vrtx-20220930
VERTEX PHARMACEUTICALS INC / MA000087532012/312022Q3falseP1M00008753202022-01-012022-09-3000008753202022-10-21xbrli:shares0000875320us-gaap:ProductMember2022-07-012022-09-30iso4217:USD0000875320us-gaap:ProductMember2021-07-012021-09-300000875320us-gaap:ProductMember2022-01-012022-09-300000875320us-gaap:ProductMember2021-01-012021-09-300000875320vrtx:CollaborativeandRoyaltyMember2022-07-012022-09-300000875320vrtx:CollaborativeandRoyaltyMember2021-07-012021-09-300000875320vrtx:CollaborativeandRoyaltyMember2022-01-012022-09-300000875320vrtx:CollaborativeandRoyaltyMember2021-01-012021-09-3000008753202022-07-012022-09-3000008753202021-07-012021-09-3000008753202021-01-012021-09-30iso4217:USDxbrli:shares00008753202022-09-3000008753202021-12-310000875320us-gaap:CommonStockMember2021-06-300000875320us-gaap:AdditionalPaidInCapitalMember2021-06-300000875320us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-06-300000875320us-gaap:RetainedEarningsMember2021-06-3000008753202021-06-300000875320us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-07-012021-09-300000875320us-gaap:RetainedEarningsMember2021-07-012021-09-300000875320us-gaap:CommonStockMember2021-07-012021-09-300000875320us-gaap:AdditionalPaidInCapitalMember2021-07-012021-09-300000875320us-gaap:CommonStockMember2021-09-300000875320us-gaap:AdditionalPaidInCapitalMember2021-09-300000875320us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-09-300000875320us-gaap:RetainedEarningsMember2021-09-3000008753202021-09-300000875320us-gaap:CommonStockMember2022-06-300000875320us-gaap:AdditionalPaidInCapitalMember2022-06-300000875320us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-300000875320us-gaap:RetainedEarningsMember2022-06-3000008753202022-06-300000875320us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-07-012022-09-300000875320us-gaap:RetainedEarningsMember2022-07-012022-09-300000875320us-gaap:CommonStockMember2022-07-012022-09-300000875320us-gaap:AdditionalPaidInCapitalMember2022-07-012022-09-300000875320us-gaap:CommonStockMember2022-09-300000875320us-gaap:AdditionalPaidInCapitalMember2022-09-300000875320us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-09-300000875320us-gaap:RetainedEarningsMember2022-09-300000875320us-gaap:CommonStockMember2020-12-310000875320us-gaap:AdditionalPaidInCapitalMember2020-12-310000875320us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-310000875320us-gaap:RetainedEarningsMember2020-12-3100008753202020-12-310000875320us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-09-300000875320us-gaap:RetainedEarningsMember2021-01-012021-09-300000875320us-gaap:CommonStockMember2021-01-012021-09-300000875320us-gaap:AdditionalPaidInCapitalMember2021-01-012021-09-300000875320us-gaap:CommonStockMember2021-12-310000875320us-gaap:AdditionalPaidInCapitalMember2021-12-310000875320us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310000875320us-gaap:RetainedEarningsMember2021-12-310000875320us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-09-300000875320us-gaap:RetainedEarningsMember2022-01-012022-09-300000875320us-gaap:CommonStockMember2022-01-012022-09-300000875320us-gaap:AdditionalPaidInCapitalMember2022-01-012022-09-30vrtx:segment0000875320vrtx:TRIKAFTAKAFTRIOMember2022-07-012022-09-300000875320vrtx:TRIKAFTAKAFTRIOMember2021-07-012021-09-300000875320vrtx:TRIKAFTAKAFTRIOMember2022-01-012022-09-300000875320vrtx:TRIKAFTAKAFTRIOMember2021-01-012021-09-300000875320vrtx:SYMDEKOSYMKEVIMember2022-07-012022-09-300000875320vrtx:SYMDEKOSYMKEVIMember2021-07-012021-09-300000875320vrtx:SYMDEKOSYMKEVIMember2022-01-012022-09-300000875320vrtx:SYMDEKOSYMKEVIMember2021-01-012021-09-300000875320vrtx:ORKAMBIMember2022-07-012022-09-300000875320vrtx:ORKAMBIMember2021-07-012021-09-300000875320vrtx:ORKAMBIMember2022-01-012022-09-300000875320vrtx:ORKAMBIMember2021-01-012021-09-300000875320vrtx:KalydecoMember2022-07-012022-09-300000875320vrtx:KalydecoMember2021-07-012021-09-300000875320vrtx:KalydecoMember2022-01-012022-09-300000875320vrtx:KalydecoMember2021-01-012021-09-300000875320country:US2022-07-012022-09-300000875320country:US2021-07-012021-09-300000875320country:US2022-01-012022-09-300000875320country:US2021-01-012021-09-300000875320srt:EuropeMember2022-07-012022-09-300000875320srt:EuropeMember2021-07-012021-09-300000875320srt:EuropeMember2022-01-012022-09-300000875320srt:EuropeMember2021-01-012021-09-300000875320vrtx:OtherNonU.S.Member2022-07-012022-09-300000875320vrtx:OtherNonU.S.Member2021-07-012021-09-300000875320vrtx:OtherNonU.S.Member2022-01-012022-09-300000875320vrtx:OtherNonU.S.Member2021-01-012021-09-300000875320us-gaap:NonUsMember2022-07-012022-09-300000875320us-gaap:NonUsMember2021-07-012021-09-300000875320us-gaap:NonUsMember2022-01-012022-09-300000875320us-gaap:NonUsMember2021-01-012021-09-300000875320vrtx:CRISPRTherapeuticsAGMember2019-01-012019-12-31vrtx:target0000875320vrtx:CRSIPRARJDCAMember2021-04-012021-06-300000875320vrtx:CRSIPRARJDCAMember2021-07-01xbrli:pure0000875320vrtx:CRISPRMembervrtx:CRSIPRARJDCAMember2021-07-010000875320us-gaap:CollaborativeArrangementTransactionWithPartyToCollaborativeArrangementMembervrtx:CRISPRTherapeuticsAGMember2022-07-012022-09-300000875320us-gaap:CollaborativeArrangementTransactionWithPartyToCollaborativeArrangementMembervrtx:CRISPRTherapeuticsAGMember2021-07-012021-09-300000875320us-gaap:CollaborativeArrangementTransactionWithPartyToCollaborativeArrangementMembervrtx:CRISPRTherapeuticsAGMember2022-01-012022-09-300000875320us-gaap:CollaborativeArrangementTransactionWithPartyToCollaborativeArrangementMembervrtx:CRISPRTherapeuticsAGMember2021-01-012021-09-300000875320us-gaap:CollaborativeArrangementTransactionWithPartyToCollaborativeArrangementMembervrtx:CostsAndExpensesMembervrtx:CRISPRTherapeuticsAGMember2022-07-012022-09-300000875320us-gaap:CollaborativeArrangementTransactionWithPartyToCollaborativeArrangementMembervrtx:CostsAndExpensesMembervrtx:CRISPRTherapeuticsAGMember2021-07-012021-09-300000875320us-gaap:CollaborativeArrangementTransactionWithPartyToCollaborativeArrangementMembervrtx:CostsAndExpensesMembervrtx:CRISPRTherapeuticsAGMember2022-01-012022-09-300000875320us-gaap:CollaborativeArrangementTransactionWithPartyToCollaborativeArrangementMembervrtx:CostsAndExpensesMembervrtx:CRISPRTherapeuticsAGMember2021-01-012021-09-300000875320vrtx:VerveMember2022-07-012022-07-310000875320vrtx:CatalystBiosciencesMember2022-05-012022-05-310000875320vrtx:ViaCyteMember2022-09-272022-09-270000875320vrtx:ViaCyteMember2022-09-270000875320us-gaap:InProcessResearchAndDevelopmentMembervrtx:ViaCyteMember2022-09-270000875320us-gaap:EmployeeStockOptionMember2022-07-012022-09-300000875320us-gaap:EmployeeStockOptionMember2021-07-012021-09-300000875320us-gaap:EmployeeStockOptionMember2022-01-012022-09-300000875320us-gaap:EmployeeStockOptionMember2021-01-012021-09-300000875320us-gaap:RestrictedStockUnitsRSUMember2022-07-012022-09-300000875320us-gaap:RestrictedStockUnitsRSUMember2021-07-012021-09-300000875320us-gaap:RestrictedStockUnitsRSUMember2022-01-012022-09-300000875320us-gaap:RestrictedStockUnitsRSUMember2021-01-012021-09-300000875320us-gaap:EmployeeStockOptionMember2022-07-012022-09-300000875320us-gaap:EmployeeStockOptionMember2021-07-012021-09-300000875320us-gaap:EmployeeStockOptionMember2022-01-012022-09-300000875320us-gaap:EmployeeStockOptionMember2021-01-012021-09-300000875320us-gaap:RestrictedStockUnitsRSUMember2022-07-012022-09-300000875320us-gaap:RestrictedStockUnitsRSUMember2021-07-012021-09-300000875320us-gaap:RestrictedStockUnitsRSUMember2022-01-012022-09-300000875320us-gaap:RestrictedStockUnitsRSUMember2021-01-012021-09-300000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2022-09-300000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel1Member2022-09-300000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:MoneyMarketFundsMember2022-09-300000875320us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2022-09-300000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2021-12-310000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel1Member2021-12-310000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:MoneyMarketFundsMember2021-12-310000875320us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2021-12-310000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:BankTimeDepositsMember2022-09-300000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:BankTimeDepositsMember2022-09-300000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:BankTimeDepositsMember2022-09-300000875320us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:BankTimeDepositsMember2022-09-300000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:BankTimeDepositsMember2021-12-310000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:BankTimeDepositsMember2021-12-310000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:BankTimeDepositsMember2021-12-310000875320us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:BankTimeDepositsMember2021-12-310000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2022-09-300000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMemberus-gaap:FairValueInputsLevel1Member2022-09-300000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:CommercialPaperMember2022-09-300000875320us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2022-09-300000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2021-12-310000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMemberus-gaap:FairValueInputsLevel1Member2021-12-310000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:CommercialPaperMember2021-12-310000875320us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2021-12-310000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:EquitySecuritiesMember2022-09-300000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:EquitySecuritiesMember2022-09-300000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:EquitySecuritiesMember2022-09-300000875320us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:EquitySecuritiesMember2022-09-300000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:EquitySecuritiesMember2021-12-310000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:EquitySecuritiesMember2021-12-310000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:EquitySecuritiesMember2021-12-310000875320us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:EquitySecuritiesMember2021-12-310000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2022-09-300000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMemberus-gaap:FairValueInputsLevel1Member2022-09-300000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:USTreasurySecuritiesMember2022-09-300000875320us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2022-09-300000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2021-12-310000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMemberus-gaap:FairValueInputsLevel1Member2021-12-310000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:USTreasurySecuritiesMember2021-12-310000875320us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2021-12-310000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMember2022-09-300000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMember2022-09-300000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMember2022-09-300000875320us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMember2022-09-300000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMember2021-12-310000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMember2021-12-310000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMember2021-12-310000875320us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMember2021-12-310000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2022-09-300000