VERTEX PHARMACEUTICALS INC / MA

Previous wording

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 seven approved medicines: five that treat the underlying cause of cystic fibrosis (“CF”), a life-threatening genetic disease, one that treats severe sickle cell disease (“SCD”) and transfusion dependent beta thalassemia (“TDT”), life shortening inherited blood disorders, and one that treats moderate-to-severe acute pain. Our clinical-stage pipeline includes programs in CF, SCD, beta thalassemia, acute and peripheral neuropathic pain, type 1 diabetes, IgA nephropathy, primary membranous nephropathy and other autoimmune renal diseases and cytopenias, APOL1-mediated kidney disease, myotonic dystrophy type 1, and autosomal dominant polycystic kidney disease.

Current wording

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 seven approved medicines: five that treat the underlying cause of cystic fibrosis (“CF”), a life-threatening genetic disease, one that treats severe sickle cell disease (“SCD”) and transfusion dependent beta thalassemia (“TDT”), life shortening inherited blood disorders, and one that treats moderate-to-severe acute pain. Our clinical-stage pipeline includes programs in CF, SCD, beta thalassemia, neuropathic pain, type 1 diabetes, IgA nephropathy, primary membranous nephropathy and other autoimmune renal diseases and cytopenias, APOL1-mediated kidney disease, autosomal dominant polycystic kidney disease and myotonic dystrophy type 1.

Previous wording

In December 2024, the U.S. Food and Drug Administration (the “FDA”) approved ALYFTREK (vanzacaftor/tezacaftor/deutivacaftor), our once-daily next-in-class triple combination for the treatment of people with CF 6 years of age and older, and our fifth CF medicine. ALYFTREK is also approved in the United Kingdom (the “U.K.”), the European Union (“E.U.”), and Canada. Collectively, our five medicines, led by TRIKAFTA/KAFTRIO (elexacaftor/tezacaftor/ivacaftor and ivacaftor), are being used to treat more than three quarters of the approximately 94,000 people with CF in the U.S., Europe, Australia, and Canada.

Current wording

In December 2024, the U.S. Food and Drug Administration (the “FDA”) approved ALYFTREK (vanzacaftor/tezacaftor/deutivacaftor), our once-daily next-in-class triple combination for the treatment of people with CF 6 years of age and older, and our fifth CF medicine. ALYFTREK is also approved in the United Kingdom (the “U.K.”), the European Union (“E.U.”), Canada, New Zealand and Switzerland. Collectively, our five medicines, led by TRIKAFTA/KAFTRIO (elexacaftor/tezacaftor/ivacaftor and ivacaftor), are being used to treat more than three quarters of the approximately 94,000 people with CF in the U.S., Europe, Australia, and Canada.

Previous wording

•Health Canada approved ALYFTREK for the treatment of people with CF 6 years of age and older who have at least one F508del mutation or another responsive mutation in the CFTR gene. We are working to secure reimbursement for eligible patients in Canada.

Current wording

•Medsafe New Zealand and Swissmedic approved ALYFTREK for the treatment of people with CF ages 6 years of age and older who have at least one F508del mutation or another responsive mutation in the cystic fibrosis transmembrane conductance regulator (“CFTR”) gene.

Previous wording

•Regulatory submissions for ALYFTREK are under review in Switzerland, Australia and New Zealand.

Current wording

•Regulatory submissions for ALYFTREK are under review in Australia.

Previous wording

•Since JOURNAVX became available at pharmacies in March through mid-July, more than 110,000 prescriptions have been written and filled across the hospital and retail settings in different acute pain conditions, consistent with its broad label.

Current wording

•Since JOURNAVX became available at pharmacies in March, through mid-October more than 300,000 prescriptions for JOURNAVX have been written and filled across the hospital and retail settings in different acute pain conditions, consistent with its broad label.

Previous wording

•As of mid-July, across commercial and government payers, nearly 150 million individuals have covered access to JOURNAVX, representing almost half of U.S. covered lives. This includes formal coverage agreements with two of the three large national pharmacy benefit managers and unrestricted access within 16 state Medicaid plans. We expect access to JOURNAVX to continue to expand over the course of 2025.

Current wording

•As of mid-October, across commercial and government payers, more than 170 million individuals have covered access to JOURNAVX, representing more than half of U.S. covered lives. This includes formal coverage with two of the three large national pharmacy benefit managers and unrestricted access within 19 state Medicaid plans. We expect access to JOURNAVX to continue to expand over the remainder of 2025 and into 2026.

