Vertex Pharmaceuticals Inc / Ma
VRTX CIK 0000875320 · Every Form 4 filed by insiders at this issuer. See financials → Annual report (10-K) Latest 10-K filed Feb 13, 2026 . Sentiment + YoY language diff vs prior year. Read sections →
Signal: Mild negative shift Risk Factors: tone -0.0321 Δ-0.0047 53% similar+656 / -340 ¶
MD&A: tone 0.0017 Δ-0.0018 69% similar+522 / -150 ¶
Sentiment via Loughran-McDonald lexicon · YoY diff via Jaccard similarity + paragraph set difference.
Recent 8-K announcements Per-item disclosure feed. Item 2.02 is the earnings release.
Top insiders Most active reporters at Vertex Pharmaceuticals Inc / Ma
Top performers Insiders ranked by realized 90-day signed return on their open-market trades at Vertex Pharmaceuticals Inc / Ma. Minimum 3 scored trades. Returns are signed - a sale followed by a rally counts against the insider.
All filings 479 Form 4 / 4-A filings, newest first
Filed Top transaction Shares Price Value
Filed Insider Top transaction Shares Price Value LJ Liu Joy
EVP and Chief Legal Officer
SSale 828 $439.91 $364,245 Details BC SSale 1,974 $450.00 $888,300 Details BC SSale 1,354 $453.45 $613,971 Details BM Bunnage Mark E.
EVP, Chief Scientific Officer
SSale 33 $453.45 $14,964 Details BC SSale 6,988 $450.00 $3,144,600 Details
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Per page5 10 25 50 Page 1 of 96 Next Real-time Form 4 intelligence. Smarter insider tracking. bearish bullish YoY shift: Lean -
Year-over-year tone shift - average net-tone change across Risk Factors and MD&A vs the prior 10-K. This filing is -0.32pp more bearish than last year's.
Why YoY instead of absolute: the LM lexicon has ~6.6× more negative words than positive (legal/risk-disclosure language is heavy on hedging), so every 10-K reads bearish on raw tone. Year-over-year change strips that bias and surfaces the actual shift in management's framing.
Tone shift by section The two components the gauge averages: how Risk Factors and MD&A each shifted in net tone versus last year's 10-K. The headline above is their average, so a green needle over a soft section just means the other section carried it.
Risk Factors
-0.47pp
Lean -
Net-tone change vs last year's 10-K.
MD&A
-0.18pp
Flat
Net-tone change vs last year's 10-K.
Per-snippet highlights
Sentence-level sentiment highlighting with category and subcategory filters is coming once the snippet-scoring pipeline lands. For now, dig into the actual section text on the Sections tab.
Language change vs prior 10-K Risk Factors (Item 1A) - words with the biggest YoY frequency increase negatively +6 incidents +5 investigations +3 denied +3 counterfeit +3 efficient +2 collaborate +2 adequately +1 better +1 improve +1 Risk Factors (Item 1A) 10,507 words
ITEM 1A. RISK FACTORS
Investing in our common stock involves a high degree of risk, and you should carefully consider the risks and
uncertainties described below in addition to the other information included or incorporated by reference in this Annual
Report on Form 10-K. If any of the following risks or uncertainties occur, our business, financial condition or results of
operations would likely suffer , possibly materially. In that case, the trading price of our common stock could decline .
Risks Related to Our Business and Products
Our success depends on our ability to develop and commercialize additional medicines.
We invest significant resources in research and development to discover and develop transformative medicines for
people with serious diseases. Product development is highly uncertain and expensive. Product candidates may appear
promising in research and development but may fail to reach commercial success for many reasons, including:
• the failure to establish safety and efficacy through clinical trials;
Language change vs prior 10-K MD&A (Item 7) - words with the biggest YoY frequency increase impairment +5 burden +5 alleged +2 losses +1 postponed +1 advancing +2 improvements +2 collaborations +1 strong +1 best +1 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Our discussion and analysis of our financial condition and results of operations for 2025 as compared to 2024 are
discussed below. For a discussion of our financial condition and results of operations for 2024 as compared to 2023 , please
refer to Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2024
Annual Report on Form 10-K, except as set forth below.
OVERVIEW
We are a global biotechnology company that invests in scientific innovation to create transformative medicines for
people with serious diseases, with a focus on specialty markets. We have approved medicines for cystic fibrosis (“CF”),
sickle cell disease (“SCD”), transfusion dependent beta thalassemia (“TDT”), and acute pain, and we continue to serially
innovate and advance next-generation clinical and research programs in these areas. Our mid- and late -stage clinical pipeline
includes programs across a range of modalities in additional serious diseases, including IgA nephropathy, APOL1-mediated
Material contracts, certifications & more
10 exhibits filed with this 10-K
Ticker VRTX
CIK 0000875320
Form Type 10-K
Accession Number 0000875320-26-000056
Filed Feb 13, 2026
Period Dec 31, 2025 (Q4 25)
Industry Pharmaceutical Preparations
Permalink https://insiderdelta.com/issuers/VRTX/10-k/0000875320-26-000056• the failure to obtain marketing approval;
• the inability to manufacture on economically feasible terms;
• the failure to gain and maintain market acceptance among physicians and patients or other members of the medical
• the failure to obtain adequate pricing or reimbursement levels from third-party payors or foreign governments; and
• competition based on, among other factors, safety, efficacy, patient convenience, pricing and reimbursement.
If we are not able to successfully develop and commercialize additional medicines, our business would be materially
Our business is substantially dependent on the success of our CF medicines.
Substantially all our net product revenues have been derived from the sale of our CF medicines. We may be unable to
sustain or increase revenues from sales of our CF medicines in the future for any number of reasons, including the potential
introduction of competitive products or the inability to successfully develop and commercialize next-generation medications
or medicines to treat people with CF who cannot benefit from our current CF medicines. Our concentrated source of revenue
increases the risks associated with potential manufacturing or supply disruptions , safety issues that may be identified with
respect to our CF medicines, and failure to gain and/or maintain market acceptance or adequate pricing or reimbursement for
our CF medicines. If we are unable to sustain or increase revenues from sales of our CF medicines, or if we do not meet the
expectations of investors, our business would be materially harmed and our ability to fund our operations could be adversely
If we are unable to successfully develop and commercialize medicines for acute and neuropathic pain, our business could
A portion of the value attributed to our company by investors is based on the expected commercial success of
JOURNAVX for acute pain and on our development programs for both acute and peripheral neuropathic pain. JOURNAVX
may not gain or maintain market acceptance among physicians, patients, or payors due to various factors, including the
availability of lower-cost alternatives, and sales, marketing, pricing, and/or distribution challenges associated with
introducing a product into a highly competitive market. Furthermore, we may not succeed in developing JOURNAVX for
additional indications or in advancing other product candidates, including NaV1.8 or NaV1.7 inhibitors, for the treatment of
acute or peripheral neuropathic pain. Even if we obtain marketing approvals for these product candidates, they will face
significant competition and there can be no assurance of commercial success .
We may not be able to increase or maintain CASGEVY product revenues.
The future commercial success of CASGEVY depends on physicians, patients, or payors accepting it as medically
useful, cost-effective , ethical, safe, and preferred with respect to current and potential future competitive therapies, and on
payors providing adequate reimbursement. In addition to risks generally associated with the commercialization of medicines,
the cell collection processes, manufacturing and other procedures required to manufacture and administer CASGEVY are
more complex, resource-intensive, and operationally demanding than for small molecules. For example, the cost of
manufacturing CASGEVY as a percentage of revenue is significantly higher than for our CF medicines. Moreover, market
acceptance continues to be dependent in part on the prevalence and severity of side effects associated with the procedure by
which CASGEVY is administered, including those resulting from the myeloablative preconditioning regime. There can be no
assurance that we will be able to increase or maintain our revenues from CASGEVY in future periods.
Risks Related to Commercialization
We are subject to pricing and reimbursement pressures that could have a material adverse effect on our business,
revenues, and results of operations.
Revenues from our products depend, to a large degree, on the extent to which the products are purchased by customers,
such as wholesalers, pharmacies, and hospitals, and reimbursed by third-party payors, such as government health programs,
commercial insurers, and managed health care organizations. Increasingly, these third-party payors are becoming more
critical in evaluating and reimbursing medicines. The containment of health care costs continues to be a priority for many
governments, and drug pricing has been a focus in this effort. The U.S. federal government and state legislatures and foreign
governments have shown significant and evolving interest in implementing cost-containment programs, including price
controls, restrictions on reimbursement, value-based and reference pricing, compulsory licensing, including the pursuit of so-
called “march in” rights, and mandatory substitution with generic products, all of which could limit the prices of, or access to,
our products. Decisions by third-party payors to not cover a product or restrict access to a product may shift over time and
could reduce market acceptance of the product and limit product revenues. We must also compete to be placed on formularies
of managed care providers, as exclusion of our products from a formulary would limit usage by managed care providers and
In the U.S., pricing and access is primarily governed by practices of private managed care providers and institutional and
governmental purchasers, federal laws and regulations related to Medicare and Medicaid, including the ACA and the IRA,
and state activities, including the establishment of PDABs and price transparency rules. For example, in August 2023, the
Colorado PDAB selected five drugs for an affordability review, including TRIKAFTA. Although the Colorado PDAB later
found TRIKAFTA to be ineligible for an upper payment limit we cannot predict whether future reviews by the Colorado
PDAB, or any other PDAB, will come to the same conclusion about TRIKAFTA or any of our other therapies, or the amount
of any potential upper payment limit. Furthermore, changes to the health care system enacted as part of health care reform in
the U.S., as well as increased purchasing power of entities that negotiate on behalf of Medicare, Medicaid, and private
payors, could result in further pricing pressures. F or example, initiatives by the U.S. government to impose most-favored -
nation pricing on U.S. prescription drug prices in government programs, including the recently proposed GUARD Model by
the CMS. While there is significant uncertainty around the related executive orders and rulemaking, mandatory initiatives
could result in reduced pricing and reimbursement for our products .
In most markets outside of the U.S., the pricing and reimbursement medicines is subject to governmental control and
governments are making greater efforts to reduce drug prices and limit drug spending. The reimbursement process in ex-U.S.
markets vary widely and can take a significant time to complete, and reimbursement decisions are made on a country-by-
country and region-by-region basis. Reimbursement for our products by governments, including the timing of any
reimbursements, may also be affected by budgetary or political constraints, particularly in challenging economic
environments. We have experienced challenges in obtaining timely reimbursement for our products in various countries
outside the U.S., and our future revenues depend on maintaining such reimbursement. There is no assurance that coverage
and reimbursement will continue for our current products or be available for our future products. Even if reimbursement is
available, there is no assurance that the timing or level of reimbursement will be sufficient. Furthermore, many ex-U.S.
governments are introducing new legislation focused on cost containment measures applicable to the pharmaceutical
industry; such legislation, if finalized, could lead to lower prices, rebates or other forms of discounts or special taxes.
Our failure to obtain or maintain adequate prices, coverage, or reimbursement for our products would have an adverse
effect on our business, revenue and results of operations, could curtail or eliminate our ability to adequately fund our research
and development programs and/or could cause a decline or volatility in our stock price.
Competing products and technological advances from our competitors may negatively affect our business and market
Our products and product candidates face or may face competition from existing and potential competing products. See
also Item 1., Business – Competition of this Annual Report on Form 10-K . Competing products may be more effective , safer,
more effectively marketed, have lower prices or better coverage or reimbursement levels, eliminate or minimize the need for
treatment with our products or product candidates, or have other differentiating factors that negatively affect the demand for
our products or product candidates. If a competitor obtains approval and reimbursement before we do, approval and/or
reimbursement of our products or product candidates could be delayed , denied , or otherwise adversely affected. We compete
with an array of companies and other organizations, including those that have substantially greater resources, more mature
development, manufacturing and commercial organizations, and/or other competitive advantages . Smaller companies with
innovative programs or technologies are frequently acquired by and enter into collaborations with larger competitors, which
may result in the acceleration or enhancement of competitive programs. We cannot predict the timing or impact of the
introduction of competitive products. If a competing product is successfully developed and commercialized for a patient
population we are currently treating or are seeking to treat, our revenues, business or market position could be materially
adversely affected. In addition, the release of new information, including clinical data and regulatory approval timelines, by
our competitors regarding competitive products or potentially competitive product candidates can affect investors’
perceptions regarding the prospects of our products and product candidates, and has caused and may in the future cause our
stock price to decline or experience periods of significant volatility .
