vrtx-20210930
VERTEX PHARMACEUTICALS INC / MA000087532012/312021Q3falseP1M00008753202021-01-012021-09-30xbrli:shares00008753202021-10-29iso4217:USD0000875320us-gaap:ProductMember2021-07-012021-09-300000875320us-gaap:ProductMember2020-07-012020-09-300000875320us-gaap:ProductMember2021-01-012021-09-300000875320us-gaap:ProductMember2020-01-012020-09-300000875320vrtx:CollaborativeandRoyaltyMember2021-07-012021-09-300000875320vrtx:CollaborativeandRoyaltyMember2020-07-012020-09-300000875320vrtx:CollaborativeandRoyaltyMember2021-01-012021-09-300000875320vrtx:CollaborativeandRoyaltyMember2020-01-012020-09-3000008753202021-07-012021-09-3000008753202020-07-012020-09-3000008753202020-01-012020-09-30iso4217:USDxbrli:shares00008753202021-09-3000008753202020-12-310000875320us-gaap:CommonStockMember2020-06-300000875320us-gaap:AdditionalPaidInCapitalMember2020-06-300000875320us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-06-300000875320us-gaap:RetainedEarningsMember2020-06-3000008753202020-06-300000875320us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-07-012020-09-300000875320us-gaap:RetainedEarningsMember2020-07-012020-09-300000875320us-gaap:CommonStockMember2020-07-012020-09-300000875320us-gaap:AdditionalPaidInCapitalMember2020-07-012020-09-300000875320us-gaap:CommonStockMember2020-09-300000875320us-gaap:AdditionalPaidInCapitalMember2020-09-300000875320us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-09-300000875320us-gaap:RetainedEarningsMember2020-09-3000008753202020-09-300000875320us-gaap:CommonStockMember2021-06-300000875320us-gaap:AdditionalPaidInCapitalMember2021-06-300000875320us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-06-300000875320us-gaap:RetainedEarningsMember2021-06-3000008753202021-06-300000875320us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-07-012021-09-300000875320us-gaap:RetainedEarningsMember2021-07-012021-09-300000875320us-gaap:CommonStockMember2021-07-012021-09-300000875320us-gaap:AdditionalPaidInCapitalMember2021-07-012021-09-300000875320us-gaap:CommonStockMember2021-09-300000875320us-gaap:AdditionalPaidInCapitalMember2021-09-300000875320us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-09-300000875320us-gaap:RetainedEarningsMember2021-09-300000875320us-gaap:CommonStockMember2019-12-310000875320us-gaap:AdditionalPaidInCapitalMember2019-12-310000875320us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-12-310000875320us-gaap:RetainedEarningsMember2019-12-3100008753202019-12-310000875320us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-01-012020-09-300000875320us-gaap:RetainedEarningsMember2020-01-012020-09-300000875320us-gaap:CommonStockMember2020-01-012020-09-300000875320us-gaap:AdditionalPaidInCapitalMember2020-01-012020-09-300000875320us-gaap:CommonStockMember2020-12-310000875320us-gaap:AdditionalPaidInCapitalMember2020-12-310000875320us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-310000875320us-gaap:RetainedEarningsMember2020-12-310000875320us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-09-300000875320us-gaap:RetainedEarningsMember2021-01-012021-09-300000875320us-gaap:CommonStockMember2021-01-012021-09-300000875320us-gaap:AdditionalPaidInCapitalMember2021-01-012021-09-30vrtx:segment0000875320vrtx:TRIKAFTAKAFTRIOMember2021-07-012021-09-300000875320vrtx:TRIKAFTAKAFTRIOMember2020-07-012020-09-300000875320vrtx:TRIKAFTAKAFTRIOMember2021-01-012021-09-300000875320vrtx:TRIKAFTAKAFTRIOMember2020-01-012020-09-300000875320vrtx:SYMDEKOSYMKEVIMember2021-07-012021-09-300000875320vrtx:SYMDEKOSYMKEVIMember2020-07-012020-09-300000875320vrtx:SYMDEKOSYMKEVIMember2021-01-012021-09-300000875320vrtx:SYMDEKOSYMKEVIMember2020-01-012020-09-300000875320vrtx:ORKAMBIMember2021-07-012021-09-300000875320vrtx:ORKAMBIMember2020-07-012020-09-300000875320vrtx:ORKAMBIMember2021-01-012021-09-300000875320vrtx:ORKAMBIMember2020-01-012020-09-300000875320vrtx:KalydecoMember2021-07-012021-09-300000875320vrtx:KalydecoMember2020-07-012020-09-300000875320vrtx:KalydecoMember2021-01-012021-09-300000875320vrtx:KalydecoMember2020-01-012020-09-300000875320country:US2021-07-012021-09-300000875320country:US2020-07-012020-09-300000875320country:US2021-01-012021-09-300000875320country:US2020-01-012020-09-300000875320srt:EuropeMember2021-07-012021-09-300000875320srt:EuropeMember2020-07-012020-09-300000875320srt:EuropeMember2021-01-012021-09-300000875320srt:EuropeMember2020-01-012020-09-300000875320vrtx:OtherNonU.S.Member2021-07-012021-09-300000875320vrtx:OtherNonU.S.Member2020-07-012020-09-300000875320vrtx:OtherNonU.S.Member2021-01-012021-09-300000875320vrtx:OtherNonU.S.Member2020-01-012020-09-300000875320us-gaap:NonUsMember2021-07-012021-09-300000875320us-gaap:NonUsMember2020-07-012020-09-300000875320us-gaap:NonUsMember2021-01-012021-09-300000875320us-gaap:NonUsMember2020-01-012020-09-30vrtx:target0000875320vrtx:CRISPRTherapeuticsAGMember2019-01-012019-12-310000875320vrtx:CRSIPRARJDCAMember2021-04-012021-06-30xbrli:pure0000875320vrtx:CRSIPRARJDCAMember2021-07-010000875320vrtx:CRSIPRARJDCAMembervrtx:CRISPRMember2021-07-010000875320vrtx:CRISPRTherapeuticsAGMemberus-gaap:CollaborativeArrangementTransactionWithPartyToCollaborativeArrangementMember2021-07-012021-09-300000875320vrtx:CRISPRTherapeuticsAGMemberus-gaap:CollaborativeArrangementTransactionWithPartyToCollaborativeArrangementMember2020-07-012020-09-300000875320vrtx:CRISPRTherapeuticsAGMemberus-gaap:CollaborativeArrangementTransactionWithPartyToCollaborativeArrangementMember2021-01-012021-09-300000875320vrtx:CRISPRTherapeuticsAGMemberus-gaap:CollaborativeArrangementTransactionWithPartyToCollaborativeArrangementMember2020-01-012020-09-300000875320vrtx:CRISPRTherapeuticsAGMemberus-gaap:CollaborativeArrangementTransactionWithPartyToCollaborativeArrangementMemberus-gaap:ResearchAndDevelopmentExpenseMember2021-07-012021-09-300000875320vrtx:CRISPRTherapeuticsAGMemberus-gaap:CollaborativeArrangementTransactionWithPartyToCollaborativeArrangementMemberus-gaap:ResearchAndDevelopmentExpenseMember2020-07-012020-09-300000875320vrtx:CRISPRTherapeuticsAGMemberus-gaap:CollaborativeArrangementTransactionWithPartyToCollaborativeArrangementMemberus-gaap:ResearchAndDevelopmentExpenseMember2021-01-012021-09-300000875320vrtx:CRISPRTherapeuticsAGMemberus-gaap:CollaborativeArrangementTransactionWithPartyToCollaborativeArrangementMemberus-gaap:ResearchAndDevelopmentExpenseMember2020-01-012020-09-300000875320vrtx:ModernaAgreementMember2020-09-012020-09-300000875320us-gaap:EmployeeStockOptionMember2021-07-012021-09-300000875320us-gaap:EmployeeStockOptionMember2020-07-012020-09-300000875320us-gaap:EmployeeStockOptionMember2021-01-012021-09-300000875320us-gaap:EmployeeStockOptionMember2020-01-012020-09-300000875320us-gaap:RestrictedStockUnitsRSUMember2021-07-012021-09-300000875320us-gaap:RestrictedStockUnitsRSUMember2020-07-012020-09-300000875320us-gaap:RestrictedStockUnitsRSUMember2021-01-012021-09-300000875320us-gaap:RestrictedStockUnitsRSUMember2020-01-012020-09-300000875320us-gaap:EmployeeStockOptionMember2021-07-012021-09-300000875320us-gaap:EmployeeStockOptionMember2020-07-012020-09-300000875320us-gaap:EmployeeStockOptionMember2021-01-012021-09-300000875320us-gaap:EmployeeStockOptionMember2020-01-012020-09-300000875320us-gaap:RestrictedStockUnitsRSUMember2021-07-012021-09-300000875320us-gaap:RestrictedStockUnitsRSUMember2020-07-012020-09-300000875320us-gaap:RestrictedStockUnitsRSUMember2021-01-012021-09-300000875320us-gaap:RestrictedStockUnitsRSUMember2020-01-012020-09-300000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2021-09-300000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:MoneyMarketFundsMember2021-09-300000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:MoneyMarketFundsMember2021-09-300000