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What changed in Vertex Pharmaceuticals's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Vertex Pharmaceuticals's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+669 added−1090 removedSource: 10-K (2026-02-13) vs 10-K (2025-02-13)

Top changes in Vertex Pharmaceuticals's 2025 10-K

669 paragraphs added · 1090 removed · 321 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

108 edited+63 added−326 removed44 unchanged
Biggest changeWe expect to advance VX-407 into a Phase 2 proof-of-concept study in people with ADPKD in 2025. • In addition to the programs listed above, we have additional research programs aimed at diseases that fit our research and development strategy and follow-on programs in our existing disease areas in accord with our serial innovation approach. 2 Our core strategy is to discover and develop innovative medicines by combining transformative advances in the understanding of human disease and the science of therapeutics to dramatically advance human health.
Biggest changeRESEARCH AND DEVELOPMENT PROGRAMS We invest in research and development to discover and develop transformative medicines for people with serious diseases, with a focus on specialty markets. Our research strategy is to combine transformative advances in the understanding of human disease and in the science of therapeutics to dramatically advance human health.
As we continue to invest in our serial innovation strategy, launch new products, advance our diverse pipeline, and expand geographically, we continue to maintain a strong financial profile. 3 MARKETED PRODUCTS Information regarding our marketed products, including information regarding the disease area, initial approval and age group for which the therapy is approved, are set forth in the table below.
We maintain a strong financial profile as we continue to invest in our serial innovation strategy, launch new products, advance our diverse pipeline, and expand geographically. 3 MARKETED PRODUCTS Information regarding our marketed products, including information regarding the disease area, initial approval and age group for which the therapy is approved, are set forth in the table below.
Acute pain usually resolves in days or weeks (for example, following surgery or an injury), while chronic pain generally lasts greater 7 than three months due to unresolved or ongoing damage to tissues or nerves. Currently available treatments have limitations around efficacy or side effects, including a risk of addiction.
Acute pain usually resolves in days or weeks (for example, following surgery or an injury), while chronic pain generally lasts greater than three months due to unresolved or ongoing damage to tissues or nerves. Currently available treatments have limitations 7 around efficacy or side effects, including a risk of addiction.
In addition, we establish business relationships with collaborators to support our research activities and to lead or support development and/or commercialization of certain product candidates. We expect to continue to identify and evaluate potential acquisitions, licenses and collaborations that may be similar or different from the transactions that we have engaged in previously.
In addition, we establish business relationships with collaborators to support our research activities and to lead or support development and/or commercialization of certain product candidates. We expect to continue to identify and evaluate potential acquisitions, licenses and collaborations that may be similar to or different from the transactions that we have engaged in previously.
Disease Initial Approval Eligible Age Group (1) Cystic Fibrosis 2024 6 years of age and older 2019 2 years of age and older 2020 2 years of age and older 2018 6 years of age and older 2018 6 years of age and older 2015 1 year of age and older 2012 1 month of age and older Sickle Cell Disease and Transfusion-Dependent Beta Thalassemia 2023 12 years of age and older Acute Pain 2025 adults (1) Specifies the youngest eligible age group in any major market.
Disease Initial Approval Eligible Age Group (1) Cystic Fibrosis 2024 6 years of age and older 2019 2 years of age and older 2018 6 years of age and older 2015 1 year of age and older 2012 1 month of age and older Sickle Cell Disease and Transfusion-Dependent Beta Thalassemia 2023 12 years of age and older Acute Pain 2025 Adults (1) Specifies the youngest eligible age group in any major market.
Because of these challenges, over- and under-utilization, as well as mis-utilization, of current pain medicines may occur. The sodium channels NaV1.8 and NaV1.7 play important roles in the physiology of pain. We have discovered multiple selective small molecule inhibitors of NaV1.8 as potential treatments for pain.
Because of these challenges, over, under, and mis-utilization of current pain medicines may occur. The sodium channels NaV1.8 and NaV1.7 play important roles in the physiology of pain. We have discovered multiple selective small molecule inhibitors of NaV1.8 as potential treatments for pain.
Mergers and acquisitions in the pharmaceutical, biotechnology and gene therapy industries may result in a larger concentration of resources among a smaller number of our competitors. Some of our competitors may have substantially greater financial, technical, marketing and human resources than we do.
Mergers and acquisitions in the pharmaceutical, biotechnology and gene therapy industries may result in a larger concentration of resources among a smaller number of our competitors. Some of our competitors may have substantially greater financial, technical, sales and marketing, and human resources than we do.
STRATEGIC TRANSACTIONS AND COLLABORATIONS As part of our business strategy, we seek to license or acquire technologies, products, product candidates, and businesses that are aligned with our corporate and research and development strategies and complement and advance our ongoing research and development efforts.
STRATEGIC TRANSACTIONS As part of our business strategy, we seek to license or acquire technologies, products, product candidates, and businesses that are aligned with our corporate and research and development strategies and that complement and advance our ongoing research and development efforts.
Subject to the terms and conditions of the A&R JDCA, we have the right to conduct all research, development, manufacturing, and commercialization activities relating to the product candidates and products under the A&R JDCA (including CASGEVY) throughout the world, subject to CRISPR’s reserved right to conduct certain activities.
Subject to the terms and conditions of the A&R JDCA, we have the right to conduct all research, 11 development, manufacturing, and commercialization activities relating to the product candidates and products under the A&R JDCA (including CASGEVY) throughout the world, subject to CRISPR’s reserved right to conduct certain activities.
Pursuant to the collaboration agreement, as amended, we have agreed to pay tiered royalties ranging from single digits to sub-teens on covered compounds first synthesized and/or tested during a research term on or before February 28, 2014, including ivacaftor, lumacaftor and tezacaftor and royalties ranging from low-single digits to mid-single digits on net sales of certain compounds first synthesized and/or tested between March 1, 2014 and August 31, 2016, including elexacaftor.
Pursuant to the CFF Agreement, as amended, we have agreed to pay tiered royalties ranging from single digits to sub-teens on covered compounds first synthesized and/or tested during a research term on or before February 28, 2014, including ivacaftor, lumacaftor and tezacaftor, and royalties ranging from low-single digits to mid-single digits on net sales of certain compounds first synthesized and/or tested between March 1, 2014 and August 31, 2016, including elexacaftor.
In connection with our serial innovation approach, we are advancing preclinical assets for myeloablative conditioning agents with improved tolerability profiles, which we refer to as “gentler conditioning agents,” which could be used in connection with treatment with CASGEVY, significantly broadening the eligible SCD and TDT patient population.
In connection with our serial innovation approach, we are advancing preclinical assets for myeloablative conditioning agents with improved tolerability profiles, which we refer to as “improved conditioning agents,” which could be used in connection with treatment with CASGEVY, significantly broadening the eligible SCD and TDT patient population.
Type 1 Diabetes T1D is a chronic metabolic disorder caused by insufficient insulin secretion by the beta cells in the pancreas. In patients with T1D, the insulin-producing islet cells of the pancreas are destroyed by the person’s own immune system, resulting in a lack of insulin and impairment of blood glucose control.
Type 1 Diabetes T1D is a chronic metabolic disorder caused by insufficient insulin secretion by the beta cells in the pancreas. In people with T1D, the insulin-producing islet cells of the pancreas are destroyed by the person’s own immune system, resulting in a lack of insulin and impairment of blood glucose control.
In order to treat people with CF who do not make full-length CFTR protein, and as a result, cannot benefit from our CFTR modulators, we are researching and developing genetic therapies, such as mRNA, and gene-editing approaches to CF.
To treat people with CF who do not make full-length CFTR protein, and as a result, cannot benefit from our CFTR modulators, we are researching and developing genetic therapies, such as mRNA, and gene-editing approaches to CF.
Patients with TDT, the most severe form of the disease, require regular blood transfusions, as frequently as every two to four weeks. Repeated blood transfusions eventually cause an unhealthy buildup of iron in the patient, leading to organ damage.
People with TDT, the most severe form of the disease, require regular blood transfusions, as frequently as every two to four weeks. Repeated blood transfusions eventually cause an unhealthy buildup of iron in the patient, leading to organ damage.
Depending on the terms of the arrangements, we may be responsible for the costs of research activities, required to make upfront payments and/or milestone payments upon the achievement of certain research, development, and commercial objectives, and/or pay royalties on future sales, if any, of commercial products resulting from the collaboration. Our current in-license agreements include: • CRISPR Therapeutics AG.
Depending on the terms of the arrangements, we may be responsible for the costs of research activities, required to make upfront payments and/or milestone payments upon the achievement of certain research, development, and commercial objectives, and/or pay royalties on future sales, if any, of commercial products resulting from the collaboration. O ur current in-license agreements include: • CRISPR Therapeutics AG.
Most commonly, patients with pain can be categorized as suffering from one of three types of pain: acute pain, chronic neuropathic pain (caused primarily by damage or dysfunction of peripheral nerves), or chronic musculoskeletal pain (caused primarily by damage to muscle, joints or bone).
Most commonly, people with pain can be categorized as suffering from one of three types of pain: acute pain, chronic neuropathic pain (caused primarily by damage or dysfunction of peripheral nerves), or chronic musculoskeletal pain (caused primarily by damage to muscle, joints or bone).
There are many public and private companies, including pharmaceutical companies and biotechnology companies, engaged in developing products for the indications our drugs are approved to treat and the therapeutic areas we are targeting with our research and development activities.
There are many public and private companies, including pharmaceutical companies and biotechnology companies, engaged in developing products for the indications our medicines are approved to treat and the therapeutic areas we are targeting with our research and development activities.
For example, we also own and/or control U.S. and foreign patents and/or patent applications relating to the following: • Other CF potentiators and correctors and many other related compounds, and the use of those compounds for the treatment CF. • VX-522 and other mRNA-based approaches for treating CF. • VX-993, VX-973, and other compounds being studied for the potential treatment of pain. • Inaxaplin and other compounds being studied for the potential treatment of AMKD. • Povetacicept for the treatment of IgAN. • Zimislecel, VX-264, and other cell-based approaches for treating T1D. 16 • VX-670 for the treatment of DM1. • VX-407 and other compounds being studied for the potential treatment of ADPKD. • Other pre-clinical and clinical candidates and the use of such candidates to treat specified diseases. • The manufacture, pharmaceutical compositions, related solid forms, formulations, dosing regimens, and methods of use of many of the above compounds.
For example, we also own and/or control U.S. and foreign patents and/or patent applications relating to the following: • Other CF potentiators and correctors and many other related compounds, and the use of those compounds for the treatment of CF. • VX-522 and other mRNA-based approaches for treating CF. • VX-993, VX-973, and other compounds being studied for the potential treatment of pain. • Povetacicept for the treatment of IgAN , pMN and gMG. • Inaxaplin for the potential treatment of AMKD. • Zimislecel and other cell-based approaches for treating T1D. • VX-407 and other compounds being studied for the potential treatment of ADPKD. • VX-670 for the treatment of DM1. • Other pre-clinical and clinical candidates and the use of such candidates to treat specified diseases. 14 • The manufacture, pharmaceutical compositions, related solid forms, formulations, dosing regimens, and methods of use of many of the above compounds.
Although we actively engage with regulatory authorities, the timing of inspections and regulatory approvals for each of these facilities is the remit of the manufacturer and not within our control and may be delayed for a number of reasons. 18 COMPETITION The pharmaceutical industry is characterized by extensive research efforts, rapid technological progress, and intense competition.
Although we actively engage with regulatory authorities, the timing of inspections and regulatory approvals for each of these facilities is the remit of the third-party manufacturer and not within our control and may be delayed for a number of reasons. 16 COMPETITION The pharmaceutical industry is characterized by extensive research efforts, rapid technological progress, and intense competition.
We expect to continue to identify and make acquisitions to expand and advance our pipeline and business. Collaboration and Licensing Arrangements Joint Development and Commercialization Agreement with CRISPR In December 2017, we entered into a joint development and commercialization agreement (“Original JDCA”) with CRISPR, pursuant to which we are co-developing and co-commercializing CASGEVY for SCD and TDT.
We expect to continue to identify and make acquisitions to expand and advance our pipeline and business. Collaboration and Licensing Arrangements Joint Development and Commercialization Agreement with CRISPR In 2017, we entered into a joint development and commercialization agreement (“Original JDCA”) with CRISPR Therapeutics AG (“CRISPR”), pursuant to which we are co-developing and co-commercializing CASGEVY for SCD and TDT.
ITEM 1. BUSINESS 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.
ITEM 1. B USINESS 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 thirteen issued U.S. patents listed in the Orange Book that cover the active pharmaceutical ingredients in KALYDECO, its marketed formulations, and/or its approved indication. 15 We have 22 issued U.S. patents listed in the Orange Book that cover the active pharmaceutical ingredients in ORKAMBI, its marketed formulations, and/or its approved indication.