If we discover safety or efficacy issues with any of our products, commercialization efforts for the product could be
negatively affected, the approved product could lose its approval, and our business could be materially harmed .
After regulatory approval and launch, our products are used over longer periods of time and by larger populations of
patients than during pre-approval clinical trials. Additional clinical and non-clinical studies, such as for label expansions, new
combinations or otherwise, may also be conducted after regulatory approval. For example, as part of FDA approval for
CASGEVY, we are required to conduct post-marketing safety studies to assess certain long-term risks associated with the
treatment. Additionally, when post-marketing studies involve our marketed products, or an active pharmaceutical ingredient
thereof, they can raise new safety issues for our existing products. The subsequent discovery or appearance of previously
unknown or underestimated safety or efficacy concerns with a product could negatively affect commercial sales of the
product, result in reduced coverage or reimbursement by payors, cause reputational harm , government investigations , and/or
lawsuits against us. Subsequent adverse safety events, as well as safety or efficacy issues affecting suppliers or competing
products, may also lead to recalls , denial or withdrawal of regulatory approvals, non-renewal of conditional regulatory
approvals, label changes, obligations to conduct additional or more extensive clinical trials or to implement a risk
management plan, and reductions in market acceptance. Each of our CF products shares at least one active pharmaceutical
ingredient with another of our products. If any of our CF products were to experience safety issues or labeling modifications,
our other CF products may be adversely affected. For example, in December 2024, the FDA required us to modify the
TRIKAFTA label by revising information regarding liver injury and liver failure and moving that information from the
“warnings and precautions” section to a “boxed warning ” section; the FDA required similar language in the ALYFTREK
label. In addition, safety or efficacy issues affecting suppliers’ or competitors’ products also may reduce the market
acceptance of our products.
The discovery of safety events involving our products or public speculation about such events could limit or reduce
product revenues and cause our stock price to decline or experience periods of volatility .
Risks Related to Product Development
The data from our product development activities may not support advancement or regulatory approval of our product
candidates, or label expansions for our marketed products, or provide sufficient data to support the successful
commercialization of our approved products.
Extensive testing is required for our product candidates and for new indications of our marketed products. The outcomes
of such clinical and non-clinical testing are highly uncertain, may not generate sufficient safety, efficacy, or other data, and
may not support regulatory approval of our product candidates. Clinical and non-clinical testing, and in particular our later-
stage clinical trials, are expensive and resource intensive. The data from our preclinical studies and other research activities
have in the past and may in the future fail to predict results in clinical trials. For example, despite considerable non-clinical
testing, the clinical study of VX-264 in T1D did not meet its efficacy endpoint. Similarly, results from earlier-stage clinical
trials may not be predictive of the results from later-stage clinical trials, or of the likelihood of approval of a product
candidate for commercial sale. In addition, interim or preliminary data from a clinical trial may not be predictive of final
results from the clinical trial and are subject to the risk that one or more of the clinical outcomes may materially change as
patient enrollment and treatment continues, more patient data become available, or as patients continue other treatments for
The data from our clinical programs may not support approval or successful commercialization of our product
candidates, and we may be unable to recoup the significant research and development, clinical trial, acquisition-related, and
other expenses incurred, which could have an adverse effect on our business, financial condition and results of operations,
and/or cause our stock price to decline or experience periods of volatility .
In addition, results of our clinical trials and findings from nonclinical studies could lead to abrupt changes in our
development activities, including the possible cessation of development activities associated with a particular product
candidate or program. For example, after VX-264 did not meet its efficacy endpoint, we announced that the program would
not advance into further clinical studies. Failure to advance product candidates through clinical development would impair
our ability to commercialize products, which could materially harm our business, financial condition and long-term prospects.
Our research and development activities are highly regulated, and it is possible that the FDA and other regulatory
• pause or halt our clinical trials based on their assessment of the potential or actual risks of continuing;
• disagree with our conclusions about the results from our clinical trials;
• require a dditional clinical trials, including confirmatory trials, or disagree with our clinical trial design or endpoint;
• fail to approve the facilities or processes used to manufacture a product candidate, or our dosing or delivery
• grant marketing approval that is more restricted than anticipated, including limiting indications to narrow patient
populations and imposing safety monitoring requirements, or risk evaluation and mitigation strategies;
• withdraw approval of a product or indication, including when the product or indication was approved under an
accelerated approval pathway and confirmatory studies were unsuccessful .
Furthermore, we periodically release new information, including clinical data, regarding our products and product
candidates, which may affect investors’ perceptions regarding our products and product candidates, and cause our stock price
to decline or experience periods of significant volatility . For example, our stock price decreased in August 2025 after we
released Phase 2 data for VX-993 and informed investors that the FDA did not see a path toward a broad peripheral
neuropathic pain label for suzetrigine at that time. The timing of the release of information by us regarding our product
development programs is often beyond our control and is influenced by the timing of receipt of communications from
regulators and data from our clinical trials, among other things.
If we fail to successfully conduct our clinical activities, our clinical trials or future regulatory approvals may be delayed or
Conducting clinical trials is a complex, lengthy and expensive process. Our ability to complete clinical trials on our
anticipated timelines depends on numerous factors, including proper and efficient protocol design, regulatory and institutional
review board approval, adequate patient enrollment and retention rates, and compliance with current good clinical practices.
Delays or complications in clinical trials may arise from difficulties in enrolling or retaining patients, competition from other
clinical trials, the occurrence of significant and/or unexpected adverse safety events, changes in regulatory requirements,
supply chain issues or disruptions at clinical trial sites. Further, we may face additional challenges identifying and enrolling
sufficient patients for clinical trials for rare diseases and cell and gene therapies due to small patient populations. With respect
to cell and genetic therapies there may be additional concerns regarding the safety of these more novel therapeutic approaches
to the treatment of these diseases. If we or our third-party clinical trial providers, including contract research organizations
(“CROs”), do not successfully conduct and manage our clinical activities or adequately comply with regulatory requirements,
our clinical trials may experience delays or increased costs, and the potential regulatory approval of a product candidate or
expansion of a label for a marketed product may be delayed or denied . Any delay in obtaining required regulatory approvals
could adversely affect our ability to successfully commercialize a product candidate.
Regulatory, Intellectual Property and Other Legal Risks
The extensive regulatory framework governing the health care industry could adversely affect our ability to obtain
approval and market our medicines and failure to comply with these regulations could result in fines , penalties or other
The health care industry is highly regulated and subject to complex and increasing regulations. U.S. federal and state
regulators, including the FDA and comparable ex-U.S. regulators directly regulate our most critical business activities,
including those related to research, development, manufacturing, and commercialization, as described in Item 1, “ Business –
The process for obtaining regulatory approvals to market a product is costly and time consuming, and approvals may not
be granted for future products, or additional indications of existing products, on a timely basis or at all. In addition, we cannot
guarantee that we will remain compliant with applicable regulatory requirements once approval has been obtained. These
requirements govern, among other things, our manufacturing practices, communications regarding our products, and
reporting of safety events. Maintaining compliance with these extensive regulations is complex, expensive, and time
consuming, and failure to comply may result in additional regulatory actions, including recalls , withdrawal or suspension of
product approvals, civil and criminal charges, reputational harm , and fines , penalties , or other monetary or non-monetary
remedies, including exclusion from receipt of payment from U.S. federal and state healthcare programs like Medicare and
Medicaid. Compliance with the regulatory requirements for biologics and cell and gene therapies can be more burdensome ,
expensive and time-consuming than for other, better known or more extensively studied types of medicines, such as small
molecules. Regulatory requirements governing cell and genetic therapy products have changed frequently and may continue
to change in the future. Furthermore, risks relating to compliance with laws and regulations may be heightened as we
continue to expand our global operations and enter new therapeutic areas with different patient populations, which may
require different commercialization activities from those we currently utilize.
We expect that regulation of the healthcare industry will continue to evolve through political and legal action, as future
proposals to reform healthcare systems are considered by U.S. and foreign governments and regulatory authorities. We
cannot predict when additional changes in the healthcare industry in general, or the pharmaceutical industry in particular, will
occur, or what the impact of such changes may be. For example, new proposals or requirements regarding local
manufacturing of pharmaceutical products, enhanced data security and privacy measures, sustainability, importation
restrictions, embargoes , or trade sanctions may negatively impact our business. In addition, our development and
commercialization activities could be harmed or delayed by a shutdown of the U.S. government or events that affect the
manner in which the FDA operates.
Commercialization of our products requires that we operate in compliance with applicable health care laws, including
laws regulating promotional activities, prohibiting fraud and abuse and requiring reporting of government pricing
We market our products to health care providers and provide promotional materials and informational programs
regarding the use of each product in these patient populations. In jurisdictions where permitted, we also market our products
to patients for whom the applicable product has been approved, as well as to their caregivers. If a regulatory authority
interprets any of our conduct, including our marketing practices or patient support programs, as promotion of unapproved
uses or otherwise false and misleading , it could request that we modify or withdraw our promotional materials or issue
corrective advertising. It could also take enforcement action, such as issuing warning or untitled letters, prohibiting certain of
our activities, seizing products, and imposing civil fines and criminal penalties . It is also possible that other federal, state, or
foreign enforcement authorities might take action if they believe that the alleged conduct led to the submission and payment
of claims for unapproved uses of our product, which could result in significant fines or penalties . Even if it is later determined
we were not in violation of these laws, we may be faced with negative publicity, incur significant expenses defending our
actions, and have to divert significant management resources from other matters.
Our interactions with health care providers that prescribe or purchase our products are also subject to laws and
regulations designed to prevent fraud and abuse in the sale and use of medicines and that place significant restrictions on the
marketing practices of biopharmaceutical companies. The relationships between companies and health care providers are
scrutinized and have been the target of lawsuits and investigations alleging various problematic conduct, including
submission of incorrect pricing information, improper promotion of pharmaceutical products, payments intended to influence
the referral of health care business, submission of false claims for government reimbursement, and anticompetitive behavior.
We are required to track and disclose financial interactions with health care providers and health care organizations, which
may increase government and public scrutiny of these financial interactions. Failure to comply with these reporting
requirements could result in significant civil monetary penalties . As we commercialize products for new patient populations
and in new geographies, we will have more interactions with a broader set of healthcare providers and we must continue to
expend significant efforts to establish, maintain and enhance systems and processes to comply with laws and regulations
governing those interactions.
Government price reporting and payment regulations are also complex, requiring us to continually assess the methods by
which we calculate and report pricing in accordance with these obligations. Our methodologies for calculations are inherently
subject to assumptions and may be subject to review and challenge by various government agencies, which may disagree
with our interpretation. If the government disagrees with our reported calculations, we may need to restate previously
reported data and could be subject to additional financial and legal liability.
If we are unable to obtain, maintain and enforce our intellectual property rights, our business could be harmed .
Our success depends, in significant part, on our ability to obtain, maintain, and enforce patents and intellectual property
rights such as trademarks and copyrights that protect our products, product candidates, and technologies. In addition, we rely
upon trade secret protection and contractual arrangements to protect certain of our proprietary information. Due to the
complexity of the legal standards and factual questions relating to the patentability, validity, and enforceability of patents
covering pharmaceutical and biotechnological inventions and the scope of claims made under these patents, our ability to
obtain, maintain and enforce our patents is uncertain. The initial grant of patents or regulatory exclusivity in the U.S. and ex-
U.S. markets depends upon decisions of the patent offices, courts, and governments in those countries. We may fail to obtain,
defend or otherwise preserve patent and other intellectual property rights, including certain forms of regulatory exclusivity ,
and our current intellectual property rights or protections and those we obtain in the future may not be broad enough or
sufficient to protect our commercial interests in all countries where we conduct business.
