Vertex Reviews Corporate Strategy and Outlines Key 2014 Business Priorities at the 32nd Annual J.P. Morgan Healthcare

  Vertex Reviews Corporate Strategy and Outlines Key 2014 Business Priorities
  at the 32nd Annual J.P. Morgan Healthcare Conference

   -KALYDECO: 2014 revenue growth anticipated from geographic expansion and
         approval for use in patients with additional CFTR mutations-

 -Lumacaftor in combination with ivacaftor: results from two Phase 3 studies,
  TRAFFIC and TRANSPORT, expected mid-year in people with two copies of the
                              F508del mutation-

-Company ends 2013 with approximately $1.47 billion in cash, cash equivalents
and marketable securities; expects 2014 KALYDECO net revenues of $470 to $500
                                   million-

JPMorgan Healthcare Conference 2014

Business Wire

SAN FRANCISCO -- January 12, 2014

Vertex Pharmaceuticals Incorporated (Nasdaq:VRTX) today outlined key 2014
business priorities aimed at supporting investment in future opportunities in
cystic fibrosis (CF) and other high-potential research and development
programs. Jeffrey Leiden, M.D., Ph.D., Chair, President and Chief Executive
Officer of Vertex, will discuss the company's corporate strategy and 2014
business priorities as part of a webcast presentation at the 32^nd Annual J.P.
Morgan Healthcare Conference in San Francisco on Tuesday, January 14 at 8:30
a.m. PT (11:30 a.m. ET). The presentation will be available on Vertex's
website, www.vrtx.com. In conjunction with the conference, Vertex today
provided updates to its development programs in CF and other early research
and development programs and provided a financial outlook for 2014.

“Throughout 2013, we made significant progress across all parts of our
company, and I am pleased that our strategy to focus investment in key
research and development programs and to maintain financial strength has
positioned us well to further advance our pipeline and our business in 2014,”
said Dr. Leiden. “Over the coming year, we expect important data from multiple
studies across our cystic fibrosis pipeline that may allow us to help many
people with this disease.”

Cystic Fibrosis (CF)

“Today, nearly all eligible patients with the G551D mutation have started
treatment with KALYDECO in the United States and Europe. As we advance through
2014, our goal is to increase the number of people eligible for KALYDECO by
achieving public reimbursement for this important medicine in additional
countries, including Australia and Canada, and through regulatory approvals
for additional mutations.

“Also this year, we will obtain results from our two Phase 3 studies of
lumacaftor and ivacaftor in people with two copies of the F508del mutation,
which will help define the role that these potential medicines may play for
the more than 28,000 people ages 6 and older with the most common form of the
disease,” continued Dr. Leiden.

KALYDECO (ivacaftor)

Global Availability of KALYDECO (ivacaftor)

KALYDECO is currently available to eligible patients in the United States,
England, Scotland, Northern Ireland, Wales, the Republic of Ireland, France,
Germany, the Netherlands, Austria, Denmark, Sweden, Norway, Greece, and Italy.
KALYDECO is also approved in Australia and Canada, and Vertex is in active
discussions with relevant agencies in these countries to expand access to
KALYDECO for eligible patients through public reimbursement. There are
approximately 300 people age six years and older who have the G551D mutation
in Australia and Canada.

Additional Studies Aimed at Increasing the Number of People Eligible for
Ivacaftor

Multiple additional studies of ivacaftor are designed to evaluate whether
additional people with CF may benefit from treatment with ivacaftor alone,
including:

  *Gating Mutations Study: In December 2013, the U.S. Food and Drug
    Administration (FDA) accepted Vertex’s supplemental New Drug Application
    (sNDA) for ivacaftor in people with CF ages 6 and older who have non-G551D
    gating mutations and granted the company’s request for Priority Review. A
    target review date of March 27, 2014 was set under the Prescription Drug
    User Fee Act (PDUFA) for the FDA's approval decision. Vertex has also
    submitted a Marketing Authorization Application (MAA) variation in Europe
    for ivacaftor in people with CF ages 6 years and older who have non-G551D
    gating mutations. Approximately 400 people ages 6 years and older have
    non-G551D gating mutations in North America, Australia and Europe.
  *R117H Study: Vertex recently announced data from a Phase 3 study of people
    ages 6 years and older with one copy of the R117H mutation. The company
    plans to meet with the FDA in early 2014 to discuss these data and the
    potential submission of an sNDA for people with the R117H mutation. R117H
    is the most common residual function mutation. In North America, Europe
    and Australia, approximately 1,100 people with CF ages 6 and older have at
    least one copy of an R117H mutation. Detailed information regarding this
    study was provided in a separate press release issued on December 19,
    2013.
  *Study in Children Ages 2 to 5 with Gating Mutations: A Phase 3 study of
    ivacaftor in children with CF ages 2 to 5 with a gating mutation is
    ongoing and fully enrolled. Data from this study are expected in the
    second quarter of 2014 to support a potential NDA submission in the second
    half of 2014. In North America, Europe and Australia, approximately 300
    children ages 2 to 5 have a gating mutation.
  *Residual Function Study: Enrollment is complete in a Phase 2
    proof-of-concept study evaluating ivacaftor in people with CF who have
    clinical evidence of residual CFTR function. Data from this study are
    expected in the second quarter of 2014. In North America, Europe and
    Australia, more than 3,000 people ages 6 and older have non-R117H
    mutations that result in residual function.