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MoneyMarketFundsMember2021-09-300000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2020-12-310000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:MoneyMarketFundsMember2020-12-310000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:MoneyMarketFundsMember2020-12-310000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MoneyMarketFundsMember2020-12-310000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2021-09-300000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:CommercialPaperMember2021-09-300000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMemberus-gaap:FairValueInputsLevel2Member2021-09-300000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMemberus-gaap:FairValueInputsLevel3Member2021-09-300000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2020-12-310000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:CommercialPaperMember2020-12-310000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMemberus-gaap:FairValueInputsLevel2Member2020-12-310000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMemberus-gaap:FairValueInputsLevel3Member2020-12-310000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:EquitySecuritiesMember2021-09-300000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:EquitySecuritiesMember2021-09-300000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:EquitySecuritiesMemberus-gaap:FairValueInputsLevel2Member2021-09-300000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:EquitySecuritiesMemberus-gaap:FairValueInputsLevel3Member2021-09-300000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:EquitySecuritiesMember2020-12-310000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:EquitySecuritiesMember2020-12-310000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:EquitySecuritiesMemberus-gaap:FairValueInputsLevel2Member2020-12-310000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:EquitySecuritiesMemberus-gaap:FairValueInputsLevel3Member2020-12-310000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2021-09-300000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:USTreasurySecuritiesMember2021-09-300000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMemberus-gaap:FairValueInputsLevel2Member2021-09-300000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMemberus-gaap:FairValueInputsLevel3Member2021-09-300000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2020-12-310000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:USTreasurySecuritiesMember2020-12-310000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMemberus-gaap:FairValueInputsLevel2Member2020-12-310000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMemberus-gaap:FairValueInputsLevel3Member2020-12-310000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMember2021-09-300000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMember2021-09-300000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Member2021-09-300000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMemberus-gaap:FairValueInputsLevel3Member2021-09-300000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMember2020-12-310000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMember2020-12-310000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Member2020-12-310000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMemberus-gaap:FairValueInputsLevel3Member2020-12-310000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2021-09-300000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:CorporateDebtSecuritiesMember2021-09-300000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Member2021-09-300000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel3Member2021-09-300000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2020-12-310000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:CorporateDebtSecuritiesMember2020-12-310000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Member2020-12-310000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel3Member2020-12-310000875320us-gaap:FairValueMeasurementsRecurringMember2021-09-300000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2021-09-300000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2021-09-300000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2021-09-300000875320us-gaap:FairValueMeasurementsRecurringMember2020-12-310000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2020-12-310000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2020-12-310000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2020-12-310000875320us-gaap:FairValueInputsLevel3Member2021-09-300000875320us-gaap:MeasurementInputDiscountRateMembersrt:MinimumMemberus-gaap:FairValueInputsLevel3Member2021-09-300000875320us-gaap:MeasurementInputDiscountRateMembersrt:MaximumMemberus-gaap:FairValueInputsLevel3Member2021-09-300000875320vrtx:CashAndMoneyMarketFundsMemberus-gaap:CashAndCashEquivalentsMember2021-09-300000875320vrtx:CashAndMoneyMarketFundsMemberus-gaap:CashAndCashEquivalentsMember2020-12-310000875320us-gaap:CommercialPaperMemberus-gaap:CashAndCashEquivalentsMember2021-09-300000875320us-gaap:CommercialPaperMemberus-gaap:CashAndCashEquivalentsMember2020-12-310000875320us-gaap:CashAndCashEquivalentsMember2021-09-300000875320us-gaap:CashAndCashEquivalentsMember2020-12-310000875320us-gaap:USTreasurySecuritiesMembervrtx:MarketableSecuritiesMember2021-09-300000875320us-gaap:USTreasurySecuritiesMembervrtx:MarketableSecuritiesMember2020-12-310000875320us-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMembervrtx:MarketableSecuritiesMember2021-09-300000875320us-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMembervrtx:MarketableSecuritiesMember2020-12-310000875320us-gaap:CorporateDebtSecuritiesMembervrtx:MarketableSecuritiesMember2021-09-300000875320us-gaap:CorporateDebtSecuritiesMembervrtx:MarketableSecuritiesMember2020-12-310000875320us-gaap:CommercialPaperNotIncludedWithCashAndCashEquivalentsMembervrtx:MarketableSecuritiesMember2021-09-300000875320us-gaap:CommercialPaperNotIncludedWithCashAndCashEquivalentsMembervrtx:MarketableSecuritiesMember2020-12-310000875320vrtx:MarketableSecuritiesMember2021-09-300000875320vrtx:MarketableSecuritiesMember2020-12-3100008753202020-01-012020-12-310000875320vrtx:PublicallyTradedCompaniesSaleMember2020-01-012020-09-300000875320vrtx:PublicallyTradedCompaniesSaleMember2021-01-012021-09-300000875320us-gaap:OtherAssetsMember2021-09-300000875320us-gaap:AccumulatedTranslationAdjustmentMember2020-12-310000875320us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2020-12-310000875320us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2020-12-310000875320us-gaap:AccumulatedTranslationAdjustmentMember2021-01-012021-09-300000875320us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2021-01-012021-09-300000875320us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2021-01-012021-09-300000875320us-gaap:AccumulatedTranslationAdjustmentMember2021-09-300000875320us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2021-09-300000875320us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2021-09-300000875320us-gaap:AccumulatedTranslationAdjustmentMember2019-12-310000875320us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2019-12-310000875320us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2019-12-310000875320us-gaap:AccumulatedTranslationAdjustmentMember2020-01-012020-09-300000875320us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2020-01-012020-09-300000875320us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2020-01-012020-09-300000875320us-gaap:AccumulatedTranslationAdjustmentMember2020-09-300000875320us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2020-09-300000875320us