In the U.S. and ex-U.S. markets, third parties have challenged and may continue to challenge , invalidate , or circumvent
our patents and patent applications relating to our products, product candidates, and technologies. We have had and may
continue to have disputes with respect to the rights to products, product candidates, and technologies developed in
collaboration with other parties. If we cannot resolve disputes and obtain adequate intellectual property right protections, we
may not be able to develop or market our products. Settlements of such proceedings could also result in reducing the period
of exclusivity and other protections, resulting in a reduction in revenue from affected products. Any litigation , including
litigation related to Abbreviated New Drug Applications (“ANDA”), litigation related to 505(b)(2) applications, interference
proceedings to determine priority of inventions , derivations proceedings, inter partes review, oppositions to patents in foreign
countries, litigation against our collaborators , or similar actions, could harm our business.
Difficulties in, or preclusion from, protecting our intellectual property rights in foreign jurisdictions could substantially
harm our business. Third-party manufacturers may be able to sell generic versions of our products in countries that do not
provide effective mechanisms for enforcement of our patents or other intellectual property rights. For example, we have
experienced a violation of our intellectual property rights in Russia, where a copy product that infringes our patents has been
made available. In addition, many foreign countries have compulsory licensing laws under which a patent owner must grant
licenses to third parties in certain circumstances. Compulsory licenses have been used in certain countries for market access
purposes and, in some cases, as a cost-containment measure. Compulsory licenses issued for our patents may diminish or
reduce revenue from those jurisdictions and negatively affect our results of operations. Third parties may also illegally
distribute and sell counterfeit versions of our products. Copy or counterfeit products may not meet our rigorous
manufacturing and testing standards and a patient who receives such product may be at risk for a number of dangerous health
consequences. Our business and reputation could suffer harm as a result of illegally produced and distributed generic versions
of our products, as well as counterfeit products sold under our brand name. The diversion of products from their authorized
market into other channels may result in reduced revenues and negatively affect our profitability .
If we are not able to operate without infringing upon intellectual property rights of third parties, our business could be
Our competitors seek to protect their products, product candidates and proprietary information through patents,
trademarks, trade secrets, and copyrights. T hird parties have claimed and may claim in the future that our products or other
activities infringe their intellectual property rights or that our employees have misappropriated their intellectual property
rights . See also Item 1., Business – Intellectual Property of this Annual Report on Form 10-K. Resolving an intellectual
property infringement or other claim can be costly and time consuming and may require us to enter into license agreements,
which may not be available on commercially reasonable terms. A successful claim of patent infringement or other violation
or misappropriation of intellectual property rights by a third party could subject us to significant damages and/or an
injunction preventing the manufacture, sale, or use of the affected product or products, and/or require us to pay royalties or
redesign our infringing products, which may be impossible or require substantial time and monetary expenditure.
Our business has a substantial risk of product liability claims and other litigation liability.
The testing, manufacturing, marketing and use of our products and product candidates involve substantial risk of product
liability claims . These claims may be made directly by consumers, patients, healthcare providers, or others. Product liability
claims and lawsuits and safety alerts or product recalls , regardless of their ultimate outcome, may decrease demand for our
products or any product candidate for which we obtain marketing approval, and may have a material adverse effect on our
business, results of operations, reputation, and our ability to market our products. Our product liability and clinical trial
insurance may not provide adequate coverage against all potential liabilities.
There continues to be a significant volume of government and regulatory investigations and litigation against companies
operating in our industry, a s well as robust regulatory enforcement and whistleblower claims . Investigations into aspects of
our business include inquiries, subpoenas , and other types of information demands from government and regulatory
authorities. We are also involved in and are subject to other various legal proceedings, including litigation , and other dispute -
related proceedings. These activities require significant financial and internal resources. This includes the arbitration initiated
by the third party to whom the CFF has assigned its ALYFTREK royalty rights. Please see Item 7. Management’s Discussion
and Analysis of Financial Condition and Results of Operations of this Annual Report on Form 10-K for more information.
The outcome of such legal proceedings, investigations or any other dispute -related proceedings are inherently uncertain and
adverse developments or outcomes can result in significant expenses, monetary damages , penalties , injunctions , or other
relief against us, and in the ALYFTREK arbitration, could result in higher future costs of goods if royalty fees are higher than
anticipated. For a description of our litigation , investigation and other dispute -related matters, see Note P., Commitments and
Contingencies — Legal Matters and Other Contingencies, included in this Annual Report on Form 10-K.
We are subject to various and evolving laws and regulations governing the privacy and security of personal data.
We are subject to a variety of evolving and developing data privacy and security laws and regulations in various
jurisdictions related to the collection, storage, use, sharing, and security of personal data, including health information.
Regulators globally are imposing data privacy and security requirements, such as the E.U.’s GDPR and other domestic data
privacy and security laws, such as the California Consumer Privacy Act and the California Privacy Rights Act. These and
other similar types of laws and regulations that have been or may be passed often include requirements with respect to
personal information. Compliance with privacy laws and regulations is a rigorous and time-intensive process that may
increase our cost of doing business or require us to change our business practices. Failure to comply may result in liability
through government enforcement, private actions, civil and criminal fines and penalties , litigation , and reputational harm .
Although we are not directly subject to HIPAA, we could face penalties , including criminal liability, for knowingly obtaining
or disclosing protected health information from non-compliant HIPAA-covered entities. The commercialization of cell and
genetic therapies involves processing more personal data than traditional therapies, increasing our risk exposure.
Furthermore, the number of government investigations , enforcement actions, and class action lawsuits related to data security
incidents and privacy violations , particularly focused on online data sharing, continue to increase. Government investigations
typically require significant resources and generate negative publicity, which could harm our business and reputation.
Risks Related to Our Operations
We may face manufacturing, supply, and distribution delays , difficulties , and disruptions , among other challenges ,
including at our third-party providers.
We could be subject to significant supply interruptions for our commercial products or product candidates as a result of
disruptions to our internal manufacturing capabilities or those of our suppliers or partners. Supply disruptions may result from
a variety of factors, including shortages in product raw materials or labor, technical difficulties , regulatory inspections or
restrictions, delays in construction, regulatory approval, and inspection of new facilities or the expansion of existing facilities,
shipping or customs delays , inability to maintain compliance with quality or other regulations, including cGMP requirements,
general global supply chain disruptions , and performance failures by us or any third-party manufacturer on which we rely.
Disruption in our supply chain or manufacturing capabilities can result in shipment delays , inventory shortages , lot failures ,
product withdrawals, recalls and other interruptions in the commercial and clinical supply of our products and product
candidates. Any such disruption with respect to our commercial products could result in a failure to meet market demand,
could negatively affect our patients, could reduce our net product revenues and/or increase our costs. Any such disruption in
the supply of product candidates to our clinical trials could negatively affect the subjects enrolled in our clinical trials and/or
cause delays in our clinical trials and applications for regulatory approval.
Additionally, unfavorable geopolitical events could affect our ability to interact with or conduct business with specific
vendors within our global supply network or could prevent or delay the transportation of supplies or products to their planned
destination. For example, we depend on China-based suppliers for portions of our supply chain. Finding alternative suppliers
due to geopolitical developments or otherwise may not be feasible or could take a significant amount of time and involve
significant expense due to the nature of our products and the need to obtain regulatory approvals.
If we are unable to maintain and expand our supply chain and manufacturing capabilities, our ability to develop our
product candidates and manufacture our products would be harmed .
We continue to invest in and expand our manufacturing capabilities and supplier relationships to ensure the stability of
our supply chains and to support the anticipated demand for our products. Establishing, managing and expanding our global
manufacturing capabilities and supply chain, particularly as we enter new therapeutic modalities, requires significant
financial commitment. This includes the creation and maintenance of numerous third-party contractual relationships upon
which we rely. There can be no assurance that we will be able to identify, establish and maintain additional manufacturers or
capacity for our product candidates and products on a timely basis, on commercially reasonable terms, or at all. The
foregoing risks may be heightened where our products and the materials that we utilize in our operations are manufactured by
only one supplier or at only one facility. In addition, in the course of providing its services, a contract manufacturer may
develop process technology related to the manufacture of our products or product candidates that the manufacturer owns,
either independently or jointly with us. This would increase our reliance on that manufacturer or require us to obtain a license
from that manufacturer to have our products or product candidates manufactured by other suppliers utilizing the same
In addition, we and our CMOs and corporate partners are subject to cGMP, as well as comparable regulations in other
jurisdictions. Manufacturing operations are also subject to routine inspections by regulatory agencies. Even after a supplier is
qualified by the regulatory authority, the supplier must continue to expend time, money and effort in the area of production
and quality control to maintain full compliance with applicable regulatory requirements, including cGMP. If, as a result of
these inspections, a regulatory authority determines that the equipment, facilities, laboratories or processes do not comply
with applicable regulations and conditions of product approval, the regulatory authority may suspend the manufacturing
operations. There can be no assurance that we or our CMOs and corporate partners will be able to remedy any deficiencies
cited by FDA or other regulatory agencies in their inspections.
Furthermore, the manufacturing and logistics for drug products are highly complex and can require significant
investment, including to scale-up manufacturing processes and to secure capacity at third parties with expertise to meet our
requirements. This capacity may be limited by the number of other clinical trials and commercial manufacturing ongoing for
other companies seeking similar support. There are many risks that could result in delays and additional costs, including the
need to hire and train qualified employees and obtain access to necessary equipment and third-party technology. Additionally,
even with relevant experience and expertise, drug manufacturers often encounter difficulties in scale-up and production,
including difficulties with production costs and yields, quality control, and compliance with federal, state and foreign
regulations, which can prevent manufacturers from completing clinical trials or commercializing products on a timely or
profitable basis, if at all.
Reliance on third-party relationships could adversely affect our business.
Our business depends on relationships with third parties, including activities critical to research, development,
manufacturing, commercialization, and technology. For example, we rely on third parties such as CROs for the day-to-day
management and oversight of our clinical trials, on CMOs for active ingredient manufacturing and finishing operations, and
on logistics providers for the distribution of our products. We are expanding our relationships with CROs, CMOs, and other
third parties as we enter markets in which we have no or limited experience. Failure by any of our third parties to meet their
contractual, regulatory, or other obligations, any disruption in the relationship between Vertex and a third party upon whom
we rely, or the failure of a third party to conduct activities in accordance with our expectations, could adversely affect the
relevant research, development, manufacturing, commercial, or administrative activity and our business. The foregoing risks
may be heightened as a result of the limited number or specialized nature of certain third parties, as we may not be able to
replace such third party in a timely manner, on commercially reasonable terms, or at all.
The third parties upon which we rely are subject to their own operational and financial risks, as well as other difficulties ,
which, if realized, could negatively affect our business. If any of our third parties violate , or are alleged to have violated , any
laws or regulations, including anti-corruption or anti-bribery regulations, the GDPR, or other laws and regulations, during the
performance of their obligations to us, we could suffer financial and reputational harm or other negative outcomes, including
possible legal consequences.
If we fail to scale our operations to accommodate growth, our business may suffer .
As we continue to expand our global operations and capabilities, we face increasing demands on our management and
infrastructure. To effectively manage our growing business, we need to:
• implement and clearly communicate corporate-wide strategies and effectively prioritize resources;
• enhance our operational and financial infrastructure, including data and information controls;
• effectively leverage technology and automation where appropriate to enable efficient growth and remain
• improve our administrative, financial and management processes, including decision-making processes and budget
• effectively grow, train and manage our global employee base; and
• expand our compliance and legal resources.
A variety of risks associated with operating in foreign countries could materially adversely affect our business.
