0000875320-22-000014 | 10-Q | XBRL Viewer | Vertex Pharmaceuticals INC MA

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Marketable Securities and Equity Investments - Available-for-Sale Debt Securities at Fair Value (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Debt Securities, Available-for-sale [Line Items]
Debt securities	$ 4,875,500	$ 3,977,100
Cash and cash equivalents
Debt Securities, Available-for-sale [Line Items]
Debt securities	4,392,800	3,478,100
Marketable securities
Debt Securities, Available-for-sale [Line Items]
Debt securities	$ 482,700	$ 499,000

Basis of Presentation and Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2022
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The accompanying condensed consolidated financial statements are unaudited and have been prepared by Vertex Pharmaceuticals Incorporated (“Vertex,” “we,” “us” or “our”) 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 Vertex and our wholly-owned subsidiaries. All material intercompany balances and transactions have been eliminated. We operate in one segment, pharmaceuticals. Certain information and footnote disclosures normally included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 (the “2021 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 March 31, 2022 and 2021. 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, 2021, which are contained in our 2021 Annual Report on Form 10-K.
Use of Estimates	Use of Estimates The preparation of condensed consolidated financial statements in accordance with U.S. GAAP requires us 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 our condensed consolidated financial statements, and the amounts of revenues and expenses during the reported periods. We base our estimates on historical experience and various other assumptions, including in certain circumstances future projections that we believe 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.

Earnings Per Share - Schedule of Computation (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Antidilutive Securities Excluded from Computation of Earnings Per Share
Net income	$ 762.1	$ 653.1
Basic weighted-average common shares outstanding (in shares)	255.1	259.4
Effect of potentially dilutive securities:
Employee stock purchase program (in shares)	0.1	0.0
Diluted weighted-average common shares outstanding (in shares)	257.9	261.9
Basic net income per common share (in dollars per share)	$ 2.99	$ 2.52
Diluted net income per common share (in dollars per share)	$ 2.96	$ 2.49
Stock options
Effect of potentially dilutive securities:
Share-based payment arrangements (in shares)	1.3	1.2
Restricted stock units (including PSUs)
Effect of potentially dilutive securities:
Share-based payment arrangements (in shares)	1.4	1.3

Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended
Income Taxes (Details) - USD ($) $ in Millions	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Income Tax Disclosure [Abstract]
Income before provision for income taxes	$ 954.8	$ 820.9
Provision for income taxes	$ 192.7	$ 167.8
Effective tax rate	20.00%	20.00%
Net unrecognized tax benefits which would affect the tax rate if recognized	$ 137.4		$ 129.5

- Definition

Amount of income (loss) from continuing operations, including income (loss) from equity method investments, before deduction of income tax expense (benefit), and income (loss) attributable to noncontrolling interest.

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+ Details

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Disaggregation of Revenue [Line Items]
Product revenues, net	$ 2,097.5	$ 1,724.3
United States
Disaggregation of Revenue [Line Items]
Product revenues, net	1,368.2	1,253.4
Europe
Disaggregation of Revenue [Line Items]
Product revenues, net	632.3	405.0
Other
Disaggregation of Revenue [Line Items]
Product revenues, net	97.0	64.9
Total product revenues outside of the United States
Disaggregation of Revenue [Line Items]
Product revenues, net	729.3	469.9
Product revenues, net
Disaggregation of Revenue [Line Items]
Product revenues, net	2,097.5	1,723.3
TRIKAFTA/KAFTRIO
Disaggregation of Revenue [Line Items]
Product revenues, net	1,761.6	1,193.2
SYMDEKO/SYMKEVI
Disaggregation of Revenue [Line Items]
Product revenues, net	64.8	125.1
ORKAMBI
Disaggregation of Revenue [Line Items]
Product revenues, net	132.1	218.7
KALYDECO
Disaggregation of Revenue [Line Items]
Product revenues, net	$ 139.0	$ 186.3

Fair Value Measurements - Fair Value of Contingent Consideration Liabilities (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance at December 31, 2021	$ 186.5
Decrease in fair value of contingent payments	(7.5)	$ (3.9)
Balance at March 31, 2022	$ 179.0

Accumulated Other Comprehensive Income (Loss)

3 Months Ended

Mar. 31, 2022

Equity [Abstract]

Accumulated Other Comprehensive Income (Loss)

The following table summarizes the changes in accumulated other comprehensive income (loss) by component:


	Foreign Currency Translation Adjustment		Unrealized Holding Gains (Losses), Net of Tax				Total
			On Available-For-Sale Debt Securities		On Foreign Currency Forward Contracts
	(in millions)
Balance at December 31, 2021	$	(13.6)	$	(0.5)	$	30.0	$	15.9
Other comprehensive (loss) income before reclassifications	(12.4)		(2.3)		25.9		11.2
Amounts reclassified from accumulated other comprehensive income (loss)	—		—		(15.8)		(15.8)
Net current period other comprehensive (loss) income	(12.4)		(2.3)		10.1		(4.6)
Balance at March 31, 2022	$	(26.0)	$	(2.8)	$	40.1	$	11.3

Balance at December 31, 2020	$	(15.6)	$	0.3	$	(53.2)	$	(68.5)
Other comprehensive income (loss) before reclassifications	1.4		(0.2)		21.0		22.2
Amounts reclassified from accumulated other comprehensive income (loss)	—		—		13.0		13.0
Net current period other comprehensive income (loss)	1.4		(0.2)		34.0		35.2
Balance at March 31, 2021	$	(14.2)	$	0.1	$	(19.2)	$	(33.3)

Stock-based Compensation Expense and Share Repurchase Programs

3 Months Ended

Mar. 31, 2022

Share-based Payment Arrangement [Abstract]

Stock-based Compensation Expense and Share Repurchase Programs

Stock-based compensation expense

During the three months ended March 31, 2022 and 2021, we recognized the following stock-based compensation expense:


	Three Months Ended March 31,
		2022		2021
		(in millions)
Stock-based compensation expense by type of award:
Restricted stock units (including PSUs)		$	118.2	$	100.8
Stock options		5.5		10.6
ESPP share issuances		6.8		5.6
Stock-based compensation expense related to inventories		(0.2)		(1.8)
Total stock-based compensation expense included in costs and expenses		$	130.3	$	115.2

Stock-based compensation expense by line item:
Cost of sales		$	2.2	$	1.4
Research and development expenses		80.4		72.8
Selling, general and administrative expenses		47.7		41.0
Total stock-based compensation expense included in costs and expenses		130.3		115.2
Income tax effect		(36.0)		(31.3)
Total stock-based compensation expense, net of tax		$	94.3	$	83.9

Share repurchase programs

In November 2020, our Board of Directors approved a share repurchase program (the “2020 Share Repurchase Program”), pursuant to which we repurchased $500.0 million of our common stock in 2020 and the first quarter of 2021. During the three months ended March 31, 2021, we repurchased 2.0 million shares of our common stock under the 2020 Share Repurchase Program for an aggregate of $424.9 million.

In June 2021, our Board of Directors approved a share repurchase program (the “2021 Share Repurchase Program”), pursuant to which we are authorized to repurchase up to $1.5 billion of our common stock by December 31, 2022. During the three months ended March 31, 2022, we did not repurchase any shares of our common stock under the 2021 Share Repurchase Program. As of March 31, 2022, a total of $499.7 million remained authorized for repurchases of common stock under the 2021 Share Repurchase Program.

Inventories

3 Months Ended

Mar. 31, 2022

Inventory Disclosure [Abstract]

Inventories

Inventories consisted of the following:


	As of March 31, 2022		As of December 31, 2021
	(in millions)
Raw materials	$	42.2	$	42.4
Work-in-process	205.8		224.0
Finished goods	90.9		86.7
Total	$	338.9	$	353.1

Basis of Presentation and Accounting Policies (Details)	3 Months Ended
Basis of Presentation and Accounting Policies (Details)	Mar. 31, 2022 segment
Accounting Policies [Abstract]
Number of operating segments	1

Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2022

Fair Value Disclosures [Abstract]

Schedule of Financial Assets Subject to Fair Value Measurements

The following tables set forth our financial assets and liabilities subject to fair value measurements by level within the fair value hierarchy (and does not include $3.2 billion and $3.3 billion of cash as of March 31, 2022 and December 31, 2021, respectively):


	As of March 31, 2022								As of December 31, 2021
	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
	(in millions)
Financial instruments carried at fair value (asset positions):
Cash equivalents:
Money market funds	$	4,378.6	$	4,378.6	$	—	$	—	$	3,478.1	$	3,478.1	$	—	$	—
Commercial paper	14.2		—		14.2		—		—		—		—		—
Marketable securities:
Corporate equity securities	155.3		155.3		—		—		230.9		230.9		—		—
U.S. Treasury securities	154.3		154.3		—		—		86.4		86.4		—		—
Government-sponsored enterprise securities	7.0		7.0		—		—		69.0		69.0		—		—
Corporate debt securities	76.8		—		76.8		—		90.9		—		90.9		—
Commercial paper	244.6		—		244.6		—		252.7		—		252.7		—
Prepaid expenses and other current assets:
Foreign currency forward contracts	57.2		—		57.2		—		44.5		—		44.5		—
Other assets:
Foreign currency forward contracts	0.9		—		0.9		—		2.0		—		2.0		—
Total financial assets	$	5,088.9	$	4,695.2	$	393.7	$	—	$	4,254.5	$	3,864.4	$	390.1	$	—