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:CorporateDebtSecuritiesMember2022-09-300000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:CorporateDebtSecuritiesMember2022-09-300000875320us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2022-09-300000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2021-12-310000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Memberus-gaap:CorporateDebtSecuritiesMember2021-12-310000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Memberus-gaap:CorporateDebtSecuritiesMember2021-12-310000875320us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2021-12-310000875320us-gaap:FairValueMeasurementsRecurringMember2022-09-300000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2022-09-300000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2022-09-300000875320us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2022-09-300000875320us-gaap:FairValueMeasurementsRecurringMember2021-12-310000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2021-12-310000875320us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2021-12-310000875320us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2021-12-310000875320us-gaap:FairValueInputsLevel3Member2022-09-300000875320us-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputDiscountRateMembersrt:MinimumMember2022-09-300000875320srt:MaximumMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputDiscountRateMember2022-09-300000875320us-gaap:InProcessResearchAndDevelopmentMembervrtx:ViaCyteMember2022-09-300000875320us-gaap:InProcessResearchAndDevelopmentMembervrtx:ViaCyteMember2021-12-310000875320us-gaap:InProcessResearchAndDevelopmentMembervrtx:ViaCyteMember2022-07-012022-09-300000875320us-gaap:InProcessResearchAndDevelopmentMembervrtx:ViaCyteMember2022-01-012022-09-300000875320us-gaap:MoneyMarketFundsMemberus-gaap:CashAndCashEquivalentsMember2022-09-300000875320us-gaap:MoneyMarketFundsMemberus-gaap:CashAndCashEquivalentsMember2021-12-310000875320us-gaap:CashAndCashEquivalentsMemberus-gaap:BankTimeDepositsMember2022-09-300000875320us-gaap:CashAndCashEquivalentsMemberus-gaap:BankTimeDepositsMember2021-12-310000875320us-gaap:CommercialPaperMemberus-gaap:CashAndCashEquivalentsMember2022-09-300000875320us-gaap:CommercialPaperMemberus-gaap:CashAndCashEquivalentsMember2021-12-310000875320us-gaap:CashAndCashEquivalentsMember2022-09-300000875320us-gaap:CashAndCashEquivalentsMember2021-12-310000875320vrtx:MarketableSecuritiesMemberus-gaap:USTreasurySecuritiesMember2022-09-300000875320vrtx:MarketableSecuritiesMemberus-gaap:USTreasurySecuritiesMember2021-12-310000875320vrtx:MarketableSecuritiesMemberus-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMember2022-09-300000875320vrtx:MarketableSecuritiesMemberus-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMember2021-12-310000875320vrtx:MarketableSecuritiesMemberus-gaap:CorporateDebtSecuritiesMember2022-09-300000875320vrtx:MarketableSecuritiesMemberus-gaap:CorporateDebtSecuritiesMember2021-12-310000875320us-gaap:CommercialPaperNotIncludedWithCashAndCashEquivalentsMembervrtx:MarketableSecuritiesMember2022-09-300000875320us-gaap:CommercialPaperNotIncludedWithCashAndCashEquivalentsMembervrtx:MarketableSecuritiesMember2021-12-310000875320vrtx:MarketableSecuritiesMember2022-09-300000875320vrtx:MarketableSecuritiesMember2021-12-3100008753202021-01-012021-12-310000875320us-gaap:OtherAssetsMember2022-09-300000875320us-gaap:AccumulatedTranslationAdjustmentMember2021-12-310000875320us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2021-12-310000875320us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2021-12-310000875320us-gaap:AccumulatedTranslationAdjustmentMember2022-01-012022-09-300000875320us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2022-01-012022-09-300000875320us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-01-012022-09-300000875320us-gaap:AccumulatedTranslationAdjustmentMember2022-09-300000875320us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2022-09-300000875320us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-09-300000875320us-gaap:AccumulatedTranslationAdjustmentMember2020-12-310000875320us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2020-12-310000875320us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2020-12-310000875320us-gaap:AccumulatedTranslationAdjustmentMember2021-01-012021-09-300000875320us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2021-01-012021-09-300000875320us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2021-01-012021-09-300000875320us-gaap:AccumulatedTranslationAdjustmentMember2021-09-300000875320us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2021-09-300000875320us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2021-09-300000875320us-gaap:ForeignExchangeForwardMembersrt:MinimumMemberus-gaap:CashFlowHedgingMember2022-01-012022-09-300000875320srt:MaximumMemberus-gaap:ForeignExchangeForwardMemberus-gaap:CashFlowHedgingMember2022-01-012022-09-300000875320us-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMembercurrency:EURus-gaap:CashFlowHedgingMember2022-09-300000875320us-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMembercurrency:EURus-gaap:CashFlowHedgingMember2021-12-310000875320us-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMembercurrency:CADus-gaap:CashFlowHedgingMember2022-09-300000875320us-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMembercurrency:CADus-gaap:CashFlowHedgingMember2021-12-310000875320us-gaap:ForeignExchangeForwardMembercurrency:GBPus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2022-09-300000875320us-gaap:ForeignExchangeForwardMembercurrency:GBPus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2021-12-310000875320us-gaap:ForeignExchangeForwardMembercurrency:AUDus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2022-09-300000875320us-gaap:ForeignExchangeForwardMembercurrency:AUDus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2021-12-310000875320us-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMembercurrency:CHFus-gaap:CashFlowHedgingMember2022-09-300000875320us-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMembercurrency:CHFus-gaap:CashFlowHedgingMember2021-12-310000875320us-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2022-09-300000875320us-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2021-12-310000875320us-gaap:ForeignExchangeForwardMemberus-gaap:NondesignatedMember2022-01-012022-09-300000875320us-gaap:ForeignExchangeForwardMemberus-gaap:NondesignatedMemberus-gaap:CashFlowHedgingMember2022-09-300000875320us-gaap:ProductMemberus-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:AccumulatedTranslationAdjustmentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2022-07-012022-09-300000875320us-gaap:ProductMemberus-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:AccumulatedTranslationAdjustmentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2021-07-012021-09-300000875320us-gaap:ProductMemberus-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:AccumulatedTranslationAdjustmentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2022-01-012022-09-300000875320us-gaap:ProductMemberus-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:AccumulatedTranslationAdjustmentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2021-01-012021-09-300000875320us-gaap:ForeignExchangeForwardMemberus-gaap:AccumulatedTranslationAdjustmentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMemberus-gaap:NondesignatedMember2022-07-012022-09-300000875320us-gaap:ForeignExchangeForwardMemberus-gaap:AccumulatedTranslationAdjustmentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMemberus-gaap:NondesignatedMember2021-07-012021-09-300000875320us-gaap:ForeignExchangeForwardMemberus-gaap:AccumulatedTranslationAdjustmentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMemberus-gaap:NondesignatedMember2022-01-012022-09-300000875320us-gaap:ForeignExchangeForwardMemberus-gaap:AccumulatedTranslationAdjustmentMemberus-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMemberus-gaap:NondesignatedMember2021-01-012021-09-300000875320us-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:CashFlowHedgingMember2022-09-300000875320us-gaap:OtherCurrentLiabilitiesMemberus-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2022-09-300000875320us-gaap:OtherAssetsMemberus-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2022-09-300000875320us-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:OtherNoncurrentLiabilitiesMemberus-gaap:CashFlowHedgingMember2022-09-300000875320us-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:CashFlowHedgingMember2021-12-310000875320us-gaap:OtherCurrentLiabilitiesMemberus-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2021-12-310000875320us-gaap:OtherAssetsMemberus-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2021-12-310000875320us-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:OtherNoncurrentLiabilitiesMemberus-gaap:CashFlowHedgingMember2021-12-310000875320us-gaap:RestrictedStockMember2022-07-012022-09-300000875320us-gaap:RestrictedStockMember2021-07-012021-09-300000875320us-gaap:RestrictedStockMember2022-01-012022-09-300000875320us-gaap:RestrictedStockMember2021-01-012021-09-300000875320us-gaap:EmployeeStockMember2022-07-012022-09-300000875320us-gaap:EmployeeStockMember2021-07-012021-09-300000875320us-gaap:EmployeeStockMember2022-01-012022-09-300000875320us-gaap:EmployeeStockMember2021-01-012021-09-300000875320us-gaap:CostOfSalesMember2022-07-012022-09-300000875320us-gaap:CostOfSalesMember2021-07-012021-09-300000875320us-gaap:CostOfSalesMember2022-01-012022-09-300000875320us-gaap:CostOfSalesMember2021-01-012021-09-300000875320us-gaap:ResearchAndDevelopmentExpenseMember2022-07-012022-09-300000875320us-gaap:ResearchAndDevelopmentExpenseMember2021-07-012021-09-300000875320us-gaap:ResearchAndDevelopmentExpenseMember2022-01-012022-09-300000875320us-gaap:ResearchAndDevelopmentExpenseMember2021-01-012021-09-300000875320us-gaap:SellingGeneralAndAdministrativeExpensesMember2022-07-012022-09-300000875320us-gaap:SellingGeneralAndAdministrativeExpensesMember2021-07-012021-09-300000875320us-gaap:SellingGeneralAndAdministrativeExpensesMember2022-01-012022-09-300000875320us-gaap:SellingGeneralAndAdministrativeExpensesMember2021-01-012021-09-300000875320vrtx:ShareRepurchaseProgram2020Member2020-11-300000875320vrtx:ShareRepurchaseProgram2020Member2021-01-012021-03-310000875320vrtx:ShareRepurchaseProgram2021Member2021-06-300000875320vrtx:ShareRepurchaseProgram2021Member2022-01-012022-09-300000875320vrtx:ShareRepurchaseProgram2021Member2022-09-300000875320us-gaap:RevolvingCreditFacilityMember2022-07-310000875320us-gaap:LetterOfCreditMember2022-07-310000875320us-gaap:RevolvingCreditFacilityMemberus-gaap:BaseRateMembersrt:MinimumMember2022-07-012022-07-310000875320srt:MaximumMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:BaseRateMember2022-07-012022-07-310000875320us-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMembersrt:MinimumMember2022-07-012022-07-310000875320srt:MaximumMemberus-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMember2022-07-012022-07-310000875320us-gaap:RevolvingCreditFacilityMember2022-07-012022-07-310000875320us-gaap:RevolvingCreditFacilityMember2019-12-310000875320us-gaap:RevolvingCreditFacilityMember2022-09-30
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________________________________________________
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2022
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM    TO   
Commission file number 000-19319
____________________________________________
Vertex Pharmaceuticals Incorporated
(Exact name of registrant as specified in its charter)