Previous wording

•More than 50 of the targeted 150 large healthcare systems and more than 500 individual hospitals of the 2,000 targeted institutions have added JOURNAVX to formularies, protocols or order sets. We have national group purchasing agreements with two of the largest group purchasing organizations in the U.S.

Current wording

•Approximately 90 of the targeted 150 large healthcare systems and more than 750 individual hospitals of the 2,000 targeted institutions have added JOURNAVX to formularies, protocols or order sets.

Previous wording

•We have completed enrollment in two global Phase 3 clinical trials evaluating CASGEVY in children 5 to 11 years of age with SCD or TDT and expect to complete dosing in the second half of 2025.

Current wording

•We have completed enrollment in two global Phase 3 clinical trials evaluating CASGEVY in children 5 to 11 years of age with SCD or TDT and expect to complete dosing in the fourth quarter of 2025. We expect to share emerging data from these clinical trials in an upcoming medical conference.

Previous wording

•We continue to enroll and dose people with diabetic peripheral neuropathy, a common form of chronic peripheral neuropathic pain, in a Phase 3 pivotal trial evaluating suzetrigine.

Current wording

•We previously initiated the first Phase 3 clinical trial evaluating suzetrigine for the treatment of people with diabetic peripheral neuropathy, a common form of chronic peripheral neuropathic pain, and we expect to start the second Phase 3 clinical trial in November. We expect to complete enrollment in both Phase 3 clinical trials by the end of 2026.

Previous wording

•Zimislecel is an allogeneic, stem cell-derived, fully differentiated, insulin-producing islet cell replacement therapy, using standard immunosuppression to protect the implanted cells. We expect to complete enrollment and dosing in the Phase 3 portion of the Phase 1/2/3 clinical trial of zimislecel in people with type 1 diabetes (“T1D”) with severe hypoglycemic events and impaired awareness of hypoglycemia in the near term. We expect global regulatory submissions for zimislecel in 2026.

Current wording

•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 the dosing in this clinical trial, pending an internal manufacturing analysis.

Previous wording

IgA Nephropathy, Primary Membranous Nephropathy and Other B Cell-Driven Diseases

Current wording

IgA Nephropathy, Primary Membranous Nephropathy and Other B Cell-Mediated Diseases

Previous wording

•We are developing povetacicept, a dual antagonist of B cell activating factor (“BAFF”) and a proliferation-inducing ligand (“APRIL”) cytokines, as a potentially best-in-class approach to treat immunoglobulin A nephropathy (“IgAN”) and primary membranous nephropathy (“pMN”). We believe povetacicept holds pipeline-in-a-product potential.

Current wording

•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”) and primary membranous nephropathy (“pMN”), and we believe it has pipeline-in-a-product potential.

Previous wording

•Inaxaplin is our small molecule for the treatment of APOL1-mediated kidney disease (“AMKD”). We expect to complete enrollment in the interim analysis cohort of the global Phase 2/3 pivotal clinical trial evaluating inaxaplin (“AMPLITUDE”) in 2025. We expect to conduct the pre-planned interim analysis once this cohort has been treated for 48 weeks, with potential to file for accelerated approval in the U.S. if the results are supportive. This trial has met its minimum target for pediatric enrollment (10 - 17 years of age) and continues to enroll both pediatric and adult patients.

Current wording

•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 (“AMPLITUDE”). We expect to conduct the pre-planned interim analysis once this cohort has been treated for 48 weeks, with potential to file for accelerated approval in the U.S. if the results are supportive.

Previous wording

In the first half of 2025, our net product revenues came 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. We are continuing to progress commercialization of CASGEVY, which has received marketing approvals in the U.S. and across multiple geographies, including countries in Europe and the Middle East, for the treatment of SCD and TDT. In addition, we have begun our commercial launch of JOURNAVX for the treatment of acute pain, which received marketing approval in the U.S. in January 2025. We also continue to advance our pipeline of product candidates for the treatment of serious diseases outside of CF, SCD, TDT, and acute pain.

Current wording

In the nine months ended September 30, 2025, our net product revenues came 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. We continue to progress commercialization of CASGEVY, which has received marketing approvals in the U.S. and across multiple geographies, including countries in Europe and the Middle East, for the treatment of SCD and TDT. In addition, we have begun our commercial launch of JOURNAVX for the treatment of acute pain, which received marketing approval in the U.S. in January 2025. We also continue to advance our pipeline of product candidates for the treatment of serious diseases outside of CF, SCD, TDT, and acute pain.

