Good evening. This is Michael Partridge. Welcome to the Vertex Fourth Quarter and Full Year 2021 Financial Results Conference Call. On tonight's call, making prepared remarks, we have Dr. Reshma Kewalramani, Vertex's CEO and President; Stuart Arbuckle, Chief Operating Officer; and Charlie Wagner, Chief Financial Officer.

We recommend that you access the webcast slides as you listen to this call. This call is being recorded, and a replay will be available on our website.

We will make forward-looking statements on this call that are subject to the risks and uncertainties discussed in detail in today's press release and in our filings with the Securities and Exchange Commission.

These statements, including, without limitation, those regarding Vertex's marketed CF medicines, our pipeline and Vertex's future financial performance are based on management's current assumptions. Actual outcomes and events could differ materially.

I would also note that select financial results and guidance we will review on the call this evening are non-GAAP. I will now turn the call over to Dr. Reshma Kewalramani..

high-quality insulin-producing islet cells, we have that; and a method to protect these cells from the immune system. We can address the immune response in several different ways. Today, with VX-880, we're combining the stem cell islets with standard immunosuppression in the Phase I/II study.

We can shield the same stem cell islets with an immunoprotective device. In this approach, immunosuppressives would not be needed. This approach is in IND-enabling studies, and we expect to file the IND later this year with clinical trials beginning thereafter.

And in earlier stages, we're using gene editing technology to make so-called hypoimmune pancreatic islets, yet another approach that eliminates the need for immunosuppressive. The VX-880 Phase I/II clinical trial is up and running at multiple sites. The trial continues to enroll in dose patients.

We anticipate sharing data from more patients and longer duration of follow-up this year. I'll conclude the pipeline overview with VX-548, a novel selective inhibitor of NaV1.8, which is in clinical proof-of-concept studies for acute pain.

Two proof-of-concept studies in acute pain were initiated in the second half of 2021, one in patients following abdominoplasty surgery, and one in patients following bunionectomy. These studies are dose-ranging, placebo-controlled studies and both include an opioid reference arm.

The abdominoplasty study has now completed enrollment and dosing, and the bunionectomy study will complete in the coming weeks. We anticipate having results from both studies this quarter and announcing both results together. With that, I'll turn it over to Stuart..

Thanks, Reshma. I'm pleased to review tonight our continued strong commercial performance. Our CF business performed exceptionally well in the fourth quarter and for the full year in 2021. Our Q4 global revenues were $2.07 billion. Full year revenues were $7.6 billion, an increase of 22% over 2020. U.S.

CF product revenues grew 10% to $5.3 billion in 2021, driven mainly by the launch of TRIKAFTA in the 6- to 11-year-old patient population following its approval last June. Our product revenues outside the U.S. increased 66% over 2020 to $2.3 billion. We signed more than 15 new reimbursement agreements in 2021.

And following these agreements, we have seen strong uptake of KAFTRIO and TRIKAFTA matching the launch dynamics in the U.S.

Looking to the future in 2022 and for the next several years, we expect significant continued revenue growth as there are more than 25,000 patients remaining who are addressable with our CFTR modulators, but who are not yet treated. These patients fall into 3 categories.

Patients who have not yet initiated treatment, largely in countries where we are recently reimbursed and therefore, are early in the launch curve. This includes countries such as Canada, Spain and the Netherlands. Patients in geographies where we are not yet reimbursed such as Australia.

And finally, younger patients who will be addressed through ongoing label expansions. We continue to make progress in addressing younger and younger patients. As examples, we secured approval for KAFTRIO in 6- to 11-year-old patients in Europe and the U.K. just a few weeks ago.

And our submission for approval of TRIKAFTA in these younger patients is also currently under review in Canada. And in 2022, we plan to file for approval for ORKAMBI in patients 12 to 24 months of age in the U.S. and Europe based on the recently completed Phase III study.

In addition, with our mRNA program in IND-enabling studies, we are making real progress in developing a medicine for the additional 5,000-plus patients that we cannot address with our current CFTR medicines, but who are potentially addressable with the successful development of an mRNA therapy.

The recent long-term and real-world data, as discussed by Reshma in her prepared remarks, have significantly strengthened our competitive position and highlight the benefits of our medicines for CF patients.