We have fourteen issued U.S. patents listed in the Orange Book that cover the active pharmaceutical ingredients in KALYDECO, its marketed formulations, and/or its approved indication. We have 22 issued U.S. patents listed in the Orange Book that cover the active pharmaceutical ingredients in ORKAMBI, its marketed formulations, and/or its approved indication.
That strategy focuses on validated targets that address causal human biology, predictive lab assays and clinical biomarkers, rapid paths to registration and approval, and product candidates that hold the potential for transformative patient benefit.
We focus on validated targets that address causal human biology, predictive lab assays and clinical biomarkers, rapid paths to registration and approval, and product candidates that hold the potential for transformative patient benefit.
Basic Product Patent Expiration Year of European Basic Product Patent KALYDECO 2027 2027 1 ORKAMBI 2031 2030 1 SYMDEKO/SYMKEVI 2027 2033 1 TRIKAFTA/KAFTRIO 2037 2037 CASGEVY 2035 2 2034 3, 4 ALYFTREK 2039 2039 JOURNAVX 2040 2040 1 Expiration date reflects SPCs granted in the five major European markets (France, Germany, Italy, Spain and the U.K.). 2 Expiration year reflects the expiration of regulatory exclusivity, which expires later than the basic product patent for this product in this market. 3 Expiration year reflects the expiration of regulatory exclusivity in the E.U., which expires later than the basic product patent for this product in this market. 4 Product is approved in Great Britain with regulatory exclusivity until November 2033, which is later than the expiration of the basic product patent.
Basic Product Patent Expiration Year of European Basic Product Patent KALYDECO 2028 1 2027 2,3 ORKAMBI 2031 1 2030 2 SYMDEKO/SYMKEVI 2027 2033 2 TRIKAFTA/KAFTRIO 2037 2037 CASGEVY 2035 4 2034 5,6 ALYFTREK 2039 2039 JOURNAVX 2040 2040 1 Includes pediatric exclusivity. 2 Expiration date reflects SPCs granted in the five major European markets (France, Germany, Italy, Spain and the U.K.). 3 SPC expires in 2028 in Germany; application for pediatric extension pending in France, Italy, Spain, and the U.K. 4 Expiration year reflects the expiration of regulatory exclusivity, which expires later than the basic product patent for this product in this market. 5 Expiration year reflects the expiration of regulatory exclusivity in the E.U., which expires later than the basic product patent for this product in this market. 6 Product is approved in Great Britain with regulatory exclusivity until November 2033, which is later than the expiration of the basic product patent.
In keeping with our serial innovation approach, we are advancing multiple additional NaV1.8 inhibitors and NaV1.7 inhibitors, which could be used alone or in combination, for the treatment of acute pain and chronic neuropathic pain .
In connection with our serial innovation approach, we are advancing multiple NaV1.8 inhibitors and NaV1.7 inhibitors, which could be used alone or in combination, for the treatment of acute pain and peripheral neuropathic pain .
We are developing povetacicept, a dual inhibitor of the B cell activating factor (“BAFF”) and a proliferation-inducing ligand (“APRIL”) pathways, as a potentially best-in-class approach to treat IgA nephropathy (“IgAN”), a serious progressive, autoimmune kidney disease that can lead to end-stage renal disease.
We are developing povetacicept, a dual inhibitor of the B cell activating factor (“BAFF”) and a proliferation-inducing ligand (“APRIL”) pathways, as a potentially best-in-class approach to treat IgA nephropathy (“IgAN”), a serious, progressive, life-threatening kidney disease that often progresses to end-stage renal disease .
We are investing and plan to continue to invest significant resources in expanding and strengthening our manufacturing, infrastructure and capabilities, such as cGMP clinical manufacturing, both independently and through third-party networks, in an effort to develop and commercialize our biological and cell and genetic therapies.
We are investing and plan to continue to invest significant resources in expanding and strengthening our manufacturing infrastructure and capabilities, such as current Good Manufacturing Practices (“cGMP”) clinical manufacturing, both independently and through third-party networks, in an effort to develop and commercialize our biologics and cell and genetic therapies.
We have 25 issued U.S. patents listed in the Orange Book that cover the active pharmaceutical ingredients in SYMDEKO, its marketed formulation, and/or its approved indication. We have 28 issued U.S. patents listed in the Orange Book that cover the active pharmaceutical ingredients in TRIKAFTA, its marketed formulation, and/or its approved indication.
We have 25 issued U.S. patents listed in the Orange Book that cover the active pharmaceutical ingredients in SYMDEKO, its marketed formulations, and/or its approved indication. W e have 34 issued U.S. patents listed in the Orange Book that cover the active pharmaceutical ingredients in TRIKAFTA, its marketed formulations, and/or its approved indication.
On July 1, 2021, with respect to CASGEVY, the net profits and net losses incurred pursuant to the A&R JDCA began to be allocated 60% to us and 40% to CRISPR, subject to certain adjustments, while all other product candidates and products continue to have net profits and net losses shared equally between the parties.
The net profits and net losses incurred pursuant to the A&R JDCA with respect to CASGEVY are allocated 60% to us and 40% to CRISPR, subject to certain adjustments, while all other product candidates and products under the A&R JDCA have net profits and net losses shared equally between the parties.
Through this mechanism, JOURNAVX provides effective relief of pain without evidence of the limitations of other currently available therapies, including the addictive potential of opioids.
Through this mechanism, JOURNAVX provides effective relief of pain without evidence of the several limitations of other currently available therapies, including the addictive potential of opioids. JOURNAVX was approved by the U.S.
In addition to ALYFTREK, our marketed medicines that treat people with CF are TRIKAFTA/KAFTRIO (elexacaftor/tezacaftor/ivacaftor and ivacaftor), SYMDEKO/SYMKEVI (tezacaftor/ivacaftor and ivacaftor), ORKAMBI (lumacaftor/ivacaftor) and KALYDECO (ivacaftor). Collectively, our five marketed CF medicines are being used to treat nearly three quarters of the approximately 94,000 people with CF in the U.S., Europe, Australia, and Canada.
Our marketed CF medicines, ALYFTREK (vanzacaftor/tezacaftor/deutivacaftor) , TRIKAFTA/KAFTRIO (elexacaftor/ tezacaftor/ivacaftor and ivacaftor), SYMDEKO/SYMKEVI (tezacaftor/ivacaftor and ivacaftor), ORKAMBI (lumacaftor/ ivacaftor) and KALYDECO (ivacaftor) , are being used by nearly three quarters of the approximately 97,000 people with CF in the U.S., Europe, Australia, and Canada.
We focus on: • disease areas with known causal human biology; • targets validated by causal human biology; • predictive lab assays and clinical biomarkers; • potential for transformative benefit regardless of modality; and • efficient path to registration and approval.
We focus on: • disease areas with known causal human biology; • targets validated by causal human biology; • predictive lab assays and clinical biomarkers; • potential for transformative benefit regardless of modality; and • efficient path to registration and approval. Our development-stage product candidates are focused on the treatment of serious diseases.
Pursuant to the A&R JDCA, we lead global development, manufacturing and commercialization of CASGEVY, with support from CRISPR.
In 2021, we and CRISPR amended and restated the Original JDCA (the “A&R JDCA”). Pursuant to the A&R JDCA, we lead global development, manufacturing and commercialization of CASGEVY, with support from CRISPR.
We have 35 issued U.S. patents listed in the Orange Book that cover the active pharmaceutical ingredients in ALYFTREK, its marketed formulation, and/or its approved indication. We expect to have an issued patent listed in the Orange Book that covers the active pharmaceutical ingredient in JOURNAVX, its marketed formulation, and/or its approved indication.
We have 35 issued U.S. patents listed in the Orange Book that cover the active pharmaceutical ingredients in ALYFTREK, its marketed formulations, and/or its approved indication .
Our approach includes advancing multiple compounds or therapies from each program into early clinical trials to obtain patient data that can inform selection of the most promising therapies for later stage development as well as inform our ongoing discovery and development efforts. We aim to rapidly follow our first-in-class therapies that achieve proof-of-concept with potential best-in-class candidates.
Our approach includes advancing multiple compounds or therapies from each program into early clinical trials to obtain patient data that can inform selection of the most promising therapies for later stage development as well as inform our ongoing discovery and development efforts.
In collaboration with Moderna, we are developing VX-522, a nebulized CF mRNA therapeutic designed to treat the underlying cause of CF lung disease for these people by enabling cells in the lungs to produce functional CFTR protein. The multiple ascending dose portion of the clinical trial is ongoing and we expect data in the first half of 2025.
In collaboration with Moderna, we are developing VX-522, a nebulized CF mRNA therapeutic designed to treat the underlying cause of CF lung disease for these people by enabling cells in the lungs to produce functional CFTR protein.
We rely on third-party manufacturers to produce or process cell culture reagents and gene-editing components, such as Cas9 protein and guide RNA molecules for clinical trials and commercial supply of CASGEVY, and to generate gene-edited cells to supply CASGEVY. We continue to rely on third-party manufacturers for commercial supply of CASGEVY.
We rely on third-party manufacturers to produce or process cell culture reagents and gene-editing components, such as Cas9 protein and guide RNA molecules, for clinical trials and commercial supply of CASGEVY, and to generate gene-edited cells to supply CASGEVY. The manufacturing process for CASGEVY involves a number of steps prior to the final infusion of drug product into patients.
Out-license Agreements We have entered into various agreements pursuant to which we have out-licensed rights to certain product candidates to third-party collaborators. Pursuant to these out-license arrangements, our collaborators are responsible for all costs related to the continued development of such product candidates and obtain development and commercialization rights to these product candidates.
Pursuant to these out-license arrangements, our collaborators are responsible for certain costs related to the continued development of such product candidates and obtain development and commercialization rights to these product candidates.
We have secured agreements for povetacicept and our T1D cell therapy program to meet our anticipated demands. We continue to evaluate additional suppliers for all of our late-stage clinical programs for additional capacity and redundancy to support commercial supply.
We have secured agreements to meet our current demands for these products and product candidates. We continue to evaluate additional suppliers for all of our late-stage clinical programs for additional capacity and redundancy to support commercial supply.
We are making significant investments to secure additional capacity and to coordinate manufacturing, testing, and logistics activities at a larger scale across multiple facilities to serve the geographies in which we are treating and expect to treat additional patients with CASGEVY. We have established manufacturing capabilities in the Boston area to support our T1D program.
We are making investments to enhance the CASGEVY manufacturing process, to secure additional capacity, and to coordinate manufacturing, testing, and logistics activities at a larger scale across multiple facilities to serve the geographies in which we are treating and expect to treat additional people with CASGEVY.
In AMKD, the kidney’s filtering units known as the glomeruli, and within them the cells known as podocytes, are damaged, leading to leakage of protein into the urine, deterioration in kidney function, scarring, and, ultimately, permanent kidney damage. Patients with proteinuria who inherited two copies of the APOL1 mutations demonstrate rapid progression to end-stage kidney disease.
In AMKD, the kidney’s filtering units, known as the glomeruli, and within them the cells known as podocytes, are damaged, leading to leakage of protein into the urine, deterioration in kidney function, scarring, and, ultimately, end stage renal disease.
Our CFTR regimens target the underlying cause of disease and have been shown to improve CFTR protein function in people with CF, and as such have been shown to provide transformative benefit for people living with CF.
Our CFTR modulators, including ivacaftor, deutivacaftor, lumacaftor, tezacaftor, elexacaftor, and vanzacaftor, target the underlying cause of disease by improving CFTR protein function, and as such have been shown to provide transformative benefit for people living with CF.
Products approved by the FDA under a BLA are not subject to the Orange Book patent listing requirement. The table below sets forth the year of projected expiration for the basic product patent covering each of our approved products.
Additionally, we have licenses to dozens of issued U.S. patents that cover CASGEVY, its approved indication, and/or its manufacture. Products approved by the FDA under a BLA are not subject to the Orange Book patent listing requirement. The table below sets forth the year of projected expiration for the basic product patent covering each of our approved products.
Our research strategy is to combine transformative advances in the understanding of human disease and in the science of therapeutics to dramatically advance human health.
Our core strategy is to discover, develop, and commercialize innovative medicines by combining transformative advances in the understanding of human disease and the science of therapeutics, to dramatically advance human health.
We have developed systems and processes to track, monitor, and oversee our and our third-party manufacturers’ activities, including a quality assurance program intended to ensure that our third-party manufacturers comply with cGMP and the foreign jurisdictional equivalents when applicable. We devote substantial time, resources and effort in the areas of production, quality control, and quality assurance to maintain cGMP compliance.
