福泰製藥 (VRTX) 2008 Q1 法說會逐字稿

Good afternoon. My name is Lamont, and I will be your conference operator today. At this time, I would like to welcome everyone to the Vertex Q1 financial results conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks there will be a question-and-answer session. (OPERATOR INSTRUCTIONS) Thank you, Mr. Partridge, you may begin your conference.

Thank you, and good evening. This is Michael Partridge. Welcome everyone to Vertex's first quarter 2008 conference call. Vertex had a very strong start to 2008, and we have made important progress in all aspects of our business. Firstly, we have commenced a Phase III registration program in HCV geneotype I patients focused on 24 week duration of treatment, second we have received our first early data in HCV patients who failed prior treatment with pegylated interferon and ribavirin suggesting an opportunity to treat this important patient population. And third, we have our first early results from a study evaluating ever 12 hour dosing of Telaprevir that suggests an opportunity for a twice daily dosing regimen. In addition to these advancements with Telaprevir, we continue to push forward with our second generation HCV program, and have the first clinical results from our cystic fibrosis program. Supporting our pipeline investment, we strengthened our financial position by raising approximately 400 million in gross proceeds from a public offering and as we finished the first quarter we have a total of 750 million in cash and marketable securities. At the easel conference later this week, we hope to see some of you, and we look forward to presenting data that support's Telaprevir's leadership and differentiated product profile in HCV.

On today's call we will cover first quarter financial highlights, Telaprevir's profile and broad first-to-market opportunity, and other progress in our pipeline. These topics will be discussed and expanded upon during today's call by Ian Smith, Dr. John Alam, Kurt Graves, and Dr. Joshua Boger. I will remind you of the following, information discussed on the conference call includes forward-looking statements, which are subject to the risks and uncertainties discussed in detail in our reports filed with the Securities & Exchange Commission, including our 10-K. GAAP and non-GAAP financial measures will be discussed on this call. Information regarding our use of non-GAAP financial measures and a reconciliation of those measures to GAAP is available in our first quarter 2008 financial press release which can be accessed on our website at www.vrtx.com unless otherwise noted all 2008 expenses and guidance discussed in this call are inclusive of stock-based compensation. As always, you can visit our website to listen to the conference call and view a Power Point presentation or download a podcast. Lastly after our prepared remarks, we will take as many questions as we can until we conclude the call at about 5:45 p.m. After the call, our investor relations team, joined by John, Kurt and Ian, will be in the office to answer any additional questions.

Before I turn the call over to Ian, I would like to remind everyone that we are hosting an investor event in Milan, during Easel this Thursday, April, 24, for those of you who will be there, and we'll have prepared remarks starting at 11:00 a.m. local time in Milan. We are planning to webcast this event at 5 a.m. eastern daylight time, for members of the investment community for members of the investment community who are unable to attend, a replay will also be available. I'll now turn the call over to Ian.

Thank you, Michael, and good evening to everyone. I'll be brief with my remarks, the financial highlight in the first quarter one of strengthening our financial position. We added approximately $400 million to the balance sheet through financing, which allowed us to end the quarter with $750 million of cash and marketable securities. We're well positioned to support the breadth of the investment into our business. Now for the first quarter 2008 financial results. The first quarter non-GAAP loss before certain charges was $82 million, compared to the first quarter, 2007 non-GAAP loss of $63 million. The increased loss was principally due to a reduction in collaborative revenues compared to the prior year, partially offset by lower R&D expenses. The GAAP net loss, for the first quarter 2008 was $96 million compared to $81 in the first quarter of 2007. Total revenues for the first quarter of 2008 were $42 million, compared to $69 million for 2007. The decrease in revenue, was primary driven by a reduction in nonrecurring milestone revenue achieved in 2007, another R&D reimbursement. As we look forward, our revenues continue to be substantially supported by R&D revenues, and more specifically revenues that support Telaprevir development. To this point, in early April, we achieved a $45 million milestone for the dosing of patients in our Telaprevir registration program. This is milestone is an important financial contribution, and we expect that it will be fully recognized in the second quarter.