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2020-09-300000875320us-gaap:ForeignExchangeForwardMembersrt:MinimumMemberus-gaap:CashFlowHedgingMember2021-01-012021-09-300000875320us-gaap:ForeignExchangeForwardMembersrt:MaximumMemberus-gaap:CashFlowHedgingMember2021-01-012021-09-300000875320currency:EURus-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2021-09-300000875320currency:EURus-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2020-12-310000875320us-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMembercurrency:GBPus-gaap:CashFlowHedgingMember2021-09-300000875320us-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMembercurrency:GBPus-gaap:CashFlowHedgingMember2020-12-310000875320us-gaap:ForeignExchangeForwardMembercurrency:AUDus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2021-09-300000875320us-gaap:ForeignExchangeForwardMembercurrency:AUDus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2020-12-310000875320us-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMembercurrency:CADus-gaap:CashFlowHedgingMember2021-09-300000875320us-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMembercurrency:CADus-gaap:CashFlowHedgingMember2020-12-310000875320currency:CHFus-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2021-09-300000875320currency:CHFus-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2020-12-310000875320us-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2021-09-300000875320us-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2020-12-310000875320us-gaap:NondesignatedMemberus-gaap:ForeignExchangeForwardMember2021-01-012021-09-300000875320us-gaap:NondesignatedMemberus-gaap:ForeignExchangeForwardMemberus-gaap:CashFlowHedgingMember2021-09-300000875320us-gaap:ProductMemberus-gaap:AccumulatedTranslationAdjustmentMemberus-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2021-07-012021-09-300000875320us-gaap:ProductMemberus-gaap:AccumulatedTranslationAdjustmentMemberus-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2020-07-012020-09-300000875320us-gaap:ProductMemberus-gaap:AccumulatedTranslationAdjustmentMemberus-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2021-01-012021-09-300000875320us-gaap:ProductMemberus-gaap:AccumulatedTranslationAdjustmentMemberus-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2020-01-012020-09-300000875320us-gaap:NondesignatedMemberus-gaap:AccumulatedTranslationAdjustmentMemberus-gaap:ForeignExchangeForwardMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2021-07-012021-09-300000875320us-gaap:NondesignatedMemberus-gaap:AccumulatedTranslationAdjustmentMemberus-gaap:ForeignExchangeForwardMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2020-07-012020-09-300000875320us-gaap:NondesignatedMemberus-gaap:AccumulatedTranslationAdjustmentMemberus-gaap:ForeignExchangeForwardMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2021-01-012021-09-300000875320us-gaap:NondesignatedMemberus-gaap:AccumulatedTranslationAdjustmentMemberus-gaap:ForeignExchangeForwardMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2020-01-012020-09-300000875320us-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:CashFlowHedgingMember2021-09-300000875320us-gaap:OtherCurrentLiabilitiesMemberus-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2021-09-300000875320us-gaap:OtherAssetsMemberus-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2021-09-300000875320us-gaap:OtherNoncurrentLiabilitiesMemberus-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2021-09-300000875320us-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:CashFlowHedgingMember2020-12-310000875320us-gaap:OtherCurrentLiabilitiesMemberus-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2020-12-310000875320us-gaap:OtherAssetsMemberus-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2020-12-310000875320us-gaap:OtherNoncurrentLiabilitiesMemberus-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2020-12-310000875320us-gaap:RestrictedStockMember2021-07-012021-09-300000875320us-gaap:RestrictedStockMember2020-07-012020-09-300000875320us-gaap:RestrictedStockMember2021-01-012021-09-300000875320us-gaap:RestrictedStockMember2020-01-012020-09-300000875320us-gaap:EmployeeStockMember2021-07-012021-09-300000875320us-gaap:EmployeeStockMember2020-07-012020-09-300000875320us-gaap:EmployeeStockMember2021-01-012021-09-300000875320us-gaap:EmployeeStockMember2020-01-012020-09-300000875320us-gaap:CostOfSalesMember2021-07-012021-09-300000875320us-gaap:CostOfSalesMember2020-07-012020-09-300000875320us-gaap:CostOfSalesMember2021-01-012021-09-300000875320us-gaap:CostOfSalesMember2020-01-012020-09-300000875320us-gaap:ResearchAndDevelopmentExpenseMember2021-07-012021-09-300000875320us-gaap:ResearchAndDevelopmentExpenseMember2020-07-012020-09-300000875320us-gaap:ResearchAndDevelopmentExpenseMember2021-01-012021-09-300000875320us-gaap:ResearchAndDevelopmentExpenseMember2020-01-012020-09-300000875320us-gaap:SellingGeneralAndAdministrativeExpensesMember2021-07-012021-09-300000875320us-gaap:SellingGeneralAndAdministrativeExpensesMember2020-07-012020-09-300000875320us-gaap:SellingGeneralAndAdministrativeExpensesMember2021-01-012021-09-300000875320us-gaap:SellingGeneralAndAdministrativeExpensesMember2020-01-012020-09-300000875320vrtx:ShareRepurchaseProgram2019Member2019-12-310000875320vrtx:ShareRepurchaseProgram2019Member2020-12-310000875320vrtx:ShareRepurchaseProgram2019Member2020-01-012020-09-300000875320vrtx:ShareRepurchaseProgram2020Member2020-11-300000875320vrtx:ShareRepurchaseProgram2020Member2021-01-012021-03-310000875320vrtx:ShareRepurchaseProgram2021Member2021-06-230000875320vrtx:ShareRepurchaseProgram2021Member2021-07-012021-09-300000875320vrtx:ShareRepurchaseProgram2021Member2021-09-300000875320us-gaap:ForeignCountryMember2021-01-012021-09-30vrtx:credit_agreement0000875320us-gaap:RevolvingCreditFacilityMember2019-09-300000875320srt:MinimumMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:BaseRateMember2019-09-012019-09-300000875320srt:MaximumMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:BaseRateMember2019-09-012019-09-300000875320us-gaap:EurodollarMembersrt:MinimumMemberus-gaap:RevolvingCreditFacilityMember2019-09-012019-09-300000875320us-gaap:EurodollarMembersrt:MaximumMemberus-gaap:RevolvingCreditFacilityMember2019-09-012019-09-300000875320us-gaap:LetterOfCreditMember2019-09-300000875320us-gaap:RevolvingCreditFacilityMember2020-09-300000875320srt:MinimumMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:BaseRateMember2020-09-012020-09-300000875320srt:MaximumMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:BaseRateMember2020-09-012020-09-300000875320us-gaap:EurodollarMembersrt:MinimumMemberus-gaap:RevolvingCreditFacilityMember2020-09-012020-09-300000875320us-gaap:EurodollarMembersrt:MaximumMemberus-gaap:RevolvingCreditFacilityMember2020-09-012020-09-300000875320us-gaap:RevolvingCreditFacilityMember2020-09-012020-09-300000875320us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember2020-12-310000875320us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember2021-09-300000875320us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember2019-12-310000875320us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember2020-09-300000875320us-gaap:OtherAssetsMember2020-12-310000875320us-gaap:OtherAssetsMember2019-12-310000875320us-gaap:OtherAssetsMember2020-09-30
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________________________________________________
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2021
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM    TO   
Commission file number 000-19319
____________________________________________
Vertex Pharmaceuticals Incorporated
(Exact name of registrant as specified in its charter)