Our global operations subject us to risks that could adversely affect our business and revenue. In addition to the ex-U.S.
risks we face with respect to compliance with local laws and regulatory requirements, pricing and reimbursement, intellectual
property, manufacturing capabilities and supply chain, foreign exchange risks, and reliance on third parties, risks associated
with operating a global biotechnology company include the potential for:
• economic weakness , including recession and inflation, or political instability globally or with respect to particular
foreign economies and markets;
• business interruptions resulting from geo-political actions, including war and terrorism;
• import and export licensing requirements, tariffs, trade barriers , and other trade and travel restrictions, the risks of
which appear to have increased in the current political environment;
• credit risks related to our customers, which may be higher in less developed markets; and
• global or regional public health emergencies.
If any of the above risks were to occur, our revenues, results of operations, financial condition or business could be
Current or future U.S. legislation, including executive orders, or other new changes in laws, regulations or policies in the
U.S. or other countries could negatively impact our business by increasing costs, decreasing demand for our products, and
increasing government cost controls, among other risks. For example, U.S. legislation has been introduced to limit certain
U.S. biotechnology companies from using equipment or services from select Chinese biotechnology companies, and others in
Congress have advocated for limitations on those Chinese service providers’ ability to engage in business in the U.S. We
cannot predict what actions may ultimately be taken with respect to trade relations between the United States and China or
other countries, what products and services may be subject to such actions, the effective date or duration of such actions, or
what actions may be taken by the other countries in response to actions by the United States. If we are unable to obtain or use
services from existing service providers or become unable to export or sell our products to any of our customers or service
providers, our business could be materially and adversely affected.
A breakdown or breach of our information technology systems, or unauthorized access to confidential information could
adversely affect our business.
We maintain and rely extensively on information technology systems and network infrastructures, internally and with
third parties for the effective operation of our business. We collect, store, and transmit confidential information, including
personal information, financial information and intellectual property . Disruption , infiltration, or failure of our information
technology systems because of software or hardware malfunctions , computer viruses, cyber-attacks, employee theft or
misuse , power disruptions , natural disasters or accidents could cause breaches of data security and/or loss of critical data,
which in turn could materially adversely affect our business.
Cyber-attacks and incidents are increasing in their frequency, sophistication, and intensity, and are difficult to detect.
Cyber-attacks are carried out by well-resourced groups and individuals with a wide range of motives and expertise. Due to
the nature of some cyber-attacks and incidents , there is a risk that they may remain undetected for a period of time. Recent
developments in the threat landscape include the use of adversarial artificial intelligence techniques and machine learning, as
well as an increased number of cyber extortion attacks with higher financial ransom demand amounts and increasing
sophistication and variety of ransomware techniques. Cyber-attacks and incidents also include manufacturing, hardware or
software supply chain attacks, which could cause disruption to or a delay in the manufacturing of our products or product
candidates, or lead to data privacy or security breach . We use cloud technologies and any failure by cloud or other technology
service providers to adequately safeguard their systems and prevent cyber-attacks or data privacy incidents could disrupt our
operations and result in misappropriation , corruption , or loss of confidential or proprietary information. The third parties
upon which we rely face similar risks and when they experience a security breach of their systems, our security can be
Like many companies, we have experienced immaterial cybersecurity incidents , including temporary service
interruptions of third-party suppliers. There can be no assurance that our efforts to protect our data and information systems
will prevent breakdowns or breaches in our systems that could adversely affect our business. While we maintain cyber
liability insurance, this insurance may not be sufficient to cover the financial, legal, business or reputational losses that may
result from an interruption or breach of our systems and those of critical third parties. Cybersecurity incidents can cause the
loss of critical or sensitive information, including personal information, and could give rise to legal liability and regulatory
action under data protection and privacy laws.
In addition, we face certain risks as we seek to leverage artificial intelligence to optimize productivity and efficiency in
various aspects of the organization. Flaws , biases, or malfunctions in these systems could lead to operational disruptions , data
loss , or erroneous decision-making, impacting our operations, financial condition, and reputation. Ethical and legal
challenges may arise, including biases or discrimination in generated outcomes, non-compliance with data protection
regulations and laws specifically governing the use of artificial intelligence systems and tools, and lack of transparency .
Furthermore, the deployment of artificial intelligence systems could expose us to increased cybersecurity threats , such as data
breaches and unauthorized access. We also face competitive risks if we do not implement artificial intelligence or other
machine learning technologies in a timely fashion.
Our operations may be disrupted by the occurrence of a natural disaster , catastrophic event, or by other serious accidents
occurring at our facilities.
Most of our operations, including our research and development activities, are conducted in a limited number of
facilities. If any of our major facilities were to experience a catastrophic loss due to an earthquake, flood, severe storms, fire
or similar event, our operations would be seriously harmed . For example, our corporate headquarters, as well as additional
leased space that we use for certain logistical and laboratory operations and manufacturing, are located in a flood zone along
the Massachusetts coast. If we are unable to effectively implement our business continuity plans, we may experience delays
in recovery of data and/or an inability to perform vital corporate functions, which could result in a significant disruption in
our operations, large expenses to repair or replace the facility and/or the loss of critical data. Additionally, we use hazardous
materials in some of our facilities, and any accident , injury or other loss related thereto could result in substantial liability.
Our property or other relevant insurance may not be sufficient to cover all potential losses that may result from an
interruption to our operations or damage resulting from these risks.
Strategic and Financial Risks
Our business development strategy, including strategic transactions and collaborations , may not be successful , and there
may be delays or failures in realizing the anticipated benefits of these activities.
As part of our business strategy, we seek to enter into strategic transactions to acquire, license, or collaborate with other
entities, in each case that have potential to complement and advance our ongoing research, development, manufacturing, and
commercialization efforts. Over the last several years we have engaged in a number of strategic transactions and
collaborations , including our acquisition of Alpine and its lead asset, povetacicept, as well as several smaller transactions and
collaboration arrangements. See also Item 1. , Business – Strategic Transactions of this Annual Report on Form 10-K. Our
future transactions and collaborations may be similar to prior transactions, may be structured differently from prior
transactions, or may involve larger transactions or later-stage assets. We face significant competition for potential strategic
transactions and collaborations from a variety of other companies, some of which have significantly more financial resources
and experience in business development activities. We may not complete future transactions in a timely manner, or at all,
including due to the possibility that a governmental entity or regulatory body may delay or refuse to grant approval for the
consummation of the transaction.
We may not realize the anticipated benefits of our completed or future strategic transactions. The product candidates or
products contemplated by those transactions may be delayed or terminated at any point during research or clinical
development. Even if a product is approved, we may not be able to successfully commercialize it. As a result, we may fail to
generate expected revenue growth or income contribution within the anticipated timeframe or at all. We also face risks that
• may not effectively integrate acquired assets or businesses into our ongoing business;
• may incur additional expenses or fail to achieve anticipated cost savings related to the strategic transactions;
• may incur impairment charges related to assets acquired in any such transactions; or
• may acquire unanticipated liabilities.
In addition, future strategic transactions could result in potentially dilutive issuances of equity securities or the incurrence
We continue to collaborate with outside partners on research, development, manufacturing, and/or commercialization
activities with respect to product candidates and products. We face the same research, development, manufacturing, and
commercialization risks with respect to product candidates and products that are subject to collaborations as with product
candidates and products that we have developed ourselves. We face additional risks in connection with our current and future
collaborative arrangements, including with respect to the performance of the collaborator and their compliance with
Our effective tax rate fluctuates, and changes in tax laws, regulations and treaties, unfavorable resolution to the tax
positions we have taken, and exposure to additional income tax liabilities could have a material impact on our future
Our effective tax rate is derived from a combination of applicable tax rates in the various places that we operate globally.
Our effective tax rate may be different than experienced in the past due to numerous factors, including:
• changes in the mix of our profitability from country to country;
• tax authority examinations/audits of our tax filings;
• adjustments to the value of our uncertain tax positions;
• changes in accounting for income taxes; and
• changes in tax laws or modifications of treaties in various jurisdictions.
Any of these factors could cause us to experience an effective tax rate that is significantly different from previous periods
or our current expectations. For example, actions taken with respect to tax-related matters by associations such as the
Organisation for Economic Co-operation and Development and the European Commission could influence tax laws in
jurisdictions in which we operate, such as the enactments by both E.U. and non-E.U. member countries of a global minimum
tax. We are subject to ongoing tax audits in various jurisdictions, and local tax authorities may disagree with certain positions
we have taken and assess additional taxes. We regularly assess the probable outcomes of these audits to determine the
appropriateness of our tax provision, and we have established contingency reserves for material tax exposures. However,
there can be no assurance that we will accurately predict the outcomes of these disputes or other tax audits or that issues
raised by tax authorities will be resolved at a financial cost that does not exceed our related reserves and the actual outcomes
of these disputes and other tax audits could have a material impact on our results of operations or financial condition.
Changes in foreign currency rates, interest rate risks, the value of our investment portfolio, and inflation affect our results
of operations and financial condition.
Fluctuations in currency exchange rates and interest rates, changes in the value of our investment portfolio, and inflation
have affected and will continue to affect our cash flows, results of operations, and financial condition. The exchange rates
among our reporting currency, the U.S. dollar, and the currencies in which we do business are volatile and our efforts to
mitigate against these risks may not be successful . We invest our available cash in a range of investments, including
investments in cash equivalents and debt securities, and fluctuations in interest rates, among other factors, could materially
negatively affect the value of this investment portfolio. In addition, systemic economic downturns , as well as inflationary
pressures, such as those observed in recent periods, may adversely impact our business and financial results. See also Item
7A., Quantitative and Qualitative Disclosures About Market Risk of this Annual Report on Form 10-K.
Future indebtedness could materially and adversely affect our financial condition, and the terms of our credit agreements
impose restrictions on our business.
If we borrow under our current credit agreement or any future credit agreements, or otherwise issue or incur additional
debt, such indebtedness could have important consequences to our business. The credit agreement requires that we comply
with certain financial covenants, including a consolidated leverage ratio covenant and negative covenants, restricting or
limiting our ability and the ability of our subsidiaries to, among other things, incur additional indebtedness, grant liens,
engage in certain investment, acquisition and disposition transactions, and enter into transactions with affiliates. As a result,
we may be restricted from engaging in business activities that may otherwise improve our business. Failure to comply with
the covenants could result in an event of default that could trigger acceleration of our indebtedness. If we incur additional
indebtedness, the risks related to our business and our ability to service or repay our indebtedness would increase.
There can be no assurance that we will repurchase shares of common stock or that we will repurchase shares at favorable
In May 2025, our Board of Directors approved a share repurchase program pursuant to which we are authorized to
repurchase up to $4.0 billion of our common stock from time to time through open market or privately negotiated
transactions, of which $618.5 million has been repurchased as of December 31, 2025 . Our stock repurchases will depend
upon, among other factors, market conditions, our cash balances and potential future capital requirements, results of
operations, financial condition, and other factors that we may deem relevant. We can provide no assurance that we will
repurchase stock at favorable prices, if at all.
Our stock price is volatile .
Our stock price is subject to significant fluctuations. From January 1, 2025 to December 31, 2025 , our common stock
traded between $362.50 and $519.68 per share. Our future stock price could be significantly and adversely affected by:
• announcements o r investor analyst commentary regarding the clinical development of our product candidates a s new
information, including efficacy and safety information becomes available;
• our financial guidance and/ or financial results, including quarterly and annual fluctuations resulting from factors
such as the timing and amount of our revenues and expenses ; and
• other factors including the risks described in these “ Risk Factors .”
Fluctuations in our stock price can result in substantial losses for shareholders. Following periods of volatility in the
market price of a company’s securities, shareholder derivative lawsuits and securities class action litigation are common.
Such litigation , if instituted against us or our officers and directors, could result in substantial costs and other harm to our
If we fail to attract and retain skilled employees, our business could be materially harmed .
We must attract and retain highly qualified and trained scientists, as well as employees with experience in the
development, manufacture, and commercialization of medicines, including biologic and cell and genetic therapies. We face
intense competition for such talent from our competitors, other companies, academic institutions, and other organizations
throughout our industry, especially with respect to employees with expertise in cell or genetic therapies. Our compensation
program, including equity awards, may not be sufficient to retain employees, especially if our stock price declines or other
employers offer more attractive opportunities . Our ability to commercialize our products and achieve our research and
development objectives depends on our ability to respond effectively to these demands. If we are unable to hire and retain
qualified personnel, our ability to advance our pipeline, commercialize our products, and achieve our business objectives
could be materially adversely affected.