Previous wording

In the U.S., we have worked successfully with third-party payors to promptly obtain appropriate levels of reimbursement for our CF medicines. In addition, we are working with U.S. government and commercial payors with respect to CASGEVY and JOURNAVX. We anticipate broad access with government and commercial payors for CASGEVY in the U.S., and we have recently entered into multiple agreements with government and commercial health insurance providers to provide such access. For JOURNAVX in the U.S., we have been working with government and commercial payors pre- and post-approval to support rapid and broad access. We plan to continue to engage in discussions with numerous commercial insurers and managed health care organizations, along with government health programs that are typically managed by authorities in the individual states, to ensure that payors recognize the significant benefits that all our therapies provide and provide patients with appropriate levels of access to our medicines and therapies now and in the future. We cannot, however, predict how changes in the law, including through the Inflation Reduction Act of 2022 and passage of state laws (e.g., transparency laws and prescription drug affordability boards), will affect our ability to negotiate successfully with third-party payors and distribute our products. In addition, federal and state governments in the U.S. continue to consider policies to lower prescription drug costs. The logistics of such initiatives continue to be discussed, and we cannot anticipate how these actions, if enacted, may impact our revenues and our business. Similarly, in ex-U.S. markets, we seek government reimbursement for our medicines on a country-by-country or region-by-region basis, as required. This is necessary for each new medicine, as well as for label expansions for our current medicines. We are working with ex-U.S. payors with respect to CASGEVY, and we are pursuing long-term reimbursement agreements. We have secured reimbursed access for people with SCD or TDT across multiple geographies, including countries in Europe and the Middle East. 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.

Current wording

In the U.S., we have worked successfully with third-party payors to promptly obtain appropriate levels of reimbursement for our CF medicines. In addition, we are working with U.S. government and commercial payors with respect to CASGEVY and JOURNAVX. We anticipate broad access with government and commercial payors for CASGEVY in the U.S., and we have entered into multiple agreements with government and commercial health insurance providers to provide such access. For JOURNAVX in the U.S., we have been working with government and commercial payors pre- and post-approval to support rapid and broad access. We plan to continue to engage in discussions with numerous commercial insurers and managed health care organizations, along with government health programs that are typically managed by authorities in the individual states, to ensure that payors recognize the significant benefits that all our therapies provide and provide patients with appropriate levels of access to our medicines and therapies now and in the future. We cannot, however, predict how changes in the law, including through the Inflation Reduction Act of 2022 and passage of state laws (e.g., transparency laws and prescription drug affordability boards), will affect our ability to negotiate successfully with third-party payors and distribute our products. In addition, federal and state governments in the U.S. continue to consider policies to lower prescription drug costs. The logistics of such initiatives continue to be discussed, and we cannot anticipate how these actions, if enacted, may impact our revenues and our business. Similarly, in ex-U.S. markets, we seek government reimbursement for our medicines on a country-by-country or region-by-region basis, as required. This is necessary for each new medicine, as well as for label expansions for our current medicines. We are working with ex-U.S. payors with respect to CASGEVY, and we are pursuing long-term reimbursement agreements. We have secured reimbursed access for people with SCD or TDT across multiple geographies, including countries in Europe and the Middle East. 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.

Previous wording

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 due to Entrada in the first quarter of 2024. 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.

Current wording

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 due to Entrada in the first quarter of 2024, 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.

Previous wording

In the first half of 2025 and 2024, our AIPR&D included $22.0 million and $4.5 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.

Current wording

In the nine months ended September 30, 2025 and 2024, our AIPR&D included $76.5 million and $4.5 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.

Previous wording

In the second quarter and first half of 2025, our net product revenues increased by $298.4 million and $368.0 million, or 11% and 7%, as compared to the second quarter and first half of 2024, respectively, primarily due to continued strong demand for TRIKAFTA/KAFTRIO and early contributions from three ongoing launches. In the second quarter and first half of 2025, "Other product revenues" included $30.4 million and $44.6 million, respectively, from CASGEVY, and $12.0 million and $13.3 million, respectively, from JOURNAVX. In the second quarter and first half of 2024, there were no revenues for these products.