Massachusetts
(State or other jurisdiction of incorporation or organization)

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

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

02210
(Zip Code)

Registrant’s telephone number, including area code (617341-6100
____________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol
Name of each exchange on which registered
Common Stock, $0.01 Par Value Per Share
VRTX
The Nasdaq Global Select Market
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  No 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes No 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No  
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Common Stock, par value $0.01 per share
256,691,452
Outstanding at October 21, 2022


Table of Contents
VERTEX PHARMACEUTICALS INCORPORATED
FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 2022

TABLE OF CONTENTS
Page
Condensed Consolidated Statements of Operations - Three and Nine Months Ended September 30, 2022 and 2021
Condensed Consolidated Statements of Comprehensive Income - Three and Nine Months Ended September 30, 2022 and 2021
Condensed Consolidated Balance Sheets - September 30, 2022 and December 31, 2021
Condensed Consolidated Statements of Shareholders' Equity - Three and Nine Months Ended September 30, 2022 and 2021
Condensed Consolidated Statements of Cash Flows - Nine Months Ended September 30, 2022 and 2021
Item 1A.

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



Table of Contents
Part I. Financial Information

Item 1.  Financial Statements
VERTEX PHARMACEUTICALS INCORPORATED
Condensed Consolidated Statements of Operations
(unaudited)
(in millions, except per share amounts)
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Revenues:
Product revenues, net$2,334.3 $1,984.1 $6,628.0 $5,500.8 
Other revenues   1.0 
Total revenues2,334.3 1,984.1 6,628.0 5,501.8 
Costs and expenses:
Cost of sales289.4 236.5 797.0 656.8 
Research and development expenses645.0 467.0 1,846.2 1,370.0 
Acquired in-process research and development expenses29.0 26.7 92.9 986.8 
Selling, general and administrative expenses246.8 198.2 677.3 584.9 
Change in fair value of contingent consideration(2.6)1.2 (59.3)(1.1)
Total costs and expenses1,207.6 929.6 3,354.1 3,597.4 
Income from operations1,126.7 1,054.5 3,273.9 1,904.4 
Interest income46.2 1.1 58.6 3.7 
Interest expense(13.7)(15.2)(43.2)(46.4)
Other income (expense), net17.2 42.4 (133.7)(2.2)
Income before provision for income taxes1,176.4 1,082.8 3,155.6 1,859.5 
Provision for income taxes245.9 230.9 652.5 287.5 
Net income$930.5 $851.9 $2,503.1 $1,572.0 
Net income per common share:
Basic$3.63 $3.30 $9.78 $6.08 
Diluted$3.59 $3.28 $9.68 $6.03 
Shares used in per share calculations:
Basic256.5 257.9 255.8 258.7 
Diluted259.5 259.7 258.7 260.9 
Please refer to Note A, “Basis of Presentation and Accounting Policies,” for an explanation of amounts reclassified from “Research and development expenses” to “Acquired in-process research and development expenses” for the three and nine months ended September 30, 2021.
The accompanying notes are an integral part of these condensed consolidated financial statements.

2

Table of Contents
VERTEX PHARMACEUTICALS INCORPORATED
Condensed Consolidated Statements of Comprehensive Income
(unaudited)
(in millions)
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Net income$930.5 $851.9 $2,503.1 $1,572.0 
Other comprehensive income:
Unrealized holding losses on marketable securities, net
(0.6)(0.0)(3.6)(0.3)
Unrealized gains on foreign currency forward contracts, net of tax of $(16.0), $(9.6), $(34.3) and $(21.2), respectively
58.8 34.7 128.1 77.0 
Foreign currency translation adjustment(18.1)2.0 (42.8)3.3 
Total other comprehensive income
40.1 36.7 81.7 80.0 
Comprehensive income$970.6 $888.6 $2,584.8 $1,652.0 
The accompanying notes are an integral part of these condensed consolidated financial statements.

3

Table of Contents
VERTEX PHARMACEUTICALS INCORPORATED
Condensed Consolidated Balance Sheets
(unaudited)
(in millions, except share data)
September 30,December 31,
20222021
Assets
Current assets:
Cash and cash equivalents$9,171.5 $6,795.0 
Marketable securities599.2 729.9 
Accounts receivable, net1,385.2 1,136.8 
Inventories388.2 353.1 
Prepaid expenses and other current assets
726.9 545.8 
Total current assets
12,271.0 9,560.6 
Property and equipment, net1,118.7 1,094.1 
Goodwill1,075.2 1,002.2 
Intangible assets
603.6 400.0 
Deferred tax assets
1,162.7 934.5 
Operating lease assets
342.7 330.3 
Other assets
132.5 110.8 
Total assets
$16,706.4 $13,432.5 
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable$126.9 $195.0 
Accrued expenses2,264.4 1,678.6 
Other current liabilities
218.0 268.4 
Total current liabilities
2,609.3 2,142.0 
Long-term finance lease liabilities442.3 509.8 
Long-term operating lease liabilities382.3 377.4 
Long-term contingent consideration
127.2 186.5 
Other long-term liabilities
115.7 116.8 
Total liabilities
3,676.8 3,332.5 
Commitments and contingencies  
Shareholders’ equity:
Preferred stock, $0.01 par value; 1,000,000 shares authorized; none issued and outstanding
  
Common stock, $0.01 par value; 500,000,000 shares authorized, 256,645,737 and 254,479,046 shares issued and outstanding, respectively
2.6 2.5 
Additional paid-in capital7,225.5 6,880.8 
Accumulated other comprehensive income97.6 15.9 
Retained earnings
5,703.9 3,200.8 
Total shareholders’ equity
13,029.6 10,100.0 
Total liabilities and shareholders’ equity
$16,706.4 $13,432.5 
The accompanying notes are an integral part of these condensed consolidated financial statements.