Massachusetts
(State or other jurisdiction of incorporation or organization)

50 Northern Avenue, Boston, Massachusetts
(Address of principal executive offices)

04-3039129
(I.R.S. Employer Identification No.)

02210
(Zip Code)

Registrant’s telephone number, including area code (617341-6100
____________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol
Name of each exchange on which registered
Common Stock, $0.01 Par Value Per Share
VRTX
The Nasdaq Global Select Market
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  No 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes No 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No  
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Common Stock, par value $0.01 per share
254,251,938
Outstanding at October 29, 2021


Table of Contents
VERTEX PHARMACEUTICALS INCORPORATED
FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 2021

TABLE OF CONTENTS
Page
Condensed Consolidated Statements of Operations - Three and Nine Months Ended September 30, 2021 and 2020
Condensed Consolidated Statements of Comprehensive Income - Three and Nine Months Ended September 30, 2021 and 2020
Condensed Consolidated Balance Sheets - September 30, 2021 and December 31, 2020
Condensed Consolidated Statements of Shareholders' Equity - Three and Nine Months Ended September 30, 2021 and 2020
Condensed Consolidated Statements of Cash Flows - Nine Months Ended September 30, 2021 and 2020
Item 1A.

“We,” “us,” “Vertex” and the “Company” as used in this Quarterly Report on Form 10-Q refer to Vertex Pharmaceuticals Incorporated, a Massachusetts corporation, and its subsidiaries.
“Vertex,” “KALYDECO®,” “ORKAMBI®,” “SYMDEKO®,” “SYMKEVI®” and “TRIKAFTA®” are registered trademarks of Vertex. The trademark for “KAFTRIOTM” is pending in the United States and registered in the European Union. Other brands, names and trademarks contained in this Quarterly Report on Form 10-Q are the property of their respective owners.
We use the brand name for our products when we refer to the product that has been approved and with respect to the indications on the approved label. Otherwise, including in discussions of our cystic fibrosis development programs, we refer to our compounds by their scientific (or generic) name or VX developmental designation.



Table of Contents
Part I. Financial Information

Item 1.  Financial Statements

VERTEX PHARMACEUTICALS INCORPORATED
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands, except per share amounts)
Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
Revenues:
Product revenues, net$1,984,164 $1,536,271 $5,500,839 $4,575,863 
Other revenues 2,000 1,000 2,000 
Total revenues1,984,164 1,538,271 5,501,839 4,577,863 
Costs and expenses:
Cost of sales236,512 186,182 656,813 533,199 
Research and development expenses493,751 493,497 2,356,814 1,362,953 
Selling, general and administrative expenses198,189 184,551 584,935 558,613 
Change in fair value of contingent consideration1,200 1,800 (1,100)12,600 
Total costs and expenses929,652 866,030 3,597,462 2,467,365 
Income from operations1,054,512 672,241 1,904,377 2,110,498 
Interest income1,116 3,100 3,714 19,919 
Interest expense(15,255)(13,856)(46,411)(41,863)
Other income (expense), net42,368 84,386 (2,234)139,621 
Income before provision for income taxes1,082,741 745,871 1,859,446 2,228,175 
Provision for income taxes230,813 78,437 287,456 120,718 
Net income$851,928 $667,434 $1,571,990 $2,107,457 
Net income per common share:
Basic$3.30 $2.56 $6.08 $8.10 
Diluted$3.28 $2.53 $6.03 $7.98 
Shares used in per share calculations:
Basic257,876 260,392 258,740 260,313 
Diluted259,707 264,079 260,877 264,031 
The accompanying notes are an integral part of these condensed consolidated financial statements.

2

Table of Contents
VERTEX PHARMACEUTICALS INCORPORATED
Condensed Consolidated Statements of Comprehensive Income
(unaudited)
(in thousands)
Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
Net income$851,928 $667,434 $1,571,990 $2,107,457 
Other comprehensive income (loss):
Unrealized holding (losses) gains on marketable securities, net(56)(1,132)(329)818 
Unrealized gains (losses) on foreign currency forward contracts, net of tax of $(9.6) million, $7.6 million, $(21.2) million and $7.3 million, respectively
34,766 (26,313)77,011 (27,211)
Foreign currency translation adjustment1,986 584 3,335 (12,616)
Total other comprehensive income (loss)36,696 (26,861)80,017 (39,009)
Comprehensive income$888,624 $640,573 $1,652,007 $2,068,448 
The accompanying notes are an integral part of these condensed consolidated financial statements.