Financial instruments carried at fair value (liability positions):
Other current liabilities:
Foreign currency forward contracts	$	(5.1)	$	—	$	(5.1)	$	—	$	(5.6)	$	—	$	(5.6)	$	—
Long-term contingent consideration	(179.0)		—		—		(179.0)		(186.5)		—		—		(186.5)
Other long-term liabilities:
Foreign currency forward contracts	(2.6)		—		(2.6)		—		(2.7)		—		(2.7)		—
Total financial liabilities	$	(186.7)	$	—	$	(7.7)	$	(179.0)	$	(194.8)	$	—	$	(8.3)	$	(186.5)

Schedule of Fair Value of Our Contingent Consideration Liabilities

The following table represents a rollforward of the fair value of our contingent consideration liabilities:


	Three Months Ended March 31, 2022
	(in millions)
Balance at December 31, 2021	$	186.5
Decrease in fair value of contingent payments	(7.5)
Balance at March 31, 2022	$	179.0

Commitments and Contingencies (Details)	1 Months Ended		3 Months Ended
Commitments and Contingencies (Details)	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)	Mar. 31, 2022 USD ($) credit_agreement	Dec. 31, 2021 USD ($)
Line of Credit Facility [Line Items]
Number of credit agreements \| credit_agreement			2
Indemnification claims			$ 0
Contingent liabilities			$ 0	$ 0
Revolving Credit Facility
Line of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity	$ 2,000,000,000	$ 500,000,000
Line of credit facility additional borrowing capacity	$ 500,000,000
Debt covenant, consolidated leverage ratio	3.50
Debt covenant, increase in consolidated leverage ratio	4.00
Debt covenant, interest coverage ratio	2.50
Letters of Credit
Line of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity		$ 50,000,000
Minimum \| Base Rate \| Revolving Credit Facility
Line of Credit Facility [Line Items]
Basis spread on variable rate (as a percent)	0.50%	0.125%
Minimum \| Eurodollar \| Revolving Credit Facility
Line of Credit Facility [Line Items]
Basis spread on variable rate (as a percent)	1.50%	1.125%
Maximum \| Base Rate \| Revolving Credit Facility
Line of Credit Facility [Line Items]
Basis spread on variable rate (as a percent)	0.875%	0.50%
Maximum \| Eurodollar \| Revolving Credit Facility
Line of Credit Facility [Line Items]
Basis spread on variable rate (as a percent)	1.875%	1.50%

Income Taxes (Tables)

3 Months Ended

Mar. 31, 2022

Income Tax Disclosure [Abstract]

Schedule of Provision for Income Taxes and Effective Tax rates

During the three months ended March 31, 2022 and 2021, we recorded the following provisions for income taxes and effective tax rates as compared to our income before provision for income taxes:


	Three Months Ended March 31,
		2022		2021
		(in millions, except percentages)
Income before provision for income taxes		$	954.8	$	820.9
Provision for income taxes		192.7		167.8


Effective tax rate															20		%				20		%

Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Statement of Comprehensive Income [Abstract]
Net income	$ 762.1	$ 653.1
Other comprehensive (loss) income:
Unrealized holding losses on marketable securities, net	(2.3)	(0.2)
Unrealized gains on foreign currency forward contracts, net of tax of $(2.2) million and $(9.3) million, respectively	10.1	34.0
Foreign currency translation adjustment	(12.4)	1.4
Total other comprehensive (loss) income	(4.6)	35.2
Comprehensive income	$ 757.5	$ 688.3

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	$ 10,100.0	$ 8,686.8
Other comprehensive (loss) income before reclassifications	11.2	22.2
Amounts reclassified from accumulated other comprehensive income (loss)	(15.8)	13.0
Total other comprehensive (loss) income	(4.6)	35.2
Ending balance	10,907.0	8,980.3
Foreign Currency Translation Adjustment
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(13.6)	(15.6)
Other comprehensive (loss) income before reclassifications	(12.4)	1.4
Amounts reclassified from accumulated other comprehensive income (loss)	0.0	0.0
Total other comprehensive (loss) income	(12.4)	1.4
Ending balance	(26.0)	(14.2)
On Available-For-Sale Debt Securities
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(0.5)	0.3
Other comprehensive (loss) income before reclassifications	(2.3)	(0.2)
Amounts reclassified from accumulated other comprehensive income (loss)	0.0	0.0
Total other comprehensive (loss) income	(2.3)	(0.2)
Ending balance	(2.8)	0.1
On Foreign Currency Forward Contracts
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	30.0	(53.2)
Other comprehensive (loss) income before reclassifications	25.9	21.0
Amounts reclassified from accumulated other comprehensive income (loss)	(15.8)	13.0
Total other comprehensive (loss) income	10.1	34.0
Ending balance	40.1	(19.2)
Total
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	15.9	(68.5)
Total other comprehensive (loss) income	(4.6)	35.2
Ending balance	$ 11.3	$ (33.3)

- Definition

Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity.

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
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-Paragraph 1
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Reference 7: http://www.xbrl.org/2009/role/commonPracticeRef
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Reference 8: http://www.xbrl.org/2009/role/commonPracticeRef
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-Name Accounting Standards Codification
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-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=114001798&loc=d3e33918-111571

+ Details

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	1,000,000	1,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	500,000,000	500,000,000
Common stock, shares issued (in shares)	255,574,961	254,479,046
Common stock, shares outstanding (in shares)	255,574,961	254,479,046

Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2022

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The following table sets forth the computation of basic and diluted net income per common share for the periods ended:


	Three Months Ended March 31,
		2022		2021
		(in millions, except per share amounts)
Net income		$	762.1	$	653.1

Basic weighted-average common shares outstanding		255.1		259.4
Effect of potentially dilutive securities:
Stock options		1.3		1.2
Restricted stock units (including PSUs)		1.4		1.3
Employee stock purchase program		0.1		0.0
Diluted weighted-average common shares outstanding		257.9		261.9

Basic net income per common share		$	2.99	$	2.52
Diluted net income per common share		$	2.96	$	2.49

Schedule of Potential Gross Common Equivalent Shares

We did not include the securities in the following table in the computation of the diluted net income per common share because the effect would have been anti-dilutive during each period:


	Three Months Ended March 31,
		2022	2021
		(in millions)
Stock options		0.0	0.4
Unvested restricted stock units (including PSUs)		0.6	0.7

Marketable Securities and Equity Investments (Tables)

3 Months Ended

Mar. 31, 2022

Investments, Debt and Equity Securities [Abstract]

Schedule of Cash Equivalents and Marketable Securities

A summary of our cash equivalents and marketable securities, which are recorded at fair value (and do not include $3.2 billion and $3.3 billion of cash as of March 31, 2022 and December 31, 2021, respectively), is shown below:


	As of March 31, 2022								As of December 31, 2021
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in millions)
Cash equivalents:
Money market funds	$	4,378.6	$	—	$	—	$	4,378.6	$	3,478.1	$	—	$	—	$	3,478.1
Commercial paper	14.2		—		—		14.2		—		—		—		—
Total cash equivalents	$	4,392.8	$	—	$	—	$	4,392.8	$	3,478.1	$	—	$	—	$	3,478.1
Marketable securities:
U.S. Treasury securities	$	155.7	$	—	$	(1.4)	$	154.3	$	86.6	$	—	$	(0.2)	$	86.4
Government-sponsored enterprise securities	7.1		—		(0.1)		7.0		69.0		—		—		69.0
Corporate debt securities	77.4		—		(0.6)		76.8		91.1		—		(0.2)		90.9
Commercial paper	245.3		—		(0.7)		244.6		252.8		—		(0.1)		252.7
Total marketable debt securities	485.5		—		(2.8)		482.7		499.5		—		(0.5)		499.0
Corporate equity securities	69.4		92.2		(6.3)		155.3		69.4		167.1		(5.6)		230.9
Total marketable securities	$	554.9	$	92.2	$	(9.1)	$	638.0	$	568.9	$	167.1	$	(6.1)	$	729.9

Available-for-sale debt securities were classified on our condensed consolidated balance sheets at fair value as follows:


	As of March 31, 2022		As of December 31, 2021
	(in millions)
Cash and cash equivalents	$	4,392.8	$	3,478.1
Marketable securities	482.7		499.0
Total	$	4,875.5	$	3,977.1

Available-for-sale debt securities by contractual maturity were as follows:


	As of March 31, 2022		As of December 31, 2021
	(in millions)
Matures within one year	$	4,819.8	$	3,912.3
Matures after one year through five years	55.7		64.8
Total	$	4,875.5	$	3,977.1

Schedule of Company's Net Unrealized Gains (Losses) on Corporate Equity Securities

During the three months ended March 31, 2022 and 2021, our net unrealized losses on corporate equity securities held at the conclusion of each period were as follows:


	Three Months Ended March 31,
		2022		2021
		(in millions)
Net unrealized losses		$	(75.6)	$	(52.3)

Fair Value Measurements

3 Months Ended

Mar. 31, 2022

Fair Value Disclosures [Abstract]

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 our 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 our assessment of the assumptions that market participants would use in pricing the asset or liability.

Our investment strategy is focused on capital preservation. 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. We maintain strategic investments separately from the investment policy that governs our other cash, cash equivalents and marketable securities as described in Note F, “Marketable Securities and Equity Investments.” Additionally, we utilize foreign currency forward contracts intended to mitigate the effect of changes in foreign exchange rates on our condensed consolidated statement of operations.