The use of social media platforms presents risks and challenges .
Social media is increasingly used by patients, advocacy groups, and other third parties to discuss our products and
product candidates. Social media posts may include statements about efficacy or adverse events that could create reporting
obligations or regulatory scrutiny . Our employees’ use of social media also presents risks, including potential noncompliance
with legal or regulatory requirements, inappropriate disclosure of confidential information or personal information, and loss
of intellectual property. In addition, misinformation , negative sentiment, or impersonation of our business on social media
could cause reputational damage or otherwise harm our business. Failure to appropriately manage these risks could result in
regulatory actions, liability, or other adverse consequences.
We have adopted provisions in our articles of organization and by-laws and are subject to Massachusetts corporate laws
that may frustrate any attempt to remove or replace members of our board or to effectuate certain types of business
combinations involving us.
Provisions of our articles of organization, by-laws and Massachusetts state laws may frustrate any attempt to remove or
replace members of our current Board of Directors and may discourage certain types of business combinations involving us.
Our by-laws allow the Board of Directors to adjourn any meetings of shareholders prior to the time the meeting has been
convened. We may issue shares of any class or series of preferred stock in the future without shareholder approval and upon
such terms as our Board of Directors may determine. The rights of the holders of common stock will be subject to, and may
be adversely affected by, the rights of the holders of any class or series of preferred stock that may be issued in the future.
Massachusetts state law also prohibits us from engaging in specified business combinations with an interested stockholder,
subject to certain exceptions, unless the combination is approved or consummated in a prescribed manner, and places
restrictions on voting by any shareholder who acquires 20% or more of the aggregate shareholder voting power without
approval by non-interested shareholders. As a result, shareholders or other parties may find it difficult to remove or replace
our directors or to effectuate certain types of business combinations involving us.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K, including the descriptions of our Business set forth in Part I, Item 1, our Risk Factors
set forth in Part I, Item 1A, and our Management’s Discussion and Analysis of Financial Condition and Results of Operations
set forth in Part II, Item 7, contains forward-looking statements. Forward-looking statements are not purely historical and
may be accompanied by words such as “anticipates,” “may,” “forecasts,” “expects,” “intends,” “plans,” “potentially,”
“believes,” “seeks,” “estimates,” and other words and terms of similar meaning. Such statements may relate to:
• our expectations regarding the amount of, timing of, and trends with respect to our financial performance, including
revenues, costs and expenses, and other gains and losses ;
• our expectations regarding clinical trials, including expectations for patient enrollment, development timelines, the
expected timing of data from our ongoing and planned clinical trials, and regulatory authority filings and other
submissions for our therapies;
• our beliefs, expectations, and plans with respect to the commercial launches of CASGEVY for the treatment of SCD
and TDT, ALYFTREK for the treatment of CF, and JOURNAVX for the treatment of moderate-to-severe acute
pain, and the anticipated launch of povetacicept for the treatment of IgAN ;
• our ability to maintain and obtain adequate reimbursement for our products and product candidates, our ability to
launch, commercialize and market our products or any of our other therapies for which we obtain regulatory
approval, and our ability to obtain label expansions for existing therapies;
• our expectations regarding our ability to continue to grow our CF business by increasing the number of people with
CF eligible and able to receive our medicines and providing improved treatment options for people who are already
eligible for one of our medicines, and our beliefs that t he majority of people with CF will transition to ALYFTREK
• our beliefs regarding the support provided by clinical trials and preclinical and nonclinical studies of our therapies
for further investigation , clinical trials or potential use as a treatment, including with respect to povetacicept as a
pipeline-in-a-product and as a potential best -in-class approach for the treatment of IgAN, pMN, and gMG;
• the data that will be generated by ongoing and planned clinical trials and the ability to use that data to advance
compounds, continue development, support regulatory filings, or accelerate regulatory approval, including our plans
to complete the full submission for potential accelerated approval of povetacicept in IgAN in the first half of 2026
and to share data from the interim analysis of the Phase 2/3 clinical trial of inaxaplin in AMKD in late 2026 or early
2027 and from the Phase 2 trial in people with AMKD in mid-2026;
• our beliefs that ALYFTREK will provide additional clinical benefits to eligible people with CF, regarding the
durable efficacy and effectiveness of CASGEVY as one-time functional cure for people with SCD and TDT, and
regarding the clinical benefits of JOURNAVX without the evidence of the several limitations of other available
• our plans to continue investing in our research and development programs, including anticipated timelines for our
programs, and our strategy to develop our pipeline programs, alone or with third-party collaborators ;
• our beliefs regarding the approximate patient populations for the disease areas on which we focus;
• the potential benefits and therapeutic scope of our acquisitions and collaborations , including our acquisition of
Alpine and its lead asset, povetacicept, its potential to become a pipeline-in-a-product , and our expectations
regarding our agreements with Zai, Ono and WuXi;
• our expectations regarding the lower royalty burden for ALYFTREK;
• our plans to expand, strengthen , and invest in our global supply chains and manufacturing infrastructure and
capabilities, including for biologic and cell and gene therapies;
• the effects of import and export licensing requirements, tariffs, trade barriers , and other trade and travel restrictions;
• potential business development activities, including the identification of potential collaborative partners or
• our ability to expand and protect our intellectual property portfolio and otherwise maintain exclusive rights to
• our expectations or beliefs regarding any legal proceedings in which we are involved, including any litigation ,
arbitration or other similar proceedings involving our products, product candidates or activities;
• the establishment, development and maintenance of collaborative relationships, including potential milestone
payments or other obligations;
• potential fluctuations in foreign currency exchange rates and the effectiveness of our foreign currency management
• our expectations regarding the amount of cash to generated by operations, our cash balance and expected generation
• our expectations regarding our provision for or benefit from income taxes and the utilization of our deferred tax
• our ability to use our research programs to identify and develop new product candidates to address serious diseases
and significant unmet medical needs;
• the effectiveness of our governance, plans and strategy with respect to managing cybersecurity risks and other
threats to our information technology systems;
• our ability to effectively implement artificial intelligence systems and tools;
• our ability to attract and retain skilled personnel;
• our expectations involving governmental cost containment and other regulatory efforts;
• our expectations surrounding the competitive landscape facing our products and product candidates; and
• our liquidity and our expectations regarding the possibility of raising additional capital.
Forward-looking statements are subject to certain risks, uncertainties, or other factors that are difficult to predict and
could cause actual events or results to differ materially from those indicated in any such statements. These risks,
uncertainties, and other factors include, but are not limited to, those described in our Risk Factors, set forth in Part I, Item 1A,
and elsewhere in this report and those described from time to time in our future reports filed with the Securities and Exchange
Any such forward-looking statements are made on the basis of our views and assumptions as of the date of the filing and
are not estimates of future performance. Except as required by law, we undertake no obligation to publicly update any
forward-looking statements. The reader is cautioned not to place undue reliance on any such statements.
kidney disease, neuropathic pain, type 1 diabetes, primary membranous nephropathy, autosomal dominant polycystic kidney
disease, and myotonic dystrophy type 1.
Collectively, our five CF medicines, led by TRIKAFTA/KAFTRIO, are being used to treat nearly three quarters of the
people with CF in the U.S., Europe, Australia, and Canada. ALYFTREK, our newest CF medicine, is approved in the United
States (the “U.S.”), the United Kingdom (the “U.K.”), the European Union (the “E.U.”), Canada, New Zealand, Switzerland,
CASGEVY, our ex-vivo, non-viral CRISPR/Cas9 gene-edited cell therapy, is approved in the U.S., the E.U., the U.K.,
the Kingdom of Saudi Arabia (“Saudi Arabia”), the Kingdom of Bahrain (“Bahrain”), Qatar, the United Arab Emirates (the
“UAE”), Kuwait, Switzerland and Canada for the treatment of people 12 years of age and older with SCD or TDT.
JOURNAVX, our selective non-opioid NaV1.8 pain signal inhibitor, is approved in the U.S. for the treatment of people
with moderate-to-severe acute pain. We are continuing our commercial launch of JOURNAVX for eligible adults.
In 2025 , our total revenues increased to $12.0 billion as compared to $11.0 billion in 2024 ,
primarily due to continued strong demand for TRIKAFTA/KAFTRIO as well as contributions
from our launches of ALYFTREK, JOURNAVX and CASGEVY.
Our cost of sales as a percentage of our net product revenues decreased from 13.9% in 2024 to
13.8% in 2025 as a result of a lower overall royalty rate for our CF medicines, partially offset by
changes in our product mix, and investments in network expansion and manufacturing process
Our total research and development (“R&D”) and selling, general and administrative (“SG&A”)
expenses increased to $5.7 billion in 2025 as compared to $5.1 billion in 2024, primarily due to
increased investment to commercialize our new products and to advance our R&D pipeline.
In 2025, our acquired in-process research and development expenses (“AIPR&D”) of $133.0
million included various upfront and milestone payments related to our collaboration and in-
licensing arrangements. In 2024, AIPR&D included $4.4 billion resulting from our acquisition of
Alpine Immune Sciences, Inc. (“Alpine”), which was accounted for as an asset acquisition.
Our total cash, cash equivalents and marketable securities increased to $12.3 billion as of
December 31, 2025 as compared to $11.2 billion as of December 31, 2024 primarily due to cash
flows provided by our operating activities partially offset by repurchases of our common stock.
Note: Charts above may not add due to rounding.
We expect that the number of people with CF taking our medicines will continue to grow through new approvals and
reimbursement agreements, treatment of younger patients, increased survival and expansion into additional geographies.
• ALYFTREK is reimbursed for eligible people with CF in the U .S., England, Ireland, Germany, Denmark, Northern
Ireland, Norway, Wales, Italy, Australia, New Zealand and Luxembourg. We are working to secure access for
eligible patients in additional countries.
Sickle Cell Disease and Beta Thalassemia
• In 2025 , we recorded $115.8 million of CASGEVY product revenues. This reflects 64 patients receiving infusions
of CASGEVY in 2025, including 30 people infused in the fourth quarter. Globally, in 2025, 147 people with SCD or
TDT had their first cell collection for CASGEVY.
• As of the end of 2025, approximately 90 percent of people with SCD or TDT in the U.S. have reimbursed access to
CASGEVY, which is also reimbursed in the U.K., Italy, Austria, Denmark, Luxembourg, Saudi Arabia, the UAE,
Bahrain, and Kuwait. In January 2026, we secured reimbursed access to CASGEVY for eligible people with SCD in
Scotland, consistent with the reimbursement agreement reached in 2025 for people with TDT.
• We expect to begin global regulatory submissions for approvals for CASGEVY in children 5 to 11 years of age, in
the first half of 2026. The FDA awarded Vertex with a Commissioner’s National Priority Voucher for this pediatric
submission, indicating an accelerated timeline for review once the submission is complete.
• Since pharmacy availability in March 2025 through year-end 2025, more than 550,000 prescriptions for
JOURNAVX were written and filled across the hospital and retail settings in different acute pain conditions,
consistent with JOURNAVX’s broad label.
• We have secured access for JOURNAVX with all three national pharmacy benefit managers, and, a s of January
2026, over 200 million individuals across commercial and government payers have coverage, representing two-
thirds of U.S. covered lives . In addition, 21 states provide coverage via Medicaid.
• More than 100 of the targeted 150 healthcare systems and more than 950 individual hospitals of the 2,000 targeted
institutions have added JOURNAVX to formularies, protocols or order sets.
Select R&D Pipeline Programs
We continue to advance a diversified pipeline of potentially transformative medicines for serious diseases utilizing a
range of modalities. Recent and anticipated progress in activities supporting these efforts is included below:
• We completed the global trial evaluating ALYFTREK in children 2 to 5 years of age. Following positive results
from this clinical trial, w e expect to submit for approval with global regulators in this age group in the first half of
2026. We also initiated a pivotal trial of ALYFTREK in children 1 year to less than 2 years of age.
• Following positive results from the clinical trial evaluating TRIKAFTA in children 1 year to less than 2 years of age,
we expect to begin submissions for global regulatory approvals in this age group in the first half of 2026.