3

Table of Contents
VERTEX PHARMACEUTICALS INCORPORATED
Condensed Consolidated Balance Sheets
(unaudited)
(in thousands, except per share amounts)
September 30,December 31,
20212020
Assets
Current assets:
Cash and cash equivalents
$6,275,698 $5,988,187 
Marketable securities
685,187 670,710 
Accounts receivable, net
1,100,372 885,352 
Inventories
333,456 280,777 
Prepaid expenses and other current assets
457,827 308,353 
Total current assets
8,852,540 8,133,379 
Property and equipment, net
1,042,347 958,534 
Goodwill
1,002,158 1,002,158 
Intangible assets
400,000 400,000 
Deferred tax assets
933,839 882,779 
Operating lease assets
312,343 325,564 
Other assets
75,518 49,394 
Total assets
$12,618,745 $11,751,808 
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable
$127,863 $155,139 
Accrued expenses
1,584,992 1,404,971 
Other current liabilities
201,409 317,423 
Total current liabilities
1,914,264 1,877,533 
Long-term finance lease liabilities
513,255 539,042 
Long-term operating lease liabilities363,545 350,463 
Long-term contingent consideration
188,500 189,600 
Other long-term liabilities
108,473 108,355 
Total liabilities
3,088,037 3,064,993 
Commitments and contingencies
  
Shareholders’ equity:
Preferred stock, $0.01 par value; 1,000 shares authorized; none issued and outstanding
  
Common stock, $0.01 par value; 500,000 shares authorized, 256,206 and 259,890 shares issued and outstanding, respectively
2,562 2,599 
Additional paid-in capital7,085,950 7,894,027 
Accumulated other comprehensive income (loss)11,537 (68,480)
Retained earnings
2,430,659 858,669 
Total shareholders’ equity
9,530,708 8,686,815 
Total liabilities and shareholders’ equity
$12,618,745 $11,751,808 
The accompanying notes are an integral part of these condensed consolidated financial statements.

4

Table of Contents
VERTEX PHARMACEUTICALS INCORPORATED
Condensed Consolidated Statements of Shareholders’ Equity
(unaudited)
(in thousands)
Three Months Ended
Common StockAdditional Paid-in CapitalAccumulated Other Comprehensive Income (Loss)Retained Earnings (Accumulated Deficit)Total Shareholders’ Equity
SharesAmount
Balance at June 30, 2020260,124 $2,601 $7,943,717 $(14,121)$(412,955)$7,519,242 
Other comprehensive loss, net of tax— — — (26,861)— (26,861)
Net income— — — — 667,434 667,434 
Repurchase of common stock(403)(4)(108,003)— — (108,007)
Common stock withheld for employee tax obligations
(141)(1)(40,527)— — (40,528)
Issuance of common stock under benefit plans594 5 21,699 — — 21,704 
Stock-based compensation expense
— — 100,489 — — 100,489 
Balance at September 30, 2020260,174 $2,601 $7,917,375 $(40,982)$254,479 $8,133,473 
Balance at June 30, 2021259,114 $2,591 $7,640,233 $(25,159)$1,578,731 $9,196,396 
Other comprehensive income, net of tax— — — 36,696 — 36,696 
Net income— — — — 851,928 851,928 
Repurchase of common stock(3,293)(33)(642,240)— — (642,273)
Common stock withheld for employee tax obligations
(144)(1)(28,558)— — (28,559)
Issuance of common stock under benefit plans529 5 12,862 — — 12,867 
Stock-based compensation expense
— — 103,653 — — 103,653 
Balance at September 30, 2021256,206 $2,562 $7,085,950 $11,537 $2,430,659 $9,530,708 
Nine Months Ended
Common Stock
Additional
Paid-in Capital
Accumulated Other Comprehensive Income (Loss)
Retained Earnings (Accumulated Deficit)
Total
Shareholders’ Equity
Shares
Amount
Balance at December 31, 2019258,993 $2,589 $7,937,606 $(1,973)$(1,852,978)$6,085,244 
Other comprehensive loss, net of tax
— — — (39,009)— (39,009)
Net income
— — — — 2,107,457 2,107,457 
Repurchase of common stock(1,807)(18)(408,015)— — (408,033)
Common stock withheld for employee tax obligations
(727)(7)(179,768)— — (179,775)
Issuance of common stock under benefit plans3,715 37 232,042 — — 232,079 
Stock-based compensation expense
— — 335,510 — — 335,510 
Balance at September 30, 2020260,174 $2,601 $7,917,375 $(40,982)$254,479 $8,133,473 
Balance at December 31, 2020259,890 $2,599 $7,894,027 $(68,480)$858,669 $8,686,815 
Other comprehensive income, net of tax— — — 80,017 — 80,017 
Net income
— — — — 1,571,990 1,571,990 
Repurchase of common stock(5,282)(53)(1,067,172)— — (1,067,225)
Common stock withheld for employee tax obligations
(633)(6)(134,217)— — (134,223)
Issuance of common stock under benefit plans2,231 22 66,707 — — 66,729 
Stock-based compensation expense
— — 326,605 — — 326,605 
Balance at September 30, 2021256,206 $2,562 $7,085,950 $11,537 $2,430,659 $9,530,708 
The accompanying notes are an integral part of these condensed consolidated financial statements.

5

Table of Contents
VERTEX PHARMACEUTICALS INCORPORATED
Condensed Consolidated Statements of Cash Flows
(unaudited)
(in thousands)
Nine Months Ended September 30,
20212020
Cash flows from operating activities:
Net income
$1,571,990 $2,107,457 
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation expense
322,792 332,434 
Depreciation expense
91,768 80,160 
(Decrease) increase in fair value of contingent consideration(1,100)12,600 
Deferred income taxes
(112,654)65,110 
Gains on equity securities(4,993)(140,866)
Other non-cash items, net
20,588 52,371 
Changes in operating assets and liabilities:
Accounts receivable, net
(231,166)(151,191)
Inventories
(65,827)(94,907)
Prepaid expenses and other assets
(107,672)(264,909)
Accounts payable
(22,043)16,153 
Accrued expenses
254,157 451,084 
Other liabilities
(67,333)296,477 
Net cash provided by operating activities
1,648,507 2,761,973 
Cash flows from investing activities:
Purchases of available-for-sale debt securities
(447,759)(246,937)
Maturities of available-for-sale debt securities
452,133 184,419 
Purchases of property and equipment(173,285)(212,109)
Investment in equity securities and notes receivable(37,991)(19,327)
Sale of equity securities
 149,595 
Net cash used in investing activities
(206,902)(144,359)
Cash flows from financing activities:
Issuances of common stock under benefit plans
67,289 234,854 
Repurchases of common stock
(1,057,225)(408,033)
Payments in connection with common stock withheld for employee tax obligations
(134,223)(179,775)
Payments on finance leases
(34,592)(31,378)
Proceeds from finance leases
12,647 8,642 
Other financing activities4,339 