	As of March 31, 2022								As of December 31, 2021
	Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
	(in millions)
Financial instruments carried at fair value (asset positions):
Cash equivalents:
Money market funds	$	4,378.6	$	4,378.6	$	—	$	—	$	3,478.1	$	3,478.1	$	—	$	—
Commercial paper	14.2		—		14.2		—		—		—		—		—
Marketable securities:
Corporate equity securities	155.3		155.3		—		—		230.9		230.9		—		—
U.S. Treasury securities	154.3		154.3		—		—		86.4		86.4		—		—
Government-sponsored enterprise securities	7.0		7.0		—		—		69.0		69.0		—		—
Corporate debt securities	76.8		—		76.8		—		90.9		—		90.9		—
Commercial paper	244.6		—		244.6		—		252.7		—		252.7		—
Prepaid expenses and other current assets:
Foreign currency forward contracts	57.2		—		57.2		—		44.5		—		44.5		—
Other assets:
Foreign currency forward contracts	0.9		—		0.9		—		2.0		—		2.0		—
Total financial assets	$	5,088.9	$	4,695.2	$	393.7	$	—	$	4,254.5	$	3,864.4	$	390.1	$	—

Financial instruments carried at fair value (liability positions):
Other current liabilities:
Foreign currency forward contracts	$	(5.1)	$	—	$	(5.1)	$	—	$	(5.6)	$	—	$	(5.6)	$	—
Long-term contingent consideration	(179.0)		—		—		(179.0)		(186.5)		—		—		(186.5)
Other long-term liabilities:
Foreign currency forward contracts	(2.6)		—		(2.6)		—		(2.7)		—		(2.7)		—
Total financial liabilities	$	(186.7)	$	—	$	(7.7)	$	(179.0)	$	(194.8)	$	—	$	(8.3)	$	(186.5)

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

We classify our investments in publicly traded corporate equity securities as “Marketable securities” on our condensed consolidated balance sheets. Generally, our investments in the common stock of publicly traded companies are valued based on Level 1 inputs because they have readily determinable fair values. However, certain of our 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, we 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. Our Level 3 contingent consideration liabilities are related to $678.3 million of development and regulatory milestones potentially payable to Exonics’ former equity holders. We base our 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 2.9% and 3.3% as of March 31, 2022, represent a measure of credit risk and market risk associated with settling the liabilities. Significant judgment is used in determining the appropriateness of these assumptions at each reporting period. Due to the uncertainties associated with development and commercialization of product candidates in the pharmaceutical industry and the effects of changes in other assumptions including discount rates, we expect our estimates regarding the fair value of contingent consideration to change in the future,

resulting in adjustments to the fair value of our contingent consideration liabilities, and the effect of any such adjustments could be material.

The following table represents a rollforward of the fair value of our contingent consideration liabilities:


	Three Months Ended March 31, 2022
	(in millions)
Balance at December 31, 2021	$	186.5
Decrease in fair value of contingent payments	(7.5)
Balance at March 31, 2022	$	179.0

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Marketable Securities and Equity Investments - Additional Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Summary of cash, cash equivalents and marketable securities
Cash	$ 3,200,000,000		$ 3,300,000,000
Other-than-temporary declines in fair value of available-for-sale debt securities	0	$ 0
Net unrealized losses	(75,600,000)	$ (52,300,000)
Other Assets
Summary of cash, cash equivalents and marketable securities
Equity securities without readily determinable fair value, amount	$ 85,800,000

Condensed Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Revenues:
Product revenues, net	$ 2,097.5	$ 1,724.3
Costs and expenses:
Cost of sales	245.8	192.3
Research and development expenses	603.1	456.0
Selling, general and administrative expenses	215.2	192.1
Change in fair value of contingent consideration	(7.5)	(3.9)
Total costs and expenses	1,056.6	836.5
Income from operations	1,040.9	887.8
Interest income	1.6	1.5
Interest expense	(14.9)	(15.7)
Other expense, net	(72.8)	(52.7)
Income before provision for income taxes	954.8	820.9
Provision for income taxes	192.7	167.8
Net income	$ 762.1	$ 653.1
Net income per common share:
Basic (in dollars per share)	$ 2.99	$ 2.52
Diluted (in dollars per share)	$ 2.96	$ 2.49
Shares used in per share calculations:
Basic (in shares)	255.1	259.4
Diluted (in shares)	257.9	261.9
Product revenues, net
Revenues:
Product revenues, net	$ 2,097.5	$ 1,723.3
Other revenues
Revenues:
Product revenues, net	$ 0.0	$ 1.0

Stock-based Compensation Expense and Share Repurchase Programs (Tables)

3 Months Ended

Mar. 31, 2022

Share-based Payment Arrangement [Abstract]

Schedule of Stock-based Compensation Expense by Line Item

During the three months ended March 31, 2022 and 2021, we recognized the following stock-based compensation expense:


	Three Months Ended March 31,
		2022		2021
		(in millions)
Stock-based compensation expense by type of award:
Restricted stock units (including PSUs)		$	118.2	$	100.8
Stock options		5.5		10.6
ESPP share issuances		6.8		5.6
Stock-based compensation expense related to inventories		(0.2)		(1.8)
Total stock-based compensation expense included in costs and expenses		$	130.3	$	115.2

Stock-based compensation expense by line item:
Cost of sales		$	2.2	$	1.4
Research and development expenses		80.4		72.8
Selling, general and administrative expenses		47.7		41.0
Total stock-based compensation expense included in costs and expenses		130.3		115.2
Income tax effect		(36.0)		(31.3)
Total stock-based compensation expense, net of tax		$	94.3	$	83.9

Hedging - Offsetting Derivatives (Details) - Cash Flow Hedging - Designated as Hedging Instruments - Foreign Currency Forward Contracts - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Offsetting Derivative Assets [Abstract]
Gross Amounts Recognized	$ 58.1	$ 46.5
Gross Amounts Offset	0.0	0.0
Gross Amounts Presented	58.1	46.5
Gross Amounts Not Offset	(7.7)	(8.3)
Legal Offset	50.4	38.2
Offsetting Derivative Liabilities [Abstract]
Gross Amounts Recognized	(7.7)	(8.3)
Gross Amounts Offset	0.0	0.0
Gross Amounts Presented	(7.7)	(8.3)
Gross Amounts Not Offset	7.7	8.3
Legal Offset	$ 0.0	$ 0.0

Commitments and Contingencies	3 Months Ended
Commitments and Contingencies	Mar. 31, 2022
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Revolving Credit Facilities Vertex and certain of its subsidiaries have entered into two credit agreements (the “Credit Agreements”) with Bank of America, N.A., as administrative agent and the lenders referred to therein (the “Lenders”). The Credit Agreements were not drawn upon at closing and we have not drawn upon them to date. Amounts drawn pursuant to the Credit Agreements, if any, will be used for general corporate purposes. Any amounts borrowed under the Credit Agreements will bear interest, at our option, at either a base rate or a Eurocurrency rate, in each case plus an applicable margin based on our consolidated leverage ratio (the ratio of our total consolidated funded indebtedness to our consolidated EBITDA for the most recently completed four fiscal quarter period). In September 2019, Vertex and certain of its subsidiaries entered into a $500.0 million unsecured revolving facility (the “2019 Credit Agreement”) with the Lenders, which matures on September 17, 2024. Under the 2019 Credit Agreement, the applicable margins on base rate loans range from 0.125% to 0.500% and the applicable margins on Eurocurrency loans range from 1.125% to 1.500%. The 2019 Credit Agreement provides a sublimit of $50.0 million for letters of credit. In September 2020, Vertex and certain of its subsidiaries entered into a $2.0 billion unsecured revolving facility (the “2020 Credit Agreement”) with the Lenders, which matures on September 18, 2022. Under the 2020 Credit Agreement, the applicable margins on base rate loans range from 0.500% to 0.875% and the applicable margins on Eurocurrency loans range from 1.500% to 1.875%. The 2020 Credit Agreement does not support letters of credit. Subject to satisfaction of certain conditions, we may request that the borrowing capacity for each of the Credit Agreements be increased by an additional $500.0 million. Any amounts borrowed pursuant to the Credit Agreements are guaranteed by certain of our existing and future domestic subsidiaries, subject to certain exceptions. The Credit Agreements contain customary representations and warranties and affirmative and negative covenants, including financial covenants to maintain (x) subject to certain limited exceptions, a consolidated leverage ratio of 3.50 to 1.00, subject to an increase to 4.00 to 1.00 following a material acquisition and (y) a consolidated interest coverage ratio of 2.50 to 1.00, in each case measured on a quarterly basis. As of March 31, 2022, we were in compliance with the covenants described above. The Credit Agreements also contain customary events of default. In the case of a continuing event of default, the administrative agent would be entitled to exercise various remedies, including the acceleration of amounts due under outstanding loans. Direct costs related to the Credit Agreements are recorded over the term of the Credit Agreements and were not material to our financial statements. Guaranties and Indemnifications As permitted under Massachusetts law, our Articles of Organization and By-laws provide that we will indemnify certain of our officers and directors for certain claims asserted against them in connection with their service as an officer or director. The maximum potential amount of future payments that we could be required to make under these indemnification provisions is unlimited. However, we have purchased directors’ and officers’ liability insurance policies that could reduce our monetary exposure and enable us to recover a portion of any future amounts paid. No indemnification claims currently are outstanding, and we believe the estimated fair value of these indemnification arrangements is minimal. We customarily agree in the ordinary course of our business to indemnification provisions in agreements with clinical trial investigators and sites in our product development programs, sponsored research agreements with academic and not-for-profit institutions, various comparable agreements involving parties performing services for us, and our real estate leases. We also customarily agree to certain indemnification provisions in our drug discovery, development and commercialization collaboration agreements. With respect to our clinical trials and sponsored research agreements, these indemnification provisions typically apply to any claim asserted against the investigator or the investigator’s institution relating to personal injury or property damage, violations of law or certain breaches of our contractual obligations arising out of the research or clinical testing of our compounds or product candidates. With respect to lease agreements, the indemnification provisions typically apply to claims asserted against the landlord relating to personal injury or property damage caused by us, to violations of law by us or to certain breaches of our contractual obligations. The indemnification provisions appearing in our collaboration agreements are similar to those for the other agreements discussed above, but in addition provide some limited indemnification for our collaborator in the event of third-party claims alleging infringement of intellectual property rights. In each of the cases above, the indemnification obligation generally survives the termination of the agreement for some extended period, although we believe the obligation typically has the most relevance during the contract term and for a short period of time thereafter. The maximum potential amount of future payments that we could be required to make under these provisions is generally unlimited. We have purchased insurance policies covering personal injury, property damage and general liability that reduce our exposure for indemnification and would enable us in many cases to recover all or a portion of any future amounts paid. We have never paid any material amounts to defend lawsuits or settle claims related to these indemnification provisions. Accordingly, we believe the estimated fair value of these indemnification arrangements is minimal. Other Contingencies We have certain contingent liabilities that arise in the ordinary course of our business activities. We accrue a reserve for contingent liabilities when it is probable that future expenditures will be made, and such expenditures can be reasonably estimated. Other than our contingent consideration liabilities discussed in Note E, “Fair Value Measurements,” there were no material contingent liabilities accrued as of March 31, 2022 or December 31, 2021.