Now, to the R&D investment. Our total R&D expense was $115 million, compared to $133 million in the first quarter of 2007. This decrease, over the prior year, reflects investment activity in 2007 so support PROVE 1 and 2 clinical trials on the investment in (inaudible) commercial supply chain. While in 2008, investment reflects the period of lower activity as we prepared for investments of Telaprevir in to the Phase III registration program. We anticipate that R&D investment will increase commensurate with the increased development activities as Telaprevir progresses through the year. Our first quarter SG&A expense was $22 million, compared to $17 million in the first quarter of 2007. This increase was a result of infrastructure build to support our business and the initial commercial steps we have taken to support Telaprevir.

Now, to guidance, we are reiterating guidance for 2008 GAAP and non-GAAP loss what we originally provided on our year end 2007 conference call for February 2011. I will close by stating the first quarter was financially important as we strengthened our financial position to close with $750 million of cash and marketable securities, and we have continued that progression with the recent achievement of a $45 million milestone. Balancing investment with financial strength continues to be an important underpinning with (inaudible) our business. John, over to you.

Thank you, Ian. I'll begin today by highlighting some of the key Telaprevir results to be presented at Easel this week. Focusing particularly on the opportunity of Telaprevir in the hard to treat patients who failed prior pegylated interferon ribavirin treatment including null responder, partial responders, and relapsers. Data from three clinical studies are being presented at Easel, PROVE 1, PROVE 2 and study 107. From PROVE 1 and PROVE 2 the key new data are the final rSVR results in the Telaprevir arms, and hence we are 24 results in the PROVE 1 control arm, and SVR 12 results in the PROVE 2 control arm. We believe the data supports the potential of Telaprevir in treatment-naive patients to increase the risk benefit over current therapy with significantly higher SVR rates and by shortening the current treatment duration in most patients.

Next study 107, because it is the first promising data in patients who failed treatment with prior pegylated interferon ribavirin, many of our investigators have said perhaps the most exciting clinical results in all of Easel are the interim analysis results from this study. Study 107 enrolled patients from those who failed the control arms of PROVE 1, PROVE 2, or PROVE 3. These data provide significant incite in to the potential opportunity for Telaprevir to address the important patient population, and also helped to differentiate Telaprevir relative to other (inaudible) inhibitors in development. Study 107 is ongoing and is still enrolling patients. The abstract that's already online highlights four-week on-treatment data from 32 patients who were in the control arms of the PROVE studies and failed to achieve an SVR, and then elected to receive a 12 week triple regiment of Telaprevir pegylated interferon ribavirin, followed by an additional 12 weeks of pegylated interferon ribavirin. At the time we submitted the abstract, a total of 54 patients had been enrolled in this study. In addition to the data disclosed in the abstract at Esasel, we expect to present all available data for more patients who have now reached the four-week time point, and we will disclose on-treatment data for patients in study 107 who have reached 12 weeks of therapy. These data are early and we do not know yet what percentage will achieve an SVR result, but the level of response we've seen so far in all patient sub-groups make the results very encouraging. A real strength of study 107 is that we're dealing with patients who are enrolled in a prior control study and we know their recent treatment history and the response to prior standard of care treatment in exquisite detail. This incite is valuable in clearly defining the potential effect of Telaprevir in treating well-defined, null responders, partial responders, and relapse of patients. I look forward to reviewing the specific results across each of these patient subgroups after the data are disclosed on Thursday.