For a genetic disease like CF, where patients start medicines at an early age and take them chronically over their lifetime, long term and real-world data like these are incredibly important to patients and physicians. They take many years and thousands of patients to generate and set a very high bar for any future therapy to meet.

I would now like to provide a commercial perspective on 2 programs that are in or entering pivotal development that highlight our future diversification beyond cystic fibrosis. I'll start with CTX001, our CRISPR-Cas9-based gene editing therapy for hemoglobinopathies, which we plan to file for regulatory approval before the end of this year.

In terms of market opportunity, we see tremendous potential for CTX001. We estimate that there are more than 150,000 patients in the U.S. and Europe who have beta thalassemia or sickle cell disease, approximately 32,000 of whom have severe disease.

25,000 of these are patients with severe sickle cell disease, and the vast majority of these are in the U.S. Published physician surveys in the U.S.

consistently indicate that they expect 1/4 to 1/3 of their sickle cell disease patients would be good candidates for a onetime, curative approach using the current busulfan-based conditioning regimen, which is in line with our own estimates of the numbers of severe patients.

With global regulatory submissions planned for CTX001 toward the end of this year, our launch preparation activities are well underway, including building our market access, patient support and health care professional-facing teams as well as finalizing our manufacturing and supply chain network.

Finally, as Reshma noted, we plan to advance VX-147 to pivotal development this quarter. So I would like to comment on the opportunity we see in APOL1-mediated kidney disease or AMKD. In the Phase II study, we enrolled patients with 2 APOL1 mutations who had focal segmental glomerulosclerosis, FSGS, as demonstrated by biopsy.

This was an ideal population to test the clinical hypothesis of APOL1 inhibition. There are approximately 10,000 patients with APOL1-mediated FSGS. However, we estimate that the population of people with 2 APOL1 mutations and kidney disease primarily driven by APOL1 is much larger, approximately 100,000 patients.

This is the initial target population that we will seek to address with VX-147, and so this represents a multibillion-dollar opportunity. Awareness of diagnosis and genotyping of patients with AMKD are all low.

So in parallel with the planned progression of VX-147 to pivotal development in 2022, we expect to begin increasing awareness of APOL1-mediated kidney disease with treating physicians with a focus on the importance of genotyping.

I'll close by noting that we are about to celebrate the tenth anniversary of the approval of our first CF medicine, KALYDECO. It has been an extraordinary 10 years as we have developed and launched not only KALYDECO, but 3 additional transformative medicines to address the underlying cause of disease for CF patients.

I'm excited for the opportunity in 2022 to bring TRIKAFTA, KAFTRIO to even more patients around the globe and the potential to commercialize multiple potentially transformative therapies outside of CF in the near future, starting with sickle cell disease and beta thalassemia. I will now turn it over to Charlie..

Thanks, Stuart. In the fourth quarter of 2021, Vertex continued to demonstrate very strong financial performance. Fourth quarter total product revenues were $2.07 billion, a 27% increase compared to Q4 of 2020. I would note that it is typical for channel inventory to fluctuate from quarter-to-quarter.

And in Q4 2021, revenues benefited from moderately higher channel inventory. We expect these inventory levels to normalize in Q1 of 2022. Our full year revenues of $7.6 billion, represents an increase of 22% compared to 2020 revenues of $6.2 billion.

2021 revenue growth was driven by strong international uptake of KAFTRIO and 6 to 11 uptake of TRIKAFTA in the U.S. And with full year sales of $5.7 billion, TRIKAFTA, KAFTRIO now represents 75% of total company revenues. Other notable milestones are that the U.S. CF product sales exceeded $5 billion for the first time and ex-U.S.

CF product sales exceeded $2 billion for the first time. Our fourth quarter 2021 combined R&D and SG&A expenses were $703 million compared to $539 million for 2020, and our full year expenses were $2.33 billion compared to $1.98 billion in 2020.

Increased expenses were driven by investment in our research pipeline, advancement of multiple mid- and late-stage clinical programs, incremental costs for our growing CF business and investments in precommercial activities for CTX001.

Our continued revenue growth, combined with disciplined spending, resulted in a 2021 operating margin of 57% and non-GAAP operating income of $4.34 billion, an increase of 24% compared to 2020. Our non-GAAP tax rate for 2021 came in at 21%. With continued revenue growth and profitability, we finished 2021 with $7.5 billion in cash.