Revenue Recognition

3 Months Ended

Mar. 31, 2022

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Disaggregation of Revenue

Revenues by Product

Product revenues, net consisted of the following:


	Three Months Ended March 31,
		2022		2021
		(in millions)
TRIKAFTA/KAFTRIO		$	1,761.6	$	1,193.2
SYMDEKO/SYMKEVI		64.8		125.1
ORKAMBI		132.1		218.7
KALYDECO		139.0		186.3
Total product revenues, net		$	2,097.5	$	1,723.3

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 March 31,
		2022		2021
		(in millions)
United States		$	1,368.2	$	1,253.4
Outside of the United States
Europe		632.3		405.0
Other		97.0		64.9
Total product revenues outside of the United States		729.3		469.9
Total product revenues, net		$	2,097.5	$	1,723.3

Contract Liabilities

We had contract liabilities of $186.1 million and $171.7 million as of March 31, 2022 and December 31, 2021, respectively, related to annual contracts with government-owned and supported customers in international markets that limit the amount of annual reimbursement we 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. We defer 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. Our product revenue contracts include performance obligations that are one year or less.

Our 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 our fiscal year. In these markets, we recognize 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.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI http://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130551-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130556-203045

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130550-203045

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (e)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130558-203045

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

+ Details

Earnings Per Share - Anti-dilutive Securities (Details) - shares shares in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share
Antidilutive securities excluded from computation of earnings per share (in shares)	0.0	0.4
Restricted stock units (including PSUs)
Antidilutive Securities Excluded from Computation of Earnings Per Share
Antidilutive securities excluded from computation of earnings per share (in shares)	0.6	0.7

Earnings Per Share

3 Months Ended

Mar. 31, 2022

Earnings Per Share [Abstract]

Earnings Per Share

The following table sets forth the computation of basic and diluted net income per common share for the periods ended:


	Three Months Ended March 31,
		2022		2021
		(in millions, except per share amounts)
Net income		$	762.1	$	653.1

Basic weighted-average common shares outstanding		255.1		259.4
Effect of potentially dilutive securities:
Stock options		1.3		1.2
Restricted stock units (including PSUs)		1.4		1.3
Employee stock purchase program		0.1		0.0
Diluted weighted-average common shares outstanding		257.9		261.9

Basic net income per common share		$	2.99	$	2.52
Diluted net income per common share		$	2.96	$	2.49

We did not include the securities in the following table in the computation of the diluted net income per common share because the effect would have been anti-dilutive during each period:


	Three Months Ended March 31,
		2022	2021
		(in millions)
Stock options		0.0	0.4
Unvested restricted stock units (including PSUs)		0.6	0.7

Marketable Securities and Equity Investments - Available-for-Sale Debt Securities by Contractual Maturity (Details) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Investments, Debt and Equity Securities [Abstract]
Matures within one year	$ 4,819.8	$ 3,912.3
Matures after one year through five years	55.7	64.8
Total	$ 4,875.5	$ 3,977.1

Revenue Recognition (Tables)

3 Months Ended

Mar. 31, 2022

Revenue from Contract with Customer [Abstract]

Schedule of Disaggregation of Revenue

Product revenues, net consisted of the following:


	Three Months Ended March 31,
		2022		2021
		(in millions)
TRIKAFTA/KAFTRIO		$	1,761.6	$	1,193.2
SYMDEKO/SYMKEVI		64.8		125.1
ORKAMBI		132.1		218.7
KALYDECO		139.0		186.3
Total product revenues, net		$	2,097.5	$	1,723.3

Total net product revenues by geographic region, based on the location of the customer, consisted of the following:


	Three Months Ended March 31,
		2022		2021
		(in millions)
United States		$	1,368.2	$	1,253.4
Outside of the United States
Europe		632.3		405.0
Other		97.0		64.9
Total product revenues outside of the United States		729.3		469.9
Total product revenues, net		$	2,097.5	$	1,723.3

Condensed Consolidated Statements of Shareholders' Equity - USD ($) shares in Millions, $ in Millions	Total	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive (Loss) Income	Retained Earnings
Beginning balance (in shares) at Dec. 31, 2020		259.9
Beginning balance at Dec. 31, 2020	$ 8,686.8	$ 2.6	$ 7,894.0	$ (68.5)	$ 858.7
Increase (Decrease) in Stockholders' Equity
Other comprehensive income (loss), net of tax	35.2			35.2
Net income	653.1				653.1
Repurchase of common stock (in shares)		(2.0)
Repurchase of common stock	(424.9)	$ 0.0	(424.9)
Common stock withheld for employee tax obligations (in shares)		(0.5)
Common stock withheld for employee tax obligations	(102.1)	$ 0.0	(102.1)
Issuance of common stock under benefit plans (in shares)		1.4
Issuance of common stock under benefit plans	15.2	$ 0.0	15.2
Stock-based compensation expense	117.0		117.0
Ending balance (in shares) at Mar. 31, 2021		258.8
Ending balance at Mar. 31, 2021	8,980.3	$ 2.6	7,499.2	(33.3)	1,511.8
Beginning balance (in shares) at Dec. 31, 2021		254.5
Beginning balance at Dec. 31, 2021	10,100.0	$ 2.5	6,880.8	15.9	3,200.8
Increase (Decrease) in Stockholders' Equity
Other comprehensive income (loss), net of tax	(4.6)			(4.6)
Net income	762.1				762.1
Common stock withheld for employee tax obligations (in shares)		(0.5)
Common stock withheld for employee tax obligations	(117.5)	$ 0.0	(117.5)
Issuance of common stock under benefit plans (in shares)		1.6
Issuance of common stock under benefit plans	36.5	$ 0.1	36.4
Stock-based compensation expense	130.5		130.5
Ending balance (in shares) at Mar. 31, 2022		255.6
Ending balance at Mar. 31, 2022	$ 10,907.0	$ 2.6	$ 6,930.2	$ 11.3	$ 3,962.9

Marketable Securities and Equity Investments

3 Months Ended

Mar. 31, 2022

Investments, Debt and Equity Securities [Abstract]

Marketable Securities and Equity Investments


	As of March 31, 2022								As of December 31, 2021
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in millions)
Cash equivalents:
Money market funds	$	4,378.6	$	—	$	—	$	4,378.6	$	3,478.1	$	—	$	—	$	3,478.1
Commercial paper	14.2		—		—		14.2		—		—		—		—
Total cash equivalents	$	4,392.8	$	—	$	—	$	4,392.8	$	3,478.1	$	—	$	—	$	3,478.1
Marketable securities:
U.S. Treasury securities	$	155.7	$	—	$	(1.4)	$	154.3	$	86.6	$	—	$	(0.2)	$	86.4
Government-sponsored enterprise securities	7.1		—		(0.1)		7.0		69.0		—		—		69.0
Corporate debt securities	77.4		—		(0.6)		76.8		91.1		—		(0.2)		90.9
Commercial paper	245.3		—		(0.7)		244.6		252.8		—		(0.1)		252.7
Total marketable debt securities	485.5		—		(2.8)		482.7		499.5		—		(0.5)		499.0
Corporate equity securities	69.4		92.2		(6.3)		155.3		69.4		167.1		(5.6)		230.9
Total marketable securities	$	554.9	$	92.2	$	(9.1)	$	638.0	$	568.9	$	167.1	$	(6.1)	$	729.9

Available-for-sale debt securities were classified on our condensed consolidated balance sheets at fair value as follows:


	As of March 31, 2022		As of December 31, 2021
	(in millions)
Cash and cash equivalents	$	4,392.8	$	3,478.1
Marketable securities	482.7		499.0
Total	$	4,875.5	$	3,977.1

Available-for-sale debt securities by contractual maturity were as follows:


	As of March 31, 2022		As of December 31, 2021
	(in millions)
Matures within one year	$	4,819.8	$	3,912.3
Matures after one year through five years	55.7		64.8
Total	$	4,875.5	$	3,977.1

We have a limited number of available-for-sale debt securities in insignificant loss positions as of March 31, 2022, which we do not intend to sell and have concluded we will not be required to sell before recovery of the amortized costs for the investments at maturity. We did not record any allowances for credit losses to adjust the fair value of available-for-sale debt securities or gross realized gains or losses in the three months ended March 31, 2022 and 2021.