4

Table of Contents
VERTEX PHARMACEUTICALS INCORPORATED
Condensed Consolidated Statements of Shareholders’ Equity
(unaudited)
(in millions)
Three Months Ended
Common StockAdditional Paid-in CapitalAccumulated Other Comprehensive (Loss) IncomeRetained EarningsTotal Shareholders’ Equity
SharesAmount
Balance at June 30, 2021259.1 $2.6 $7,640.2 $(25.2)$1,578.8 $9,196.4 
Other comprehensive income, net of tax— — — 36.7 — 36.7 
Net income— — — — 851.9 851.9 
Repurchase of common stock(3.3)(0.0)(642.2)— — (642.2)
Common stock withheld for employee tax obligations(0.1)(0.0)(28.6)— — (28.6)
Issuance of common stock under benefit plans0.5 0.0 12.9 — — 12.9 
Stock-based compensation expense
— — 103.7 — — 103.7 
Balance at September 30, 2021256.2 $2.6 $7,086.0 $11.5 $2,430.7 $9,530.8 
Balance at June 30, 2022256.0 $2.6 $7,100.0 $57.5 $4,773.4 $11,933.5 
Other comprehensive income, net of tax— — — 40.1 — 40.1 
Net income— — — — 930.5 930.5 
Common stock withheld for employee tax obligations(0.2)(0.0)(48.0)— — (48.0)
Issuance of common stock under benefit plans0.8 0.0 38.2 — — 38.2 
Stock-based compensation expense
— — 135.3 — — 135.3 
Balance at September 30, 2022256.6 $2.6 $7,225.5 $97.6 $5,703.9 $13,029.6 
Nine Months Ended
Common StockAdditional
Paid-in Capital
Accumulated Other Comprehensive (Loss) IncomeRetained EarningsTotal
Shareholders’ Equity
SharesAmount
Balance at December 31, 2020259.9 $2.6 $7,894.0 $(68.5)$858.7 $8,686.8 
Other comprehensive income, net of tax— — — 80.0 — 80.0 
Net income
— — — — 1,572.0 1,572.0 
Repurchase of common stock(5.3)(0.0)(1,067.2)— — (1,067.2)
Common stock withheld for employee tax obligations(0.6)(0.0)(134.2)— — (134.2)
Issuance of common stock under benefit plans2.2 0.0 66.8 — — 66.8 
Stock-based compensation expense
— — 326.6 — — 326.6 
Balance at September 30, 2021256.2 $2.6 $7,086.0 $11.5 $2,430.7 $9,530.8 
Balance at December 31, 2021254.5 $2.5 $6,880.8 $15.9 $3,200.8 $10,100.0 
Other comprehensive income, net of tax— — — 81.7 — 81.7 
Net income
— — — — 2,503.1 2,503.1 
Common stock withheld for employee tax obligations(0.7)(0.0)(169.9)— — (169.9)
Issuance of common stock under benefit plans2.8 0.1 135.2 — — 135.3 
Stock-based compensation expense
— — 379.4 — — 379.4 
Balance at September 30, 2022256.6 $2.6 $7,225.5 $97.6 $5,703.9 $13,029.6 
The accompanying notes are an integral part of these condensed consolidated financial statements.

5

Table of Contents
VERTEX PHARMACEUTICALS INCORPORATED
Condensed Consolidated Statements of Cash Flows
(unaudited)
(in millions)
Nine Months Ended September 30,
20222021
Cash flows from operating activities:
Net income
$2,503.1 $1,572.0 
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation expense379.8 322.8 
Depreciation expense109.9 91.8 
Decrease in fair value of contingent consideration(59.3)(1.1)
Deferred income taxes(424.0)(112.7)
Gains (losses) on equity securities143.1 (5.0)
Other non-cash items, net(32.8)20.5 
Changes in operating assets and liabilities:
Accounts receivable, net(368.8)(231.2)
Inventories(58.1)(65.8)
Prepaid expenses and other assets(41.9)(107.7)
Accounts payable(39.1)(22.0)
Accrued expenses980.3 254.2 
Other liabilities(40.7)(67.3)
Net cash provided by operating activities
3,051.5 1,648.5 
Cash flows from investing activities:
Purchases of available-for-sale debt securities(417.8)(447.8)
Maturities of available-for-sale debt securities435.9 452.1 
Payment to acquire ViaCyte, Inc., net of cash acquired(295.9) 
Purchases of property and equipment(171.1)(173.2)
Investment in equity securities and notes receivable(47.8)(38.0)
Net cash used in investing activities
(496.7)(206.9)
Cash flows from financing activities:
Issuances of common stock under benefit plans134.7 67.3 
Repurchases of common stock
 (1,057.2)
Payments in connection with common stock withheld for employee tax obligations
(169.9)(134.2)
Payments on finance leases
(75.1)(34.6)
Proceeds from finance leases
 12.6 
Other financing activities2.4 4.3 
Net cash used in financing activities
(107.9)(1,141.8)
Effect of changes in exchange rates on cash
(70.0)(8.5)
Net increase in cash, cash equivalents and restricted cash2,376.9 291.3 
Cash, cash equivalents and restricted cash—beginning of period
6,800.1 5,988.9 
Cash, cash equivalents and restricted cash—end of period
$9,177.0 $6,280.2 
Supplemental disclosure of cash flow information:
Cash paid for interest
$41.1 $42.7 
Cash paid for income taxes
$840.1 $381.5 
The accompanying notes are an integral part of these condensed consolidated financial statements.
6