Current wording

In the third quarter and nine months ended September 30, 2025, our net product revenues increased by $304.5 million and $672.5 million, or 11% and 8%, as compared to the third quarter and nine months ended September 30, 2024, respectively, primarily due to continued strong demand for TRIKAFTA/KAFTRIO and early contributions from three ongoing launches. In the third quarter and nine months ended September 30, 2025, "Other product revenues" included $16.9 million and $61.5 million, respectively, from CASGEVY, and $19.6 million and $32.9 million, respectively, from JOURNAVX. The third quarter and nine months ended September 30, 2024 included $2.0 million related to CASGEVY.

Previous wording

In the second quarter and first half of 2025, our net product revenues increased 13% and 11% in the U.S., as compared to the second quarter and first half of 2024, respectively, due to higher net realized pricing and continued strong patient demand. In the second quarter of 2025, our ex-U.S. net product revenues increased 8% as compared to the second quarter of 2024, primarily due to strong performance across multiple geographies. In the first half of 2025, our ex-U.S. net product revenues increased 1%, as compared to the first half of 2024, primarily due to an expected decline in product revenues in Russia, where we are continuing to experience a violation of our intellectual property rights.

Current wording

In the third quarter and nine months ended September 30, 2025, our net product revenues increased 15% and 13% in the U.S., as compared to the third quarter and nine months ended September 30, 2024, respectively, due to continued strong patient demand, new patient initiations and higher net realized pricing. In the third quarter and nine months ended September 30, 2025, our ex-U.S. net product revenues increased 4% and 2%, respectively, as compared to the third quarter and nine months ended September 30, 2024, primarily due to solid performance across multiple geographies, partially offset by an expected decline in product revenues in Russia, where we are continuing to experience a violation of our intellectual property rights.

Previous wording

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 with the Cystic Fibrosis Foundation, 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 is 9.33% and the royalty burden associated with ALYFTREK is 4%. As previously disclosed, the third party to whom the Cystic Fibrosis Foundation has assigned its ALYFTREK royalty rights has made public statements that they believe the ALYFTREK royalty burden is in the high single-digits. We believe that these statements are inconsistent with the plain terms of our agreement with the Cystic Fibrosis Foundation and would not survive close scrutiny. Following our earnings call on August 4, 2025, the third party requested that we engage in discussions to resolve this disagreement, which engagement is required by the agreement.

Current wording

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 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

Previous wording

In the second quarter and first half of 2025, our cost of sales increased $35.6 million and $56.0 million, or 10% and 8%, as compared to the second quarter and first half of 2024, respectively, primarily due to increased sales volume and changes in product mix. Our cost of sales as a percentage of our net product revenues was 14% in each of the second quarter of 2025, second quarter of 2024, and first half of 2025, and 13% in the first half of 2024.

Current wording

In the third quarter and nine months ended September 30, 2025, our cost of sales increased $22.2 million and $78.2 million, or 6% and 7%, as compared to the third quarter and nine months ended September 30, 2024, respectively, primarily due to increased sales volume and changes in product mix. Our cost of sales as a percentage of our net product revenues was 13.5% and 14.2% in the third quarter of 2025 and 2024, respectively, and 13.5% and 13.7% in the nine months ended September 30, 2025 and 2024, respectively.

Previous wording

Since January 2023, we have incurred approximately $8.8 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.

Current wording

Since January 2023, we have incurred approximately $9.7 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.

Previous wording

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 the second quarter and first half of 2025 as compared to the second quarter and first half of 2024. Salary and benefits in the second quarter and first half of 2024 included $13.1 million associated with cash-settled unvested Alpine equity awards. Compared to the second quarter and first half of 2024, our research expenses increased by $2.0 million, or 1%, and $12.0 million, or 3%, respectively. We expect to continue to invest in our research programs with a focus on creating transformative medicines for serious diseases.

Current wording

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 the third quarter and nine months ended September 30, 2025 as compared to the third quarter and nine months ended September 30, 2024. Salary and benefits in the nine months ended September 30, 2024 included $13.1 million associated with cash-settled unvested Alpine equity awards. Compared to the third quarter and nine months ended September 30, 2024, our research expenses increased by

Previous wording

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 programs, including from our povetacicept programs acquired from Alpine, CF, T1D and pain programs. In conjunction with our acquisition of Alpine, we incurred $151.9 million associated with cash-settled unvested Alpine equity awards within development expenses in the second quarter and first half of 2024. Compared to the second quarter and first half of 2024, our development expenses increased by $9.8 million, or 1%, and $190.4 million, or 14%, respectively.