(4,399)
Net cash used in financing activities
(1,141,765)(380,089)
Effect of changes in exchange rates on cash
(8,472)2,779 
Net increase in cash, cash equivalents and restricted cash291,368 2,240,304 
Cash, cash equivalents and restricted cash—beginning of period
5,988,845 3,120,681 
Cash, cash equivalents and restricted cash—end of period
$6,280,213 $5,360,985 
Supplemental disclosure of cash flow information:
Cash paid for interest
$42,698 $40,769 
Cash paid for income taxes
$381,533 $81,684 
The accompanying notes are an integral part of these condensed consolidated financial statements.
6

Table of Contents
VERTEX PHARMACEUTICALS INCORPORATED
Notes to Condensed Consolidated Financial Statements (unaudited)

A.Basis of Presentation and Accounting Policies
Basis of Presentation
The accompanying condensed consolidated financial statements are unaudited and have been prepared by Vertex Pharmaceuticals Incorporated (“Vertex” or the “Company”) in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
The condensed consolidated financial statements reflect the operations of the Company and its wholly-owned subsidiaries. All material intercompany balances and transactions have been eliminated. The Company operates in one segment, pharmaceuticals. The Company has reclassified certain items from the prior year’s condensed consolidated financial statements to conform to the current year’s presentation.
Certain information and footnote disclosures normally included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 (the “2020 Annual Report on Form 10-K”) have been condensed or omitted. These interim financial statements, in the opinion of management, reflect all normal recurring adjustments necessary for a fair presentation of the financial position and results of operations for the interim periods ended September 30, 2021 and 2020.
The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full fiscal year. These interim financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2020, which are contained in the Company’s 2020 Annual Report on Form 10-K.
Use of Estimates
The preparation of condensed consolidated financial statements in accordance with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the amounts of revenues and expenses during the reported periods. The Company bases its estimates on historical experience and various other assumptions, including in certain circumstances future projections that management believes to be reasonable under the circumstances. Actual results could differ from those estimates. Changes in estimates are reflected in reported results in the period in which they become known.
Recently Adopted and Issued Accounting Standards
Income Taxes
In 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) (“ASU 2019-12”), which simplifies the accounting for income taxes. ASU 2019-12 became effective on January 1, 2021. The adoption of ASU 2019-12 did not have a significant impact on the Company’s condensed consolidated financial statements.
For a discussion of other recent accounting pronouncements please refer to Note A, “Nature of Business and Accounting Policies,” in the Company’s 2020 Annual Report on Form 10-K.
Summary of Significant Accounting Policies
The Company’s significant accounting policies are described in Note A, “Nature of Business and Accounting Policies,” in its 2020 Annual Report on Form 10-K.


7

Table of Contents
VERTEX PHARMACEUTICALS INCORPORATED
Notes to Condensed Consolidated Financial Statements (unaudited)
B.Revenue Recognition
Disaggregation of Revenue
Revenues by Product
Product revenues, net consisted of the following:
Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
(in thousands)
TRIKAFTA/KAFTRIO$1,555,772 $960,308 $4,004,600 $2,773,256 
SYMDEKO/SYMKEVI81,415 156,178 339,969 501,066 
ORKAMBI184,561 225,919 624,224 692,038 
KALYDECO162,416 193,866 532,046 609,503 
Total product revenues, net$1,984,164 $1,536,271 $5,500,839 $4,575,863 
Product Revenues by Geographic Location
Total net product revenues by geographic region, based on the location of the customer, consisted of the following:
Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
(in thousands)
United States
$1,382,892 $1,222,565 $3,893,245 $3,620,467 
Outside of the United States
Europe
518,826 251,366 1,382,701 766,438 
Other
82,446 62,340 224,893 188,958 
Total product revenues outside of the United States601,272 313,706 1,607,594 955,396 
Total product revenues, net
$1,984,164 $1,536,271 $5,500,839 $4,575,863 
Contract Liabilities
The Company had contract liabilities of $104.1 million and $191.5 million as of September 30, 2021 and December 31, 2020, respectively, related to annual contracts with government-owned and supported customers in international markets that limit the amount of annual reimbursement the Company can receive. Upon exceeding the annual reimbursement amount, products are provided free of charge, which is a material right. These contracts include upfront payments and fees. The Company defers a portion of the consideration received for shipments made up to the annual reimbursement limit as a portion of “Other current liabilities.” The deferred amount is recognized as revenue when the free products are shipped. The Company’s product revenue contracts include performance obligations that are one year or less.
The Company’s contract liabilities at the end of each fiscal year relate to contracts with annual reimbursement limits in international markets in which the annual period associated with the contract is not the same as the Company’s fiscal year. In these markets, the Company recognizes revenues related to performance obligations satisfied in previous years; however, these revenues do not relate to any performance obligations that were satisfied more than 12 months prior to the beginning of the current year.