In terms of this patient population otherwise, as you know, we have PROVE 3 ongoing. PROVE 3 is a phase II-B trial evaluating Telaprevir combination therapy in 440 patients who failed prior treatment with pegylated interferon ribavirin. In May, we expect to complete and submit to the FDA the first interim analysis for PROVE 3. We expect those results to form the basis for the first of multiple discussions on a development and registation path for Telaprevir in patients who have failed to achieve SVR with prior pegylated interferon ribavirin therapy. It is too early to speculate on the exact next steps for development with US and European health authorities. As we've said consistently, our primary objective remains to achieve a broad and differentiated label in both treatment naive patients and patients who failed prior treatment with pegylated interferon ribavirin as quickly as possible. At present, our guidance on our core development plan and time line remain unchanged. We plan to have SVR data from our treatment naive program in the first half of 2010 with a subsequent NDA filing. In addition to study 107 and PROVE 3, we are conducting a range of Phase II studies that can further enhance the profile of Telaprevir. Today, we've provided the first information from a study evaluating the safety and efficacy of Telaprevir dosed either twice daily or three times daily together with either pegasus or pegintron. The twice regiment consisted of 3 tablets of Telaprevir, totaling 1125 milligram given every 12 hours while the three times daily regiment is the same regiment we are evaluating in our other clinical studies, two tablets totaling 750 milligrams given every 8 hours. This study began in October 2007, and is now fully enrolled. We reported today the first pharmacokinetic analyses of the study have been completed and the results support continuation of the twice daily dosing regimen. Specifically preliminary pharmacokinetic analysis of pre-dosed samples taken on day 8 of dosing in approximately 50 patients, indicates that the trough concentration in these patients receiving a twice daily Telaprevir based dosing schedule were approximately 2,300 -- 2,300 nanograms grams per milliliter, a value that is better than we expected and similar to the trough concentration of the three times daily Telaprevir based dosing schedule in this study. This concentration is also similar to the trough concentration that we observed in the PROVE 1 and PROVE 2 studies, where Telaprevir was dosed every 8 hours, and where we saw the substantial increase in SVR over standard of care treatment ops. For reference, in PROVE 1 and PROVE 2 from the population PK sampling analysis, trough concentrations were approximately 2,300 nano gram per milliliter in PROVE 1 and PROVE 2 was similar. While we still need further efficacy and safety data, we are optimistic that with these pharmacokinetic results there is real potential for Telaprevir to be dosed in a twice-daily dosing schedule. We expect to have the additional efficacy and safety data to fully compare the regimens in the second half of the year. If those results are successful, we will determine the best path forward to get twice daily dosing on the label as soon as possible after launch. In summary for Telaprevir, we have made great progress in the first quarter of 2008. We commenced dosing in our registration study of treatment naive patients, we have the first data in patients who failed prior treatment with pegylated interferon ribavirin, and we have the preliminary pharmacokinetic results suggesting a twice daily dosing opportunity for Telaprevir. All very important advancements.

Now briefly to two of our other development opportunities I'll start with VX-770, an oral candidate we have in development for cystic fibrosis. In late March, we announced the data from a part one of a two part phase II-A trial in patients with a mutation known as G551D. Part 1 enrolled 20 patients. Our goal in testing this compound in a small subset of patients was to see if a potentiated compound could improve the gating of the defective CFTR channel data that causes CF. These data showed a mean 10% improvement in lung function at the highest dose as well as significant reduction in sweat chloride levels and changes in chloride levels and changes in chloride iron transport in the upper air way as measured by changes in nasal potential differences. Results from the interim analysis support the hypothesis that improving chloride ion transport in CF patients, may correlate to improvements in lung functions. We expect to present these data at the 31st European Cystic Fibrosis Society annual conference taking place from June 11 to June 14 in Prague. Following presentation of this data, we expect to complete part 2, which is a 28 day study of the Phase II-A study -- which is a 28-day part of the Phase II-A study in the second half of 2008. Also, in the cystic fibrosis program, we are conducting a Phase I-A trial of VX-809, a corrector compound for CF that could treat a greater number of patients living with this disease. We expect results from this study later in 2008.

Finally, briefly to our Aurora Kinase program. We expect that our collaborator Merck, will initiate phase 1 clinical development of MK-5108 also known as VX-689 in the second quarter. This drug candidate is currently being evaluated in patients with advance or refractory tumors. Additionally, Merck continues to evaluate efficacy and safety data for the Aurora Kinase inhibitor, MK-0457 or VX-680, for the treatment of cancer following the previously announced suspension of clinical trial enrollment for this compound. These programs reflect ours and Merck's conviction that Aurora Kinase's are an important potential mechanism for the treatment of cancer. In summary we have made tremendous progress and still have a lot to accomplish in 2008. I'll now turn the call over to Kurt.