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

A.Basis of Presentation and Accounting Policies
Basis of Presentation
The accompanying condensed consolidated financial statements are unaudited and have been prepared by Vertex Pharmaceuticals Incorporated (“Vertex,” “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.
Beginning with the second quarter of 2022, we are separately classifying upfront, contingent milestone, and other payments pursuant to our business development transactions, including collaborations, licenses of third-party technologies, and asset acquisitions as “Acquired in-process research and development expenses” in our condensed consolidated statements of operations. To conform prior periods to current presentation, we reclassified $26.7 million and $986.8 million from “Research and development expenses” to “Acquired in-process research and development expenses” for the three and nine months ended September 30, 2021, respectively. Please refer to Note C, “Acquired In-Process Research and Development and Other Arrangements,” for further information on these transactions.
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 September 30, 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.


7

Table of Contents
VERTEX PHARMACEUTICALS INCORPORATED
Notes to Condensed Consolidated Financial Statements (unaudited)
B.Revenue Recognition
Disaggregation of Revenue
Revenues by Product
Product revenues, net consisted of the following:
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
(in millions)
TRIKAFTA/KAFTRIO$2,010.5 $1,555.8 $5,665.3 $4,004.6 
SYMDEKO/SYMKEVI38.2 81.4 145.7 340.0 
ORKAMBI146.2 184.5 399.9 624.2 
KALYDECO139.4 162.4 417.1 532.0 
Total product revenues, net$2,334.3 $1,984.1 $6,628.0 $5,500.8 
Product Revenues by Geographic Location
Total net product revenues by geographic region, based on the location of the customer, consisted of the following:
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
(in millions)
United States$1,455.6 $1,382.9 $4,238.9 $3,893.2 
Outside of the United States
Europe730.5 518.8 2,018.3 1,382.7 
Other
148.2 82.4 370.8 224.9 
Total product revenues outside of the United States878.7 601.2 2,389.1 1,607.6 
Total product revenues, net
$2,334.3 $1,984.1 $6,628.0 $5,500.8 
Contract Liabilities
We had contract liabilities of $119.5 million and $171.7 million as of September 30, 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.


8

Table of Contents
VERTEX PHARMACEUTICALS INCORPORATED
Notes to Condensed Consolidated Financial Statements (unaudited)
C.Acquired In-Process Research and Development 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. Our “Acquired in-process research and development expenses” included $29.0 million and $92.9 million for the three and nine months ended September 30, 2022, respectively, and $26.7 million and $986.8 million, for the three and nine months ended September 30, 2021, 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 and nine months ended September 30, 2022 and 2021, or were new or materially revised during the three and nine months ended September 30, 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 exagamglogene autotemcel (“exa-cel”), formerly known as 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 lead global development, manufacturing and commercialization of exa-cel, with support from CRISPR. Subject to the terms and conditions of the A&R JDCA, we conduct all research, development, manufacturing and commercialization activities relating to the product candidates and products under the A&R JDCA (including exa-cel) throughout the world subject to CRISPR’s reserved right to conduct certain activities.

9

Table of Contents
VERTEX PHARMACEUTICALS INCORPORATED
Notes to Condensed Consolidated Financial Statements (unaudited)
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 “Acquired in-process 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 exa-cel 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 exa-cel pursuant to the A&R JDCA began to be allocated 60% to us and 40% to CRISPR, subject to certain adjustments, while all other product candidates and products continue to have net profits and net losses shared equally between the parties. 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 and nine months ended September 30, 2022 and 2021, we recognized the following amounts in total, not including amounts recorded to “Acquired in-process research and development expenses,” related to these agreements:
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
(in millions)
Total expenses incurred under the Original CTX001 JDCA and A&R JDCA$98.2 $58.7 $259.8 $147.4 
Vertex’s share recognized in “Total costs and expenses” in our condensed consolidated statements of operations
$59.0 $35.2 $155.9 $79.6 
Verve Therapeutics, Inc.
In July 2022, we entered into a research collaboration with Verve Therapeutics, Inc. (“Verve”) focused on discovering and developing an in vivo gene-editing program for a liver disease. Under the terms of the agreement, we made a $25.0 million upfront payment to Verve and purchased $35.0 million of Verve’s common stock. We concluded that there is no alternative future use for the acquired in-process research and development and recorded the upfront payment to “Acquired in-process research and development expenses.” The investment in Verve’s common stock is recorded at fair value on our condensed consolidated balance sheet within “Marketable securities.”
Asset Acquisition
Catalyst Biosciences, Inc. - Complement 3 Degrader Program
In May 2022, pursuant to an asset purchase agreement, we acquired Catalyst Biosciences, Inc.’s portfolio of protease medicines that target the complement system (the “complement portfolio”) and related intellectual property, including CB 2782-PEG, which is a pre-clinical complement component 3 degrader program for geographic atrophy in dry age-related macular degeneration. We determined that substantially all the fair value acquired was concentrated in the CB-2782 PEG in-process research and development assets, which did not constitute a business, and for which we determined there was no alternative future use. As a result, we recorded our $60.0 million upfront payment to “Acquired in-process research and development expenses” in the nine months ended September 30, 2022.
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.”