8

Table of Contents
VERTEX PHARMACEUTICALS INCORPORATED
Notes to Condensed Consolidated Financial Statements (unaudited)
C.Collaborative Arrangements
The Company has entered into numerous agreements pursuant to which it collaborates with third parties on research, development and commercialization programs, including in-license and out-license agreements.
The Company’s in-license and out-license agreements that had a significant impact on its financial statements for the three and nine months ended September 30, 2021 and 2020, or were new or materially revised during the nine months ended September 30, 2021, are described below. Additional in-license and out-license agreements were described in Note B, “Collaborative Arrangements,” of the Company’s 2020 Annual Report on Form 10-K.
In-license Agreements
The Company has entered into a number of in-license agreements in order to advance and obtain access to technologies and services related to its research and early-development activities. The Company is generally required to make an upfront payment upon execution of the license agreement; development, regulatory and commercialization milestones payments upon the achievement of certain product research, development and commercialization objectives; and royalty payments on future sales, if any, of commercial products resulting from the collaboration.
Pursuant to the terms of its in-license agreements, the Company’s collaborators typically lead the discovery efforts and the Company leads all preclinical, development and commercialization activities associated with the advancement of any drug candidates and funds all expenses.
The Company typically can terminate its in-license agreements by providing advance notice to its collaborators; the required length of notice is dependent on whether any product developed under the license agreement has received marketing approval. The Company’s license agreements may be terminated by either party for a material breach by the other, subject to notice and cure provisions. Unless earlier terminated, these license agreements generally remain in effect until the date on which the royalty term and all payment obligations with respect to all products in all countries have expired.
The Company’s “Research and development expenses” included $26.8 million and $986.8 million for the three and nine months ended September 30, 2021, respectively, and $80.1 million and $143.3 million for the three and nine months ended September 30, 2020, respectively, related to upfront and milestone payments pursuant to its in-license agreements.
CRISPR Therapeutics AG - CRISPR-Cas9 Gene-editing Therapies
In 2015, the Company entered into a strategic collaboration, option and license agreement (the “CRISPR Agreement”) with CRISPR Therapeutics AG and its affiliates (“CRISPR”) to collaborate on the discovery and development of potential new treatments aimed at the underlying genetic causes of human diseases using CRISPR-Cas9 gene-editing technology. The Company had the exclusive right to license certain targets. In 2019, the Company elected to exclusively license three targets, including cystic fibrosis, pursuant to the CRISPR Agreement. For each of the three targets that the Company elected to license, CRISPR has the potential to receive up to an additional $410.0 million in development, regulatory and commercial milestones as well as royalties on net product sales.
In 2017, the Company entered into a joint development and commercialization agreement with CRISPR pursuant to the terms of the CRISPR Agreement (the “Original CTX001 JDCA”), under which the Company and CRISPR were co-developing and preparing to co-commercialize CTX001 for the treatment of hemoglobinopathies, including treatments for sickle cell disease and beta thalassemia.
In the second quarter of 2021, the Company and CRISPR amended and restated the Original CTX001 JDCA (the “A&R JDCA”), pursuant to which the parties agreed to, among other things, (a) adjust the governance structure for the collaboration and adjust the responsibilities of each party thereunder; (b) adjust the allocation of net profits and net losses between the parties; and (c) exclusively license (subject to CRISPR’s reserved rights to conduct certain activities) certain intellectual property rights to the Company relating to the products that may be researched, developed, manufactured and commercialized under such agreement.
Pursuant to the A&R JDCA, the Company is now leading global development, manufacturing and commercialization of CTX001, with support from CRISPR. Subject to the terms and conditions of the A&R JDCA, the Company also has the right

9

Table of Contents
VERTEX PHARMACEUTICALS INCORPORATED
Notes to Condensed Consolidated Financial Statements (unaudited)
to conduct all research, development, manufacturing and commercialization activities relating to the product candidates and products under the A&R JDCA (including CTX001) throughout the world subject to CRISPR’s reserved right to conduct certain activities.
In connection with the amendment and restatement of this agreement, the Company made a $900.0 million upfront payment to CRISPR in the second quarter of 2021. The Company concluded that it did not have any alternative future use for the acquired in-process research and development and recorded this upfront payment to “Research and development expenses.” CRISPR has the potential to receive an additional one-time $200.0 million milestone payment upon receipt of the first marketing approval of CTX001 from the U.S. Food or Drug Administration or the European Commission.
The Company and CRISPR shared equally all expenses incurred under the Original CTX001 JDCA. On July 1, 2021, with respect to CTX001, the net profits and net losses incurred pursuant to the A&R JDCA began to be allocated 60% to the Company and 40% to CRISPR, while all other product candidates and products continued to have net profits and net losses shared equally between the parties. The Company concluded that the Original CTX001 JDCA and the A&R JDCA are cost-sharing arrangements, which result in the net impact of the arrangements being recorded in “Research and development expenses” in its condensed consolidated statements of operations. During the three and nine months ended September 30, 2021 and 2020, the Company recognized the following amounts in total related to these agreements:
Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
(in thousands)
Total research and development expenses incurred under the Original CTX001 JDCA and A&R JDCA$58,659 $28,623 $147,448 $66,720 
Vertex’s share recognized in research and development expenses in condensed consolidated statement of operations35,195 14,311 79,590 33,360 
Moderna, Inc.
In 2016, the Company entered into a strategic collaboration and licensing agreement with Moderna, Inc. (“Moderna”), pursuant to which the parties are seeking to identify and develop messenger ribonucleic acid (“mRNA”) therapeutics for the treatment of CF.
In September 2020, the Company entered into a new strategic collaboration and licensing agreement with Moderna (the “2020 Moderna Agreement”) aimed at the discovery and development of lipid nanoparticles and mRNAs that can deliver gene-editing therapies to lung cells for the treatment of CF. Pursuant to the 2020 Moderna Agreement, Moderna received an upfront payment of $75.0 million and is eligible to receive up to $380.0 million in development, regulatory and commercial milestones as well as royalties on net product sales. The Company determined that substantially all of the fair value of the 2020 Moderna Agreement was attributable to in-process research and development and no substantive processes were acquired that would constitute a business. The Company concluded that it did not have any alternative future use for the acquired in-process research and development and recorded the upfront payment to “Research and development expenses” in the third quarter of 2020.
Out-license Agreements
The Company has entered into licensing agreements pursuant to which it has out-licensed rights to certain drug candidates to third-party collaborators. Pursuant to these out-license agreements, the Company’s collaborators become responsible for all costs related to the continued development of such drug candidates and obtain development and commercialization rights to these drug candidates. Depending on the terms of the agreements, the Company’s collaborators may be required to make upfront payments, milestone payments upon the achievement of certain product research and development objectives and may also be required to pay royalties on future sales, if any, of commercial products resulting from the collaboration. The termination provisions associated with these collaborations are generally the same as those described above related to the Company’s in-license agreements. None of the Company’s out-license agreements had a significant impact on the Company’s condensed consolidated statement of operations during the three and nine months ended September 30, 2021 and 2020.

10

Table of Contents
VERTEX PHARMACEUTICALS INCORPORATED
Notes to Condensed Consolidated Financial Statements (unaudited)
Cystic Fibrosis Foundation
The Company has a research, development and commercialization agreement that was originally entered into in 2004 with the Cystic Fibrosis Foundation, as successor in interest to the Cystic Fibrosis Foundation Therapeutics, Inc. This agreement was most recently amended in 2016. Pursuant to the agreement, as amended, the Company agreed to pay royalties ranging from low-single digits to mid-single digits on potential sales of certain compounds first synthesized and/or tested between March 1, 2014 and August 31, 2016, including elexacaftor, and 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 KALYDECO (ivacaftor), ORKAMBI (lumacaftor in combination with ivacaftor) and SYMDEKO/SYMKEVI (tezacaftor in combination with ivacaftor). For combination products, such as ORKAMBI, SYMDEKO/SYMKEVI and TRIKAFTA/KAFTRIO (elexacaftor/tezacaftor/ivacaftor and ivacaftor), sales are allocated equally to each of the active pharmaceutical ingredients in the combination product.