Thank you, John, and good evening, everyone. I'll keep my remarks brief tonight and in the context of what we're doing to build on our lead and strengthen our position. Our number one priority remains the same, fully leveraging our first to market opportunity with Telaprevir. With the new data we're developing, and the data we have going into Easel next week, we're now seeing the potential, more than ever to build on Telaprevir's strengths in our ACV portfolio strategy to create a sustainable leadership position in this dynamic category. Telaprevir continues to raise the benchmarks, and differentiate its pro files among STAT-C therapies. To date, it has number one, generated unprecedented SVR rates ranging between 61% and 68%, together with a potential for a shortened treatment duration of 24 weeks for the majority of treatment naive geneotype 1 patients. And two, it is the first and only STAT-C to enter a registrational phase III program focused on 24-week treatment durations. On top of that we're seeing a differentiation in our early anti-viral data in patients who failed prior treatment with pegylated interferon and ribavirin, and we're also seeing early PK results which shows the potential for Telaprevir to be a twice-daily drug. While these data are early and more data are required in both cases, they are highly relevant to strengthening our competitive differentiation and the breadth and depth of our market opportunity. As John mentioned in a week 4 interim analysis of data from study 107, Telaprevir significantly brought down the viral load in patients who had not responded to current therapies. Most notably, in all three subgroups, including null responders, partial responders, and relapsers. Many of whom have very limited or no treatment alternatives at all. Many of these patients represent the highest unmet need patient populations in hepatitis C, and a very important piece of the hepatitis C market opportunity. We recognize that these data, from study 107, are early, but we are encouraged by the viral responses at week for and look forward to discussing further on-treatment data with you in more detail at Easel. Beyond this promising data in parallel we're not standing still. We are seeking to leverage our first to market position and are pursuing a number of potential collaborations and deals, with companies that have future complimentary therapies to Telaprevir and our second-generation protease inhibitors. Once Telaprevir is launched and well established, prescribers will want to know how to use the next evolution of potentially complementary therapies, once they are approved. We think it makes , as a leader in the area, to address that opportunity and provide the Telaprevir combination data as early as possible. Working with companies who share a common vision of the opportunity created by our lead position. This is a high-priority for us in 2008, and we look forward to keeping you updated as we progress.

In summary, as more and more data emerge from our global development program, I believe we are strengthening key aspects of our product profile and our potential differential advantages. Which should provide launch uptake and also provide a stronger and more durable competitive position. If our early 107 data and our preliminary twice-daily results translate into our desired results, we have even reasons why we are well on the way towards establishing Telaprevir as a cornerstone therapy in the treatment of HCV. There is more to do and challenges will always lie ahead, but we are serious about our commitment to eradicating this disease, and we fully intend to leverage our lead position, our profile-enhancing studies, smart business development collaborations, and our expanding STAT-C portfolio. Joshua, over

Thank you, Kurt. 2008 is an important year for demonstrating the strength of Telaprevir's profile. We recognize and respect that other companies also see the unmet need for patients with HCV. The HCV market has tremendous opportunities for growth, increasing numbers of HCV patients entering the healthcare system, and we are developing the leading product candidate to address this severe unmet medical need. With the first STAT-C to enter a phase III registrational program, we are one step closer to capitalizing on the first to market opportunities in treatment naive patients. I'm also pleased with the progress Telaprevir is already demonstrating in treatment failures. Telaprevir has shown an early effect in non-responders and in relapsers and most impressively in null responders, where others have shown that they are not likely to show success in this population. We have a deep commitment to HCV. In addition to our progress in treatment naives and treatment failures, we are also focused on building a category leadership position. We are exploring opportunities to evaluate Telaprevir in combination with other STAT-C therapies. Beyond HCV, we are diversifying our pipeline with a number of other novel first in class product candidates. We are demonstrating our commitment to high growth specialized diseases. VX-770, our oral compound for the treatment of cystic fibrosis showed it has potential in an early study to restore lung function in CF patients. It's a very exciting time to be at Vertex. We are making important therapeutic advancements. We are lighting the way forward in a number of diseases. Michael back to you.

Thank you. At this time, we will now open the call to questions.

(OPERATOR INSTRUCTIONS) We'll pause for just a moment to compile the Q&A roster. Your first question comes from the line of Rachel McMinn with Cowen & Company.

Yes, thanks very much for taking the question. I guess I wanted to ask you a little bit more about the BID study. I think you mentioned that -- you say that the trial will continue as planned. Is there a specific pre-specified analysis at week four that we should be thinking about? And if there is if there is, is there some sort of non-inferiority delta that you would need to see in order to continue on past week 4?