In addition, we have obligations to supply product to global third parties that support the development and commercialization of povetacicept. We have developed systems and processes to track, monitor, and oversee our and our third-party manufacturers’ activities, including a quality assurance program intended to ensure that our third-party manufacturers comply with cGMP and the foreign jurisdictional equivalents when applicable.
ALYFTREK is our next-in-class triple combination, which has the benefit of a once-daily dosing regimen and demonstrated non-inferiority to TRIKAFTA in ppFEV 1 , a measure of lung function, and an improvement in sweat chloride levels as compared to TRIKAFTA.
ALYFTREK, our most- recently approved triple combination CF medicine, has the benefit of a once-daily dosing regimen and demonstrated non- inferiority to TRIKAFTA in ppFEV 1 , a measure of lung function, and an improvement in sweat chloride levels as compared to TRIKAFTA. We expect that the majority of people with CF will transition to ALYFTREK over time.
Sickle Cell Disease and Transfusion-Dependent Beta Thalassemia Two global Phase 3 clinical trials evaluating CASGEVY in children 5 to 11 years of age with severe SCD (the CLIMB SCD-151 clinical trial) and TDT (the CLIMB THAL-141 clinical trial) are ongoing. We have completed enrollment in these two clinical trials, and we expect to complete dosing in 2025.
Sickle Cell Disease and Transfusion-Dependent Beta Thalassemia In December 2025, we presented positive data from the pivotal trials evaluating CASGEVY in children 5 to 11 years of age with severe SCD (the CLIMB SCD-151 clinical trial) and TDT (the CLIMB THAL-141 clinical trial ).
In addition, to further expand our capabilities in cell therapy manufacturing, we have a strategic agreement with Lonza to support the manufacture of our portfolio of investigational allogeneic stem cell-derived, fully differentiated, insulin-producing islet cell therapies. We also rely on third-party manufacturers to produce drug substance and finished drug product for clinical trials for povetacicept.
To further expand our ability to supply clinical and potentially commercial quantities of our cell therapies, we have a strategic agreement with Lonza to support the manufacture of T1D cell therapy product candidates. We also rely on third-party manufacturers to produce drug substance and finished drug product for clinical trials for povetacicept.
Depending on the terms of the arrangements, our collaborators may be required to make upfront payments, milestone payments upon the achievement of certain research and development objectives and/or pay royalties on future sales, if any, of commercial products licensed under the agreement.
Depending on the terms of the arrangements, our collaborators may be required to make upfront payments, milestone payments upon the achievement of certain research and development objectives and/or pay royalties on future sales, if any, of commercial products licensed under the agreement. 12 In 2025, we entered into agreements with Zai Lab Limited (“Zai”) and Ono Pharmaceuticals Co., Ltd (“Ono”) related to the development and commercialization of povetacicept in certain Asian markets.
The manufacturing process for CASGEVY involves a number of steps prior to the final infusion of drug product into patients. Following mobilization and collection of blood cells from the patient, cells are transferred to a manufacturing site where HSPCs are purified and CRISPR/Cas9 gene-editing is performed.
Following mobilization and collection of blood cells from the patient, cells are transferred to a manufacturing site where HSPCs are purified and CRISPR/Cas9 gene-editing is performed. The edited cellular product, called CASGEVY, is frozen and transported back to the authorized treatment center where it is stored prior to infusion into the patient.
Our approach to drug discovery has been further validated by our successful demonstration of clinical proof-of-concept in four additional disease areas: in diabetic peripheral neuropathy with our NaV1.8 inhibitors, in AMKD with inaxaplin, in T1D with zimislecel, and in IgAN with povetacicept.
Our approach to drug discovery has been further validated by ongoing pivotal development in five additional disease areas: in IgAN and pMN with povetacicept, in AMKD with inaxaplin, in T1D with zimislecel, and in diabetic peripheral neuropathy with suzetrigine.
Our internal and external innovation approaches are based on the same strategy, which enables us to effectively integrate and execute on new internal capabilities as we invest in external innovation.
Our 6 internal and external innovation approaches are based on the same strategy, which enables us to effectively integrate and execute on new internal capabilities as we invest in external innovation. Our investments in external innovation include our collaboration with CRISPR, which resulted in the successful development and approval of CASGEVY; our acquisition of Semma Therapeutics, Inc.
The final analysis will occur when patients reach two years of treatment and will evaluate total eGFR (estimated glomerular filtration rate) slope. We expect to complete enrollment in the interim analysis cohort in 2025 and apply for potential accelerated approval in the U.S., assuming a positive interim analysis.
We expect to share data from the interim analysis in the first half of 2026 . If positive, the interim analysis may serve as the basis to seek accelerated approval in the U.S. The final analysis will occur when patients reach two years of treatment and will evaluate total eGFR (estimated glomerular filtration rate) slope.
Our research and development strategy has been validated through our success in moving novel product candidates into clinical trials and obtaining marketing approvals for ALYFTREK, TRIKAFTA/KAFTRIO, KALYDECO, ORKAMBI, and 6 SYMDEKO/SYMKEVI for the treatment of CF, CASGEVY for the treatment of SCD and TDT, and JOURNAVX for the treatment of acute pain.
Our research and development strategy has been validated through our success in moving novel product candidates into clinical trials and obtaining marketing approvals for our five CF medicines, CASGEVY, and JOURNAVX.
VX-407 is a first-in-class small molecule corrector that is designed to target the underlying cause of ADPKD in people with a subset of PKD1 variants. We are nearing completion of a Phase 1 clinical trial in healthy volunteers evaluating VX-407 and expect to advance VX-407 into a Phase 2 proof-of-concept clinical trial in people with ADPKD in 2025.
VX-407 is a first-in-class small molecule corrector that is designed to target the underlying cause of ADPKD in people with a subset of PKD1 variants, which represents up to approximately 10% of the overall patient population living with ADPKD. We are enrolling and dosing patients in a Phase 2 proof-of-concept clinical trial evaluating VX-407 (“AGLOW”) for the treatment of ADPKD.
Commercialization of CF Medicines In the U.S., we primarily sell our CF products to a limited number of specialty pharmacy and specialty distributors. In international markets, we sell our CF products primarily through distributor arrangements and to retail pharmacies, as well as to hospitals and clinics, many of which are government-owned or supported.
Outside of the U.S., we generate 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 and instead may sell CASGEVY directly to ATCs.
In 2016, we entered into a collaboration with Moderna for the identification and development of mRNA therapeutics encoding CFTR for the treatment of CF. In December 2022, the FDA cleared our Investigational New Drug Application (“IND”) for VX-522, an mRNA therapeutic we are developing with Moderna pursuant to this collaboration.
In 2016, we entered into a collaboration with Moderna for the identification and development of mRNA therapeutics encoding CFTR for the treatment of CF. We are evaluating VX-522, an mRNA therapeutic, pursuant to this collaboration. • Entrada Therapeutics, Inc. In 2022, we established a collaboration with Entrada focused on enabling efficient intracellular delivery of an oligonucleotide for DM1.
The absence of working CFTR protein results in poor flow of salt and water into and out of cells in a number of organs, including the lungs. As a result, thick, sticky mucus builds up and blocks the passages in many organs, leading to a variety of symptoms.
The absence of working CFTR protein results in poor flow of salt and water into and out of cells in a number of organs, including the lungs, where mucus builds up, causing chronic lung infections and progressive lung damage.
We continue to enroll and dose people with AMKD in the Phase 3 portion of the global Phase 2/3 clinical trial. • IgA Nephropathy .
We continue to enroll and dose patients in the adaptive Phase 2/3 pivotal trial in 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.
The manufacturing processes for biological and cell and genetic therapies are more complex than those required for small molecule drugs and require different systems, equipment, facilities, and expertise. Additionally, we are unable to utilize a single process for all of our biological and cell and genetic therapies; they must be customized for each program and therapy.
Additionally, we are unable to utilize a single process for all of our biologics and cell and genetic therapies; they must be customized for each program and therapy.
We regularly evaluate the performance of our third-party manufacturers with the objective of confirming their continuing capabilities to meet our needs efficiently and economically. Manufacturing facilities, both foreign and domestic, are subject to inspections by or under the authority of the FDA and other U.S. and foreign government authorities.
Manufacturing facilities, both foreign and domestic, are subject to inspections by or under the authority of the FDA and other U.S. and foreign government authorities.
Zai will also be responsible for commercialization activities in the licensed territories, if povetacicept becomes an approved product. Cystic Fibrosis Foundation In 2004, we entered into a collaboration agreement with the Cystic Fibrosis Foundation, as successor in interest to the Cystic Fibrosis Foundation Therapeutics, Inc., to support research and development activities.
Cystic Fibrosis Foundation In 2004, we entered into an agreement (the “CFF Agreement”) with the Cystic Fibrosis Foundation (the “CFF”), as successor in interest to the Cystic Fibrosis Foundation Therapeutics, Inc., to support research and development activities.
The edited cellular product, called CASGEVY, is frozen and transported back to the authorized treatment center where it is stored prior to infusion into the patient. Each step must be completed successfully, and in a timely manner, requiring coordination between us, authorized treatment centers, third-party manufacturers and shipping vendors.
Each step must be completed successfully, and in a timely manner, requiring coordination between us, authorized treatment centers, third-party manufacturers and shipping vendors.
The clinical trial design contemplates a pre-planned interim analysis evaluating the change from baseline in urine protein-to-creatine ratio (“UPCR”) after a certain number of patients reach 36 weeks of treatment. If positive, the interim analysis may serve as the basis to seek accelerated approval in the U.S.
We completed enrollment in RAINIER, the global Phase 3 pivotal trial of povetacicept versus placebo in people with IgAN. The clinical trial design contemplates a pre-planned interim analysis evaluating the change from baseline in urine protein-to-creatine ratio (“UPCR”) after a certain number of patients reach 36 weeks of treatment.
In December 2024, the FDA approved ALYFTREK (vanzacaftor/tezacaftor/deutivacaftor) for people with CF 6 years of age and older. • In 2019, we established our T1D program through our acquisition of Semma, a privately held company focused on the use of stem cell-derived human islets as a potentially curative treatment for T1D.
We previously made other acquisitions which have expanded and advanced our pipeline, including: • In 2019, we established our T1D program through our acquisition of Semma, a privately held company focused on the use of stem cell-derived human islets as a potentially curative treatment for T1D.
Products approved by the FDA under a Biologics Licensing Application (“BLA”), including CASGEVY, receive 12 years of regulatory exclusivity in the U.S. from a product’s approval date. Additionally, we have licenses to dozens of issued U.S. patents that cover CASGEVY, its approved indication, and/or its manufacture.
We have an issued patent listed in the Orange Book that covers the active pharmaceutical ingredient in JOURNAVX, its marketed formulation, and/or its approved indication. 13 Products approved by the FDA under a BLA, including CASGEVY, receive 12 years of regulatory exclusivity in the U.S. from a product’s approval date.
In general, these raw materials and other necessary supplies are available from multiple sources. Third-party contract manufacturers, including some in China, perform different parts of our manufacturing process. Contract manufacturers supply us with raw materials, convert these raw materials into drug substance and/or convert the drug substance or product into final dosage form.
Our supply chain for sourcing raw materials and manufacturing our products and product candidates, including obtaining all necessary supplies, is a multi-step, global endeavor. In general, these raw materials and other necessary supplies are available from multiple sources. Third-party contract manufacturers, including some based in China, perform different parts of our manufacturing process.
We expect to continue to rely on third parties to meet our commercial supply needs, including for TRIKAFTA/KAFTRIO, CASGEVY, ALYFTREK, JOURNAVX, and pipeline programs, and a significant portion of our clinical supply needs for the foreseeable future.
We have established our own small molecule manufacturing capabilities in Boston, which we use for clinical trial and commercial supplies, including certain manufacturing steps related to our commercial supply of TRIKAFTA/KAFTRIO. We 15 expect to continue to rely on third parties to meet our commercial supply needs and a significant portion of our clinical supply needs for the foreseeable future.
Autosomal Dominant Polycystic Kidney Disease ADPKD is a life-shortening genetic kidney disease characterized by the growth of numerous kidney-enlarging cysts that impair kidney function and can ultimately lead to kidney failure, requiring dialysis or kidney transplantation, and premature death.
We expect to complete the Phase 2 portion of the clinical trial and to initiate the Phase 3 portion of the trial in mid-2026. Autosomal Dominant Polycystic Kidney Disease ADPKD is a life-shortening genetic kidney disease characterized by the growth of numerous kidney-enlarging cysts that impair kidney function and can ultimately lead to end stage renal disease.
VX-670, our lead approach for DM1, holds the potential to address the underlying cause of DM1. VX-670 is an oligonucleotide connected to a cyclic peptide to promote effective delivery into cells. We completed the single ascending dose portion of the global Phase 1/2 clinical trial evaluating the first candidate, VX-670, in patients with DM1.
