (“Leiden Campus”) near our corporate headquarters in Boston, Massachusetts. The
VERTEX PHARMACEUTICALS INCORPORATED
Notes to Condensed Consolidated Financial Statements (unaudited)
Leiden II lease includes approximately 348,000 square feet of office and laboratory space for a term of approximately 16 years. We anticipate that base rent payments will commence in the first quarter of 2027 and expect them to continue through the first quarter of 2042. We have an option to extend the Leiden II term for up to two additional ten-year periods.
In the third quarter of 2025, we were given access to begin construction of leasehold improvements in Leiden II, which resulted in lease commencement for accounting purposes. We classified the Leiden II lease as an operating lease because none of the finance lease criteria were met. On the Leiden II lease commencement date, a right-of-use asset and corresponding lease liability, net of tenant allowances, of $296.7 million was recorded within each of “Operating lease assets” and “Long-term operating lease liabilities” on our condensed consolidated balance sheet. We utilize the initial approximate 16-year period as our Leiden II lease term.
Cash, Cash Equivalents and Restricted Cash Presented in Condensed Consolidated Statements of Cash Flows
The cash, cash equivalents and restricted cash at the beginning and ending of each period presented in our condensed consolidated statements of cash flows consisted of the following:
| Nine Months Ended September 30, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| Beginning of period | End of period | Beginning of period | End of period | ||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||
| Cash and cash equivalents | $ | 4,569.6 | $ | 4,939.6 | $ | 10,369.1 | $ | 5,239.2 | |||||||||||||||
| Prepaid expenses and other current assets | 2.6 | 8.2 | 3.2 | 8.9 | |||||||||||||||||||
| Cash, cash equivalents and restricted cash per condensed consolidated statement of cash flows | $ | 4,572.2 | $ | 4,947.8 | $ | 10,372.3 | $ | 5,248.1 |
Supplemental Cash Flow Information
We obtained $310.8 million and $1.1 billion of right-of-use operating lease assets in exchange for lease obligations during the nine months ended September 30, 2025 and 2024, respectively, which represent non-cash operating activities associated with our condensed consolidated statement of cash flows. These amounts primarily relate to the Leiden II lease for the nine months ended September 30, 2025, and an amendment to our corporate headquarters leases for the nine months ended September 30, 2024.
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