Yes, Rachel this is John. Thank you for the question. We are -- the study is actually now fully enrolled, and it's proceeding, you know, with -- very smoothly and very nicely. There is no pre-specified stopping point at week 4 or week 12. There will be an analysis of the 12-week safety and anti-viral data that we expect early in the second half of the year. I think in terms of the RVR or anti viral data, our expectation at this point is -- is that the results between given the pharmacokinetic data that that we have seen, that the results between the two arms in terms of twice daily and three times daily will also actually be quite similar. Given that for an anti viral drug, trough concentration is a key driver of anti viral activity whether it's measured in hepatitis C as RVR, undetectable HCVR and ultimately SVR, it is the blood and trough concentrations that consistently for anti-viral drugs that trough concentrations drive the results. We have with PROVE 1 and PROVE 2, established a particular trough concentration as a benchmark to be able to achieve the SVR rates that we achieved which -- and RVR and SVR rates that we achieved, which was an approximately 2300 nano gram per milliliter. And then with all of that, with the analysis that we have done, which is on -- you know, the first -- about 0.3 of the patients in the study, but with that data, at a time point that you are at steady state for trough concentrations, they aren't going to go up any further, they are stable at that point. With known -- with a similarity in trough concentrations, the anti-viral affect should follow with similar anti-viral affect as well.

So should we take that to mean from your perspective, then if there's a risk, if you will in the trial, that the biggest risk would be safety as opposed to efficacy?

I think that's the one that -- you know, in terms of, again, the anti-viral affect, that you are right. Our expectation at this point, it is actually to confirm what we're seeing in terms of the -- in terms of the anti-viral results. In terms of safety, you know, we haven't seen -- you know, we have obviously at this point haven't done the detailed safety analysis, but the results that we -- that is available at a high level it's consistent with what we have seen in PROVE 1 and PROVE 2, and nothing really stands out as going with one arm or another. You know, in terms of -- you know, if your question is in terms of P-concentrations, and what that might play out in terms of a safety profile, in our prior analysis in PROVE 1 and PROVE 2, we haven't seen any -- whether it's GI side affect, rash, any of the adverse events that we've seen in that particular combination, have not been correlated to peak concentrations, but, you know, we'll confirm that with the more detailed safety analysis that's coming up.

Okay. So -- and then just last question on this, how -- do you have a significant proportion of patients out through 12 weeks?

We haven't provided the specific numbers of patients. It is -- it started in October 2007. It is now fully enrolled.

Okay. Thanks very much, appreciate it.

Okay.

Your next question is from the line of Geoffrey Porges with Bernstein.

Congratulations on the BID I think it's certainly intriguing at this time. Question, you obviously have (inaudible) on these patients at least of 8 days. Can you confirm whether the same percentage of patient are undetectable at 8 days or roughly the same in the two arms. And then a follow up question, if you just talk through, John, what the regulatory strategy might be for BID your big phase II and and now your phase III, (inaudible) with CID, how can you sort of incorporate BID and the potential label? And what is your thinking on that at this point? Thanks.

I can't comment on the HCVR&A data. We haven't disclosed that information. Again, I think with the PK data that that we have with the trough concentrations, with an anti-viral drug, with the PKPD relationships that we've already established to this point at cross are various studies, in terms of anti-viral effect we are definitely optimistic in terms of being able to ultimately establish the similarity of anti-viral profiles for twice daily versus three times a day. In terms of strategy going forward, you know, we will need the full set of data to define the profile, and it may be that at that point it's a better time to specifically go in -- in terms of what the long-term strategy is going to be. We will be working, obviously with the data, and with regulatory authorities if it's confirmed, our expectations in terms of safety and efficacy, to bring it to the market as soon as possible after launch. In the short-term, I think it does provide that much more confidence in the three-times daily regimen. Overall, what we found in the data that we have obtained in PROVE 1 and PROVE 2 and now in this study, that the blood level profiles are in fact flatter and more sustained than we had originally expected coming out of Phase I, and that's presuming a combination of the formulation being in HCV patients, and -- and all around, it's performed better in terms of -- of sustained trough concentrations, which may, in fact, explain the -- the very good results we have obtained in PROVE 1 and PROVE 2, particularly in terms of the very low break-through rates.

And John, could I just follow up then. Should we be thinking about this as data that suggests it's okay for a patient to miss a dose? Or should we be thinking about this in terms of this being a drug thats labeled for BID demonstration routinely?

Both.

Okay. Thank you.

Your next question is from the line of Yaron Werber with Citi.