And consistent with our corporate strategy, our top priority for capital deployment is reinvestment in innovation both internally in our R&D programs and externally with business development aligned to our R&D strategy. We have invested approximately $3 billion in collaborations and acquisitions since 2019.

Additionally, we have made more than $2 billion in share repurchases to offset dilution over that same time frame. Now to guidance. Our 2021 performance reflected strong uptake for TRIKAFTA in the U.S. and for KAFTRIO in multiple countries around the world. For 2022, we project that we will achieve total product revenues of $8.4 million to $8.6 billion.

At the midpoint, that's an increase of nearly $1 billion or 12% growth over 2021. I'd like to remind you, as is our practice, this guidance reflects our expectations for approved products in countries where we have already secured reimbursement. For non-GAAP OpEx, we are guiding to a range of $2.7 billion to $2.75 billion.

Consistent with our innovation strategy, we expect to continue to allocate greater than 70% of our OpEx to R&D with year-over-year growth largely driven by investment in our pipeline in order to advance key programs through mid- and late-stage development. Finally, we expect our non-GAAP tax rate for 2022 to be in the range of 21% to 22%.

In closing, 2021 was a very important and successful year for the company. We significantly expanded our leadership position in CF by treating more patients, generating key long-term and real-world data, advancing the next-in-class CFTR modulator program into Phase III and continuing to innovate for all CF patients.

We also accelerated our R&D pipeline in 2021 and obtained key data readouts across multiple programs and multiple modalities. We further strengthened our financial position, enabling continued investment in internal and external innovation while delivering industry-leading operating margins.

Most importantly, these advances set the foundation which positions us for multiple milestones and significant value creation in 2022 and beyond. We look forward to updating you as we progress through the year. Let's now open the call to questions..

. Certainly. And first, I'd like to hand the program over to Michael Partridge, Senior Vice President of Investor Relations..

Thanks, operator. I would just want to note to everybody before we start the Q&A that our conference from audio has cut out. We're all on our cell phones and we'd like to proceed with Q&A, so please bear with us. Thank you..

. Our first question comes from the line of Michael Yee from Jefferies..

Congrats on a great year-end. We had a question on APOL1. I know that you are certainly meeting with FDA soon and trying to start a pivotal study. So you must have some thoughts around both the design, the endpoints and what you expect out of the FDA and what you plan to do.

Maybe you could give some color on that, both on primary and key secondary endpoints you'd expect to be an agreement with FDA..

proteinuria, which is what we measured in Phase II, that is a measure of kidney damage. It's an important endpoint in and of itself. The community and the agency have had discussions over the last many years about that endpoint being a potential regulatory enabling endpoint for accelerated approval in homogenous proteinuric kidney diseases.

So that's just one point to mention. The second point is what would the endpoints be? We're talking about proteinuria. And certainly, the hard endpoint would be time to ESRD, a decrease in the GFR slope and death. It's usually a composite endpoint for the hard endpoint. So that's really what we're looking at. We are very excited about the program.

We are looking to have our end of Phase II meeting with the FDA in the near term, and we're looking to start our pivotal development towards the end of this quarter. I hope that's helpful..

Our next question comes from the line of Phil Nadeau from Cowen and Company..

Maybe just a follow-up to Michael's. In terms of the specific endpoint, you just mentioned proteinuria and then the composite endpoint of more clinical results. In the recent past, it seems like the renal division of the FDA has been shying away from surrogate markers and focusing companies on the more clinical endpoints.

So can you talk a bit more about your optimism for -- maybe in proteinuria as a primary endpoint? Would you actually seek an SPA if you get an agreement on that endpoint to try to lock the FDA in? And maybe how likely is it that you actually have to do a clinical endpoint-based trial? If so, how long of a study would that end up being?.

Yes. Phil, thanks for the follow-up question there. Okay. So with regard to what is the likelihood of proteinuria being the endpoint and such, we have to simply have our end of Phase II meeting, and we're going to know that soon enough. So no need to speculate. The end of Phase II meeting is going to happen in the near term, and we will know.

What I can tell you is that the agency has been open for many years now for proteinuria to be an acceptable surrogate for accelerated approval in homogeneous kidney diseases. And when I say that, inherent in that statement is -- and then, of course, you'd have to do the continuation of the trial to get to the hard outcome.