We record changes in the fair value of our investments in corporate equity securities to “Other expense, net” in our condensed consolidated statements of operations. During the three months ended March 31, 2022 and 2021, our net unrealized losses on corporate equity securities held at the conclusion of each period were as follows:


	Three Months Ended March 31,
		2022		2021
		(in millions)
Net unrealized losses		$	(75.6)	$	(52.3)

As of March 31, 2022, the carrying value of our equity investments without readily determinable fair values, which are recorded in “Other assets” on our condensed consolidated balance sheets, was $85.8 million.

Hedging - Notional Amount (Details) - Foreign Currency Forward Contracts - Designated as Hedging Instruments - Cash Flow Hedging - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Derivative [Line Items]
Notional amount of foreign currency forward contract	$ 2,155.6	$ 1,892.5
Euro
Derivative [Line Items]
Notional amount of foreign currency forward contract	1,542.6	1,364.5
British pound sterling
Derivative [Line Items]
Notional amount of foreign currency forward contract	283.7	287.7
Canadian dollar
Derivative [Line Items]
Notional amount of foreign currency forward contract	170.2	89.9
Australian dollar
Derivative [Line Items]
Notional amount of foreign currency forward contract	102.1	96.3
Swiss Franc
Derivative [Line Items]
Notional amount of foreign currency forward contract	$ 57.0	$ 54.1

Inventories (Details) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Inventory Disclosure [Abstract]
Raw materials	$ 42.2	$ 42.4
Work-in-process	205.8	224.0
Finished goods	90.9	86.7
Total	$ 338.9	$ 353.1

Hedging

3 Months Ended

Mar. 31, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Hedging

Foreign currency forward contracts - Designated as hedging instruments

We maintain a hedging program intended to mitigate the effect of changes in foreign exchange rates for a portion of our forecasted product revenues denominated in certain foreign currencies. The program includes foreign currency forward contracts that are designated as cash flow hedges under U.S. GAAP having contractual durations from one to eighteen months. We recognize realized gains and losses for the effective portion of such contracts in “Product revenues, net” in our

condensed consolidated statements of operations in the same period that we recognize the product revenues that were impacted by the hedged foreign exchange rate changes.

We formally document the relationship between foreign currency forward contracts (hedging instruments) and forecasted product revenues (hedged items), as well as our risk management objective and strategy for undertaking various hedging activities, which includes matching all foreign currency forward contracts that are designated as cash flow hedges to forecasted transactions. We also formally assess, both at the hedge’s inception and on an ongoing basis, whether the foreign currency forward contracts are highly effective in offsetting changes in cash flows of hedged items on a prospective and retrospective basis. If we were to determine that a (i) foreign currency forward contract is not highly effective as a cash flow hedge, (ii) foreign currency forward contract has ceased to be a highly effective hedge or (iii) forecasted transaction is no longer probable of occurring, we would discontinue hedge accounting treatment prospectively. We measure effectiveness based on the change in fair value of the forward contracts and the fair value of the hypothetical foreign currency forward contracts with terms that match the critical terms of the risk being hedged. As of March 31, 2022, all hedges were determined to be highly effective.

We consider the impact of our counterparties’ credit risk on the fair value of the foreign currency forward contracts. As of March 31, 2022 and December 31, 2021, credit risk did not change the fair value of our foreign currency forward contracts.

The following table summarizes the notional amount in U.S. dollars of our outstanding foreign currency forward contracts designated as cash flow hedges under U.S. GAAP:


	As of March 31, 2022		As of December 31, 2021
Foreign Currency	(in millions)
Euro	$	1,542.6	$	1,364.5
British pound sterling	283.7		287.7
Canadian dollar	170.2		89.9
Australian dollar	102.1		96.3
Swiss Franc	57.0		54.1
Total foreign currency forward contracts	$	2,155.6	$	1,892.5

Foreign currency forward contracts - Not designated as hedging instruments

We also enter into foreign currency forward contracts with contractual maturities of less than one month, which are designed to mitigate the effect of changes in foreign exchange rates on monetary assets and liabilities, including intercompany balances. These contracts are not designated as hedging instruments under U.S. GAAP. We recognize realized gains and losses for such contracts in “Other expense, net” in our condensed consolidated statements of operations each period. As of March 31, 2022, the notional amount of our outstanding foreign currency forward contracts where hedge accounting under U.S. GAAP is not applied was $527.2 million.

During the three months ended March 31, 2022 and 2021, we recognized the following related to foreign currency forward contracts in our condensed consolidated statements of operations:


	Three Months Ended March 31,
		2022		2021
		(in millions)
Designated as hedging instruments - Reclassified from AOCI
Product revenues, net		$	20.1	$	(16.5)
Not designated as hedging instruments
Other expense, net		$	(8.4)	$	(8.0)

Total reported in the Condensed Consolidated Statement of Operations
Product revenues, net		$	2,097.5	$	1,723.3
Other expense, net		$	(72.8)	$	(52.7)

The following table summarizes the fair value of our outstanding foreign currency forward contracts designated as cash flow hedges under U.S. GAAP included on our condensed consolidated balance sheets:


As of March 31, 2022
Assets			Liabilities
Classification	Fair Value		Classification	Fair Value
(in millions)
Prepaid expenses and other current assets	$	57.2	Other current liabilities	$	(5.1)
Other assets	0.9		Other long-term liabilities	(2.6)
Total assets	$	58.1	Total liabilities	$	(7.7)


As of December 31, 2021
Assets			Liabilities
Classification	Fair Value		Classification	Fair Value
(in millions)
Prepaid expenses and other current assets	$	44.5	Other current liabilities	$	(5.6)
Other assets	2.0		Other long-term liabilities	(2.7)
Total assets	$	46.5	Total liabilities	$	(8.3)

As of March 31, 2022, we expect the amounts that are related to foreign exchange forward contracts designated as cash flow hedges under U.S. GAAP recorded in “Prepaid expenses and other current assets” and “Other current liabilities” to be reclassified to earnings within twelve months.

We present the fair value of our foreign currency forward contracts on a gross basis within our condensed consolidated balance sheets. The following table summarizes the potential effect of offsetting derivatives by type of financial instrument designated as cash flow hedges under U.S. GAAP on our condensed consolidated balance sheets:


	As of March 31, 2022
	Gross Amounts Recognized		Gross Amounts Offset		Gross Amounts Presented		Gross Amounts Not Offset		Legal Offset
Foreign currency forward contracts	(in millions)
Total assets	$	58.1	$	—	$	58.1	$	(7.7)	$	50.4
Total liabilities	(7.7)		—		(7.7)		7.7		—


	As of December 31, 2021
	Gross Amounts Recognized		Gross Amounts Offset		Gross Amounts Presented		Gross Amounts Not Offset		Legal Offset
Foreign currency forward contracts	(in millions)
Total assets	$	46.5	$	—	$	46.5	$	(8.3)	$	38.2
Total liabilities	(8.3)		—		(8.3)		8.3		—

Collaborative and Other Arrangements

3 Months Ended

Mar. 31, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Collaborative and Other Arrangements

We have entered into numerous agreements with third parties to collaborate on research, development and commercialization programs, license technologies, or acquire assets. In the three months ended March 31, 2022 and 2021, our “Research and development expenses” included $2.0 million and $1.7 million, respectively, related to upfront, contingent milestone, or other payments pursuant to our business development transactions, including collaborations, licenses of third-party technologies, and asset acquisitions.

Our collaboration, licensing and asset acquisition agreements that had a significant impact on our financial statements for the three months ended March 31, 2022 and 2021, or were new or materially revised during the three months ended March 31, 2022, are described below. Additional agreements were described in Note B, “Collaborative and Other Arrangements,” of our 2021 Annual Report on Form 10-K.

In-license Agreements

We have entered into a number of in-license agreements in order to advance and obtain access to technologies and services related to our research and early-development activities. We are generally required to make an upfront payment upon execution of our license agreements; 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 our collaborations.

Pursuant to the terms of our in-license agreements, our collaborators typically lead the discovery efforts and we lead all preclinical, development and commercialization activities associated with the advancement of any product candidates and fund all expenses.

We typically can terminate our in-license agreements by providing advance notice to our collaborators; the required length of notice is dependent on whether any product developed under the license agreement has received marketing approval. Our 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.

CRISPR Therapeutics AG - CRISPR-Cas9 Gene-editing Therapies

In 2015, we 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. We had the exclusive right to license certain targets. In 2019, we elected to exclusively license three targets, including cystic fibrosis, pursuant to the CRISPR Agreement. For each of the three targets that we 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, we entered into a joint development and commercialization agreement with CRISPR pursuant to the terms of the CRISPR Agreement (the “Original CTX001 JDCA”), under which we and CRISPR were co-developing and preparing to co-commercialize CTX001 for the treatment of hemoglobinopathies, including treatments for sickle cell disease and transfusion-dependent beta thalassemia.

In the second quarter of 2021, we 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 us relating to the products that may be researched, developed, manufactured and commercialized under such agreement.

Pursuant to the A&R JDCA, we are now leading global development, manufacturing and commercialization of CTX001, with support from CRISPR. Subject to the terms and conditions of the A&R JDCA, we also 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 CTX001) throughout the world subject to CRISPR’s reserved right to conduct certain activities.

In connection with the A&R JDCA, we made a $900.0 million upfront payment to CRISPR in the second quarter of 2021. We concluded that we 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 and Drug Administration or the European Commission.

We and CRISPR shared equally all expenses incurred under the Original CTX001 JDCA. On July 1, 2021, the net profits and net losses incurred with respect to CTX001 pursuant to the A&R JDCA began to be allocated 60% to us and 40% to CRISPR, while all other product candidates and products continue to have net profits and net losses shared equally between the parties. We 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 “Total costs and expenses” within our condensed consolidated statements of operations. During the three months ended March 31, 2022 and 2021, we recognized the following amounts in total related to these agreements:


	Three Months Ended March 31,
		2022		2021
		(in millions)
Total research and development expenses incurred under the Original CTX001 JDCA and A&R JDCA		$	76.6	$	40.0
Vertex’s share recognized in “Total costs and expenses” in our condensed consolidated statements of operations		46.0		20.0

Cystic Fibrosis Foundation

We have 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, we 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. We record our royalties payable to the Cystic Fibrosis Foundation to “Cost of sales.”