Hi, this is (Kareme DeFillipe) actually in for Yaron Werber, thanks for taking my question. In regards to the PROVE 3, what interim data, exactly do you expect to submit to the regulatory authorities in May? And could you elaborate, perhaps a little more what the next steps would be when we would see that data, and also the possibility of PROVE 3 serving as a second registration trial? Thank you.

The key data in the interim data are the SVR 12 results in the two 24 week arms in PROVE 3. Including in particular the 12 plus 12 regimen in that study. We would -- again, we would -- that interim analysis would be completed and submitted in May, and we'll talk further in terms of specific registration patch, or how we would move forward from there after we've had our initial set of discussions with the regulatory authorities. The focus of which will clearly be as the first set of data that they will have seen in this particularly hard to treat patient population, to get a full understanding of the data and the implications of the data.

Great. Thanks very much.

Thanks (Kareme).

Your next question is from the line of Annabel Samimy with UBS.

Annabel?

Yes. Can you hear me?

Yes.

Oh, sorry, all of my questions have been answered thank you.

Thanks.

Thanks, Annabel.

Your next question is from the line of Hari Sambasivam with Merrill Lynch.

Quick question for John! In terms of the BID dosing is there any evidence of any safety-related changes with the BID dosing that you might see with TID? I'm just wondering if you get a smother profile, or PK profile whether you are eliminating any of the adverse events that you saw with the (inaudible) was one of the questions. Secondly on the 770 as you go towards the Phase II-A -- the second part of it, I'm just wondering, have you actually determined your maximum tolerated dose here? Or I'm just kind of curious as to what remains to be done before you actually start on your pivotal trial sort of -- I guess design.

Hi, Hari, thank you for the question. So on the safety profile, we haven't seen any -- again, it's a high-level analysis at this point. We haven't seen any substantive differences between the regimens and what we've seen is consistent with what we have seen in PROVE 1 and PROVE 2. In terms of the VX-770 and dosing, we do have an on going PKPD analysis and a dose response analysis, I think as we said in our call -- I know we said in our call, there was an underlying dose response with a number of patients with a -- with -- we have in the study, a more robust analysis of where we are in terms of dose response curve will be t PKPD analysis, and that will drive whether we add additional doses in the -- the 28 day part of the study or not. Otherwise our focus will be on the 150 milligram dose level twice a day.

That's great. Thank you.

Your next question is from the line of Brian Abrahams with Oppenheimer & Company.

Thanks for taking my question. I am just wondering, going back to the BID study, if you could talk in a little bit more detail about how the PKPD profile that you are seeing compares to what you saw in that original 14 day mono therapy study. I guess I'm just wondering how much of an impact do you think that -- the different formulation that you used back then -- how much of an impact do you think that that might have on -- potentially different outcomes in the two studies? Or should we think about it more in terms of the bigger impact, the larger impact coming from the combination used with interferon ribavirin in this study versus that prior study.

Thanks for the question, Brian. We -- at this point just to be clear, the HCVR&A data are blinded and we have not evaluated any anti-viral data, and so I can't comment on PKPD for twice daily versus three times a day.

Blood levels.

The key information at this point are the -- the blood levels of Telaprevir with trough concentrations, which have been consistently across our studies that what drives the anti-viral effect, those trough concentrations are in the twice daily regimen at 12 hours after the last dose, are -- and immediately prior to the next dose -- they are approximately 2300 nano gram per mill, similar to what was seen in the three times daily, and similar to what we reported in PROVE 1.

I guess just to clarify my question, I was just wondering how those trough levels compared to the trough levels you observed at a similar time point in that initial study.

Alright, great question. The -- as we came out of the monotherapy study, our objective, as you might recall was that -- we targeted concentration of maintaining 1000 nano gram per mill at trough in all patients. In PROVE 1 and PROVE 2, we actually were able to achieve with the formulation in the combination we evaluated and in HCV patients, everything together a median around 2300 nano gram per mill. So, about two times above our initial target and again, it may be the reason why that regimen has performed as well as it has in PROVE 1 and PROVE 2. And, again, we -- those are the trough concentrations that we're achieving. So, we're with twice daily as well, more than -- at a median more than twice above that initial target.

Great. And just a quick follow-up, any updates on when the second pivotal study might begin?

We have no further update as of today.