Lumacaftor in Combination with Ivacaftor

Phase 3 Program in People with Two Copies (homozygous) of the F508del Mutation

  *Phase 3 TRAFFIC and TRANSPORT Studies: Vertex completed enrollment in
    October 2013 for the global Phase 3 TRAFFIC and TRANSPORT studies
    evaluating lumacaftor (VX-809) in combination with ivacaftor in people
    with CF ages 12 and older who have two copies (homozygous) of the F508del
    mutation. Vertex began dosing in TRAFFIC and TRANSPORT in June and May
    2013, respectively, and expects data from these studies to be available in
    mid-2014 to support the potential submission of an NDA and MAA for the
    combination therapy in people homozygous for the F508del mutation in the
    second half of 2014.
  *Two additional studies of lumacaftor in combination with ivacaftor are
    being conducted as part of the Phase 3 program, including a study in
    children with CF ages 6 to 11 who have two copies of the F508del mutation
    and a study in people 18 and older with one copy (heterozygous)  of the
    F508del mutation on one allele and a second mutation on the other allele
    that is not expected to respond to either ivacaftor or lumacaftor alone.
    The second part of the study in children is expected to begin in the
    second half of 2014 and will be used for potential subsequent registration
    of the combination in children ages 6 to 11. The study in people with one
    copy of the F508del mutation is ongoing and intended to provide additional
    safety and lung function data on the combination in heterozygous patients.
  *More than 28,000 people ages 6 and older have two copies of the F508del
    mutation in North America, Europe and Australia, including approximately
    22,000 ages 12 and older.

VX-661 in Combination with Ivacaftor

  *12-Week Phase 2 Study of VX-661 and Ivacaftor in People with Two Copies of
    the F508del Mutation: Vertex is preparing to conduct a 12-week study of
    VX-661 in combination with ivacaftor in people with CF who have two copies
    of the F508del mutation. The study is designed to evaluate safety,
    efficacy and pharmacokinetics to characterize VX-661 for further clinical
    development. Vertex has submitted a protocol to the FDA for this study and
    expects enrollment to begin in the first quarter of 2014.
  *4-Week Phase 2 Study of VX-661 in Combination with KALYDECO in People with
    One Copy of the G551D and F508del mutation: Enrollment is complete in a
    Phase 2 study evaluating a 4-week regimen of VX-661 in combination with
    KALYDECO in people with one copy of the G551D mutation and one copy of the
    F508del mutation. This study is intended to explore whether the addition
    of a corrector to treatment with KALYDECO can provide greater clinical
    benefit than treatment with KALYDECO alone in people with the G551D and
    F508del mutations. Data from this study are expected in the first half of
    2014.

Early Research and Development Programs

“In addition to our late-stage efforts in cystic fibrosis, we continue to
advance multiple early-stage research and development programs, including
VX-135 as part of potential all-oral regimens for hepatitis C. Vertex was
built upon innovative science, and our commitment to research will continue to
be our growth engine for the future as we seek to create new transformative
medicines for cystic fibrosis, cancer, multiple sclerosis and other serious
and rare diseases,” concluded Dr. Leiden.

Next-Generation Correctors for Cystic Fibrosis:

  *Vertex's goal is to advance a next-generation corrector into clinical
    development by the end of 2014. Next-generation correctors could be
    evaluated as part of potential dual-corrector regimens. The proposed use
    of a dual-corrector combination regimen is supported by in vitro data that
    showed a combination of two correctors with ivacaftor increased chloride
    transport in human bronchial epithelial cells with one or two copies of
    the F508del mutation, as compared to the use of a single corrector in
    combination with ivacaftor.