So those are the conversations we're going to enter into. Obviously, and I think you know this, but I'll mention it just in case. The degree of proteinuria is really important because, one, not only could proteinuria be a potential accelerated endpoint, but two, the degree of proteinuria is directly related to the hard outcome.

So when you see an improvement in proteinuria of almost 50%, it bodes well for many reasons..

Our next question comes from the line of Alethia Young from Cantor..

Just wanted to shift a little bit to sickle cell. And I know, obviously, you guys are heading towards kind of a submission hopefully.

But can you talk a little bit about where you stand on conditioning regimens and some of the work that you may be doing going forward to kind of maybe make them kind of less onerous for patients with sickle cell?.

Yes, yes, great question. Alethia, let me just step one step back and make sure everyone is tracking with you on where we are with the CTX001 program today and then where we're going with conditioning regimens that we're looking to improve. Okay. So where are we today? Across the sickle cell and beta thalassemia programs, we have completed enrollment.

The initial target was 45 patients in each program. Each of the studies was oversubscribed, and we have more patients than that and we have completed enrollment. We have dosed more than 70 patients. And we are looking, as I said in my prepared remarks, towards a filing towards the end of this year.

This program is with busulfan-based, single-agent myeloablative therapy. And we think that, that regimen with the benefit risk that it provides would be applicable to about 32,000 people in the U.S. and Europe with sickle cell and beta thal. 25,000 of those would be sickle cell patients and the majority of those in the U.S.

But to unlock the full potential, which is, I would say, about 150,000 patients in the U.S. and Europe, we do see gentler conditioning regimens being key to that. We have programs internally at Vertex. We have recruited a world-renowned team in our, what we call, VCGT, Vertex Cell and Genetic Therapies division.

We -- our partners at CRISPR also have programs in improved conditioning as do a number of other academic and biotechnology -- other biotech companies. I will say, Alethia, that I think that this is a problem that will be solved. And I say that for 2 reasons. One, we have line of sight on to the biology.

We understand the cell surface markers and the ligands that we could use to pursue the cell types that we are trying to deplete selectively. And two, because this kind of approach, this gentler conditioning regimen would have applicability beyond sickle cell and beta thal in oncology.

And so I do think that this is a problem that is going to be solved..

Our next question comes from the line of Geoff Meacham from Bank of America..

I have a couple also on CTX001.

The first one is from a regulatory perspective, what would you highlight, Reshma, that regulators may need to see? Is it stuff like number of patients, median follow-up? Or is it better clarity on things like manufacturing scale up? And then on the commercial front, I'm just trying to think of the arguments you can make with the curative approach and the cost savings you can make.

So is there an evaluation ongoing on treatment costs that you're doing maybe in parallel to support reimbursement? Things along those lines..

Yes, sure thing, Geoff. Geoff, I'm going to start, and then I'll turn it over to Stuart to tell you a little bit about how we see the burden of this disease with regard to the regulatory next steps.

The most important thing to share with you is that we are the beneficiaries of almost every regulatory designation you could imagine on both sides of the pond. PRIME, Orphan, RMAT, which is the cell and genes for breakthrough designation, so we've had the benefit of having discussions with the regulators over time.

You are right about the 2 outstanding items. It's about the number of patients and the duration of follow-up. With regard to your question on manufacturing, in the grand scheme of things, Geoff, this is an easier manufacturing approach.

I don't mean to suggest it's easy, but it is easier because it's an ex-vivo approach and it requires just the Cas9 enzyme and the guide RNA. Our partners at CRISPR were very thoughtful. And from the start, we planned for the manufacturing that we are using in clinical trials to be the same process that we use in our commercial program.

And not only that, it's also the same site, the same exact sites that we are using to manufacture in our clinical trials program are the same sites that we expect to use when we commercialize. So that all is proceeding to plan. I'm going to ask Stuart to comment on the burden of disease and how we see that.

Stuart?.

Yes, Geoff, so you asked a great question, these are obviously lifetime conditions and have a significant clinical but also economic burden on patients and on the health care system. There are some published data on this topic. They're not terribly up to date, many of them.