Okay. Thanks for taking my questions, look forward to seeing you guys on Thursday.

Thanks.

Your next questions is from the line of Liisa Bayko with JMP Securities.

Hi, guys and congratulations on the BID data it looks very encouraging.

Thank you.

Thank you.

Just have a couple of questions on that, is the trial being run in both the US or Europe? Or just in Europe?

It's a being run only in Europe.

Okay. And then --

But in -- in just to be clear, in PROVE 1 and PROVE 2, PROVE 1 all in the US, PROVE 2 all in Europe. The PK and trough concentrations between -- there were no difference -- no significance difference between the US and European populations.

Okay. Okay. And then can you just give us the specific blood concentration that was established in PROVE 2?

We have not provided that, but it is -- it's very similar to the -- the 2300 nano gram per mill, which we did report in Ira Jacobson's presentation at ASOD.

Okay -- I mean, I'm just trying to follow the train of logic that, you know, perhaps you are seeing a different blood concentration because of the difference in population, you know, size --

The comparison within the study is between -- within the same population. S,o the first part of the result is -- that in study -- the study we're reporting on, the study C-208, the twice-daily regimen and our otherwise -- you know, the three times daily regimen, do in fact have very similar trough concentrations.

Okay great. Thanks for the clarification.

Yes.

Thanks, Liisa.

Your next question is from the line of Howard Liang with Leerink Swann & Company.

Just to say on the BID trial, the concentration you mentioned 2300 was that median or mean? And I guess my question is what about the variance? Was the standard deviation the same between the BID and TID arms?

So that's -- thank you for the question, good -- great question. The median is what -- what we're providing, but you are absolutely right, when we say similar trough concentrations, we're not just looking at one number, we're looking at actually all of the data from the 50 patients about half of whom received twice daily regimen, half who received three times daily regimen, and its looking at all available data, the range, the -- you know, we basically plotted the individual patients of where the trough concentrations were, and that comparison is what -- you know, is where the conclusion that there's similar trough concentrations comes from.

Okay. Great, then why only 50 patients? I thought the trial had 200 patients, and also whats the breakdown between -- of the 50 parents between the pegasus and (inaudible) arms?

So the -- the trial will enroll -- has enrolled approximately 160 patients. That was the original target. This pharmacokinetic analysis was basically set up and run at the point that about 0.3 of the patients had been to the point, and then the PK was run and -- you know, run and analyzed. We would have -- I mean, there is an ongoing data generation. The next plan interim analysis is a full PK as well as safety and efficacy analysis that will include as much of the up to week 12 data as possible.

Okay. Just on the -- a question on 107 study, can you say how many more patients are we going to see on Thursday? And how many have reached week 12.

Let's talk on Thursday, Howard. But we will have more week 4 data, and -- and we will have up to week 12 data, and this is an advertisement for everyone here, it is going to be a good discussion, and I hope to see you there to talk about the full set of data that we'll be presenting on Thursday.

Thanks very much.

Your next question is from the line of Tom Russo with Baird.

Most of mine have been answered, but can you give any update on any commercial inventory build so far this year, and also the numbers and types of positions that you might be adding within sales and marketing?

Thanks, Tom, it's Ian here. Firstly, clearly we're increasing our investment in this customer markets area, and currently have a brief comment there. Not significantly at this point, but as we get more data, and as we get more understanding with the FDA how quickly we can bring this drug to the market, you'll find a quicker rate of investment, and thats basically the story in our customers markets area. As far as commercial inventories build, we're not being specific on how much the investment is there. Its very similar the the customer markets investment as well based on our past, based on our time line, we're going to investment based on risk to build inventory for launch, we won't give any specificity on the launch we are building at this time, maybe something will be more clear on -- close to market.

And then, you may have already given this in the past, but the primary Phase III trial in treatment naives, can you confirm how many patients are on a 12 plus 12, versus an 8 plus 16 regimen.

Well the study is 1,050 -- sorry John, go ahead.

No, go ahead.

The study is 1,050 patient, divided by four it gives you the size of the arm -- sorry 3 arms.

350 patients per arm. Control 8-week Telaprevir duration with pegylated interferon driven by ether -- by RVR of 24-48 weeks, and then the 12 week Telaprevir duration with 24-48 weeks of peg in ribavirin, but the focus obviously being -- give -- with -- on the 24 week regimen.