Current wording

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 programs, including from our povetacicept programs acquired from Alpine, pain and T1D programs. In conjunction with our acquisition of Alpine, we incurred $151.9 million associated with cash-settled unvested Alpine equity awards within development expenses in the nine months ended September 30, 2024. Compared to the third quarter and nine months ended September 30, 2024, our development expenses increased by $85.6 million, or 13%, and $276.0 million, or 14%, respectively.

Previous wording

AIPR&D in the second quarter and first half of 2025 included milestone payments. AIPR&D in the second quarter and first half of 2024 was primarily related to $4.4 billion AIPR&D resulting from our acquisition of Alpine, which was accounted for as an asset acquisition. AIPR&D in the first half of 2024 also included the $75.0 million milestone paid to Entrada during the first quarter of 2024. 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.

Current wording

AIPR&D in the third quarter and nine months ended September 30, 2025 and third quarter ended September 30, 2024 included various upfront and milestone payments. AIPR&D in the nine months ended September 30, 2024 was primarily related to $4.4 billion AIPR&D resulting from our acquisition of Alpine, which was accounted for as an asset acquisition. AIPR&D in the nine months ended September 30, 2024 also included the $75.0 million milestone paid to Entrada during the first quarter of 2024. 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.

Previous wording

Selling, general and administrative expenses increased by 14% and 15% in the second quarter and first half of 2025, respectively, as compared to the second quarter and first half of 2024 primarily due to increased commercial investment to support the launch of JOURNAVX.

Current wording

Selling, general and administrative expenses increased by 20% and 17% in the third quarter and nine months ended September 30, 2025, respectively, as compared to the third quarter and nine months ended September 30, 2024 primarily due to increased commercial investment to support the launch of JOURNAVX.

Previous wording

The fair value of our contingent consideration increased by $0.9 million and $3.1 million in the second quarter and first half of 2025, respectively, and increased by $0.5 million and $0.4 million in the second quarter and first half of 2024, respectively.

Current wording

The fair value of our contingent consideration decreased by $1.9 million and increased by $1.2 million in the third quarter and nine months ended September 30, 2025, respectively, and increased by $0.3 million and $0.7 million in the third quarter and nine months ended September 30, 2024, respectively.

Previous wording

Interest income decreased from $156.5 million and $337.7 million in the second quarter and first half of 2024, respectively, to $122.4 million and $243.3 million in the second quarter and first half of 2025, respectively, primarily due to decreased market interest rates and decreased cash equivalents and available-for-sale debt securities following our acquisition of Alpine in the second quarter of 2024. Our future interest income is dependent on the amount of, and prevailing market interest rates on, our outstanding cash equivalents and available-for-sale debt securities.

Current wording

Interest income decreased from $132.2 million in the third quarter of 2024 to $125.7 million in the third quarter of 2025, primarily due to decreased market interest rates partially offset by increased cash, cash equivalents and available-for-sale debt securities. Interest income decreased from $469.9 million in the nine months ended September 30, 2024 to $369.0 million in the nine months ended September 30, 2025, primarily due to decreased market interest rates and decreased cash, cash equivalents and available-for-sale debt securities following our acquisition of Alpine in the second quarter of 2024. Our future interest income is dependent on the amount of, and prevailing market interest rates on our outstanding cash equivalents and available-for-sale debt securities.

Previous wording

Interest expense was $3.7 million and $6.7 million in the second quarter and first half of 2025, respectively, and $9.9 million and $20.3 million in the second quarter and first half of 2024, respectively. Prior to the third quarter of 2024, the majority of our interest expense related to imputed interest expense associated with our corporate headquarters leases in Boston. Following the amendment of these leases in the third quarter of 2024 that changed their classifications from finance to operating leases, the operating lease costs associated with the leases are recorded entirely within operating expenses in our condensed consolidated statements of income (loss).

Current wording

Interest expense was $3.3 million and $10.0 million in the third quarter and nine months ended September 30, 2025, respectively, and $7.5 million and $27.8 million in the third quarter and nine months ended September 30, 2024, respectively. Prior to the third quarter of 2024, the majority of our interest expense related to imputed interest expense associated with our corporate headquarters leases in Boston. Following the amendment of these leases in the third quarter of 2024 that changed their classifications from finance to operating leases, the operating lease costs associated with the leases are recorded entirely within operating expenses in our condensed consolidated statements of income (loss).