So as you might expect, we are working to develop updated estimates of the economic impact of sickle cell and beta thalassemia. It is very, very significant. It's obviously impacted by things like in sickle cell disease, the cost of the vaso-occlusive crisis, particularly if they lead to hospitalizations and the other medications that patients take.

In thalassemia, it's obviously the burden of transfusions and then also some of the additional care that patients can require because of the transfusion such as iron chelation and other supportive care.

So we are working to generate updated estimates of the economic and indeed, social burden of sickle cell disease and thalassemia, and that will be an important part of the context to demonstrating the cost effectiveness of a onetime curative therapy like CTX001..

Our next question comes from the line of Brian Abrahams from RBC Capital Markets..

Congratulations on the quarter and the year. You've obviously shown very promising data from the first patients with the VX-880 for diabetes.

And I guess I'm curious, how consistent should we expect the effects to be patient to patient with this type of approach? How are you feeling overall about the safety profile as you've continued to enroll patients? And what will be your aim as you move from half to full doses? Would it be generating a more rapid response -- an even more rapid response than you've seen or potentially moving towards complete normalization of some of the key parameters?.

One, it was at half dose, yet the results, whether you look at the endogenous C-peptide levels -- and remember, this patient has 30 years of diabetes and made no endogenous insulin. That result was pretty impressive. The second is hemoglobin A1C, and the really significant decline in insulin was what made us share those results.

It has not been -- results like that have simply not been seen in this field. With regard to consistency, what we are aiming for here is a functional cure for this disease. So we are expecting patients to consistently have elevations in C-peptide, decreases in hemoglobin A1C and improvements, if not elimination of exogenous insulin.

With regard to the safety profile, I'm only going to comment on the data that we've already shared. And as I said, the therapy was well-tolerated in my prepared remarks. And importantly, because as you think about hemoglobin A1C decreasing, you have to think about the patient not suffering from low glucose levels, and that didn't happen.

This patient has been free of severe hypoglycemic episodes since the periodic operative period. So as we look forward, what are we looking to? The study is up and running in multiple sites. We are looking to enroll more patients, dose more patients. And the reason we are looking to go to full dose is because the -- we are going for a curative approach.

And when you look at the history and the experience of cadaveric islet transplants, the quality and quantity of cells are very related to the durability of the response..

Our next question comes from the line of Salveen Richter from Goldman Sachs..

What is the bar here for the 2 Phase II acute pain programs that are reading out this quarter in terms of moving forward? And then separately, could you speak to your capital allocation plans?.

Yes, sure thing, Salveen. Let's take the pain studies first. We are in 2 acute pain studies, 1 in abdominoplasty, a model of soft tissue pain and 1 in bunionectomy, which is seen as a model for pain in a "hard tissue." Both studies are very similarly designed. They are dose-ranging studies with a placebo control arm and an opioid reference group.

What we're really looking for here is therapeutic pain relief without the side effects of opioids. And obviously, the most important one of that is the addictive potential. I don't have to tell you about the opioid epidemic raging in the U.S.

and we have very high confidence in VX-548 on the safety side and the lack of addictive potential because there is simply no receptors for NaV1.8 in the central nervous system.

On the efficacy side, we go into this with confidence for 3 reasons; one, this is a genetically validated target; two, this is also a pharmacologically validated target with our own VX-150 data that you'll remember had positive proof-of-concept across acute, neuropathic and, let's call it, musculoskeletal pain; and three, this particular molecule, VX-548, amongst its other properties is also multifold, more potent.

So that's really what we're expecting, and that's how we are looking at the 548 program. With regard to capital allocation, Salveen, we've been very consistent as we've talked about our capital allocation strategy that we believe that the greatest value we can create is by investing our capital in innovation, both internal and external.

We've never invested more than we are today in internal innovation. And you see the results of that with VX-147 with the Phase II results and its progress into pivotal development. With the 2 Phase II studies we just spoke about in the pain program, not to mention the VX-121/561/tezacaftor program in CF in Phase III.

And you also see it with our investments that we've made in business development with the Semma acquisition and the really terrific results, albeit early from the VX-880 program. And going forward, what you can expect is the same. Our strategy is working, and we expect that we will continue to invest in both internal and external innovation..

Our next question comes from the line of Colin Bristow from UBS..