• We are developing povetacicept, a dual inhibitor of B cell activating factor (“BAFF”) and a proliferation-inducing
ligand (“APRIL”) cytokines, for multiple diseases. Povetacicept represents a potentially best -in-class approach to
control B cell activity in immunoglobulin A nephropathy (“IgAN”).
• We completed enrollment in the Phase 3 clinical trial evaluating povetacicept for IgAN and, in the fourth quarter of
2025, we initiated the rolling Biologics Licensing Application (“BLA”) filing for U.S. accelerated approval with
submission of the first module. We expect to release interim analysis data in the first half of 2026 and we expect to
complete the submission in the first half of 2026, if data from the interim analysis are supportive . We are using a
priority review voucher to expedite the review of the povetacicept BLA from ten months to six months.
APOL1-Mediated Kidney Disease
• Inaxaplin is our small molecule for the treatment of APOL1-mediated kidney disease (“AMKD”). We completed
enrollment in the interim analysis cohort of the global Phase 2/3 pivotal clinical trial evaluating inaxaplin in people
with primary AMKD (“AMPLITUDE”). We expect to conduct the pre-planned interim analysis once this cohort has
been treated for 48 weeks and we expect to share data from the interim analysis in l ate 2026 or early 2027. We
expect to complete full enrollment in AMPLITUDE in the second half of 2026.
Peripheral Neuropathic Pain
• We previously initiated the first Phase 3 clinical trial evaluating suzetrigine for the treatment of people with diabetic
peripheral neuropathy (“DPN”), a common form of peripheral neuropathic pain, and have initiated a second Phase 3
clinical trial evaluating suzetrigine in DPN in the fourth quarter of 2025. We expect to complete enrollment in both
Phase 3 clinical trials by the end of 2026.
• Zimislecel is an allogeneic, stem cell-derived, fully differentiated, insulin-producing islet cell replacement therapy,
using standard immunosuppression to protect the implanted cells. We have completed enrollment in the Phase 1/2/3
clinical trial of zimislecel in people with type 1 diabetes (“T1D”). We have temporarily postponed completion of
dosing in this clinical trial, pending an internal manufacturing analysis.
Primary Membranous Nephropathy
• Povetacicept represents a potentially best -in-class approach to control B cell activity in primary membranous
nephropathy (“pMN”), another B cell-mediated disease. We are enrolling and dosing patients in the adaptive Phase
2/3 pivotal clinical trial of povetacicept for the treatment of people with pMN. We expect to complete the Phase 2
portion of the clinical trial and to initiate the Phase 3 portion in mid-2026.
Recent investments in external innovation include:
• An exclusive global license agreement with WuXi Biologics to develop and commercialize a trispecific T cell
engager for B cell-mediated autoimmune diseases, which is currently in preclinical development.
In 2025 , our net product revenues were primarily from the sale of our medicines for the treatment of CF. Our CF strategy
involves continuing to develop and obtain approval and reimbursement for treatment regimens that will provide benefits to all
people with CF and increasing the number of people with CF eligible and able to receive our medicines. Outside of CF, we
continue to advance the commercialization of CASGEVY for the treatment of SCD and TDT, and JOURNAVX for the
treatment of acute pain. In addition, we are advancing our pipeline of product candidates for the treatment of serious diseases
outside of CF, SCD, TDT and acute pain.
Our strategy is to combine transformative advances in the understanding of causal human biology and the science of
therapeutics to discover and develop innovative medicines. This approach includes advancing multiple compounds or
therapies from each program, spanning multiple modalities, into early clinical trials to obtain patient data that can inform
selection of the most promising therapies for later-stage development, as well as to inform discovery and development
efforts. We aim to serially innovate in our disease areas of interest and follow our first-in-class therapies with potential best -
in-class candidates to provide durable clinical and commercial success .
In pursuit of new product candidates and therapies in specialty markets, we invest in research and development. We
believe that pursuing research in diverse areas allows us to balance the risks inherent in product development and may
provide product candidates that will form our pipeline in future years. To supplement our internal research programs, we
acquire technologies and programs and collaborate with biopharmaceutical and technology companies, leading academic
research institutions, government laboratories, foundations and other organizations, as needed, to advance research in our
areas of therapeutic interest and to access technologies needed to execute on our strategy.
Discovery and development of a new pharmaceutical or biological product is a difficult and lengthy process that requires
significant financial resources along with extensive technical and regulatory expertise. Across the industry, most potential
drug or biological products never progress into development, and most products that advance into development never receive
marketing approval. Our investments in product candidates are subject to considerable risks. We closely monitor our research
and development activities, and frequently evaluate our pipeline programs in light of new data and scientific, business and
commercial insights, with the objective of balancing risk and potential. This process can result in rapid changes in focus and
priorities as new information becomes available and as we gain additional understanding of our ongoing programs and
potential new programs, as well as those of our competitors. In addition, our product candidates must satisfy rigorous
standards of safety and efficacy before they can be approved for sale by regulatory authorities. Our analysis of data obtained
from nonclinical and clinical activities is subject to confirmation and interpretation by regulatory authorities, which could
delay , limit or prevent regulatory approval.
Our business also requires ensuring appropriate manufacturing and supply of our products. As we advance our product
candidates through clinical development toward commercialization and market and sell our approved products, we build and
maintain our supply chain and quality assurance resources. We rely on a global network of third parties, including some in
China, and our internal capabilities to manufacture and distribute our products for commercial sale and post-approval clinical
trials and to manufacture and distribute our product candidates for clinical trials. In addition to establishing supply chains for
each newly approved product, we adapt our supply chain for existing products to include additional formulations or to
increase scale of production for existing products as needed. The processes for biological and cell and genetic therapies can
be more complex than those required for small molecule drugs and require additional investments in different systems,
equipment, facilities and expertise. We are focused on ensuring the stability of the supply chains for our current products, as
well as for our pipeline programs.
Sales of our products depend, to a large degree, on the extent to which our products are reimbursed by third-party payors,
such as government health programs, commercial insurance and managed health care organizations. Reimbursement for our
products, including our potential pipeline therapies, cannot be assured and may take significant periods of time to obtain. We
dedicate substantial management and other resources to obtain and maintain appropriate levels of reimbursement for our
products from third-party payors, including governmental organizations in the U.S. and ex-U.S. markets. In the U.S., we
work with government and commercial payors to obtain and maintain appropriate levels of reimbursement for our medicines.
In ex-U.S. markets, we seek government reimbursement for our medicines on a country-by-country or region-by-region, as
required. This is necessary for each new medicine, as well as for label expansions for our current medicines. We expect to
continue to focus significant resources to expand and maintain reimbursement for our CF medicines, CASGEVY,
JOURNAVX, and, ultimately, our pipeline therapies, in U.S. and ex-U.S. markets.
As part of our business strategy, we seek to acquire technologies, products, product candidates and other businesses that
are aligned with our corporate and research and development strategies and complement and advance our ongoing research
and development efforts. We have acquired multiple biotechnology companies over the last several years and expect to
continue to identify and evaluate such opportunities . The accounting for these acquisitions can vary significantly based on
whether we conclude the transactions represent business combinations or asset acquisitions. In 2024, we acquired Alpine and
its lead molecule, povetacicept, for approximately $5.0 billion. Povetacicept has shown potential to treat multiple diseases or
conditions and become a pipeline-in-a-product. 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 the
fair value attributed to povetacicept was expensed as AIPR&D in 2024. In 2019 and 2022, we acquired Semma Therapeutics,
Inc. (“Semma”) and ViaCyte, Inc. (“ViaCyte”), respectively, pursuant to which we established and accelerated the
development of our T1D program. We accounted for each of these acquisitions as a business combination.
Please refer to our critical accounting policies, “ Acquisitions ,” for further information regarding the significant
judgments and estimates related to our acquisitions.
Collaboration and In-Licensing Arrangements
We enter into arrangements with third parties, including collaboration and licensing arrangements, for the development,
manufacture and commercialization of products, product candidates, and other technologies that have the potential to
complement our ongoing research and development efforts.
Over the last several years, we entered into collaboration agreements with a number of companies, including CRISPR
Therapeutics AG (“CRISPR”), Entrada Therapeutics, Inc. (“Entrada”), and Moderna, Inc.
Generally, when we in-license a technology or product candidate, we make upfront payments to the collaborator , assume
the costs of the program and/or agree to make contingent payments, which could consist of milestone, royalty and option
payments. Most of these collaboration payments are expensed as AIPR&D, including, a $75.0 million milestone paid to
Entrada in 2024, and, in 2023, total payments of $242.6 million to Entrada and total upfront and milestone payments of
$170.0 million to CRISPR related to T1D. These payments were expensed to AIPR&D because they were primarily
attributable to acquired in-process research and development for which there was no alternative future use. However,
depending on many factors, including the structure of the collaboration , the stage of development of the acquired technology,
the significance of the in-licensed product candidate to the collaborator ’s operations and the other activities in which our
collaborators are engaged, the accounting for these transactions can vary significantly. We expect to continue to identify and
evaluate collaboration and licensing opportunities that may be similar to or different from the collaborations and licenses that
we have engaged in previously.
Joint Development and Commercialization Agreement with CRISPR
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 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 FDA 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. We are recording intangible asset amortization
expense to “ Cost of sales ” related to this intangible asset. 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
Prior to receiving marketing approval from the FDA for CASGEVY in December 2023, we accounted for the CRISPR
JDCA as a cost-sharing arrangement, with costs incurred related to CASGEVY allocated 60% to us and 40% to CRISPR,
subject to certain adjustments. In 2023, we recognized net reimbursements from CRISPR as credits to “Research and
development expenses” and to “Selling, general and administrative expenses,” related to CRISPR’s share of the CRISPR
JDCA’s operating expenses.
Acquired In-Process Research and Development Expenses
In 2025 and 2024 , our AIPR&D included $133.0 million and $4.6 billion , respectively, related to upfront, contingent
milestone, or other payments pursuant to our business development transactions, including the asset acquisitions,
collaborations , and licenses of third-party technologies described above. Please refer to Note B, “Collaboration , License and
Other Arrangements,” for further information regarding our asset acquisitions, collaborations , and in-license agreements.
Out-licensing Arrangements
We also have out-licensed certain development programs to collaborators who are leading the development or
commercialization of these programs, either globally or within certain geographic regions.
I n 2025, we entered into agreements with Zai Lab Limited (“Zai”) and Ono Pharmaceuticals, Co Ltd (“Ono”)
respectively, for the development and commercialization of povetacicept in various Asian markets. Zai licensed povetacicept
for mainland China, Hong Kong SAR, Macau SAR, Taiwan region, and Singapore, while Ono licensed povetacicept for
Japan and South Korea. Zai and Ono will help advance povetacicept c linical trials, and will be responsible for obtaining
marketing authorizations and commercialization activities, if povetacicept becomes an approved product, in their licensed
territories. We are eligible to receive certain future milestone payments and tiered royalties on future net sales of povetacicept
(in millions, except percentages)
In 2025 , our net product revenues increased $950.5 million , or 9% , as compared to 2024 , primarily due to continued
strong demand for TRIKAFTA/KAFTRIO as well as contributions from our launches of ALYFTREK, JOURNAVX and
CASGEVY. In 2025 , “ Other product revenues ” included $115.8 million from CASGEVY and $59.6 million from
JOURNAVX. In 2024 , “ Other product revenues ” included CASGEVY product revenues of $10.0 million . Our remaining
“Other product revenues” are related to KALYDECO, ORKAMBI, and SYMDEKO/SYMKEVI, our other CF products.
In 2025 , other revenues were $30.7 million, which included $20.6 million and $10.0 million related to upfront payments
received from our agreements with Ono and Zai, respectively.