Hedging - Additional Information (Details) - Foreign Currency Forward Contracts	3 Months Ended
	Mar. 31, 2022 USD ($)
Not Designated as Hedging Instrument
Derivative [Line Items]
Derivative term	1 month
Cash Flow Hedging \| Not Designated as Hedging Instrument
Derivative [Line Items]
Notional amount of foreign currency forward contract	$ 527,200,000
Cash Flow Hedging \| Minimum
Derivative [Line Items]
Derivative term	1 month
Cash Flow Hedging \| Maximum
Derivative [Line Items]
Derivative term	18 months

Marketable Securities and Equity Investments - Summary of Cash Equivalents and Marketable Securities (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Mar. 31, 2022	Jun. 30, 2021	Dec. 31, 2021
Total marketable debt securities
Fair Value	$ 4,875,500		$ 3,977,100
Corporate equity securities
Amortized Cost	69,400		69,400
Gross Unrealized Gains	92,200	$ 167,100
Gross Unrealized Losses	(6,300)	$ (5,600)
Fair Value	155,300		230,900
Amortized Cost	554,900		568,900
Gross Unrealized Gains	92,200		167,100
Gross Unrealized Losses	(9,100)		(6,100)
Fair Value	638,000		729,900
Cash equivalents:
Total marketable debt securities
Amortized Cost	4,392,800		3,478,100
Gross Unrealized Gains	0		0
Gross Unrealized Losses	0		0
Fair Value	4,392,800		3,478,100
Cash equivalents: \| Money market funds
Total marketable debt securities
Amortized Cost	4,378,600		3,478,100
Gross Unrealized Gains	0		0
Gross Unrealized Losses	0		0
Fair Value	4,378,600		3,478,100
Cash equivalents: \| Commercial paper
Total marketable debt securities
Amortized Cost	14,200		0
Gross Unrealized Gains	0		0
Gross Unrealized Losses	0		0
Fair Value	14,200		0
Marketable securities
Total marketable debt securities
Amortized Cost	485,500		499,500
Gross Unrealized Gains	0		0
Gross Unrealized Losses	(2,800)		(500)
Fair Value	482,700		499,000
Marketable securities \| U.S. Treasury securities
Total marketable debt securities
Amortized Cost	155,700		86,600
Gross Unrealized Gains	0		0
Gross Unrealized Losses	(1,400)		(200)
Fair Value	154,300		86,400
Marketable securities \| Government-sponsored enterprise securities
Total marketable debt securities
Amortized Cost	7,100		69,000
Gross Unrealized Gains	0		0
Gross Unrealized Losses	(100)		0
Fair Value	7,000		69,000
Marketable securities \| Corporate debt securities
Total marketable debt securities
Amortized Cost	77,400		91,100
Gross Unrealized Gains	0		0
Gross Unrealized Losses	(600)		(200)
Fair Value	76,800		90,900
Marketable securities \| Commercial paper
Total marketable debt securities
Amortized Cost	245,300		252,800
Gross Unrealized Gains	0		0
Gross Unrealized Losses	(700)		(100)
Fair Value	$ 244,600		$ 252,700

Collaborative and Other Arrangements (Tables)

3 Months Ended

Mar. 31, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Collaborative Arrangement Costs

During the three months ended March 31, 2022 and 2021, we recognized the following amounts in total related to these agreements:


	Three Months Ended March 31,
		2022		2021
		(in millions)
Total research and development expenses incurred under the Original CTX001 JDCA and A&R JDCA		$	76.6	$	40.0
Vertex’s share recognized in “Total costs and expenses” in our condensed consolidated statements of operations		46.0		20.0

Stock-based Compensation Expense and Share Repurchase Programs - Additional Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Jun. 30, 2021	Nov. 30, 2020
Equity, Class of Treasury Stock [Line Items]
Value of shares repurchased		$ 424,900,000
Share Repurchase Program 2020
Equity, Class of Treasury Stock [Line Items]
Number of shares authorized to be repurchased				$ 500,000,000
Shares repurchased (in shares)		2,000,000.0
Value of shares repurchased		$ 424,900,000
Share Repurchase Program 2021
Equity, Class of Treasury Stock [Line Items]
Number of shares authorized to be repurchased			$ 1,500,000,000
Shares repurchased (in shares)	0
Stock repurchase program, remaining amount	$ 499,700,000

Income Taxes

3 Months Ended

Mar. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

We are subject to U.S. federal, state, and foreign income taxes. During the three months ended March 31, 2022 and 2021, we recorded the following provisions for income taxes and effective tax rates as compared to our income before provision for income taxes:


	Three Months Ended March 31,
		2022		2021
		(in millions, except percentages)
Income before provision for income taxes		$	954.8	$	820.9
Provision for income taxes		192.7		167.8


Effective tax rate															20		%				20		%

Our effective tax rate for each of the three months ended March 31, 2022 and 2021 was lower than the U.S. statutory rate primarily due to excess tax benefits related to stock-based compensation.

We have reviewed the tax positions taken, or to be taken, in our tax returns for all tax years currently open to examination by a taxing authority. As of March 31, 2022 and December 31, 2021, we had $137.4 million and $129.5 million, respectively, of net unrecognized tax benefits, which would affect our tax rate if recognized.

Starting in 2022, our cash paid for income taxes will substantially increase due to the elimination of the option in the U.S. to deduct research and development expenses in the period they are incurred and instead, as required by the Tax Cuts and Job Act of 2017, amortize them over a five year period if they are from the U.S. and fifteen years if they are from foreign jurisdictions.

We file U.S. federal income tax returns and income tax returns in various state, local and foreign jurisdictions. We have various income tax audits ongoing at any time throughout the world. Except for jurisdictions where we have net operating losses or tax credit carryforwards, we are no longer subject to any tax assessment from tax authorities for years prior to 2018.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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+ Details

Inventories (Tables)

3 Months Ended

Mar. 31, 2022

Inventory Disclosure [Abstract]

Schedule of Inventories by Type

Inventories consisted of the following:


	As of March 31, 2022		As of December 31, 2021
	(in millions)
Raw materials	$	42.2	$	42.4
Work-in-process	205.8		224.0
Finished goods	90.9		86.7
Total	$	338.9	$	353.1

Fair Value Measurements - Additional Information (Details) $ in Millions	Mar. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash	$ 3,200.0	$ 3,300.0
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Remaining milestone payment	$ 678.3
Level 3 \| Minimum \| Discount Rate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration, measurement input (as a percent)	0.029
Level 3 \| Maximum \| Discount Rate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration, measurement input (as a percent)	0.033

Hedging - Cash Flow Hedging Instruments (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Derivative Instruments, Gain (Loss) [Line Items]
Product revenues, net	$ 2,097.5	$ 1,724.3
Other expense, net	(72.8)	(52.7)
Foreign Currency Forward Contract \| Reclassification out of Accumulated Other Comprehensive Income \| Foreign Currency Forward Contracts \| Not designated as hedging instruments
Derivative Instruments, Gain (Loss) [Line Items]
Other expense, net	(8.4)	(8.0)
Product revenues, net
Derivative Instruments, Gain (Loss) [Line Items]
Product revenues, net	2,097.5	1,723.3
Product revenues, net \| Foreign Currency Forward Contract \| Reclassification out of Accumulated Other Comprehensive Income \| Foreign Currency Forward Contracts \| Designated as hedging instruments
Derivative Instruments, Gain (Loss) [Line Items]
Product revenues, net	$ 20.1	$ (16.5)

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

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+ Details

Stock-based Compensation Expense and Share Repurchase Programs - Stock-based Compensation Expense (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Stock-based compensation expense:
Total stock-based compensation expense included in costs and expenses	$ 130.3	$ 115.2
Stock-based compensation expense related to inventories	(0.2)	(1.8)
Total stock-based compensation expense included in costs and expenses	130.3	115.2
Income tax effect	(36.0)	(31.3)
Total stock-based compensation expense, net of tax	94.3	83.9
Cost of sales
Stock-based compensation expense:
Total stock-based compensation expense included in costs and expenses	2.2	1.4
Research and development expenses
Stock-based compensation expense:
Total stock-based compensation expense included in costs and expenses	80.4	72.8
Selling, general and administrative expenses
Stock-based compensation expense:
Total stock-based compensation expense included in costs and expenses	47.7	41.0
Restricted stock units (including PSUs)
Stock-based compensation expense:
Total stock-based compensation expense included in costs and expenses	118.2	100.8
Stock options
Stock-based compensation expense:
Total stock-based compensation expense included in costs and expenses	5.5	10.6
ESPP share issuances
Stock-based compensation expense:
Total stock-based compensation expense included in costs and expenses	$ 6.8	$ 5.6

Basis of Presentation and Accounting Policies	3 Months Ended
Basis of Presentation and Accounting Policies	Mar. 31, 2022
Accounting Policies [Abstract]
Basis of Presentation and Accounting Policies	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,” “we,” “us” or “our”) 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 Vertex and our wholly-owned subsidiaries. All material intercompany balances and transactions have been eliminated. We operate in one segment, pharmaceuticals. Certain information and footnote disclosures normally included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 (the “2021 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 March 31, 2022 and 2021. 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, 2021, which are contained in our 2021 Annual Report on Form 10-K. Use of Estimates The preparation of condensed consolidated financial statements in accordance with U.S. GAAP requires us 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 our condensed consolidated financial statements, and the amounts of revenues and expenses during the reported periods. We base our estimates on historical experience and various other assumptions, including in certain circumstances future projections that we believe 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 For a discussion of recently adopted accounting pronouncements please refer to Note A, “Nature of Business and Accounting Policies,” in our 2021 Annual Report on Form 10-K. We do not expect any recently issued accounting standards to have a significant impact on our condensed consolidated financial statements. Summary of Significant Accounting Policies Our significant accounting policies are described in Note A, “Nature of Business and Accounting Policies,” in our 2021 Annual Report on Form 10-K.