Congrats on the quarter and the strong '22 guide. Not to sort of flog a dead horse, but we're obviously getting closer to a competitor CF trip at readout.

And I'd love you to remind us specifically, what is it that gives you comfort around the level of competitive threat or the lack of? And then just a quick one on your type 1 diabetes one, the 880, on the encapsulation device, you said you've overcome fibrosis and vascularization issues.

Is there a drug-eluting component to this device?.

Yes, Colin, thanks so much for the kind words and for the question. Let's do type 1 diabetes first, and then we'll go back and do CF landscape. All right.

The -- we talked a little bit about the results on patient Number 1 and the progress to full dose and why we're doing that and what our real goal is and to restate that, we're looking to bring a functional cure forward for this disease.

The other reason those results in that first patient are so important is because those same cells, exactly those same cells, are the cells that are in the cell plus device program. And that cells plus device program is now in its IND-enabling study space, and we do expect to file that IND this year.

I will keep my comments about the encapsulation at a high level. But what I can tell you is that the device has been specifically configured to allow vascularization and exchange of oxygen and nutrients, to allow insulin to go back and forth and for it to sense glucose but to keep the immune system out.

I'll also tell you that it's not just the materials, but it's the geometry. And our studies to date, including in large animal models, tell us that we've overcome the historic complications with foreign body response and the lack of the ability to properly oxygenate and provide nutrients to the cells.

With regard to the CF landscape and we've talked about it before, but I'll remind that as you look at the CF landscape today, the bottom line is that TRIKAFTA has simply set a very high bar. More patients around the globe are treated with a VERTEX CFTR modulator today than ever before. And the vast majority of that is with TRIKAFTA.

TRIKAFTA's clinical trial data are remarkable. You remember the ppFEV1 at 14% from the clinical trial results. But it's not just the acute changes in lung function. As I shared in my prepared remarks, TRIKAFTA now has long-term data from the 96-week follow-up study from the pivotal trials.

And what it shows is no decline in mean lung function over time, the first for any CFTR modulator. And now we also have data, real-world data from the CF registry. And that shows improvements in really important measures like transplantation, pulmonary exacerbation and death.

And so you put this all together and what you really have is if there's any medicine that will compete with TRIKAFTA, it has to go head-to-head against TRIKAFTA in clinical trials. That's exactly what we're doing with 121/561/tezacaftor. It has to have improved benefit. And you have to have the long-term data. The only company that has that is Vertex.

And the most advanced competitor to TRIKAFTA is our own 121/561/tezacaftor, which is already in Phase III studies..

Our next question comes from the line of Robyn Karnauskas, Truist Securities..

So a real quick one. So just for 548, can -- does that new molecule has the ability to work in neuropathic pain? I notice that you didn't do a trial this time with that molecule. And then on type 1 diabetes program, there is going to be some patient data coming out of Viacyte and CRISPR with an edited embryonic stem cell program that they have.

And I was just curious like when we see that data, like how do you see that as a read to whether or not your edited program will work without immune suppressants? I know it's a less differentiated program potentially than your cell line versus your iPSC cell line -- or your cell line.

And so just trying to understand the read that we should expect or how you're looking at that data when it comes out to the potential for using an edited version without immune suppression for your program?.

Yes, yes, really great questions, Robyn. Let me take the neuropathic pain question first with 548 and then let's do type 1 diabetes. Okay. the NaV1.8 axis, as I described earlier, is an exciting one.

It's an exciting target for us because of the genetic validation but also because of the pharmacologic validation with VX-150, which had positive results not only in acute, but also neuropathic pain. So yes, I do expect VX-548 has potential in neuropathic pain.

Unlike acute pain, which as the name implies, is a short-lived pain syndrome, neuropathic pain is a chronic disease state. So the kind of preclinical data and the work that we need to do and the package we need to put together is different, and that's what we're doing right now.

But I do expect that the NaV1.8 axis and that target will be important in neuropathic pain. And I point you to the NaV, 150 results as the clearest reason to believe.

With regard to the question around potentially getting to a point of having fully differentiated, allogeneic, insulin-producing pancreatic islet cells that could be edited to evade the immune system, here's the most important thing, you have to have the cells. It's not actually about the editing. It's not actually about the device.