Previous wording

In July 2025, the U.S. enacted H.R.1, which includes significant provisions modifying the U.S. tax framework. We are currently evaluating the impact of these legislative changes and will review additional interpretative guidance as it becomes available. These legislative changes could have an impact on our future effective tax rates, tax liabilities, and cash taxes. As required by ASC 740, Income Taxes, the estimated impact of H.R.1 will be included in our financial results in the third quarter of 2025, the period of enactment.

Current wording

In July 2025, the U.S. enacted H.R.1, which includes significant provisions modifying the U.S. tax framework, including the ability for companies to immediately deduct research and development expenditures for 2025 and provisions for deducting previously capitalized amounts. We continue to assess the impact that H.R.1. has on us and will review guidance as it becomes available. These legislative changes could have an impact on our future effective tax rates, tax liabilities, and cash taxes.

Previous wording

We recorded provisions for income taxes of $250.1 million and $202.4 million in the second quarter of 2025 and 2024, respectively, and $334.2 million and $381.9 million in the first half of 2025 and 2024, respectively. Our effective tax rate of 16.6% in the first half of 2025 was lower than the U.S. statutory rate primarily due to excess tax benefits related to stock-based compensation and tax credits. Our effective tax rate of (18.1)% in the first half of 2024 was materially different than the U.S. statutory rate primarily due to the $4.4 billion of AIPR&D resulting from our acquisition of Alpine, which drove our pre-tax loss in the first half of 2024.

Current wording

Our effective tax rate of 16.6% in the nine months ended September 30, 2025 was lower than the U.S. statutory rate primarily due to a benefit from a research and development tax credit study that was completed in the third quarter of 2025, excess tax benefits related to stock-based compensation, and increased utilization of foreign tax credits, partially offset by changes in uncertain tax positions. Our effective tax rate of (63.1)% in the nine months ended September 30, 2024 was materially different than the U.S. statutory rate primarily due to the $4.4 billion of AIPR&D resulting from our acquisition of Alpine, which drove our pre-tax loss in the nine months ended September 30, 2024.

Previous wording

Cash provided by operating activities was $1.9 billion in the first half of 2025 primarily due to income from operations of $1.8 billion driven by our net product revenues. Cash used by operations was $2.4 billion in the first half of 2024 primarily due to our acquisition of Alpine partially offset by cash flows provided by other operating activities.

Current wording

Cash provided by operating activities was $3.1 billion in the nine months ended September 30, 2025 primarily due to income from operations of $3.0 billion driven by our net product revenues. Cash used by operations was $1.1 billion in the nine months ended September 30, 2024 primarily due to our acquisition of Alpine partially offset by cash flows provided by other operating activities.

Previous wording

Cash used in investing activities was $540.3 million in the first half of 2025, primarily related to net purchases of available-for-sale debt securities and purchases of property and equipment. Cash used in investing activities was $2.6 billion in the first half of 2024. The largest portion of our investing activities in the first half of 2024 were net purchases of available-for-sale debt securities.

Current wording

Cash used in investing activities was $657.3 million in the nine months ended September 30, 2025, primarily related to net purchases of available-for-sale debt securities and purchases of property and equipment. Cash used in investing activities was $2.9 billion in the nine months ended September 30, 2024, which included net purchases of available-for-sale debt securities of $2.3 billion.

Previous wording

Cash used in financing activities were $1.0 billion and $716.1 million in the first half of 2025 and 2024, respectively. Our financing activities in each of these periods were primarily related to repurchases of our common stock pursuant to our share repurchase program and payments related to our employee stock benefit plans.

Current wording

Cash used in financing activities were $2.2 billion and $1.1 billion in the nine months ended September 30, 2025 and 2024, respectively. Our financing activities in each of these periods 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.

Previous wording

•As of June 30, 2025, we had $4.6 billion remaining authorization available in total under the share repurchase programs that our Board of Directors approved in February 2023 and May 2025. The programs do not have expiration dates and can be discontinued at any time. We expect to fund the programs through a combination of cash on hand and cash generated by operations.

Current wording

•As of September 30, 2025, we had $3.5 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 by operations.

Previous wording

Our discussion and analysis of our financial condition and results of operations are based upon our condensed 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 condensed 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. During the six months ended June 30, 2025, there were no material changes to our critical accounting policies as reported in our Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the SEC on February 13, 2025.

Current wording

Our discussion and analysis of our financial condition and results of operations are based upon our condensed 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 condensed 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. During the nine months ended September 30, 2025, there were no material changes to our critical accounting policies as reported in our Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the SEC on February 13, 2025.