D.Earnings Per Share
Basic net income per common share is based upon the weighted-average number of common shares outstanding during the period. Diluted net income per common share utilizing the treasury-stock method is based upon the weighted-average number of common shares outstanding during the period plus additional weighted-average common equivalent shares outstanding during the period when the effect is dilutive.
The following table sets forth the computation of basic and diluted net income per common share for the periods ended:
Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
(in thousands, except per share amounts)
Net income
$851,928 $667,434 $1,571,990 $2,107,457 
Basic weighted-average common shares outstanding
257,876 260,392 258,740 260,313 
Effect of potentially dilutive securities:
 Stock options971 1,887 1,124 1,936 
 Restricted stock units (including PSUs)
841 1,788 1,003 1,765 
 Employee stock purchase program
19 12 10 17 
Diluted weighted-average common shares outstanding
259,707 264,079 260,877 264,031 
Basic net income per common share
$3.30 $2.56 $6.08 $8.10 
Diluted net income per common share
$3.28 $2.53 $6.03 $7.98 
The Company did not include the securities in the following table in the computation of the net income per common share because the effect would have been anti-dilutive during each period:
Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
(in thousands)
Stock options1,060 23 711 303 
Unvested restricted stock units (including PSUs)204 252 440 229 


11

Table of Contents
VERTEX PHARMACEUTICALS INCORPORATED
Notes to Condensed Consolidated Financial Statements (unaudited)
E.Fair Value Measurements
The following fair value hierarchy is used to classify assets and liabilities based on observable inputs and unobservable inputs used in order to determine the fair value of the Company’s financial assets and liabilities:
Level 1:
Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
Level 2:
Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.
Level 3:
Unobservable inputs based on the Company’s assessment of the assumptions that market participants would use in pricing the asset or liability.
The Company’s investment strategy is focused on capital preservation. The Company invests in instruments that meet the credit quality standards outlined in the Company’s investment policy. This policy also limits the amount of credit exposure to any one issue or type of instrument. The Company maintains strategic investments separately from the investment policy that governs its other cash, cash equivalents and marketable securities as described in Note F, “Marketable Securities and Equity Investments.” Additionally, the Company utilizes foreign currency forward contracts intended to mitigate the effect of changes in foreign exchange rates on its condensed consolidated statement of operations.
During the three and nine months ended September 30, 2021 and 2020, the Company did not record any other-than-temporary impairment charges related to its financial assets.

12

Table of Contents
VERTEX PHARMACEUTICALS INCORPORATED
Notes to Condensed Consolidated Financial Statements (unaudited)
The following tables set forth the Company’s financial assets and liabilities subject to fair value measurements by level within the fair value hierarchy (and does not include $2.7 billion and $2.8 billion of cash as of September 30, 2021 and December 31, 2020, respectively):
As of September 30, 2021As of December 31, 2020
Total
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
(in thousands)
Financial instruments carried at fair value (asset positions):
Cash equivalents:
Money market funds
$3,578,764 $3,578,764 $ $ $3,141,053 $3,141,053 $ $ 
Commercial paper
31,998  31,998      
Marketable securities:
Corporate equity securities218,764 218,764   195,781 15,650 180,131  
U.S. Treasury securities46,539 46,539       
Government-sponsored enterprise securities
69,002 69,002   80,063 80,063   
Corporate debt securities
95,359  95,359  231,598  231,598  
Commercial paper
255,523  255,523  163,268  163,268  
Prepaid expenses and other current assets:
Foreign currency forward contracts34,300  34,300      
Other assets:
Foreign currency forward contracts4,781  4,781      
Total financial assets
$4,335,030 $3,913,069 $421,961 $ $3,811,763 $3,236,766 $574,997 $ 
Financial instruments carried at fair value (liability positions):
Other current liabilities:
Foreign currency forward contracts
$(4,356)$ $(4,356)$ $(59,184)$ $(59,184)$ 
Long-term contingent consideration
(188,500)  (188,500)(189,600)  (189,600)
Other long-term liabilities:
Foreign currency forward contracts
(29) (29) (4,283) (4,283) 
Total financial liabilities
$(192,885)$ $(4,385)$(188,500)$(253,067)$ $(63,467)$(189,600)
Please refer to Note F, “Marketable Securities and Equity Investments,” for the carrying amount and related unrealized gains (losses) by type of investment.
Fair Value of Corporate Equity Securities
The Company classifies its investments in publicly traded corporate equity securities as “Marketable securities” on its condensed consolidated balance sheets. Generally, the Company’s investments in the common stock of these publicly traded companies are valued based on Level 1 inputs because they have readily determinable fair values. However, certain of the Company’s investments in publicly traded companies have been or continue to be valued based on Level 2 inputs due to transfer restrictions associated with these investments. Please refer to Note F, “Marketable Securities and Equity Investments,” for further information on these investments.
Fair Value of Contingent Consideration
In 2019, the Company acquired Exonics Therapeutics, Inc. (“Exonics”), a privately-held company focused on creating transformative gene-editing therapies to repair mutations that cause DMD and other severe neuromuscular diseases, including DM1. The Company’s Level 3 contingent consideration liabilities are related to $678.3 million of development and regulatory milestones potentially payable to Exonics’ former equity holders. The Company bases its estimates of the probability of achieving the milestones relevant to the fair value of contingent payments on industry data attributable to rare diseases. The discount rates used in the valuation model for contingent payments, which were between 0.3% and 2.2% as of September 30, 2021, represent a measure of credit risk and market risk associated with settling the liabilities. Significant

13

Table of Contents
VERTEX PHARMACEUTICALS INCORPORATED
Notes to Condensed Consolidated Financial Statements (unaudited)
judgment is used in determining the appropriateness of these assumptions at each reporting period. Due to the uncertainties associated with development and commercialization of drug candidates in the pharmaceutical industry and the effects of changes in other assumptions including discount rates, the Company expects its estimates regarding the fair value of contingent consideration to change in the future, resulting in adjustments to the fair value of the Company’s contingent consideration liabilities, and the effect of any such adjustments could be material.
The following table represents a rollforward of the fair value of the Company’s contingent consideration liabilities:
Nine Months Ended September 30, 2021
(in thousands)
Balance at December 31, 2020$189,600 
Decrease in fair value of contingent payments
(1,100)
Balance at September 30, 2021$188,500 

F.Marketable Securities and Equity Investments
A summary of the Company’s cash equivalents and marketable securities, which are recorded at fair value (and do not include $2.7 billion and $2.8 billion of cash as of September 30, 2021 and December 31, 2020, respectively), is shown below:
As of September 30, 2021As of December 31, 2020
Amortized Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair
Value
Amortized Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair
Value
(in thousands)
Cash equivalents:
Money market funds
$3,578,764 $ $