It's not actually about the off-the-shelf immunosuppressives. Those are 3 different ways to protect the cells from the immune system, but it's actually about the cells. And the only company that has these allogeneic, fully differentiated, pancreatic islet cells that make insulin and can make these cells in industrial quantities is Vertex.

And we are working on multiple approaches to protect these cells from the immune system. VX-180 -- 880 uses the off-the-shelf immunosuppressives. The -- we call it VX-264. That's the cells plus device program that uses a device to protect the cells from the immune system. And then, of course, we have our program to edit the cells.

But the key is it's the cells..

Our next question comes from the line of Mohit Bansal from Wells Fargo..

My congratulations as well. Maybe another one on VX-147. How well understood is the homogeneous nature of APOL1-mediated kidney diseases with proteinuria being the key marker here? I'm asking it because genetic testing is not routinely performed in these patients.

So trying to understand if there is a lack of data that could be a gating factor for the FDA from making the leap from FSGS to broader APOL1-mediated kidney diseases..

Yes. Mohit, thanks so much. So let me tell you a little bit about the background of APOL1-mediated kidney disease, and I think it will help you understand where we are and what it means for the future. And you're right about the fact that testing is low and that we need to do more in order to get patients tested.

But as you also know, when we have a disease for which we have no therapy to offer patients, which is the case today with APOL1-mediated kidney disease, the motivation for patients and physicians understandably is not high to get a genetic diagnosis for something we can do nothing to be helpful. Okay. So the one APOL1 story is a very recent story.

It's only about a decade, 12 years old that we have actually come to understand that the large amount of kidney disease, proteinuric kidney disease that we previously didn't understand in patients of African origin is APOL1-mediated kidney disease. This is only something we've figured out in the last 10 to 12 years.

The homogeneity of the disease is clear, and I would even say obvious. And I say that because it's found in people who have kidney disease with proteinuria and 2 APOL1 alleles. That's how you define this group. And the underlying thread, therefore, is having 2 APOL1 alleles.

There have been studies done in patients who have proteinuria and have 2 APOL1 alleles versus not. And when you have 2 APOL1 alleles, your outcomes are uniformly worse, you progress the kidney disease faster. That's the homogeneity.

Now the question you also ask is, is this well-known? Is this well understood? Because the -- our understanding of the genetics itself is fairly recent, there is an education effort, and that is part of what we're doing.

We, ourselves, are working on 503c diagnostic to accompany VX-147, and we're working with patients and physicians to ensure that diagnosis is supported..

Our next question comes from the line of Evan Seigerman from BMO Capital Markets..

One for you, Reshma.

So from your view as a nephrologist, how important is EGFR as the measure of kidney disease progression? Is this change in proteinuria confirm the same measurement in your view?.

Yes, it's a really great question, Evan. The thing I would share with you that's topmost on my mind is a -- if I wear my nephrology hat is that the hope that VX-147 offers is something that is truly novel and a big deal, a big deal in the renal community.

The reason I say that is that this is one of the few genetically defined kidney diseases that we understand. And it is one of the first, if not the first precision medicine approach to a genetically driven kidney disease where we're targeting the underlying cause of the kidney disease. There is a relationship between proteinuria and GFR.

So GFR is simply a measure of kidney function, right? Just like ppFEV1, which we're all very familiar with is a measure of lung function. And the relationship is this. Proteinuria measures kidney damage. It tells you that protein, which is supposed to stay on one side of the membrane is leaking out into the urine.

When you have that and it progresses, the next step is decreases in GFR, a measure a function of the kidney. And unfortunately, the next steps after that are continued decline leading to either transplantation, dialysis or death. So these are very related measures.

I think they are individually important and collectively very telling about the course of a patient.

But maybe clinically speaking, what I would say is when you see a patient who has a proteinuric kidney disease, what are we trying to do in the clinic? We are trying to reduce proteinuria because there is a clear correlation between proteinuria and the hard outcomes of transplantation, dialysis and death..

Operator, we'll take two more questions..

Certainly. Our next question comes from the line of Hartaj Singh from Oppenheimer..

I'll ask Stuart a question here, Reshma, to give you just a quick break. Stuart, on cystic fibrosis, you're doing -- you'll do close to $9 billion by the end of this year in cystic fibrosis. You've penetrated about 2/3, 75% of the population by then.