Okay. Thanks a lot.

Thank you.

Your next question is from the line of Gorge Farmer with Wachovia Capital.

Thanks for taking my question. John, can you comment more on the BID trough levels? And just expanding on a previous question. Going back and looking at the original monotherapy data, the trough levels that were attained with TID were about 100 nano grams per mill, and with BID they were 780, I am just reading this directly from the slide right now. You mentioned that you got to 2500 in both PROVE 1 and PROVE 2. How did you achieve that? Was this a different formulation in the mono therapy study? Or might have there been an effect due to peg riba?

The primary effect is a formulation. The mono therapy study was a suspension. Our work subsequent to that is with a -- with a tablet formulation, which -- with which we actually do achieve on -- by itself and about two fold higher concentrations that than we achieved in the original monotherapy study. There is an effect of interferon. We assume it's the Interferon, that does modestly increase the levels, ultimately to that, around 2300 nanogram per mill level. But the major effect -- the major increase in trough concentrations comes from the formulation.

Okay. Thanks. And Ian, do you expect any other milestone payments this year?

Yes, we haven't given specificity. They are included in our revenue guidance that we have provided for the full year. Just to remind you, that revenue guidance for the full year, that we gave back in February of this year, was between $200 and $220 million, and that would include all of the milestones.

Okay, thanks very much.

Thanks, George.

Your next question system from the line of Jason Zhang with BMO Capital Markets.

Thanks. Couple of questions. One, when will be the first time we can see the BID study data presented at a medical meeting? And the second is the supply channel -- supply management, how many, you know, suppliers have you identified for Telaprevir, and how are you going to de-risk that by -- you know, securing more supplier, or are you going to rely on one or two main supplier?

Thanks for the question, Jason. First, on the data question on the BID study, given that it is a Phase II-A type study, 160 patients, what you should expect is a disclosure that would probably be top line data in a press release that would come later this year. We tended to preserve the detail of this study for medical conferences, and we have also preserved the disclosure of medical (inaudible) for those trials that could potentially be used for registration, but in summary the BID study would be a top-line press release in the latter part of this year. On the supply question, first of all, we have a supply chain in place that starts overseas and comes through Europe and into the US, and it's had it's validation and we're productive in already producing commercial product. As far as diversifying the risk in our supply chain, we've also have J&J as a very capable partner, (inaudible) with J&J and TivoTech and they are replicating our process, they are a very able backup interms of diversifying our risks. We're in a very good place for scale-up and commercial supply of our product, including where J&J is today as well.

Okay, I think a quick question on your collaboration, I think -- it is certainly not the first time you have emphasized exploring opportunity and seeking collaboration of other products in the future development, and I know you are not going to disclose, you know, the exact company you are talk to, but from a philosophical point of view, given there are so many opportunities out there, different types of drugs, you know, polymers inhibitors protease inhibitor, your know your new modulator, how are you going to evaluate this opportunity, and to whom you are going to focus more, you know, versus the others?

Jason, it's Kurt. It's a good question. Right now we at Vertex are really trying to take a view that we are trying to build a leadership position in the category of hepatitis C. And we're looking at novel therapies that can be combined with either Telaprevir we're also obviously looking at potential therapies and the time frame that could be combined with our second generation proteases as well. Right now our current thinking, based on the data that comes out, and we're tracking all the different complimentary therapies and we're in discussions with not just one company, but multiple companies, we tend to be leaning towards the STAT-C therapies that are most advanced with what looks like so far potentially promising efficacy and safety data to the point where they could be potentially combined with Telaprevir and get to the market based on the leadership position with Telaprevir potentially quicker.

You know, financially, how are you going to arrange these collaborations? Do you have any preference?

It really depends company by company the different types of collaborations we are looking at. Some of them include just doing joint studies for potential inclusion and labeling, right up through different kinds of deals where we would have the asset ourselves in our own portfolio. So, it's not something I can give you one specific response on. There's a number of different companies we're talking to and different structures.

Thanks.

Thank you.

(OPERATOR INSTRUCTIONS) And there are no further questions at this time.

Okay. If there are no further questions, we'll say thank you very much for listening to the call tonight, and let you know that we will in our offices to answer any follow up questions that you have. Thanks again.

This concludes today's Vertex Q1 financial results conference call. You may now disconnect.