Hepatitis C:

  *Study of VX-135 in Combination with Daclatasvir: Vertex and Bristol Myers
    Squibb Company (BMS) recently announced sustained viral response (SVR4)
    rate and safety data from the initial cohorts of a Phase 2a study of
    VX-135 in combination with daclatasvir, an NS5A replication complex
    inhibitor being developed by BMS, in New Zealand. Vertex is currently
    evaluating these data with BMS to determine the potential next steps for
    this combination in people with hepatitis C.
  *VX-135 in Combination with Simeprevir: A drug-drug interaction study of
    VX-135 in combination with simeprevir in healthy volunteers is complete.
    Simeprevir (TMC435) is a once-daily investigational hepatitis C protease
    inhibitor being jointly developed by Janssen R&D Ireland and Medivir AB.
    Vertex and Janssen are currently discussing the potential next steps for
    further evaluation of VX-135 in combination with simeprevir.

Research Activities:

  *Early-stage research and development programs are ongoing in cystic
    fibrosis, cancer, multiple sclerosis and other serious and rare diseases.
    Vertex expects to advance one or more compounds for the treatment of these
    diseases into clinical development in 2014.

Financial Guidance and Outlook

“Entering 2014, we have aligned our business and investment with the future
potential we see within our cystic fibrosis program and other high-potential
research and development programs,” said Ian Smith, Executive Vice President
and Chief Financial Officer for Vertex. “We believe there is the potential for
significant future growth in revenues from KALYDECO and that we may achieve
further revenue growth from the potential combination regimen of lumacaftor
and ivacaftor in people with two copies of the F508del mutation. As we
progress over the coming months, we remain committed to maintaining balance
sheet strength to support continued investment in our business as we receive
data from multiple clinical studies, including our Phase 3 studies in CF.”

Vertex today provided the following financial outlook and will provide
complete financial guidance on its year-end conference call on January 29,
2014:

  *Vertex ended 2013 with approximately $1.47 billion in cash, cash
    equivalents and marketable securities.
  *Vertex expects total 2014 net revenues of $570 to $600 million, including
    KALYDECO net revenues of $470 to $500 million for 2014. Total revenues
    include net product revenues for KALYDECO and INCIVEK, as well as royalty
    and collaborative revenues.
  *Vertex expects that its 2014 non-GAAP operating expenses will be in the
    range of $900 to $950 million. The company’s planned 2014 investment
    includes approximately $40 to $50 million of expense related to
    development of an all-oral treatment regimen for hepatitis C.
    Additionally, the company expects to record approximately $60 million in
    effective interest expense in 2014 related to the accounting treatment for
    the leases of the company’s corporate headquarters. Vertex’s expected
    non-GAAP operating expense excludes cost of revenues, stock-based
    compensation expense, restructuring charges, transition costs related to
    the relocation of our corporate headquarters, Alios expenses related to
    the accounting for the collaboration with Vertex and any similar expenses
    incurred in 2014.

Non-GAAP Financial Measures

In financial press releases, Vertex's financial results and financial guidance
are provided in accordance with accounting principles generally accepted in
the United States (GAAP) and using certain non-GAAP financial measures. In
this press release, Vertex provides its 2014 non-GAAP guidance excluding costs
of revenues, stock-based compensation expense, restructuring charges,
transition costs related to the relocation of our corporate headquarters,
Alios expenses related to the accounting for the collaboration with Vertex and
any similar expenses incurred in 2014. Vertex provides these financial
measures as a complement to results provided in accordance with GAAP because
management believes these non-GAAP financial measures help indicate underlying
trends in the company's business, are important in comparing current results
with prior period results and provide additional information regarding its
financial position. Management also uses these non-GAAP financial measures to
establish budgets and operational goals that are communicated internally and
externally, and to manage the company's business and to evaluate its
performance.

About Vertex

Vertex is a global biotechnology company that aims to discover, develop and
commercialize innovative medicines so people with serious diseases can lead
better lives. Vertex scientists and our collaborators are working on new
medicines to cure or significantly advance the treatment of cystic fibrosis,
hepatitis C, rheumatoid arthritis and other life-threatening diseases. In
addition to our clinical development programs, Vertex has more than a dozen
ongoing preclinical programs aimed at other serious and life-threatening
diseases.

Founded in 1989 in Cambridge, Mass., Vertex today has research and development
sites and commercial offices in the United States, Europe, Canada and
Australia. For four years in a row, Science magazine has named Vertex one of
its Top Employers in the life sciences. For additional information and the
latest updates from the company, please visit www.vrtx.com.