Condensed Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Statement of Comprehensive Income [Abstract]
Unrealized gains (losses) on foreign currency forward contracts, tax	$ (2.2)	$ (9.3)

Additional Cash Flow Information

3 Months Ended

Mar. 31, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Additional Cash Flow Information

The cash, cash equivalents and restricted cash at the beginning and ending of each period presented in our condensed consolidated statements of cash flows consisted of the following:


	Three Months Ended March 31,
	2022				2021
	Beginning of period		End of period		Beginning of period		End of period
	(in millions)
Cash and cash equivalents	$	6,795.0	$	7,600.1	$	5,988.2	$	6,304.3
Prepaid expenses and other current assets	5.1		3.9		0.7		8.6

Cash, cash equivalents and restricted cash per condensed consolidated statement of cash flows	$	6,800.1	$	7,604.0	$	5,988.9	$	6,312.9

Additional Cash Flow Information (Tables)

3 Months Ended

Mar. 31, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Additional Cash Flow Information

The cash, cash equivalents and restricted cash at the beginning and ending of each period presented in our condensed consolidated statements of cash flows consisted of the following:


	Three Months Ended March 31,
	2022				2021
	Beginning of period		End of period		Beginning of period		End of period
	(in millions)
Cash and cash equivalents	$	6,795.0	$	7,600.1	$	5,988.2	$	6,304.3
Prepaid expenses and other current assets	5.1		3.9		0.7		8.6

Cash, cash equivalents and restricted cash per condensed consolidated statement of cash flows	$	6,800.1	$	7,604.0	$	5,988.9	$	6,312.9

Collaborative and Other Arrangements - Additional Information (Details)	3 Months Ended			12 Months Ended
	Mar. 31, 2022 USD ($)	Jun. 30, 2021 USD ($)	Mar. 31, 2021 USD ($)	Dec. 31, 2019 USD ($) target	Jul. 01, 2021
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Collaborative arrangement, research and development expenses	$ 2,000,000		$ 1,700,000
CRISPR Therapeutics
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Collaborative arrangement, right to exclusively license, number of targets \| target				3
Collaborative arrangement, development and regulatory potential milestone payments maximum				$ 410,000,000
CRISPR A&R JDCA
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Collaborative arrangement, development and regulatory potential milestone payments maximum		$ 200,000,000
Up-front payment		$ 900,000,000
Allocation of net profits and net losses, percent					40.00%

Fair Value Measurements - Financial Assets and Liabilities Subject to Fair Value Measurements (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Financial instruments carried at fair value (liability positions):
Long-term contingent consideration	$ (179,000)	$ (186,500)
Recurring Basis
Financial instruments carried at fair value (asset positions):
Derivative asset current, foreign currency forward contracts	57,200	44,500
Other assets, foreign currency forward contracts	900	2,000
Total financial assets	5,088,900	4,254,500
Financial instruments carried at fair value (liability positions):
Other current liabilities, foreign currency forward contracts	(5,100)	(5,600)
Long-term contingent consideration	(179,000)	(186,500)
Other long-term liabilities, foreign currency forward contracts	(2,600)	(2,700)
Total financial liabilities	(186,700)	(194,800)
Recurring Basis \| Level 1
Financial instruments carried at fair value (asset positions):
Derivative asset current, foreign currency forward contracts	0	0
Other assets, foreign currency forward contracts	0	0
Total financial assets	4,695,200	3,864,400
Financial instruments carried at fair value (liability positions):
Other current liabilities, foreign currency forward contracts	0	0
Long-term contingent consideration	0	0
Other long-term liabilities, foreign currency forward contracts	0	0
Total financial liabilities	0	0
Recurring Basis \| Level 2
Financial instruments carried at fair value (asset positions):
Derivative asset current, foreign currency forward contracts	57,200	44,500
Other assets, foreign currency forward contracts	900	2,000
Total financial assets	393,700	390,100
Financial instruments carried at fair value (liability positions):
Other current liabilities, foreign currency forward contracts	(5,100)	(5,600)
Long-term contingent consideration	0	0
Other long-term liabilities, foreign currency forward contracts	(2,600)	(2,700)
Total financial liabilities	(7,700)	(8,300)
Recurring Basis \| Level 3
Financial instruments carried at fair value (asset positions):
Derivative asset current, foreign currency forward contracts	0	0
Other assets, foreign currency forward contracts	0	0
Total financial assets	0	0
Financial instruments carried at fair value (liability positions):
Other current liabilities, foreign currency forward contracts	0	0
Long-term contingent consideration	(179,000)	(186,500)
Other long-term liabilities, foreign currency forward contracts	0	0
Total financial liabilities	(179,000)	(186,500)
Recurring Basis \| Money market funds
Financial instruments carried at fair value (asset positions):
Cash equivalents:	4,378,600	3,478,100
Recurring Basis \| Money market funds \| Level 1
Financial instruments carried at fair value (asset positions):
Cash equivalents:	4,378,600	3,478,100
Recurring Basis \| Money market funds \| Level 2
Financial instruments carried at fair value (asset positions):
Cash equivalents:	0	0
Recurring Basis \| Money market funds \| Level 3
Financial instruments carried at fair value (asset positions):
Cash equivalents:	0	0
Recurring Basis \| Commercial paper
Financial instruments carried at fair value (asset positions):
Cash equivalents:	14,200	0
Marketable securities:	244,600	252,700
Recurring Basis \| Commercial paper \| Level 1
Financial instruments carried at fair value (asset positions):
Cash equivalents:	0	0
Marketable securities:	0	0
Recurring Basis \| Commercial paper \| Level 2
Financial instruments carried at fair value (asset positions):
Cash equivalents:	14,200	0
Marketable securities:	244,600	252,700
Recurring Basis \| Commercial paper \| Level 3
Financial instruments carried at fair value (asset positions):
Cash equivalents:	0	0
Marketable securities:	0	0
Recurring Basis \| Corporate equity securities
Financial instruments carried at fair value (asset positions):
Marketable securities:	155,300	230,900
Recurring Basis \| Corporate equity securities \| Level 1
Financial instruments carried at fair value (asset positions):
Marketable securities:	155,300	230,900
Recurring Basis \| Corporate equity securities \| Level 2
Financial instruments carried at fair value (asset positions):
Marketable securities:	0	0
Recurring Basis \| Corporate equity securities \| Level 3
Financial instruments carried at fair value (asset positions):
Marketable securities:	0	0
Recurring Basis \| U.S. Treasury securities
Financial instruments carried at fair value (asset positions):
Marketable securities:	154,300	86,400
Recurring Basis \| U.S. Treasury securities \| Level 1
Financial instruments carried at fair value (asset positions):
Marketable securities:	154,300	86,400
Recurring Basis \| U.S. Treasury securities \| Level 2
Financial instruments carried at fair value (asset positions):
Marketable securities:	0	0
Recurring Basis \| U.S. Treasury securities \| Level 3
Financial instruments carried at fair value (asset positions):
Marketable securities:	0	0
Recurring Basis \| Government-sponsored enterprise securities
Financial instruments carried at fair value (asset positions):
Marketable securities:	7,000	69,000
Recurring Basis \| Government-sponsored enterprise securities \| Level 1
Financial instruments carried at fair value (asset positions):
Marketable securities:	7,000	69,000
Recurring Basis \| Government-sponsored enterprise securities \| Level 2
Financial instruments carried at fair value (asset positions):
Marketable securities:	0	0
Recurring Basis \| Government-sponsored enterprise securities \| Level 3
Financial instruments carried at fair value (asset positions):
Marketable securities:	0	0
Recurring Basis \| Corporate debt securities
Financial instruments carried at fair value (asset positions):
Marketable securities:	76,800	90,900
Recurring Basis \| Corporate debt securities \| Level 1
Financial instruments carried at fair value (asset positions):
Marketable securities:	0	0
Recurring Basis \| Corporate debt securities \| Level 2
Financial instruments carried at fair value (asset positions):
Marketable securities:	76,800	90,900
Recurring Basis \| Corporate debt securities \| Level 3
Financial instruments carried at fair value (asset positions):
Marketable securities:	$ 0	$ 0

Hedging - Derivative Fair Value (Details) - Designated as Hedging Instruments - Foreign Currency Forward Contracts - Cash Flow Hedging - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Derivative [Line Items]
Total assets	$ 58.1	$ 46.5
Total liabilities	(7.7)	(8.3)
Prepaid expenses and other current assets
Derivative [Line Items]
Total assets	57.2	44.5
Other assets
Derivative [Line Items]
Total assets	0.9	2.0
Other current liabilities
Derivative [Line Items]
Total liabilities	(5.1)	(5.6)
Other long-term liabilities
Derivative [Line Items]
Total liabilities	$ (2.6)	$ (2.7)