Revenues by Geographic Location
Our total revenues from the U.S. and from ex-U.S. markets were as follows:
(in millions, except percentages)
Our U.S. total revenues increased 13% in 2025 , as compared to 2024 , due to continued strong patient demand, new
patient initiations and higher realized net prices. Our ex-U.S. total revenues increased 3% in 2025 , as compared to 2024 ,
primarily due to solid CF performance across multiple geographies and increased CASGEVY product revenues, partially
offset by a decline in product revenues in Russia, where we are continuing to experience a violation of our intellectual
In 2026 , we expect our total revenues to increase due to continued growth of our CF product revenues, including from
ALYFTREK globally, and increased contributions from CASGEVY and JOURNAVX.
Operating Costs and Expenses
(in millions, except percentages)
Research and development expenses
Acquired in-process research and development
Selling, general and administrative expenses
Intangible asset impairment charge
Change in fair value of contingent consideration
Our cost of sales primarily consists of third-party royalties payable on net sales of our CF products as well as the cost of
producing inventories. Pursuant to our agreement (the “CFF Agreement”) with the Cystic Fibrosis Foundation (the “CFF”),
our tiered third-party royalties on sales of ALYFTREK, TRIKAFTA/KAFTRIO, SYMDEKO/SYMKEVI, KALYDECO, and
ORKAMBI, calculated as a percentage of net sales, range from the single digits to the sub-teens, with lower royalties on sales
of ALYFTREK and TRIKAFTA/KAFTRIO than for our other products. The royalty burden associated with TRIKAFTA/
KAFTRIO is 9.33% and 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
Our cost of sales as a percentage of our net product revenues was 13.8% and 13.9% in 2025 and 2024 , respectively,
primarily due to ALYFTREK sales in 2025, which has the royalty burden lower than TRIKAFTA/KAFTRIO, partially offset
by changes in product mix, and investments in network expansion and manufacturing process improvements .
In 2026 , we expect our cost of sales as a percentage of our net product revenues to increase due to a higher proportion of
products outside of CF, which currently have greater manufacturing costs relative to their net product revenue contributions,
and continued investments in efficient manufacturing and delivery processes .
Research and Development Expenses
(in millions, except percentages)
Total research and development expenses
Over the past three years, we have incurred approximately $10.7 billion in research and development expenses
associated with product discovery and development. Our research and development expenses include internal and external
costs incurred for research and development of our products and product candidates. We assign external costs of services
provided to us by clinical research organizations and other outsourced research by individual program. Our internal costs
include salary and benefits, stock-based compensation expense, laboratory supplies and other direct expenses and
infrastructure costs, the majority of which are not assigned to individual products or product candidates.
(in millions, except percentages)
Stock-based compensation expense
Outsourced services and other direct expenses
Our research expenses reflect investment in our pipeline and expansion of our cell and genetic therapy capabilities,
which has increased our outsourced services and other direct expenses and infrastructure costs in 2025 as compared to 2024 .
Salary and benefits in 2024 included $13.1 million associated with cash-settled unvested Alpine equity awards. Compared to
2024 , our total res earch expenses in 2025 increased $23.4 million , or 3% . We expect to continue to invest in our research
programs with a focus on creating transformative medicines for serious diseases.
(in millions, except percentages)
Stock-based compensation expense
Compensation expense for cash-settled
unvested Alpine equity awards
Outsourced services and other direct expenses
Total development expenses
As we have advanced our pipeline of transformative medicines, we have invested in internal headcount and infrastructure
to support multiple mid- and late -stage clinical development program s. These include our povetacicept programs acquired
from Alpine, pain and T1D programs, which together have increased our outsourced services and other direct expenses. In
conjunction with our acquisition of Alpine, we incurred $151.9 million associated with cash-settled unvested Alpine equity
awards within development expenses in 2024. Compared to 2024 , our total de velopment expenses in 2025 increased by
$255.8 million , or 9% . In 2026 , we expect our development expenses to continue to increase due to our advancing pipeline
programs, including our T1D pro grams.
Our stock-based compensation expenses, including those recorded as research and development expenses, have
historically fluctuated and are expected to continue to fluctuate from one period to another primarily due to changes in the
probability of achieving milestones associated with our performance-based awards.
Acquired In-P rocess Research and Development Expenses
(in millions, except percentages)
Acquired in-process research and development
In 2025, AIPR&D included various upfront and mileston e payment s related to our collaboration and in-licensing
arrangements. I n 2024, AIPR&D included $4.4 billion resulting from our acquisition of Alpine, which was accounted for as
an asset acquisition, and various other upfront and milestone payments. Our AIPR&D has historically fluctuated, and is
expected to continue to fluctuate, from one period to another due to upfront, contingent milestone, and other payments
pursuant to our existing and future business development transactions, including collaborations , licenses of third-party
technologies, and asset acquisitions.
Selling, General and Administrative Expenses
(in millions, except percentages)
Selling, general and administrative expenses
Selling, general and administrative expenses increased by 20% in 2025 as compared to 2024 , primarily due to increased
commercial investment to support the launch of JOURNAVX. We expect our selling, general and administrative expenses to
continue to increase in 2026 to as we expand the commercialization of JOURNAVX, prepare for our anticipated launch of
povetacicept for the treatment of IgAN, and further investments in infrastructure to scale our organization.
Intangible Asset Impairment Charge
In the first quarter of 2025, based on results from a Phase 1/2 clinical trial evaluating our VX-264 clinical program in
patients with 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. As a result, we recorded a full intangible asset impairment charge of
$379.0 million associated with VX-264 in the first quarter of 2025.
Non-Operating Income (Expense), Net
Interest income decreased from $598.1 million in 2024 to $490.9 million in 2025 , primarily due to decreased market
interest rat es. Our future interest income is dependent on the amount of, and prevailing market interest rates on, our
outstanding cash, cash e quivalents and available-for-sale debt securities.
Other Income (Expense), Net
Other income (expense), net were expenses of $7.7 million and $86.1 million in 2025 and 2024 , respectively. These
amounts primarily related to net unrealized and realized losses resulting from changes in the fair value of certain of our
strategic equity investments a nd net foreign currency exchange losses .
Our effective tax rate fluctuates from year to year due to the global nature of our operations. The factors that most
significantly impact our effective tax rate include changes in tax laws, variability in the amount and allocation of our taxable
earnings among multiple jurisdictions, the amount and characterization of our research and development expenses, the levels
of certain deductions and credits, adjustments to the value of our uncertain tax positions, acquisitions and third-party
collaboration and licensing transactions.
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. H.R.1 does not have a material impact on our 2025 U.S. taxes, but we expect
further guidance to be issued. We will review guidance when issued for impacts on future years and disclose any impacts if
needed at that time. These legislative changes could have an impact on our future effective tax rates, tax liabilities, and cash
Our provision for income taxes was $690.0 million in 2025 and $784.1 million in 2024 . In 2025, our 14.9% effective tax
rate was lower than the U.S. statutory rate primarily due to research and development tax credits, increased utilization of
foreign tax credits, and excess tax benefits related to stock-based compensation .
In 2024, our 315.5% effective tax rate 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 significantly lowered our pre-tax
income. The non-deductible AIPR&D was partially offset by a benefit from a research and development tax credit study that
was completed in 2024 and excess tax benefits related to stock-based compensation .
LIQUIDITY AND CAPITAL RESOURCES
The following table summarizes the components of our financial condition as of December 31, 2025 and 2024 :
(in millions, except percentages)
Cash, cash equivalents and marketable securities:
Cash and cash equivalents
Long-term marketable securities
Total cash, cash equivalents and marketable securities
Total current liabilities
As of December 31, 2025 , total working capital was $7.3 billion , which represented an increase of $1.3 billion , or 22% ,
from $6.0 billion as of December 31, 2024 , primarily due to increased cash and marketable securities due to product revenue
growth, as well as increased inventories to support our recent commercial launches.
Net cash provided by (used in):
Cash provided by operating activities was $3.6 billion in 2025 , primarily due to income from operations of $4.2 billion
driven by our net product revenues partially offset by purchases of inventory and other changes in operating assets and
liabilities. Cash used in operating activities was $492.6 million in 2024 , primarily due to our acquisition of Alpine partially
offset by cash flows provided by other operating activities.
Cash used in investing activities was $945.4 million in 2025 , primarily related to net purchases of available-for-sale debt
securities and purchases of property and equipment. Cash used in investing activities was $3.8 billion in 2024 , which
included net purchases of available-for-sale debt securities of $3.0 billion .
Cash used in financing activities were $2.3 billion and $1.5 billion in 2025 and 2024 , respectively. Our financing
activities in each year were primarily related to repurchases of our common stock pursuant to our share repurchase programs
and payments in connection with common stock withheld for employee tax obligations.
Sources and Uses of Liquidity
We intend to rely on our existing cash, cash equivalents and current marketable securities together with our operating
profitability as our primary source of liquidity. We expect that cash flows from our product sales together with our cash, cash
equivalents and current marketable securities will be sufficient to fund our operations for at least the next twelve months. The
adequacy of our available funds to meet our future operating and capital requirements will depend on many factors, including
our future sales of currently marketed products, and the potential introduction of one or more new product candidates to the
market, our business development activities, and the number, breadth and cost of our research and development programs.
Credit Facilities & Financing Strategy
We may borrow up to a total of $500.0 million pursuant to a revolving credit facility that we entered into in July 2022
and could repay and reborrow amounts under this revolving credit agreement without penalty . Subject to certain conditions,
we could request that the borrowing capacity be increased by an additional $500.0 million, for a total of $1.0 billion.
Negative covenants in our credit agreement could prohibit or limit our ability to access this source of liquidity. As of
December 31, 2025 , the facility was undrawn, and we were in compliance with these covenants.
We may also raise additional capital by borrowing under credit agreements, through public offerings or private
placements of our securities, or securing new collaborative agreements or other methods of financing. We will continue to
manage our capital structure and will consider all financing opportunities , whenever they may occur, that could strengthen
our long-term liquidity profile. There can be no assurance that any such financing opportunities will be available on
acceptable terms, if at all.
Future Capital Requirements
We have significant future capital requirements, including:
• Expected operating expenses to conduct research and development activities, manufacture and commercialize our
existing and future products, and to operate our organization.
• Cash that we pay for income taxes.
• Royalties we pay related to sales of our CF products.
• Facility, operating and finance lease obligations as described below.
• Firm purchase obligations related to our supply and manufacturing processes.
In addition, other potential significant future capital requirements may include:
• We have entered into certain agreements with third parties that include the funding of certain research, development,
manufacturing and commercialization efforts. Certain of our transactions, including collaborations , licensing
arrangements, and asset acquisitions, include the potential for future milestone and royalty payments by us upon the
achievement of pre-established developmental and regulatory targets and/or commercial targets. Other transactions
include the potential for future lease-related expenses and other costs. Our obligation to fund these research and
development and commercialization efforts and to pay these potential milestones, expenses and royalties is
contingent upon continued involvement in the programs and/or the lack of any adverse events that could cause their
discontinuance . We may enter into additional agreements, including acquisitions, collaborations , licensing
arrangements and equity investments, which require additional capital.
• To the extent we borrow amounts under our existing credit agreement, we would be required to repay any
outstanding principal amounts in 2027.
• As of December 31, 2025 , we had $3.4 billion remaining authorization available under the share repurchase program
that our Board of Directors approved in May 2025. The program does not have an expiration date and can be
discontinued at any time. We expect to fund the program through a combination of cash on hand and cash generated
Additional information on several of our future capital requirements is provided below.
Research and Development Costs
We have ongoing clinical trials of product candidates at various stages of clinical development. Our clinical trial costs
are dependent on, among other things, the size, number, and length of our clinical trials. These costs can increase as product
candidates move from earlier-stage clinical trials into later-stage clinical development.