10

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

D.Business Combination
On September 27, 2022, we acquired all outstanding shares of ViaCyte, Inc. (“ViaCyte”), a privately held biotechnology company primarily focused on delivering novel stem cell-derived cell replacement therapies as a functional cure for type 1 diabetes, in exchange for $315.0 million. ViaCyte’s intellectual property and assembled workforce complement our ongoing programs and have the potential to produce therapies for patients with type 1 diabetes. We accounted for the transaction as a business combination, and allocated the purchase price to the following assets acquired and liabilities assumed:
As of September 27, 2022
(in millions)
Cash and cash equivalents$19.1 
Goodwill73.0 
Intangible asset216.6 
Net other assets
6.3 
Total purchase price
$315.0 
The “Goodwill” represents the difference between the fair value of the consideration transferred and the fair value of the assets acquired and liabilities assumed. The goodwill is attributable to (i) the technological expertise in cell therapy of ViaCyte’s assembled workforce, (ii) the potential synergies from combining ViaCyte’s technology with our clinical development capabilities and (iii) the potential future benefits for other therapeutic programs that the acquired technology could be used for, but did not meet the definition of an in-process research and development asset. None of the goodwill is expected to be deductible for income tax purposes.
The “Intangible asset” is an in-process research and development asset of $216.6 million related to ViaCyte’s technology and intellectual property associated with stem cell differentiation and manufacturing. The fair value of the intangible asset was determined through a discounted cash flow analysis using the relief from royalty method, which estimated the cost savings associated with owning an asset instead of paying a royalty to the previous owner. The relief from royalty method utilized Level 3 fair value inputs including (i) estimated future product sales, which were calculated using, among other assumptions, an estimated probability of obtaining marketing approval for the asset, (ii) estimated after-tax royalty savings expected from ownership of the asset, and (iii) an appropriate discount and tax rate.
As of September 30, 2022, our analysis of the fair value of certain assets acquired, including certain tax analyses, related to the ViaCyte business combination is preliminary and will be finalized during the measurement period of up to one year from the acquisition date. The financial results of ViaCyte did not have a material effect on our condensed consolidated statement of operations in the three and nine months ended September 30, 2022.


11

Table of Contents
VERTEX PHARMACEUTICALS INCORPORATED
Notes to Condensed Consolidated Financial Statements (unaudited)
E.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 September 30,Nine Months Ended September 30,
2022202120222021
(in millions, except per share amounts)
Net income$930.5 $851.9 $2,503.1 $1,572.0 
Basic weighted-average common shares outstanding256.5 257.9 255.8 258.7 
Effect of potentially dilutive securities:
Stock options1.4 1.0 1.4 1.1 
Restricted stock units (including PSUs)
1.6 0.8 1.4 1.1 
Employee stock purchase program
0.0 0.0 0.1 0.0 
Diluted weighted-average common shares outstanding259.5 259.7 258.7 260.9 
Basic net income per common share$3.63 $3.30 $9.78 $6.08 
Diluted net income per common share$3.59 $3.28 $9.68 $6.03 
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 September 30,Nine Months Ended September 30,
2022202120222021
(in millions)
Stock options 1.1 0.0 0.7 
Unvested restricted stock units (including PSUs)0.0 0.2 0.2 0.4 

F.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 G, “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.

12

Table of Contents
VERTEX PHARMACEUTICALS INCORPORATED
Notes to Condensed Consolidated Financial Statements (unaudited)
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 $3.5 billion and $3.3 billion of cash as of September 30, 2022 and December 31, 2021, respectively):
As of September 30, 2022As 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$3,610.9 $3,610.9 $ $ $3,478.1 $3,478.1 $ $ 
Time deposits2,000.0  2,000.0      
Commercial paper18.2  18.2      
Marketable securities:
Corporate equity securities122.8 78.2 44.6  230.9 230.9   
U.S. Treasury securities130.0 130.0   86.4 86.4   
Government-sponsored enterprise securities
10.5 10.5   69.0 69.0   
Corporate debt securities
66.8  66.8  90.9  90.9  
Commercial paper
269.1  269.1  252.7  252.7  
Prepaid expenses and other current assets:
Foreign currency forward contracts191.6  191.6  44.5  44.5  
Other assets:
Foreign currency forward contracts9.1  9.1  2.0  2.0  
Total financial assets
$6,429.0 $3,829.6 $2,599.4 $ $4,254.5 $3,864.4 $390.1 $ 
Financial instruments carried at fair value (liability positions):
Other current liabilities:
Foreign currency forward contracts
$(0.0)$ $(0.0)$ $(5.6)$ $(5.6)$ 
Long-term contingent consideration
(127.2)  (127.2)(186.5)  (186.5)
Other long-term liabilities:
Foreign currency forward contracts
(0.0) (0.0) (2.7) (2.7) 
Total financial liabilities
$(127.2)$ $