How to think about where you can get to -- can you get to 90%-plus penetration with our CFTRs aside from the approach of Moderna? And then just quickly, assuming you get approval for sickle cell disease and beta thalassemia, how do you see an uptake? I mean would there be a warehousing in the beginning? Would there not be? Would the uptake be still on study? Just any color there..

Great, Hartaj, thank you. So yes, our guidance for 2022 is $8.4 billion to $8.6 billion, as Charlie said in his prepared remarks, and that is a reflection of the momentum we have coming into 2022 from 2021, where we launched 6 to 11 TRIKAFTA in the U.S. and also secured numerous reimbursement agreements outside of the U.S.

So our guidance incorporates that momentum and countries where we already have reimbursement agreements. As you said, though, we still have a lot of the CF population who could potentially benefit from a CFTR modulator, who are not yet being treated, somewhere north of 25,000.

And we have a lot of confidence that we're going to get to the vast majority of those patients because they are in sort of 3 categories that we've demonstrated that we can address. The first one is patients who are in countries where we have reimbursement agreements but patients haven't been initiated.

And that's largely because we're early in the launch curve, so think of countries like the Netherlands and Spain. The second category is countries where we have regulatory approval, but don't yet have reimbursement. So think countries like Australia.

And the third category is younger patient groups where we've demonstrated with KALYDECO and ORKAMBI, but we can develop our products down into younger and younger age ranges. And as I said, TRIKAFTA is now approved for 6 to 11 here in the U.S.

Very recently, KAFTRIO was approved for 6- to 11-year-old patients in both the EU and the U.K., and we're continuing to look at developing it for even younger patient group.

So we have a lot of confidence that we're going to be able to get to the vast majority of those 25,000 patients over the next few years, and that's going to drive significant revenue growth for several years to come.

And then as you mentioned, in addition to that, there's an additional 5,000-plus patients who aren't going to be able to respond to CFTR modulators because they produce no protein. And those other patients, we're seeking to address with our mRNA therapy. And as Reshma said in her prepared remarks, we've made good progress with that.

So we have a lot of confidence. There's a lot of growth left in our CF franchise over the next several years. In terms of the sickle cell and transfusion-developed thalassemia patient populations, again, we see a very significant opportunity there. As Reshma mentioned, approximately 32,000 patients who have severe disease between the U.S. and the EU.

So we see a significant multibillion-dollar opportunity just treating those severe patients. Obviously, this is a different type of condition. This is a different therapy, and so I wouldn't be thinking of an uptake curve like we've seen in CF. It's not going to be anywhere as dramatic as that.

But certainly, in that severe sickle cell and thalassemia populations, we see a multibillion-dollar opportunity ahead of us..

Then our final question for today comes from the line of Debjit Chattopadhyay from Guggenheim Securities..

I want to go back to VX-147 with a three part question.

Number 1, has the agency signaled a threshold for proteinuria reduction for accelerated approval? Number 2, if I understood your prior comments, the hard endpoints will be collected in the same study and will convert the subpart edge to a full approval? And Number 3, does the broader high-risk APOL1 proteinuric kidney disease population, is this also a double-hit disease? And do they progress to ESRD at the same speed at FSGS?.

Yes, Debjit, you asked three important and related questions to the 147 program in AMKD. So let me try to answer them in this way.

When we talk about the 147 program and targeting our pivotal development so that we can address the 100,000 people with 2 APOL1 alleles and proteinuric kidney disease, these people already have kidney disease, these are not people at risk for kidney disease. So the double-hit hypothesis is a good point. That's for "at risk to develop" disease.

These people we are talking about already have disease. The second question is a related question around proteinuria, its potential use as a surrogate endpoint for accelerated approval, and then how you do these studies in terms of the hard endpoint. As I said before, we simply haven't had our end of Phase II meeting.

We'll have it soon enough, and then I can share details of the program with you. But generally speaking, the way that studies are done when proteinuria is the endpoint for accelerated approval is in the same study. The study continues and you go on to the composite endpoint of change in GFR, time to ESRD or death.

And that's how you collect that hard endpoint..

Okay. Operator, thanks very much. We appreciate everybody joining us tonight, the Investor Relations team in the office tonight. And happy to talk to you if you have additional questions. And you may now disconnect. Thank you very much..

Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day..