We account for the majority of our real estate leases and each of our embedded leases with contract manufacturing
organizations as operating leases. These include leases for our corporate headquarters at Fan Pier in Boston, Massachusetts,
which continues through June 2044, and office and laboratory space at the Jeffrey Leiden Center for Biologics, Cell and
Genetic Therapies Campus (the “Leiden Campus”) near our corporate headquarters. As of December 31, 2025 , the longest
lease at the Leiden Campus continues through the first quarter of 2042. W e also have several embedded leases with contract
manufacturing organizations related to the manufacturing and commercialization of our products with remaining lease terms
up to 7 years as of December 31, 2025 .
Our total future minimum lease payments for our leases for each of the next five years and in total are included in Note
L, “Leases.” The total future undiscounted minimum lease payments were $3.2 billion and $178.1 million related to our
operating and finance leases, respectively, as of December 31, 2025 .
In addition to the items described above, w e have a strategic agreement with Lonza to support the manufacture of T1D
cell therapy product candidates, pursuant to which we have partnered with Lonza to build a 130,000 square foot dedicated
new facility operated by Lonza in New Hampshire. Lease payments will begin in the first quarter of 2026 and continue
through the tenth anniversary of the facility’s regulatory approval for commercial production . We may enter into additional
lease agreements to support future product development and commercialization efforts, which would require additional
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial
statements prepared in accordance with generally accepted accounting principles in the U.S. The preparation of these
financial statements requires us to make certain estimates and assumptions that affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the
reported amounts of revenues and expenses during the reported periods. These items are monitored and analyzed by
management for changes in facts and circumstances, and material changes in these estimates could occur in the future.
Changes in estimates are reflected in reported results for the period in which the change occurs. We base our estimates on
historical experience and various other assumptions that we believe to be reasonable under the circumstances. Actual results
may differ from our estimates if past experience or other assumptions do not turn out to be substantially accurate.
We believe that our application of the following accounting policies, each of which requires significant judgments and
estimates on the part of management, are the most critical to aid in fully understanding and evaluating our reported financial
• acquisitions, including intangible assets;
• pre-launch inventories; and
Our accounting policies, including the ones discussed below, are more fully described in Note A, “Nature of Business
and Accounting Policies.”
We generate product revenues from sales in the U.S. and in international markets. We sell our products principally to a
limited number of specialty pharmacy and specialty distributors as well as certain major wholesalers in the U.S., which
account for the largest portion of our total revenues. Our customers in the U.S. subsequently resell our products to patients,
health care providers, retail pharmacies, hospitals, or authorized treatment centers (“ATCs”) for CASGEVY. We contract
with government agencies so that our products will be eligible for purchase by, or partial or full reimbursement from, such
third-party payors. We make international sales primarily through distributor arrangements and to retail pharmacies, as well
as to hospitals and clinics, many of which are government-owned or supported customers. In certain markets, we may not
utilize a specialty distributor or specialty pharmacy to distribute CASGEVY. In these markets, we sell CASGEVY directly to
ATCs. We recognize net product revenues from sales of our products when our customers obtain control of our products,
which typically occurs upon delivery to customers for our small molecule products, including our CF products and
JOURNAVX, and upon infusion of our gene-therapy products, including CASGEVY. Revenues from our product sales are
recorded at the net sales price, or transaction price, which requires us to make several significant estimates regarding the net
We are required to make estimates for o ur product reve nues related to government, commercial, and private payor
rebates, chargebacks, discounts and fees, collectively rebates. The values of the rebates provided to third-party payors per
course of treatment vary significantly and are based on government-mandated discounts and our arrangements with other
third-party payors. Our most significant estimate relates to determining amounts due pursuant to the Medicaid Drug Rebate
Program, including estimating the level of expected utilization of the rebates based on the amount of product sold to eligible
patients. We track available information regarding changes, if any, to the payor mix for our products, to our contractual terms
with third-party payors and to applicable governmental programs and regulations and levels of our products in the
distribution channel. We adjust our estimated rebates based upon new information as it becomes available, including
information regarding actual rebates for our products. Claims by third-party payors for rebates are submitted to us
significantly after the related sales, potentially resulting in adjustments in the period in which the new information becomes
The following table summarizes activity related to our product revenue accr uals for rebates for 2025 , 2024 and 2023 :
Balance at December 31, 2022
Provision related to 2023 sales
Adjustments related to prior year(s) sales
Balance at December 31, 2023
Provision related to 2024 sales
Adjustments related to prior year(s) sales
Balance at December 31, 2024
Provision related to 2025 sales
Adjustments related to prior year(s) sales
Balance at December 31, 2025
We have also entered into annual contracts with government-owned and supported customers in international markets
that limit the amount of annual reimbursement we can receive for our products. Upon exceeding the annual reimbursement
amount provided by the customer’s contract with us, products are provided free of charge, which is a material right. If we
estimate that the annual reimbursement amount under a contract will be exceeded for an annual period, we defer a portion of
the consideration received, which includes upfront payments and fees, for shipments made up to the annual reimbursement
limit as “ Other current liabilities .” Once the annual reimbursement limit has been reached, we recognize the deferred amount
as revenue when we deliver the free products. To estimate the portion of the consideration received to be recognized as
revenue and the portion of the amount to be deferred, we rely on our forecast of the number of units we will distribute during
the applicable annual period in each international market in which our contracts with government-owned and supported
customers limit the amount of annual reimbursement we can receive. Our forecasts are based on, among other things, our
The preceding estimates and judgments materially affect our recognition of net product revenues. Changes in our
estimates of net product revenues could have a material effect on net product revenues recorded in the period in which we
determine that change occurs.
As part of our business strategy, we seek to acquire products, product candidates and other technologies and businesses
that are aligned with our corporate and research and development strategies and complement and advance our ongoing
research and development efforts.
We are required to make several significant judgments and estimates to determine the accounting treatment for each
acquisition transaction. If we determine that substantially all the fair value associated with an acquisition is concentrated in a
single asset, or the acquisition does not constitute a business, we account for it as an asset acquisition. For example, we
accounted for our $5.0 billion acquisition of Alpine in 2024 as an asset acquisition because povetacicept, Alpine’s lead
molecule, represented substantially all of the fair value of the gross assets that we acquired. As a result, $4.4 billion of the fair
value attributed to povetacicept was expensed to AIPR&D in 2024. If the fair value that we acquired in an acquisition is
distributed among more than one asset, and the acquisition constitutes a business, we account for it as a business
For an asset acquisition involving rights to intellectual property related to in-process research and development that is not
yet associated with a product that has achieved regulatory approval, we generally expense our upfront payment to AIPR&D,
because there is no alternative future use for the asset that was acquired.
For business combinations, we are required to make several significant judgments and estimates to calculate and allocate
the purchase price, including the fair value of contingent consideration liabilities, to the assets that we have acquired and the
liabilities that we have assumed on our consolidated balance sheet. The most significant judgment and estimate we have
made for our business combinations relates to the fair value of the in-process research and development assets.
In-process Research and Development Intangible Assets
As of December 31, 2025 and 2024 , we had $224.6 million and $603.6 million , respectively, of in-process research and
development assets on our consolidated balance sheet within “ Other intangible assets, net .” During 2025, we recorded a
$379.0 million impairment of one of these assets, which was classified as an “ Intangible asset impairment charge .” As of
December 31, 2025 , our remaining indefinite-lived in-process research and development assets were associated with our T1D
We characterize in-process research and development assets on our consolidated balance sheets as indefinite-lived
intangible assets until the completion or abandonment of the associated research and development efforts. We test our in-
process research and development intangible assets for impairment on an annual basis, and more frequently if indicators are
present or changes in circumstances suggest that impairment may exist. When we determine that an indefinite-lived
intangible asset has become impaired or we abandon the associated research and development project, we write down the
carrying value to its fair value and record an impairment charge in the period in which the impairment occurs.
For example, i n 2025 , based on results from a Phase 1/2 clinical trial evaluating our VX-264 clinical program in patients
with 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. We recorded the $379.0 million impairment charge based on
the results of this impairment test.
We use significant judgment to determine the fair value of our in-process research and development assets and have
utilized either the multi-period excess earnings or the relief from royalty methods of the income approach. Each method
requires us to estimate the probability of technical and regulatory success , revenue projections and growth rates, and
appropriate discount and tax rates. The multi-period excess earnings method also requires us to estimate development and
commercial costs. The relief from royalty method also requires us to estimate the after-tax royalty savings expected from
ownership of the asset that we acquired. In 2025, we used the multi-period earnings method to record the impairment
If one of our product candidates achieves regulatory approval, the in-process research and development intangible assets
associated with the product candidate become finite-lived intangible assets as described below.
Finite-lived Intangible Assets
As of December 31, 2025 and 2024 , we had $199.6 million and $222.3 million , respectively, of finite-lived intangible
assets on our consolidated balance sheet within “ Other intangible assets, net .” These finite-lived intangible assets primarily
relate to $208.0 million of CASGEVY regulatory approval milestones recorded in 2023.
We amortize our finite-lived intangible assets related to our marketed products, which represent the majority of our
finite-lived intangible assets, using the straight-line method within “ Cost of sales ” over the remaining estimated life of the
assets beginning in the period in which regulatory approval is achieved or the assets are acquired and continuing through the
period that we no longer have either exclusive rights to market the products associated with the assets or in-license rights to
the intellectual property underlying the assets. We test finite-lived intangible assets for impairment if indicators are present or
changes in circumstances suggest that the carrying value of an asset may not be recoverable. If we determine that the carrying
value of a finite-lived intangible asset may not be recoverable, we compare the carrying value of the asset to the undiscounted
cash flows that we expect the asset to generate. When we determine that a finite-lived intangible asset has become impaired ,
we write down the carrying value of the asset to its fair value and record an impairment charge in the period in which the
We capitalize inventories prior to regulatory approval when we consider the related product candidate to have a high
likelihood of regulatory approval and expect to recover the related costs. In making this determination, we evaluate, among
other factors, the status of regulatory submissions and communications with regulatory authorities, information regarding the
product candidate’s safety and efficacy, and the outlook for commercial sales, including the existence of any competition. As
an example, during the first quarter of 2024, following positive results related to our Phase 3 trials for JOURNAVX, we
began capitalizing inventories produced in preparation for our planned product launch. In January 2025, we received approval
from the FDA to market JOURNAVX in the U.S. Prior to making this determination, we expensed inventoriable and related
costs associated with JOURNAVX as “ Research and development expenses .”
We utilize the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and
liabilities are determined based on the difference between the financial statement carrying amounts and tax basis of assets and
liabilities using enacted tax rates in effect for years in which the temporary differences are expected to reverse. If our estimate
of the tax effect of reversing temporary differences is (i) not reflective of actual outcomes, (ii) modified to reflect new
developments or interpretations of the tax law, or (iii) revised to incorporate new accounting principles, or changes in the
expected timing or manner of the reversal, our results of operations could be materially impacted.
We provide a valuation allowance when it is more likely than not that deferred tax assets will not be realized. On a
periodic basis, we reassess our valuation allowances on our deferred tax assets, weighing positive and negative evidence to
assess the recoverability of the deferred tax assets. Judgment is required in making these assessments to maintain or adjust
our valuation allowances and, to the extent our future expectations change we would have to assess the recoverability of these
deferred tax assets at that time. As of December 31, 2025 , we maintained a valuation allowance of $326.2 million related
primarily to U.S. state tax attributes.
We record liabilities related to uncertain tax positions by prescribing a minimum recognition threshold and measurement
attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax
return. We adjust our liability to reflect any subsequent changes in the relevant facts and circumstances surrounding the
uncertain positions. We are subject to tax laws and audits in multiple jurisdictions and judgment is required in making this
assessment. Consequently, we regularly re-evaluate uncertain tax positions and consider various factors, including changes in
tax law, the measurement of tax positions taken or expected to be taken in tax returns, and changes in facts or circumstances
related to a tax position. As of December 31, 2025 , our liability for uncertain tax positions was $852.1 million .
RECENT ACCOUNTING PRONOUNCEMENTS
Refer to Note A, “Nature of Business and Accounting Policies,” in the accompanying notes to the consolidated financial
statements for a discussion of recent accounting pronouncements and new accounting pronouncements adopted during 2025 .