VX-670 is an oligonucleotide connected to a cyclic peptide to promote effective delivery into cells. We continue to enroll and dose in the multiple ascending dose portion of the global Phase 1/2 clinical trial of VX-670 in people with DM1 (“GALILEO”), which evaluates both safety and efficacy of VX-670.
While there are approved therapies for the treatment of IgAN, there are no approved therapies that specifically target the underlying cause of the disease. IgAN is thought to occur when the body produces an abnormal form of IgA, a type of antibody that normally helps the body fight infections.
A high percentage of people with IgAN progress to end-stage kidney disease. IgAN is thought to occur when the body produces an abnormal form of IgA, a type of antibody that normally helps the body fight infections.
Currently available treatments have limitations around efficacy or side effects, including a risk of addiction. Because of these challenges, over- and under-utilization, as well as misutilization, of current pain medicines may occur. In January 2025, the FDA approved JOURNAVX for the treatment of moderate-to-severe acute pain in adults.
Currently available treatments have limitations around efficacy or side effects, including a risk of addiction with opioids. Because of these challenges, over- and under-utilization, as well as misutilization, of current pain medicines may occur. JOURNAVX (suzetrigine) is a first-in-class, oral pain signal inhibitor that is highly selective for voltage-gated sodium channel NaV1.8 .
For our approved commercial products, and those in development, we own or hold exclusive and non-exclusive licenses to several hundred patents around the world. In the U.S., once an NDA, or a supplement thereto, is approved we are required to list with the FDA each U.S. patent with claims that cover our product or a method of using the product.
In the U.S., once a New Drug Application (“NDA”), or a supplement thereto, is approved we are required to list with the FDA each U.S. patent with claims that cover our product or a method of using the product. The FDA publishes the patents we list in a book referred to as the Orange Book.
We are enrolling and dosing patients in the Phase 3 clinical trial evaluating povetacicept in people with IgAN. • Type 1 Diabetes. Z imislecel, formerly known as VX-880, is an allogeneic stem-cell derived, fully differentiated islet cell therapy in pivotal development for the treatment of type 1 diabetes (“T1D”).
We expect to complete enrollment in both Phase 3 clinical trials by the end of 2026. 2 • Type 1 Diabetes. Z imislecel is an allogeneic stem-cell derived, fully differentiated islet cell therapy in pivotal development for the treatment of type 1 diabetes (“T1D”). We have completed enrollment in the Phase 1/2/3 clinical trial of zimislecel in people with T1D.
In addition, third parties assist us with packaging, warehousing, and global distribution of our products. Establishing and managing this global supply chain for each of our products and product candidates require a significant financial commitment and the creation and maintenance of numerous third-party contractual relationships.
Establishing and managing this global supply chain for each of our products and product candidates requires a significant financial commitment and the creation and maintenance of numerous third-party contractual relationships. We have established and we maintain second sources for the vast majority of our commercial products, including active ingredients, drug product, and finished dosage form packaging.
These cells are collected from the patient’s bloodstream and transferred to a manufacturing facility where the HSPCs are purified and CRISPR/Cas9 gene-editing is performed. The gene-editing procedure results in a precise and specific gene-edit in a non-coding intron of the BCL11A gene. Following manufacturing, the edited cells, now called CASGEVY, are transferred back to the ATC.
The gene-editing procedure results in a precise and specific gene-edit in a non-coding intron of the BCL11A gene. Following manufacturing, the edited cells, now called CASGEVY, are transferred back to the ATC. Patients are preconditioned with a myeloablative conditioning treatment that ablates their bone marrow to create space for the edited cells.
We plan to continue investing to advance our strategy, fostering scientific innovation by identifying additional product candidates through internal research efforts, and investing in business development transactions to access emerging technologies, products and product candidates. Our serial innovation approach is intended to increase the likelihood of successfully bringing transformative medicines to patients and to provide durable clinical and commercial success.
We aim to serially innovate in our disease areas of interest and follow our first-in-class therapies with potential best-in-class candidates. We plan to continue investing to advance our strategy, fostering scientific innovation by identifying additional product candidates through internal research efforts, and investing in business development transactions to access emerging technologies, products and product candidates.
SCD and TDT are hemoglobinopathies, a group of inherited blood disorders that result from gene mutations that alter hemoglobin, a protein in red blood cells that delivers oxygen throughout the body. We estimate approximately 60,000 people with severe SCD or TDT are or could become eligible for CASGEVY in the U.S., Canada, Europe, Saudi Arabia and Bahrain.
Sickle Cell Disease and Transfusion-Dependent Beta Thalassemia SCD and TDT are hemoglobinopathies, a group of inherited blood disorders that result from gene mutations that alter hemoglobin, a protein in red blood cells that delivers oxygen throughout the body.
Our clinical-stage pipeline includes programs in CF, SCD, beta thalassemia, acute and peripheral neuropathic pain, APOL1-mediated kidney disease, IgA nephropathy and other autoimmune renal diseases and cytopenias, type 1 diabetes, myotonic dystrophy type 1, and autosomal dominant polycystic kidney disease.
O ur mid- and late-stage clinical pipeline includes programs across a range of modalities in additional serious diseases, including IgA nephropathy, APOL1-mediated kidney disease, neuropathic pain, type 1 diabetes, primary membranous nephropathy, autosomal dominant polycystic kidney disease, and myotonic dystrophy type 1 .
We estimate approximately 60,000 people with severe SCD and TDT are or could become eligible for CASGEVY in the U.S., Canada, Europe, Saudi Arabia and Bahrain.
CASGEVY (exagamglogene autotemcel), our ex-vivo, non-viral CRISPR/Cas9-based gene-editing therapy for severe SCD and TDT, is approved in the U.S. and across multiple geographies including Europe, Canada, and the Middle East . We estimate approximately 60,000 people with severe SCD or TDT are or could become eligible for CASGEVY in these geographies.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRisks associated with operating a global biotechnology company include: • differing regulatory requirements for drug approvals and regulation of approved drugs in foreign countries; • varying reimbursement regimes and difficulties or the inability to obtain reimbursement for our products in foreign countries in a timely manner; • differing patient treatment infrastructures, particularly since our business is focused on the treatment of serious diseases that affect relatively smaller numbers of patients and are typically prescribed by specialist physicians; • collectability of accounts receivable; • changes in tariffs, trade barriers, and regulatory requirements, the risks of which appear to have increased in the current political environment; • economic weakness, including recession and inflation, or political instability in particular foreign economies and markets; • differing levels of enforcement and/or recognition of contractual and intellectual property rights; • circulation of unauthorized copy versions of our medicines that infringe our intellectual property rights; • governments seeking to override our intellectual property rights through the introduction of compulsory license or similar mechanisms; • complying with local laws and regulations, which can change significantly over time; • foreign taxes, including withholding of payroll taxes; • foreign currency fluctuations, which could result in reduced revenues or increased operating expenses, and other obligations incident to doing business or operating in another country; • workforce uncertainty in countries where labor unrest is more common than in the U.S.; • reliance on third-party vendors, distributors and suppliers; • import and export licensing requirements, tariffs, and other trade and travel restrictions; • global or regional public health emergencies that could affect our operations or business; • production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and • business interruptions resulting from geo-political actions, including war and terrorism.
Biggest changeIn 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. 34 If any of the above risks were to occur, our revenues, results of operations, financial condition or business could be materially harmed.
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.
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 38 restrictions on voting by any shareholder who acquires 20% or more of the aggregate shareholder voting power without approval by non-interested shareholders.
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.
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.
UNRESOLVED STAFF COMMENTS We did not receive any written comments from the Securities and Exchange Commission prior to the date 180 days before the end of the fiscal year ended December 31, 2024 regarding our filings under the Securities Exchange Act of 1934, as amended, that have not been resolved.
UNRESOLVED STAFF COMMENTS We did not receive any written comments from the Securities and Exchange Commission prior to the date 180 days before the end of the fiscal year ended December 31, 2025 regarding our filings under the Securities Exchange Act of 1934, as amended, that have not been resolved.
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.
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.
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 could be seriously harmed.
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.
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 and more patient data become available or as patients from our clinical trials continue other treatments for their disease.
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 their disease.
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 repurchases will depend 37 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. General Risk Factors Our stock price is volatile.
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, may be costly and time consuming and could harm our business.
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.
Product candidates that may appear promising in research and development may fail to reach commercial success for many reasons, including: • the failure to establish safety and efficacy through clinical trials; • the failure to obtain marketing approval for the product candidate; • the inability to manufacture the product candidate on economically feasible terms; • the failure to gain and maintain market acceptance among physicians and patients or other members of the medical community; and • the failure to obtain market acceptance or adequate reimbursement levels from third-party payors or foreign governments for such product.
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; • 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 community; • 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.
Failure to advance product candidates through clinical development could impair our ability to ultimately commercialize products, which could materially harm our business and long-term prospects.
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.
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 or what actions may be taken by the other countries in retaliation.
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.
General Data Protection Regulation (“GDPR”) went into effect in 2018 and has imposed new obligations on us with respect to our processing of personal data and the cross-border transfer of such data, including higher standards of obtaining consent, more robust transparency requirements, data breach notification requirements, requirements for contractual language with our data processors, and stronger individual data rights.
General Data Protection Regulation (“GDPR”) imposes obligations on us with respect to our processing of personal data and the cross-border transfer of such data, including higher standards of obtaining consent, more robust transparency requirements, data breach notification requirements, requirements for contractual language with our data processors, and stronger individual data rights.
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; • 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; • 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 share data in 2025 from the ongoing clinical trial of VX-522 in patients with CF and from Part B of the ongoing clinical trial evaluating VX-264 in patients with T1D, and our plans to file for accelerated regulatory approvals based on interim analyses from the AMPLITUDE study in AMKD and the RAINIER study in IgAN; • 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 limitations of other available therapies; • 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; • 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 the Zai collaboration; • 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; • potential business development activities, including the identification of potential collaborative partners or acquisition targets; • our ability to expand and protect our intellectual property portfolio and otherwise maintain exclusive rights to products; • 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 program; • our expectations regarding the amount of cash to generated by operations, our cash balance and expected generation and interest income; 64 • our expectations regarding our provision for or benefit from income taxes and the utilization of our deferred tax assets; • 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 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.
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 over time ; • 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 therapies; • 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 acquisition targets; 39 • our ability to expand and protect our intellectual property portfolio and otherwise maintain exclusive rights to products; • 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 program; • our expectations regarding the amount of cash to generated by operations, our cash balance and expected generation and interest income; • our expectations regarding our provision for or benefit from income taxes and the utilization of our deferred tax assets; • 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.
The final form of these laws and the relevant practical application is unknown at this time, but may lead to lower prices, paybacks or other forms of discounts or special taxes.
The impact of these laws where finalized, the final form of laws under consideration, and their relevant practical application, are unknown at this time, but may lead to lower prices, paybacks, or other forms of discounts or special taxes.
For example, in December 2024, the FDA modified the labeling of TRIKAFTA by revising information regarding liver injury and liver failure and moving it from the “warnings and precautions” section to a “boxed warning” section, and included similar language in the ALYFTREK label.
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.
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. We have adopted business continuity plans to address most crises.
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.
For example, legislation has been introduced in Congress to limit certain U.S. biotechnology companies from using equipment or services produced or provided by select Chinese biotechnology companies, and others in Congress have advocated for the use of existing executive branch authorities to limit those Chinese service providers’ ability to engage in business in the U.S.
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.
In February 2023, our Board of Directors approved a share repurchase program pursuant to which we are authorized to repurchase up to $3.0 billion of our common stock from time to time through open market or privately negotiated transactions, of which $1.6 billion has been repurchased as of December 31, 2024.
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 .
However, if we are unable to fully 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 research, development, manufacturing and/or commercial activities, large expenses to repair or replace the facility and/or the loss of critical data, which could have a material adverse effect on our business.
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.
Due to evolving legal standards 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 patents is uncertain and involves complex legal and factual questions. We have many pending patent applications covering our products.
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.
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.
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.
A disruption, infiltration, or failure of our information technology systems or any of our data centers as a result of software or hardware malfunctions, computer viruses, cyber-attacks, employee theft or misuse, power disruptions, natural disasters, floods or accidents could cause breaches of data security and loss of critical data, which in turn could materially adversely affect our business and subject us to both private and governmental causes of action.
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.
In many countries, the health care professionals we regularly interact with may meet the definition of a foreign government official for purposes of the FCPA. We also are subject to import/export control laws.
In many countries, the health care professionals we regularly interact with may meet the FCPA’s definition of a foreign government official. We are also subject to U.K.
In addition, our increased use of cloud technologies heightens these third party and other operational risks, and any failure by cloud or other technology service providers to adequately safeguard their systems and prevent cyber-attacks could disrupt our operations and result in misappropriation, corruption, or loss of confidential or propriety information.