INDICATION AND IMPORTANT SAFETY INFORMATION FOR KALYDECO™ (ivacaftor)

Ivacaftor (150mg tablets) is indicated for the treatment of cystic fibrosis
(CF) in patients age 6 years and older who have a G551D mutation in the CFTR
gene.

Ivacaftor is not for use in people with CF due to other mutations in
theCFTRgene. It is not effective in patients with CF with 2 copies of the
F508del mutation (F508del/F508del) in theCFTRgene. The efficacy and safety
of ivacaftor in children younger than 6 years of age have not been evaluated.

Elevated liver enzymes (transaminases; ALT and AST) have been reported in
patients receiving ivacaftor. It is recommended that ALT and AST be assessed
prior to initiating ivacaftor, every 3 months during the first year of
treatment, and annually thereafter. Patients who develop increased
transaminase levels should be closely monitored until the abnormalities
resolve. Dosing should be interrupted in patients with ALT or AST of greater
than 5 times the upper limit of normal. Following resolution of transaminase
elevations, consider the benefits and risks of resuming ivacaftor dosing.

Use of ivacaftor with medicines that are strong CYP3A inducers, such as the
antibiotics rifampin and rifabutin; seizure medications (phenobarbital,
carbamazepine, or phenytoin); and the herbal supplement St. John's Wort,
substantially decreases exposure of ivacaftor which may diminish
effectiveness. Therefore, co-administration is not recommended.

The dose of ivacaftor must be adjusted when used concomitantly with potent and
moderate CYP3A inhibitors. The dose of ivacaftor must be adjusted when used in
patients with moderate or severe hepatic disease.

Ivacaftor can cause serious adverse reactions including abdominal pain and
high liver enzymes in the blood. The most common side effects associated with
ivacaftor include headache; upper respiratory tract infection (the common
cold), including sore throat, nasal or sinus congestion, and runny nose;
stomach (abdominal) pain; diarrhea; rash; and dizziness. These are not all the
possible side effects of ivacaftor. A list of the adverse reactions can be
found in the product labeling for each country where ivacaftor is approved.
Patients should tell their healthcare providers about any side effect that
bothers them or does not go away.

Please see full U.S. Prescribing Information for KALYDECO atwww.KALYDECO.com,
the EU Summary of Product Characteristics for KALYDECO at http://goo.gl/N3Tz4,
the Canadian Product Monograph for KALYDECO at www.vrtx.ca and the Australian
Consumer Medical Information and Product Information for KALYDECO (ivacaftor)
athttp://bit.ly/18wlMld.

Special Note Regarding Forward-looking Statements

This press release contains forward-looking statements as defined in the
Private Securities Litigation Reform Act of 1995, including, without
limitation, Dr. Leiden's statements in the second, third and fourth paragraphs
of the press release and the paragraph following the caption “Early Research
and Development Programs,” the information provided in the section captioned
"Financial Guidance and Outlook" and statements regarding (i) expected
revenues and expenses for 2014, including growth in KALYDECO net revenues
anticipated from geographic expansion and approval for use in patients with
additional CFTR mutations; (ii) the timing of initiation and receipt of data
from ongoing and planned Phase 2 and Phase 3 studies; (iii) potential
regulatory submissions to the FDA and in Europe and the expected timing of
those submissions; (iv) the company’s plans regarding meetings with the FDA
regarding the data from the R117H study; (v) the company’s research programs,
including its goal of advancing a next-generation corrector into clinical
development by the end of 2014; (vi) the company’s discussions with BMS and
Janssen regarding VX-135; and (vii) expectations regarding the advancement of
one or more research compounds into clinical development in 2014. While Vertex
believes the forward-looking statements contained in this press release are
accurate, there are a number of factors that could cause actual events or
results to differ materially from those indicated by such forward-looking
statements. Those risks and uncertainties include, among other things, that
the company's expectations regarding its 2014 revenues and expenses may be
incorrect (including because one or more of the company's assumptions
underlying its expectations may not be realized), that data from the company’s
development programs may not support registration or further development of
its compounds due to safety, efficacy or other reasons, and other risks listed
under Risk Factors in Vertex's annual report and quarterly reports filed with
the Securities and Exchange Commission and available through the company's
website at www.vrtx.com. Vertex disclaims any obligation to update the
information contained in this press release as new information becomes
available.

(VRTX-GEN)

Contact:

Vertex Pharmaceuticals Incorporated
Media:
Zach Barber, 617-341-6992
mediainfo@vrtx.com
or
Investors:
Michael Partridge, 617-341-6108
or
Kelly Lewis, 617-961-7530
 
Press spacebar to pause and continue. Press esc to stop.