Collaborative and Other Arrangements - Collaborative Arrangement Costs (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Collaborative arrangement costs	$ 603.1	$ 456.0
Collaborative Arrangement, Transaction with Party to Collaborative Arrangement \| CRISPR Therapeutics
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Collaborative arrangement costs	76.6	40.0
Collaborative Arrangement, Transaction with Party to Collaborative Arrangement \| CRISPR Therapeutics \| Total collaborative arrangement costs included in costs and expenses
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Collaborative arrangement costs	$ 46.0	$ 20.0

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Cash flows from operating activities:
Net income	$ 762.1	$ 653.1
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation expense	130.3	115.2
Depreciation expense	35.9	28.8
Decrease in fair value of contingent consideration	(7.5)	(3.9)
Deferred income taxes	(12.3)	57.0
Losses on equity securities	75.6	52.3
Other non-cash items, net	4.9	2.3
Changes in operating assets and liabilities:
Accounts receivable, net	(165.2)	(98.4)
Inventories	2.0	(22.8)
Prepaid expenses and other assets	67.6	(13.3)
Accounts payable	(14.5)	(10.6)
Accrued expenses	61.6	153.0
Other liabilities	15.7	8.3
Net cash provided by operating activities	956.2	921.0
Cash flows from investing activities:
Purchases of available-for-sale debt securities	(117.1)	(121.5)
Maturities of available-for-sale debt securities	129.7	118.1
Purchases of property and equipment	(63.6)	(70.9)
Net cash used in investing activities	(51.0)	(74.3)
Cash flows from financing activities:
Issuances of common stock under benefit plans	33.7	15.6
Repurchases of common stock	0.0	(424.9)
Payments in connection with common stock withheld for employee tax obligations	(117.5)	(102.1)
Payments on finance leases	(12.9)	(12.2)
Proceeds from finance leases	0.0	3.6
Other financing activities	1.3	1.3
Net cash used in financing activities	(95.4)	(518.7)
Effect of changes in exchange rates on cash	(5.9)	(4.0)
Net increase in cash, cash equivalents and restricted cash	803.9	324.0
Cash, cash equivalents and restricted cash—beginning of period	6,800.1	5,988.9
Cash, cash equivalents and restricted cash—end of period	7,604.0	6,312.9
Supplemental disclosure of cash flow information:
Cash paid for interest	13.7	14.5
Cash paid for income taxes	$ 85.0	$ 10.7

Additional Cash Flow Information (Details) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021	Mar. 31, 2021	Dec. 31, 2020
Restricted Cash and Cash Equivalents Items [Line Items]
Cash and cash equivalents	$ 7,600.1	$ 6,795.0	$ 6,304.3	$ 5,988.2
Cash, cash equivalents and restricted cash per condensed consolidated statement of cash flows	7,604.0	6,800.1	6,312.9	5,988.9
Prepaid expenses and other current assets
Restricted Cash and Cash Equivalents Items [Line Items]
Prepaid expenses and other current assets	$ 3.9	$ 5.1	$ 8.6	$ 0.7

Condensed Consolidated Balance Sheets - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 7,600.1	$ 6,795.0
Marketable securities	638.0	729.9
Accounts receivable, net	1,292.8	1,136.8
Inventories	338.9	353.1
Prepaid expenses and other current assets	491.5	545.8
Total current assets	10,361.3	9,560.6
Property and equipment, net	1,107.4	1,094.1
Goodwill	1,002.2	1,002.2
Intangible assets	400.0	400.0
Deferred tax assets	945.5	934.5
Operating lease assets	329.0	330.3
Other assets	110.7	110.8
Total assets	14,256.1	13,432.5
Current liabilities:
Accounts payable	173.6	195.0
Accrued expenses	1,720.5	1,678.6
Other current liabilities	286.1	268.4
Total current liabilities	2,180.2	2,142.0
Long-term finance lease liabilities	495.5	509.8
Long-term operating lease liabilities	377.0	377.4
Long-term contingent consideration	179.0	186.5
Other long-term liabilities	117.4	116.8
Total liabilities	3,349.1	3,332.5
Commitments and contingencies	0.0	0.0
Shareholders’ equity:
Preferred stock, $0.01 par value; 1,000,000 shares authorized; none issued and outstanding	0.0	0.0
Common stock, $0.01 par value; 500,000,000 shares authorized, 255,574,961 and 254,479,046 shares issued and outstanding, respectively	2.6	2.5
Additional paid-in capital	6,930.2	6,880.8
Accumulated other comprehensive income	11.3	15.9
Retained earnings	3,962.9	3,200.8
Total shareholders’ equity	10,907.0	10,100.0
Total liabilities and shareholders’ equity	$ 14,256.1	$ 13,432.5

Revenue Recognition - Additional Information (Details) - USD ($) $ in Millions	Mar. 31, 2022	Dec. 31, 2021
Revenue from Contract with Customer [Abstract]
Contract liabilities	$ 186.1	$ 171.7

Hedging (Tables)

3 Months Ended

Mar. 31, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Cash Flow Hedging Instruments

The following table summarizes the notional amount in U.S. dollars of our outstanding foreign currency forward contracts designated as cash flow hedges under U.S. GAAP:


	As of March 31, 2022		As of December 31, 2021
Foreign Currency	(in millions)
Euro	$	1,542.6	$	1,364.5
British pound sterling	283.7		287.7
Canadian dollar	170.2		89.9
Australian dollar	102.1		96.3
Swiss Franc	57.0		54.1
Total foreign currency forward contracts	$	2,155.6	$	1,892.5

Schedule of Foreign Exchange Contracts, Condensed Consolidated Statements of Operations

During the three months ended March 31, 2022 and 2021, we recognized the following related to foreign currency forward contracts in our condensed consolidated statements of operations:


	Three Months Ended March 31,
		2022		2021
		(in millions)
Designated as hedging instruments - Reclassified from AOCI
Product revenues, net		$	20.1	$	(16.5)
Not designated as hedging instruments
Other expense, net		$	(8.4)	$	(8.0)

Total reported in the Condensed Consolidated Statement of Operations
Product revenues, net		$	2,097.5	$	1,723.3
Other expense, net		$	(72.8)	$	(52.7)

Schedule of Foreign Exchange Contracts


As of March 31, 2022
Assets			Liabilities
Classification	Fair Value		Classification	Fair Value
(in millions)
Prepaid expenses and other current assets	$	57.2	Other current liabilities	$	(5.1)
Other assets	0.9		Other long-term liabilities	(2.6)
Total assets	$	58.1	Total liabilities	$	(7.7)


As of December 31, 2021
Assets			Liabilities
Classification	Fair Value		Classification	Fair Value
(in millions)
Prepaid expenses and other current assets	$	44.5	Other current liabilities	$	(5.6)
Other assets	2.0		Other long-term liabilities	(2.7)
Total assets	$	46.5	Total liabilities	$	(8.3)

Schedule of Offsetting Liabilities

The following table summarizes the potential effect of offsetting derivatives by type of financial instrument designated as cash flow hedges under U.S. GAAP on our condensed consolidated balance sheets:


	As of March 31, 2022
	Gross Amounts Recognized		Gross Amounts Offset		Gross Amounts Presented		Gross Amounts Not Offset		Legal Offset
Foreign currency forward contracts	(in millions)
Total assets	$	58.1	$	—	$	58.1	$	(7.7)	$	50.4
Total liabilities	(7.7)		—		(7.7)		7.7		—


	As of December 31, 2021
	Gross Amounts Recognized		Gross Amounts Offset		Gross Amounts Presented		Gross Amounts Not Offset		Legal Offset
Foreign currency forward contracts	(in millions)
Total assets	$	46.5	$	—	$	46.5	$	(8.3)	$	38.2
Total liabilities	(8.3)		—		(8.3)		8.3		—

Schedule of Offsetting Assets


	As of March 31, 2022
	Gross Amounts Recognized		Gross Amounts Offset		Gross Amounts Presented		Gross Amounts Not Offset		Legal Offset
Foreign currency forward contracts	(in millions)
Total assets	$	58.1	$	—	$	58.1	$	(7.7)	$	50.4
Total liabilities	(7.7)		—		(7.7)		7.7		—


	As of December 31, 2021
	Gross Amounts Recognized		Gross Amounts Offset		Gross Amounts Presented		Gross Amounts Not Offset		Legal Offset
Foreign currency forward contracts	(in millions)
Total assets	$	46.5	$	—	$	46.5	$	(8.3)	$	38.2
Total liabilities	(8.3)		—		(8.3)		8.3		—

Accumulated Other Comprehensive Income (Loss) (Tables)

3 Months Ended

Mar. 31, 2022

Equity [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss)

The following table summarizes the changes in accumulated other comprehensive income (loss) by component:


	Foreign Currency Translation Adjustment		Unrealized Holding Gains (Losses), Net of Tax				Total
			On Available-For-Sale Debt Securities		On Foreign Currency Forward Contracts
	(in millions)
Balance at December 31, 2021	$	(13.6)	$	(0.5)	$	30.0	$	15.9
Other comprehensive (loss) income before reclassifications	(12.4)		(2.3)		25.9		11.2
Amounts reclassified from accumulated other comprehensive income (loss)	—		—		(15.8)		(15.8)
Net current period other comprehensive (loss) income	(12.4)		(2.3)		10.1		(4.6)
Balance at March 31, 2022	$	(26.0)	$	(2.8)	$	40.1	$	11.3

Balance at December 31, 2020	$	(15.6)	$	0.3	$	(53.2)	$	(68.5)
Other comprehensive income (loss) before reclassifications	1.4		(0.2)		21.0		22.2
Amounts reclassified from accumulated other comprehensive income (loss)	—		—		13.0		13.0
Net current period other comprehensive income (loss)	1.4		(0.2)		34.0		35.2
Balance at March 31, 2021	$	(14.2)	$	0.1	$	(19.2)	$	(33.3)