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.
It also is possible that other federal, state, or foreign enforcement authorities might take action if they believe that the alleged improper promotion led to the submission and payment of claims for an unapproved use, which could result in significant fines or penalties under other statutory authorities, such as laws prohibiting false claims for reimbursement.
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.
In addition, we maintain cyber liability insurance, however, 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. Cyber-attacks are increasing in their frequency, sophistication, and intensity, and are becoming increasingly difficult to detect.
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.
Further, the credit agreement includes negative covenants, subject to exceptions, 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.
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.
We are subject to data privacy and security laws and regulations in various jurisdictions that apply to the collection, storage, use, sharing, and security of personal data, including health information, and impose significant compliance obligations.
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.
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 process.
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 process. In addition, we and our CMOs and corporate partners are subject to cGMP, as well as comparable regulations in other jurisdictions.
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. 63 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.
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.
Any failure to obtain regulatory approvals for a product candidate would prevent us from commercializing that product candidate. Any delay in obtaining required regulatory approvals could materially adversely affect our ability to successfully commercialize a product candidate.
Any delay in obtaining required regulatory approvals could adversely affect our ability to successfully commercialize a product candidate.
Following periods of volatility in the market price of a company’s securities, stockholder 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 a diversion of management’s attention and resources.
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 business. If we fail to attract and retain skilled employees, our business could be materially harmed.
We cannot, however, 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. We may continue to see more state action requiring additional disclosures or other actions.
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.
Supply disruptions may result from a number of factors, including shortages in product raw materials, labor or technical difficulties, regulatory inspections or restrictions, shipping or customs delays, general global supply chain disruptions, events beyond our control, or any other performance failure by us or any third-party manufacturer on which we rely.
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.
To ensure the stability of our supply chains, we continue to develop alternative suppliers for our manufacturing processes and key materials. However, there can be no assurance that we will be able to establish and maintain additional manufacturers or capacity for all of our product candidates and products on a timely basis or at all.
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.
As a result, if any of our CF products were to experience safety issues or labeling modifications, our other CF products may be adversely affected.
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.
If any of the above risks were to materialize, if we are otherwise unable to increase revenues from sales of our CF medicines, or if we do not meet the expectations of investors or public equity market analysts, our business would be materially harmed and our ability to fund our operations could be adversely affected. 35 If we are unable to successfully develop, obtain approval and commercialize treatments for acute and neuropathic pain, our business could be materially harmed.
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 affected.
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.
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.
The timing of the release of information by us regarding our drug and therapy development programs is often beyond our control and is influenced by the timing of receipt of data from our clinical trials and by the general preference among pharmaceutical companies to disclose clinical data during medical conferences.
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.
Additionally, unfavorable geopolitical events or situations 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. Any such disruptions could disrupt sales of our products and/or the timing or advancement of our clinical trials.
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.
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. 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.
While we have implemented security measures to minimize these risks to our data and information technology systems and have adopted a business continuity plan to deal with a disruption to our information technology systems, 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.
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.
The regulatory approval process and clinical trial requirements for cell and genetic therapies can be more expensive and take longer than for other, better known or more extensively studied product candidates, and regulatory requirements governing cell and genetic therapy products have changed frequently and may continue to change in the future.
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.
For example, the results from completed preclinical studies and clinical trials may not be replicated in later clinical trials, and ongoing clinical trials for our product candidates may not be predictive of the results we may obtain in later-stage clinical trials or of the likelihood of approval of a product candidate for commercial sale.
Similarly, results from earlier-stage clinical 28 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.
We maintain and rely extensively on information technology systems and network infrastructures for the effective operation of 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 .
There is no assurance that coverage and reimbursement will be available outside of the U.S. for our approved or future therapies and, even if it is available, whether 41 the timing or the level of reimbursement will be sufficient to allow us to market them.
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.
Results of our clinical trials and findings from our nonclinical studies, including toxicology findings in nonclinical studies conducted concurrently with clinical trials, could lead to abrupt changes in our development activities, including the possible cessation of development activities associated with a particular product candidate or program.
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.
Our ability to continue 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, there could be a material adverse effect on our business. If our facilities were to experience a catastrophic loss, our operations would be seriously harmed.
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.
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. Our revenues are subject to foreign exchange rate fluctuations due to the global nature of our operations.
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.
If any of the following risks or uncertainties actually occurs, 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. SUMMARY OF RISK FACTORS Our business is subject to numerous risks and uncertainties, discussed in more detail in the following section.
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.
Cyber-attacks also include manufacturing, hardware or software supply chain attacks, which could cause a delay in the manufacturing of products or products produced for contract manufacturing or lead to a data privacy or security breach. Our business partners face similar risks and when they experience a security breach of their systems, our security can be adversely affected.
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.
Some state PDABs either have the authority or have defined a pathway where they may be granted the authority to establish upper payment limits for prescription drugs, including Colorado, Maryland, Washington, and Minnesota. Under the Washington law, the PDAB cannot select for an affordability review drugs that are solely for the treatment of an orphan-designated disease or condition.
Some state PDABs, including those in Colorado, Maryland, Washington, and Minnesota, either have the authority or have defined a pathway pursuant to which they may be granted the authority to establish upper payment limits for prescription drugs. In certain states, there is pending litigation that would establish a PDAB or expand the authority of an existing PDAB.
Failure to maintain our third-party relationships or challenges at or with these third parties could materially harm our business. Our business depends on relationships with third parties for a variety of functions, including activities critical to supply and manufacturing, commercialization, research and development, and technology.
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.
Our effective tax rate fluctuates, and changes in tax laws, regulations and treaties, unfavorable resolution to the tax positions we have taken or exposure to additional income tax liabilities could have a material impact on our future taxable income. Our effective tax rate is derived from a combination of applicable tax rates in the various places that we operate globally.
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 contractual obligations. 36 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 taxable income.
The reporting of adverse safety events involving our products or public speculation about such events could cause our stock price to decline or experience periods of volatility.
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 Our Operations If we fail to scale our operations to accommodate growth, our business may suffer. We have expanded and are continuing to expand our global operations and capabilities, which has placed, and will continue to place, significant demands on our management and our operational, research and development and financial infrastructure.
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.
Compliance with the these 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, and despite those efforts, there is a risk that we may be subject to fines and penalties, litigation, and reputational harm in connection with any activities falling within the scope of the GDPR or other privacy laws or regulations.
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.
If we discover safety issues with any of our products or if we fail to comply with continuing U.S. and applicable foreign regulations, commercialization efforts for the product could be negatively affected, the approved product could lose its approval, and our business could be materially harmed.
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.
We expended significant efforts to establish, and are continuing to devote significant resources to maintain and enhance, systems and processes to comply with these regulations. Requirements to track and disclose financial interactions with health care providers and organizations increase government and public scrutiny of these financial interactions.
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.
If we are not able to successfully develop and commercialize additional products our business could be materially harmed. If we are unable to sustain and grow revenues from sales of our CF medicines, our business would be materially harmed and the market price of our common stock would likely decline.
If we are not able to successfully develop and commercialize additional medicines, our business would be materially harmed. 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.
Furthermore, the number of government investigations and enforcement actions related to data security incidents and privacy violations, with a specific focus on online data sharing, continue to increase and government investigations typically require significant resources and generate negative publicity, which could harm our business and our reputation.
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.
In August 2023, the Colorado PDAB selected five drugs for an affordability review, including TRIKAFTA; later that year, it found TRIKAFTA to be not unaffordable, and thus not eligible for an upper payment limit.
For example, in August 2023, the Colorado PDAB selected five drugs for an affordability review, including TRIKAFTA.
Additionally, establishing, managing and expanding our global manufacturing and supply chain requires a significant financial commitment and the creation and maintenance of our numerous third-party contractual relationships. We may not 50 be able to agree on contractual terms with third parties as needed for manufacturing of 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.
Due to the highly technical nature of our drug discovery and development activities, we require the services of highly qualified and trained scientists who have the skills necessary to conduct these activities. In addition, we need to attract and retain employees with experience in development, marketing and commercialization of medicines and therapies, including cell and genetic therapies.
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.
In the event of a successful claim of infringement against us, we may have to pay substantial damages, obtain one or more licenses from third parties, pay royalties or redesign our infringing products, which may be impossible or require substantial time and monetary expenditure.
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.
Even with the relevant experience and expertise, manufacturers of cell and genetic therapy products often encounter difficulties in production, including difficulties with production costs and yields, quality control, and compliance with federal, state and foreign regulations.
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 33 regulations, which can prevent manufacturers from completing clinical trials or commercializing products on a timely or profitable basis, if at all.
Although we have a foreign currency risk management program, our efforts to reduce currency exchange volatility may not be successful. As a result, currency fluctuations among our reporting currency, the U.S. dollar, and the currencies in which we do business will affect our operating results, often in unpredictable ways.
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 participate in the Medicaid Drug Rebate Program, the 340B program, and a number of other federal and state government pricing programs in the U.S. to obtain coverage for our products by certain government health care programs.
In the U.S., we participate in the Medicaid Drug Rebate Program, Medicare, and other governmental pricing programs. Medicaid is a joint federal and state program that is administered by the states for low-income and disabled beneficiaries.
In addition, failure of any third-party contractor to conduct activities in accordance with our expectations, could adversely affect the relevant research, development, commercial or administrative activity. 51 Risks Related to Business Development Activities We face risks in connection with existing and future collaborations with respect to the development, manufacture and commercialization of our products and product candidates.
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 issuance of restricted common stock or common stock upon exercise of any outstanding options would be dilutive, and may cause the market price for a share of our common stock to decline. There can be no assurance that we will repurchase shares of common stock or that we will repurchase shares at favorable prices.
There can be no assurance that we will repurchase shares of common stock or that we will repurchase shares at favorable prices.
In the U.S., federal and state laws regulate financial interactions between pharmaceutical manufacturers and healthcare providers, require disclosure to government authorities and the public of such interactions, and mandate the adoption of compliance standards or programs.
Laws and regulations also have been enacted by the federal government and various states to regulate the sales and marketing practices of pharmaceutical manufacturers. The laws and regulations generally limit financial interactions between manufacturers and health care providers, require manufacturers to adopt certain compliance standards or require disclosure to the government and public of such interactions.
We have faced and will continue to face significant competition for the acquisition of rights to these types of products, product candidates and other technologies from a variety of other companies, some of which have significantly more financial resources and experience in business development activities than we have.
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.
If a regulatory agency determines that our promotional materials, or other activities constitute promotion of unapproved uses or otherwise false and misleading promotion, it could request that we modify our promotional materials or other activities, conduct corrective advertising, or subject us to regulatory enforcement actions, such as the issuance of a warning or untitled letter, injunction, seizure, civil fines and criminal penalties.
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.
We face intense competition for our personnel from our competitors and other companies throughout our industry, especially with respect to employees with expertise in cell or genetic therapies. We also experience competition for the hiring of scientific and clinical personnel from universities and research institutions.
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.
The reimbursement process in ex-U.S. markets can take a significant time to conclude and reimbursement decisions are made on a country by country or region by region basis. Further, many ex-U.S. governments are introducing new legislation focusing on cost containment measures in the pharmaceutical industry.
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.
In addition, we maintain property insurance, however, this insurance may not be sufficient to cover all potential losses that may result from an interruption to our operations. The use of social media platforms and artificial intelligence tools presents risks and challenges.
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.
Failure to comply with the covenants could result in an event of default that could trigger acceleration of our indebtedness, which would require us to repay all amounts owed under the credit agreements and/or our finance leases and could have a material adverse effect on our business.
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.
If we borrow under our current credit agreement or any future credit agreements, such indebtedness could have important consequences to our business, including increasing our vulnerability to general adverse financial, business, economic and industry conditions, 62 as well as other factors that are beyond our control.
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.
We have experienced challenges in obtaining timely reimbursement for our products in various countries outside the U.S. Our future product revenues, including from TRIKAFTA/KAFTRIO, ALYFTREK, and CASGEVY, depend on, among other things, our ability to maintain reimbursement in ex-U.S. markets for our products.
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.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur cybersecurity program is integrated into our overall risk management systems, including our annual enterprise risk management program, internal audit program, business continuity and crisis management programs, third-party risk management program, insurance risk management program, and employee compliance programs. As part of our overall risk management program, we maintain a global insurance portfolio with comprehensive cyber coverage.
Biggest changeWe engage a range of third-party experts in connection with various development, implementation, and maintenance activities related to our cybersecurity program, including audit and compliance, threat hunting, monitoring, and end-user support. 40 Our cybersecurity program is integrated into our overall risk management systems, including our annual enterprise risk management program, internal audit program, business continuity and crisis management programs, third-party risk management program, insurance risk management program, and employee compliance programs.
Our CISO oversees a team of skilled cybersecurity professionals who have Certified Information Systems Security Professional (“CISSP”) credentials, Global Information Assurance Certification from the SANS Institute, and other security and network certifications. The cybersecurity team monitors and evaluates our cybersecurity posture and performance on an ongoing basis, including through regular vulnerability scans, penetration tests, and threat intelligence feeds.
Our CISO oversees a team of skilled cybersecurity professionals who have Certified Information Systems Security Professional credentials, Global Information Assurance Certification from the SANS Institute, and other security and network certifications. The cybersecurity team monitors and evaluates our cybersecurity posture and performance on an ongoing basis, including through regular vulnerability scans, penetration tests, and threat intelligence feeds.
At the same time, primary responsibility for assessing, monitoring, and managing our cybersecurity risks lies with our CISO, Michael Daly, who has more than 35 years of experience in security and information systems and spent 25 years with Raytheon Technologies, most recently as Chief Technology Officer of Cybersecurity, Special Missions, Training & Services. Our CISO supported the U.S.
A t the same time, primary responsibility for assessing, monitoring, and managing our cybersecurity risks lies with our CISO. Our CISO has more than 35 years of experience in security and information systems and spent 25 years with Raytheon Technologies, most recently as Chief Technology Officer of Cybersecurity, Special Missions, Training & Services. Our CISO supported the U.S.
The CISO is continually informed regarding the performance of the cybersecurity program, as well as the latest developments in cybersecurity, including potential threats and innovative risk management techniques aligned with industry standards. The CISO reports to our Chief Scientific Officer (“CSO”).
The CISO is continually informed regarding the performance of the cybersecurity program, as well as the latest developments in cybersecurity, including potential threats and innovative risk management techniques aligned with industry standards.
Our cybersecurity program includes systems and processes for assessing, identifying and managing material risks from cybersecurity threats and include maintenance and monitoring of information security policies aligned with global regulatory controls and aligned with National Institute of Standards and Technology Cybersecurity Framework; user and employee awareness of cyber policies and practices; information systems configuration management; third-party risk management systems; identity and information asset protection; infrastructure security systems; and cyber threat operations with continuous monitoring and threat hunting.
Our cybersecurity program includes systems and processes for assessing, identifying and managing material risks from cybersecurity threats and include maintenance and monitoring of information security policies aligned with global regulatory controls and aligned with National Institute of Standards and Technology Cybersecurity Framework and System and Organization Controls 2.
Over the last three years, net expenses incurred from any information security breaches, including any penalties and settlements, are not material relative to our total revenue.
As of the date of this report, however, known cybersecurity incidents, individually or in aggregate, have not had a material impact on our company. Over the last three years, net expenses incurred from any information security breaches, including any penalties and settlements, are not material relative to our total revenue.
Governance While our board of directors has oversight responsibility for risk management generally, the Audit and Finance Committee (“Audit Committee”) is specifically responsible for overseeing our cybersecurity risk management program to ensure that cybersecurity risks are identified, assessed, managed, and monitored.
For additional discussion on cybersecurity risks we face, see Item 1.A, Risk Factors – “A breakdown or breach of our information technology systems, or unauthorized access to confidential information could adversely affect our business.” of this Annual Report on Form 10-K Governance While our board of directors has oversight responsibility for risk management generally, the Audit and Finance Committee (“Audit Committee”) is specifically responsible for overseeing our cybersecurity risk management program to ensure that cybersecurity risks are identified, assessed, managed, and monitored.
Our Chief Information Security Officer (“CISO”) and the Information Security function advises, consults with, or provides input to each of these programs to ensure that material risks from cybersecurity threats are appropriately assessed, identified, and managed. 65 As of the date of this report, there have been no cybersecurity threats that have materially affected or are reasonably likely to materially affect our business, operations, or financial condition.
As part of our overall risk management program, we maintain a global insurance portfolio with comprehensive cyber coverage. Our Chief Information Security Officer (“CISO”) and the Information Security function advises, consults with, or provides input to each of these programs to ensure that material risks from cybersecurity threats are appropriately assessed, identified, and managed.
Similar to other companies, we have experienced cybersecurity incidents, including temporary service interruptions of third-party suppliers. As of the date of this report, however, known cybersecurity incidents, individually or in aggregate, have not had a material impact on our company.
As of the date of this report, there have been no cybersecurity threats that have materially affected or are reasonably likely to materially affect our business, operations, or financial condition. Similar to other companies, we have experienced cybersecurity incidents, including temporary service interruptions of third-party suppliers.
This program includes processes to oversee and identify material risks from cybersecurity threats associated with our use of third-party service providers. We also engage a range of third-party experts in connection with various development, implementation, and maintenance activities related to our cybersecurity program, including audit and compliance, threat hunting, monitoring, and end-user support.
T his program also includes processes to oversee and identify material risks from cybersecurity threats associated with our use of third-party service providers.
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For additional discussion on cybersecurity risks we face, see Item 1.A Risk Factors — A breakdown or breach of our information technology systems could subject us to liability or interrupt the operation of our business .
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The program includes user and employee awareness of cyber policies and practices; information systems configuration management; third-party risk management systems; identity and information asset protection; infrastructure security systems; and cyber threat operations with continuous monitoring and threat hunting.
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Our CSO is an executive officer and leads internal research and external innovation, corporate data strategy, technology and data sciences, and reports directly to our CEO.
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The CISO reports to our Chief Digital and Information Officer, who is a Senior Vice President of the Company and reports directly to our Chief Operating and Financial Officer (“COFO”). Our COFO is an Executive Vice President and an executive officer of the Company, and reports directly to our CEO.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThis space includes logistical, laboratory, commercial and manufacturing operations, as well as laboratory and office space to support our research and development organizations. We also own approximately 213,000 square feet at our continuous manufacturing facility in Massachusetts. 66 ITEM 3. LEGAL PROCEEDINGS We are not currently subject to any material legal proceedings. ITEM 4.
Biggest changeThis space includes logistical, laboratory, commercial and manufacturing operations, as well as laborator y and office space to support our research and development organizations. We also own approximately 213,000 square feet at our continuous manufacturing facility in Massachusetts.
We have the option to extend the term of the leases for up to two additional ten-year periods. Additional United States and Worldwide Locations In addition to our corporate headquarters, we lease an aggregate of approximately 850,000 square feet of space globally.
We have the option to extend the term of the leases for up to two additional ten-year periods. 41 Additional United States and Worldwide Locations In addition to our corporate headquarters, we lease an aggregate of approximately 865,000 squar e feet of space globally.
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MINE SAFETY DISCLOSURES Not applicable. 67 PART II
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Additionally, we are constructing the second building of our Leiden Campus in Massachusetts (“Leiden II”), which will include approximately 348,000 square feet of office and laboratory space. We expect Leiden II to be operational in late 2026 . ITEM 3.
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LEGAL PROCEEDINGS Other than as described in Note P, “Commitments and Contingencies,” to our consolidated financial statements, we are not currently subject to any material legal proceedings. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 42 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeDividends We have never paid any cash dividends on our common stock, and we do not anticipate paying any in the foreseeable future. 68 Issuer Repurchases of Equity Securities In February 2023, our Board of Directors approved a share repurchase program (the “Share Repurchase Program”) pursuant to which we are authorized to repurchase up to $3.0 billion of our common stock.
Biggest changeIssuer Repurchases of Equity Securities In May 2025, our Board of Directors approved a share repurchase program (our “2025 Share Repurchase Program”), pursuant to which we are authorized to repurchase up to $4.0 billion of our common stock. The 2025 Share Repurchase Program does not have an expiration date and can be discontinued at any time.
Such purchases may be made pursuant to Rule 10b5-1 plans or other means as determined by our management and in accordance with the requirements of the Securities and Exchange Commission. ITEM 6. [RESERVED] 69
Such purchases may be made pursuant to Rule 10b5-1 plans or other means as determined by our management and in accordance with the requirements of the Securities and Exchange Commission. ITEM 6. [RESERVED] 44
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is traded on The Nasdaq Global Select Market under the symbol “VRTX.” Shareholders As of February 7, 2025, there were 101 holders of record of our common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is traded on The Nasdaq Global Select Market under the symbol “VRTX.” Shareholders As of February 6, 2026 , there were 94 holders of record of our common stock.
Performance Graph Our performance graph includes the NASDAQ Biotechnology Index, which we believe is a comparable index consisting of companies with similar industry classifications, and which we plan to use in our future performance graphs.
Performance Graph Our performance graph includes the NASDAQ Biotechnology Index, which we believe is a comparable index consisting of companies with similar industry classifications, and which we plan to use in our future performance graphs. 43 Dividends We have never paid any cash dividends on our common stock, and we do not anticipate paying any in the foreseeable future.
Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Programs (1) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Programs (1) Oct. 1, 2024 to Oct. 31, 2024 230,000 $ 472.77 230,000 $ 1,699,865,374 Nov. 1, 2024 to Nov. 30, 2024 221,000 $ 471.15 221,000 $ 1,595,740,301 Dec. 1, 2024 to Dec. 31, 2024 510,129 $ 420.46 510,129 $ 1,381,251,940 Total 961,129 $ 444.63 961,129 $ 1,381,251,940 (1) Under our Share Repurchase Program, we are authorized to purchase shares from time to time through open market or privately negotiated transactions.
Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Programs (1) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Programs (1) Oct. 1, 2025 to Oct. 31, 2025 256,788 $ 409.11 256,788 $ 3,381,462,793 Nov. 1, 2025 to Nov. 30, 2025 — $ — — $ 3,381,462,793 Dec. 1, 2025 to Dec. 31, 2025 — $ — — $ 3,381,462,793 Total 256,788 $ 409.11 256,788 $ 3,381,462,793 (1) Under our 2025 Share Repurchase Program, we are authorized to purchase shares from time to time through open market or privately negotiated transactions.
Our Share Repurchase Program does not have an expiration date and can be discontinued at any time. The table set forth below shows repurchases of securities by us during the three months ended December 31, 2024 under our Share Repurchase Program.
The table set forth below shows repurchases of securities by us during the three months ended December 31, 2025 under our 2025 Share Repurchase Program.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeLIQUIDITY AND CAPITAL RESOURCES The following table summarizes the components of our financial condition as of December 31, 2024 and 2023: 2024 2023 % Change (in millions, except percentages) Cash, cash equivalents and marketable securities: Cash and cash equivalents $ 4,569.6 $ 10,369.1 Marketable securities 1,546.3 849.2 Long-term marketable securities 5,107.9 2,497.8 Total cash, cash equivalents and marketable securities $ 11,223.8 $ 13,716.1 (18)% Working Capital: Total current assets $ 9,596.4 $ 14,144.2 (32)% Total current liabilities (3,564.6) (3,547.4) —% Total working capital $ 6,031.8 $ 10,596.8 (43)% Working Capital As of December 31, 2024, total working capital was $6.0 billion, which represented a decrease of $4.6 billion from $10.6 billion as of December 31, 2023 primarily due to cash paid to acquire Alpine. 82 Cash Flows 2024 2023 2022 (in millions) Net cash (used in) provided by: Operating activities $ (492.6) $ 3,537.3 $ 4,129.9 Investing activities $ (3,770.0) $ (3,141.7) $ (321.1) Financing activities $ (1,494.9) $ (562.2) $ (67.7) Operating Activities Cash used in operating activities was $492.6 million in 2024 as compared to cash provided by operating activities of $3.5 billion in 2023.
Biggest changeThe 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 . 54 LIQUIDITY AND CAPITAL RESOURCES The following table summarizes the components of our financial condition as of December 31, 2025 and 2024 : 2025 2024 % Change (in millions, except percentages) Cash, cash equivalents and marketable securities: Cash and cash equivalents $ 5,084.8 $ 4,569.6 Marketable securities 1,523.3 1,546.3 Long-term marketable securities 5,712.3 5,107.9 Total cash, cash equivalents and marketable securities $ 12,320.4 $ 11,223.8 10% Working Capital: Total current assets $ 11,201.0 $ 9,596.4 17% Total current liabilities (3,861.2) (3,564.6) 8% Total working capital $ 7,339.8 $ 6,031.8 22% Working Capital 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.
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.
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 59 appropriate discount and tax rates.
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. 83 • Facility, operating and finance lease obligations as described below. • Firm purchase obligations related to our supply and manufacturing processes.
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.
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. 76 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.
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.
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 do advance into development never receive marketing approval.
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 accounting policies, including the ones discussed below, are more fully described in Note A, “Nature of Business and Accounting Policies.” Revenue Recognition Product Revenues, Net We generate product revenues from sales in the U.S. and in international markets.
Our accounting policies, including the ones discussed below, are more fully described in Note A, “Nature of Business and Accounting Policies.” 57 Revenue Recognition Product Revenues, Net We generate product revenues from sales in the U.S. and in international markets.
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 CF, and upon infusion of our gene-therapy products, including CASGEVY.
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.
We are reimbursed by CRISPR for its 40% share of these research and development activities, subject to certain adjustments, and we record this reimbursement from CRISPR as a credit within “Research and development expenses.” We also share with CRISPR 40% of the net commercial profits or losses incurred with respect to CASGEVY, subject to certain adjustments, which is recorded to “Cost of sales.” The net commercial profits or losses equal the sum of the product revenues, cost of sales and selling, general and administrative expenses that we have recognized related to the CRISPR JDCA.
We are reimbursed by CRISPR for its 40% share of these research and development activities, subject to certain adjustments, and we record this reimbursement from CRISPR as a credit within “ Research and development expenses .” We also share with CRISPR 40% of the net commercial profits or losses incurred with respect to CASGEVY, subject to certain adjustments, which is recorded to “ Cost of sales .” The net commercial profits or losses equal the sum of the product revenues, cost of sales and selling, general and administrative expenses that we have recognized related to the CRISPR JDCA.
In 2023 and 2022, 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.
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.
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. 84 Changes in estimates are reflected in reported results for the period in which the change occurs.
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.
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, 2024, the facility was undrawn, and we were in compliance with these covenants.
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.
Please refer to Note B, “Collaboration, License and Other Arrangements,” for further information regarding our asset acquisitions, collaboration, 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.
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.
Please refer to our critical accounting policies, “Acquisitions,” for further information regarding the significant judgments and estimates related to our acquisitions.
Please refer to our critical accounting policies, “ Acquisitions ,” for further information regarding the significant judgments and estimates related to our acquisitions.
We are subject to tax laws and audits in multiple jurisdictions and significant judgment is required in making this assessment.
We are subject to tax laws and audits in multiple jurisdictions and judgment is required in making this assessment.
For a discussion of our financial condition and results of operations for 2023 as compared to 2022, please refer to Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2023 Annual Report on Form 10-K, except as set forth 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.
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.
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 58 as revenue when we deliver the free products.
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.
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.
In addition to establishing supply chains for each new 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.
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.
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.
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.
Inventories 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.
Pre-Launch Inventories 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.
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 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.
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 2024 as compared to 2023 are discussed below.
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.
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, 2024, we had $1.4 billion remaining authorization available under our $3.0 billion Share Repurchase Program that our Board of Directors approved in February 2023.
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.
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 for approximately $5.0 billion in cash.
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.
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 results: • revenue recognition; • acquisitions, including intangible assets, goodwill and contingent consideration; • inventories; and • income taxes.
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 results: • revenue recognition; • acquisitions, including intangible assets; • pre-launch inventories; and • income taxes.
Prior to making this determination, we expensed inventoriable and related costs associated with JOURNAVX, as well as ALYFTREK, as “Research and development expenses.” Income Taxes We utilize the asset and liability method of accounting for income taxes.
Prior to making this determination, we expensed inventoriable and related costs associated with JOURNAVX as “ Research and development expenses .” Income Taxes We utilize the asset and liability method of accounting for income taxes.
Acquired In-Process Research and Development Expenses In 2024 and 2023, our AIPR&D included $4.6 billion and $527.1 million, 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.
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.
Significant 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, 2024, we maintained a valuation allowance of $272.9 million related primarily to U.S. state tax attributes.
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.
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 sales price. The most significant estimate we are required to make for our product revenues is related to government, commercial, and private payor rebates, chargebacks, discounts and fees, collectively rebates.
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 sales price. 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.
We sell our products principally to a limited number of specialty pharmacy and specialty distributors 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, or authorized treatment centers (“ATCs”) for CASGEVY.
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.
CASGEVY (exagamglogene autotemcel), our ex-vivo, non-viral CRISPR/Cas9 gene-edited cell therapy, is approved in the U.S., the European Union (“E.U.”), the United Kingdom (“U.K.”), the Kingdom of Saudi Arabia (“Saudi Arabia”), the Kingdom of Bahrain (“Bahrain”), the United Arab Emirates (the “UAE”), Switzerland and Canada for the treatment of people 12 years of age and older with SCD or TDT.
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.
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 $2.7 billion and $189.0 million related to our operating and finance leases, respectively, as of December 31, 2024.
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 .
Our Business Environment In 2024, our net product revenues came primarily from the sale of our medicines for the treatment of CF.
Our Business Environment In 2025 , our net product revenues were primarily from the sale of our medicines for the treatment of CF.
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.
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 described above.
Our provision for income taxes was $784.1 million for 2024 and $760.2 million for 2023. 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.
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.
We assign external costs of services provided to us by clinical research organizations and other outsourced research by individual program. Our internal costs are greater than our external costs. All research and development costs for our products and product candidates are expensed as incurred.
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.
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. 75 In the U.S., we have worked successfully with third-party payors to promptly obtain appropriate levels of reimbursement for our CF medicines.
We dedicate substantial management and other resources to obtain and maintain appropriate levels of reimbursement for our 48 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.
Alpine’s lead molecule, 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.
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.
We have not identified any goodwill impairment to date. Finite-lived Intangible Assets As of December 31, 2024 and 2023, we had $222.3 million and $236.3 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.
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 aim to rapidly follow our first-in-class therapies that achieve proof-of-concept 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 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.
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.
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.
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.
Consequently, we regularly re-evaluate uncertain tax positions and consider various factors, including changes in 60 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 .
Selling, General and Administrative Expenses 2024 % Change 2023 % Change 2022 (in millions, except percentages) Selling, general and administrative expenses $ 1,464.3 29% $ 1,136.6 20% $ 944.7 Selling, general and administrative expenses increased by 29% in 2024 as compared to 2023, primarily due to increased commercial investments to prepare for the launch of JOURNAVX and support the launch of CASGEVY, and stock-based compensation expense.
Selling, General and Administrative Expenses 2025 % Change 2024 % Change 2023 (in millions, except percentages) Selling, general and administrative expenses $ 1,753.1 20% $ 1,464.3 29% $ 1,136.6 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 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.
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.
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.
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.
APOL1-Mediated Kidney Disease • Inaxaplin is our small molecule for the treatment of APOL1-mediated kidney disease (“AMKD”). We continue to enroll and dose people with AMKD in the Phase 3 portion of the global Phase 2/3 pivotal clinical trial (“AMPLITUDE”).
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”).
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 known. 85 The following table summarizes activity related to our product revenue accruals for rebates for 2024, 2023 and 2022: (in millions) Balance at December 31, 2021 $ 838.6 Provision related to 2022 sales 2,977.2 Adjustments related to prior year(s) sales (10.4) Credits/payments made (2,514.0) Balance at December 31, 2022 $ 1,291.4 Provision related to 2023 sales 3,481.4 Adjustments related to prior year(s) sales (6.5) Credits/payments made (3,064.7) Balance at December 31, 2023 $ 1,701.6 Provision related to 2024 sales 3,673.0 Adjustments related to prior year(s) sales (42.1) Credits/payments made (3,725.4) Balance at December 31, 2024 $ 1,607.1 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.
The following table summarizes activity related to our product revenue accr uals for rebates for 2025 , 2024 and 2023 : (in millions) Balance at December 31, 2022 $ 1,291.4 Provision related to 2023 sales 3,481.4 Adjustments related to prior year(s) sales (6.5) Credits/payments made (3,064.7) Balance at December 31, 2023 $ 1,701.6 Provision related to 2024 sales 3,673.0 Adjustments related to prior year(s) sales (42.1) Credits/payments made (3,725.4) Balance at December 31, 2024 $ 1,607.1 Provision related to 2025 sales 3,780.4 Adjustments related to prior year(s) sales (90.4) Credits/payments made (3,519.5) Balance at December 31, 2025 $ 1,777.6 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.
This program does not have an expiration date and can be discontinued at any time. We expect to fund these programs through a combination of cash on hand and cash generated by operations. Additional information on several of our future capital requirements is provided below.
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.
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. 86 For business combinations, we are required to make several significant judgments and estimates to calculate and allocate the purchase price to the assets that we have acquired and the liabilities that we have assumed on our consolidated balance sheet.
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.
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.
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. 49 CASGEVY was approved by the FDA in December 2023 for the treatment of SCD.
As of December 31, 2024, our liability for uncertain tax positions was $706.2 million. 88 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 2024.
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 .
To support future product development and commercialization efforts, we may enter into additional lease agreements, which require additional capital. 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.
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.
Over the last several years, we entered into collaboration agreements with a number of companies, including CRISPR Therapeutics AG (“CRISPR”), Entrada, and Moderna. 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.
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.
We also have several embedded leases with contract manufacturing organizations related to the manufacturing and commercialization of our products with remaining lease terms up to 8 years as of December 31, 2024.
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 .
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. To estimate our total rebates, we estimate the percentage of prescriptions that will be covered by each third-party payor, which is referred to as the payor mix.
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.
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.
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.
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.
Additional information on several of our future capital requirements is provided below. 56 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.
Both of these trials are ongoing , and we expect data in some of these conditions in 2025. Type 1 Diabetes • 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 in both Phase 3 clinical trials by the end of 2026. Type 1 Diabetes • 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”).
Cash Our total cash, cash equivalents and marketable securities decreased to $11.2 billion as of December 31, 2024 as compared to $13.7 billion as of December 31, 2023 primarily due to cash paid to acquire Alpine and repurchases of our common stock, partially offset by cash flows provided by other operating activities.
Cash 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. $0.1 45 $0.1 2024 2025 December 31, 2025 December 31, 2024 Note: Charts above may not add due to rounding.
Development Expenses 2024 Change % 2023 Change % 2022 (in millions, except percentages) Development Expenses: Salary and benefits $ 686.7 16% $ 590.9 24% $ 475.1 Stock-based compensation expense 313.7 20% 262.5 23% 213.9 Compensation expense for cash-settled unvested Alpine equity awards 151.9 ** — ** — Outsourced services and other direct expenses 1,239.1 0% 1,238.7 36% 912.9 Infrastructure costs 434.4 19% 365.2 17% 311.7 Total development expenses $ 2,825.8 15% $ 2,457.3 28% $ 1,913.6 ** Not meaningful Our development expenses increased by $368.5 million, or 15%, in 2024 as compared to 2023, due to continued investments in internal headcount and related expenses and infrastructure to support advancement of additional therapies into mid-to-late-stage development, including our T1D program.
We expect to continue to invest in our research programs with a focus on creating transformative medicines for serious diseases. 52 Development Expenses 2025 Change % 2024 Change % 2023 (in millions, except percentages) Development Expenses: Salary and benefits $ 744.8 8% $ 686.7 16% $ 590.9 Stock-based compensation expense 320.6 2% 313.7 20% 262.5 Compensation expense for cash-settled unvested Alpine equity awards — ** 151.9 ** — Outsourced services and other direct expenses 1,493.5 21% 1,239.1 0% 1,238.7 Infrastructure costs 522.7 20% 434.4 19% 365.2 Total development expenses $ 3,081.6 9% $ 2,825.8 15% $ 2,457.3 ** Not meaningful 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.
We do not assign our internal costs, such as salary and benefits, stock-based compensation expense, laboratory supplies and other direct expenses and infrastructure costs, to individual products or product candidates, because the employees within our research and development groups typically are deployed across multiple research and development programs.
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.
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. Interest Expense Interest expense was $30.6 million in 2024, as compared to $44.1 million in 2023.
Non-Operating Income (Expense), Net Interest Income 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.
Collectively, our five medicines, led by TRIKAFTA/KAFTRIO (elexacaftor/tezacaftor/ivacaftor and ivacaftor), are being used to treat nearly three quarters of the approximately 94,000 people with CF in the U.S., Europe, Australia, and Canada.
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, Australia and Israel.
Research Expenses 2024 Change % 2023 Change % 2022 (in millions, except percentages) Research Expenses: Salary and benefits $ 210.7 14% $ 184.1 15% $ 159.5 Stock-based compensation expense 112.1 21% 92.4 10% 84.0 Outsourced services and other direct expenses 271.4 15% 237.0 25% 189.6 Intangible asset impairment charge — ** — ** 13.0 Infrastructure costs 210.3 9% 192.1 6% 180.6 Total research expenses $ 804.5 14% $ 705.6 13% $ 626.7 ** Not meaningful Our research expenses have been increasing over the last several years as we invested in our pipeline and expanded our cell and genetic therapy capabilities, resulting in increased headcount and stock-based compensation expense, and outsourced services, other direct expenses, and infrastructure costs.
Research Expenses 2025 Change % 2024 Change % 2023 (in millions, except percentages) Research Expenses: Salary and benefits $ 203.9 (3)% $ 210.7 14% $ 184.1 Stock-based compensation expense 94.8 (15)% 112.1 21% 92.4 Outsourced services and other direct expenses 286.2 5% 271.4 15% 237.0 Infrastructure costs 243.0 16% 210.3 9% 192.1 Total research expenses $ 827.9 3% $ 804.5 14% $ 705.6 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 .
We estimate approximately 60,000 people with severe SCD or TDT are or could become eligible for CASGEVY in the U.S., Canada, Europe, Saudi Arabia, and Bahrain. In January 2025, the FDA approved JOURNAVX, our selective non-opioid NaV1.8 pain signal inhibitor, for the treatment of people with moderate-to-severe acute pain.
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.
IgA Nephropathy and Other B Cell-Mediated Diseases • In May 2024, we acquired Alpine, whose lead compound was povetacicept, a dual inhibitor of B cell activating factor (“BAFF”) and a proliferation-inducing ligand (“APRIL”) pathways.
IgA Nephropathy • We are developing povetacicept, a dual inhibitor of B cell activating factor (“BAFF”) and a proliferation-inducing ligand (“APRIL”) cytokines, for multiple diseases.
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.
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. 55 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.
Our net product revenues from the U.S. and from ex-U.S. markets were as follows: 2024 % Change 2023 % Change 2022 (in millions, except percentages) United States $ 6,684.9 11% $ 6,040.4 6% $ 5,699.3 ex-U.S. 4,335.2 13% 3,828.8 18% 3,231.4 Product revenues, net $ 11,020.1 12% $ 9,869.2 11% $ 8,930.7 In 2025, we expect our net product revenues to increase due to the approval of ALYFTREK for CF in the U.S., continued demand globally for TRIKAFTA/KAFTRIO, including in younger age groups and from label expansions, increased CASGEVY patient infusions, and contribution from the launch of JOURNAVX. 78 Operating Costs and Expenses 2024 % Change 2023 % Change 2022 (in millions, except percentages) Cost of sales $ 1,530.5 21% $ 1,262.2 17% $ 1,080.3 Research and development expenses 3,630.3 15% 3,162.9 25% 2,540.3 Acquired in-process research and development expenses 4,628.4 ** 527.1 356% 115.5 Selling, general and administrative expenses 1,464.3 29% 1,136.6 20% 944.7 Change in fair value of contingent consideration (0.5) ** (51.6) ** (57.5) Total costs and expenses $ 11,253.0 86% $ 6,037.2 31% $ 4,623.3 ** Not meaningful Cost of Sales 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.
Operating Costs and Expenses 2025 % Change 2024 % Change 2023 (in millions, except percentages) Cost of sales $ 1,651.3 8% $ 1,530.5 21% $ 1,262.2 Research and development expenses 3,909.5 8% 3,630.3 15% 3,162.9 Acquired in-process research and development expenses 133.0 ** 4,628.4 ** 527.1 Selling, general and administrative expenses 1,753.1 20% 1,464.3 29% 1,136.6 Intangible asset impairment charge 379.0 ** — ** — Change in fair value of contingent consideration 2.1 ** (0.5) ** (51.6) Total costs and expenses $ 7,828.0 (30)% $ 11,253.0 86% $ 6,037.2 ** Not meaningful Cost of Sales 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.
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. Our business also requires ensuring appropriate manufacturing and supply of our products.
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.
Growth in internal headcount over the last several years has increased our stock-based compensation expense, which has historically fluctuated and is expected to continue to fluctuate from one period to another based on the probability of achieving milestones associated with our performance-based awards.
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.
In 2023, our 17.4% effective tax rate 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 2023 and excess tax benefits related to stock-based compensation, partially offset by changes in uncertain tax positions.
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 .
Leases 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 and office and laboratory space at the Jeffrey Leiden Center for Cell and Genetic Therapies (the “Jeffrey Leiden Center”) near our corporate headquarters.
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.
Expenses Our total research and development (“R&D”), and selling, general and administrative (“SG&A”) expenses increased to $5.1 billion in 2024 as compared to $4.3 billion in 2023, primarily due to continued investment to support additional therapies in mid-to-late stage development and increased commercial investments to support launches of our therapies globally.
Total R&D and SG&A Expenses 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.
The largest driver of the decrease in cash provided by operating activities was cash paid to acquire Alpine. Investing Activities Cash used in investing activities were $3.8 billion and $3.1 billion in 2024 and 2023, respectively. The largest portion of our investing activities in each year were net purchases of available-for-sale debt securities.
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 . Financing Activities Cash used in financing activities were $2.3 billion and $1.5 billion in 2025 and 2024 , respectively.
External Innovation Recent investments in external innovation are included below. • In January 2025, we entered into a collaboration agreement with Zai Lab Limited (“Zai”) for the development and commercialization of povetacicept in mainland China, Hong Kong SAR, Macau SAR, Taiwan region and Singapore.
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.
Our clinical-stage pipeline includes programs in CF, SCD, beta thalassemia, acute and peripheral neuropathic pain, APOL1-mediated kidney disease, IgA nephropathy and other autoimmune renal diseases and cytopenias, type 1 diabetes, myotonic dystrophy type 1, and autosomal dominant polycystic kidney disease. In December 2024, the U.S.
Our mid- and late-stage clinical pipeline includes programs across a range of modalities in additional serious diseases, including IgA nephropathy, APOL1-mediated kidney disease, neuropathic pain, type 1 diabetes, primary membranous nephropathy, autosomal dominant polycystic kidney disease, and myotonic dystrophy type 1.
We have begun our commercial launch of JOURNAVX in the U.S. for eligible adults. In addition, we are enrolling and dosing patients in a Phase 3 clinical trial evaluating suzetrigine for the treatment of diabetic peripheral neuropathy, a common form of peripheral neuropathic pain.
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.
Research and Development Expenses 2024 % Change 2023 % Change 2022 (in millions, except percentages) Research expenses $ 804.5 14% $ 705.6 13% $ 626.7 Development expenses 2,825.8 15% 2,457.3 28% 1,913.6 Total research and development expenses $ 3,630.3 15% $ 3,162.9 25% $ 2,540.3 Our research and development expenses include internal and external costs incurred for research and development of our products and product candidates.
Research and Development Expenses 2025 % Change 2024 % Change 2023 (in millions, except percentages) Research expenses $ 827.9 3% $ 804.5 14% $ 705.6 Development expenses 3,081.6 9% 2,825.8 15% 2,457.3 Total research and development expenses $ 3,909.5 8% $ 3,630.3 15% $ 3,162.9 Over the past three years, we have incurred approximately $10.7 billion in research and development expenses associated with product discovery and development.
In-process Research and Development Intangible Assets As of both December 31, 2024 and 2023, we had $603.6 million of in-process research and development assets on our consolidated balance sheet within “Other intangible assets, net,” which primarily relate to our T1D clinical program established through our acquisitions of Semma and ViaCyte.
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 program.
These amounts primarily related to net unrealized losses resulting from changes in the fair value of certain of our strategic equity investments, which consist of investments in our collaborators that may be public or privately-held companies.
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.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

10 edited+1 added−4 removed8 unchanged
Biggest changeForeign Exchange Market Risk As a result of our foreign operations, we face significant exposure to movements in foreign currency exchange rates, primarily the Euro and British Pound against the U.S. dollar. Fluctuations in the amounts of our foreign revenues and fluctuations in foreign currency exchange rates, may have a positive or negative effect on our foreign exchange rate exposure.
Biggest changeForeign Exchange Market Risk As a result of our foreign operations, we face significant exposure to movements in foreign currency exchange rates between the U.S. dollar and various foreign currencies, the most significant of which is the Euro.
However, since these contracts hedge a specific portion of our forecasted product revenues denominated in certain foreign currencies, any change in the fair value of these contracts is recorded in “Accumulated other comprehensive income (loss)” on our consolidated balance sheets and is reclassified to earnings in the same periods during which the underlying product revenues affect earnings.
However, since these contracts hedge a specific portion of our forecasted product revenues denominated in certain foreign currencies, any change in the fair value of these contracts is recorded in “Accumulated other comprehensive (loss) income ” on our consolidated balance sheets and is reclassified to earnings in the same periods during which the underlying product revenues affect earnings.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The information required by this Item 8 is contained on pages F-1 through F-49 of this Annual Report on Form 10-K. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Not applicable.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The information required by this Item 8 is contained on pages F-1 through F- 49 of this Annual Report on Form 10-K. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Not applicable.
If the December 31, 2024 exchange rates were to change by a hypothetical 10%, the fair value recorded on our consolidated balance sheet related to our foreign exchange forward contracts that were designated as cash flow hedges as of December 31, 2024 would change by approximately $286.0 million.
If the December 31, 2025 exchange rates were to change by a hypothetical 10%, the fair value recorded on our consolidated balance sheet related to our foreign exchange forward contracts that were designated as cash flow hedges as of December 31, 2025 would change by approximately $608.0 million .
We invest in instruments that meet the credit quality standards outlined in our investment policy, which also limits the amount of credit exposure to any one issue or type of instrument. These instruments primarily include securities issued by the U.S. government and its agencies, investment-grade corporate bonds and commercial paper, and money market funds.
We invest in instruments that meet the credit quality standards outlined in our investment policy, which also limits the amount of credit exposure to any one issue or type of instrument. These instruments primarily include securities issued by the U.S. government and its agencies, investment-grade corporate bonds, asset-backed securities and money market funds. These investments are primarily denominated in U.S.
As of December 31, 2024, we had no principal or interest outstanding under our credit facility. A portion of our “Interest expense” in 2025 will be dependent on whether, and to what extent, we borrow amounts under this facility.
As of December 31, 2025 , we had no principal or interest outstanding under our credit facility. A portion of our “ Interest expense ” in 2026 will be dependent on whether, and to what extent, we borrow amounts under this facility.
These investments are primarily denominated in U.S. Dollars and none are held for trading purposes. All of our interest-bearing securities are subject to interest rate risk and could change in value if interest rates fluctuate.
Dollars and none are held for trading purposes. All of our interest-bearing securities are subject to interest rate risk and could change in value if interest rates fluctuate.
As of December 31, 2024, we held foreign exchange forward contracts that were designated as cash flow hedges with notional amounts totaling $2.9 billion representing a net asset of $142.5 million on our consolidated balance sheet. 89 Although not predictive in nature, we believe a hypothetical 10% threshold reflects a reasonably possible near-term change in exchange rates.
As of December 31, 2025 , we held foreign exchange forward contracts that were designated as cash flow hedges with notional amounts totaling $6.1 billion representing a net liability of $111.5 million on our consolidated balance sheet. 61 Although not predictive in nature, we believe a hypothetical 10% threshold reflects a reasonably possible near-term change in exchange rates.
We currently have cash flow hedges for the Euro, British Pound, Canadian Dollar, Swiss Franc and Australian Dollar related to a portion of our forecasted product revenues that qualify for hedge accounting treatment under U.S. GAAP. We do not seek hedge accounting treatment for our foreign currency forward contracts related to monetary assets and liabilities that impact our operating results.
W e have cash flow hedges related to a portion of our forecasted product revenues that qualify for hedge accounting treatment under U.S. GAAP. We do not seek hedge accounting treatment for our foreign currency forward contracts related to monetary assets and liabilities that impact our operating results.
The current exposures arise primarily from cash, accounts receivable, intercompany receivables and payables, payables, and accruals, and inventories. We have a foreign currency management program, which is separate from our investment policy and portfolio, with the objective of reducing the effect of exchange rate fluctuations on our operating results and forecasted revenues denominated in foreign currencies.
We have a foreign currency management program, which is separate from our investment policy and portfolio, with the objective of reducing the effect of exchange rate fluctuations on our operating results and forecasted revenues denominated in foreign currencies.
Removed
Equity Price Risk We hold strategic equity investments in certain public and private companies, and we expect to make additional strategic equity investments in the future.
Added
Fluctuations in the amounts of our foreign revenues and fluctuations in foreign currency exchange rates, may have a positive or negative effect on our foreign exchange rate exposure. The current exposures arise primarily from cash, accounts receivable, intercompany receivables and payables, payables, and accruals, and inventories.
Removed
In 2024 and 2023, we recorded net losses of $9.5 million and $0.6 million, respectively, to “Other income (expense), net” in our consolidated statements of income to reflect changes in the fair value of equity investments with readily determinable fair values (including publicly traded securities).
Removed
The fair value of our equity investments in publicly traded companies was less than $50.0 million as of December 31, 2024.
Removed
To the extent that we continue to hold strategic equity investments in publicly traded companies, we expect that due to the volatility of the stock price of biotechnology companies, our “other income (expense), net” will fluctuate in future periods based on increases or decreases in the fair value of our strategic equity investments. ITEM 8.

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