Event Brief of Vertex Pharmaceuticals Incorporated Strengthens HCV Drug Development Portfolio, Adds Novel Polymerase Inhibitors to Shape New Combinations with Telaprevir Conference Call - Final.(Broadcast transcript)(Clinical report)

PARTICIPANTS

. Michael Partridge, Vertex Pharmaceuticals, Inc., Senior Director of Strategic Communications . Kurt Graves, Vertex Pharmaceuticals, Inc., EVP, Chief Commercial Officer, Head of Development . Freda Lewis-Hall, Vertex Pharmaceuticals, Inc., EVP Medicines Development . Ian Smith, Vertex Pharmaceuticals, Inc., CFO . Joshua Boger, Vertex Pharmaceuticals, Inc., CEO . Rachel McMinn, Cowen & Company, Analyst . Michael Aberman, Credit Suisse, Analyst . Steve Harr, Morgan Stanley, Analyst . Tom Russo, Robert W. Baird, Analyst . Liisa Bayko, JMP Securities, Analyst . Jason Zhang, BMO Capital Markets, Analyst . Terence Flynn, Lazard Capital Markets, Analyst . Brian Abrahams, Oppenheimer & Co, Analyst

OVERVIEW

VRTX announced that it has signed a share purchase agreement to acquire ViroChem Pharma. Acquisition is structured as combination of cash and stock, comprising of $100m in cash and 9.9m shares of common stock.

FINANCIAL DATA

A. Key Data From Call 1. Transaction value = $100m in cash and 9.9m shares of common stock.

PRESENTATION SUMMARY

S1. Transaction Overview (M.P.) 1. Highlights: 1. Announced that VRTX has signed a share purchase agreement to acquire ViroChem Pharma. 1. Acquisition will add two HCV polymerase inhibitors to VRTX's [telaprevir] HCV development portfolio. 2. Strategic Rationale of Transaction: 1. It further enhances VRTX development portfolio with potential for industry leading position in development of STAT-C combination therapy. 2. Creates possibility to combine telaprevir with promising HCV polymerase inhibitors and potentially further advance HCV patient care. 3. HCV assets Co. has acquired includes: 1. VCH-222, non-nucleoside polymerase inhibitors that has shown thus far unprecedented antiviral activity for polymerase inhibitors in early clinical trial. 2. [VCH-759], shows substantial plasma HCV RNA reduction at end of ten days in Phase Ib trial. 1. Co.'s plan is to initiate first combination study of telaprevir with one of aforementioned compounds as early as 4Q of this year. 4. Transaction is being financed through combination of stock and cash.

S2. Strategic Rationale of Transaction (K.G.) 1. Highlights: 1. Announced strategic transaction to strengthen HCV development portfolio and put Co. in position to potentially lead development of novel STAT-C combinations for hepatitis C. 1. Aim with STAT-C combinations is to enhance profile and extent life cycle of telaprevir based regiment. 1. Potentially adding and protecting significant value around most important late stage asset. 2. After closely evaluating STAT-C landscape for well over a year, to find most attractive and complementary STAT-C agents, announced on 03/03/09 an agreement to add ViroChem Pharma's HCV polymerase inhibitors to VRTX's HCV development portfolio. 1. Transaction is one of Co.'s most important corporate goals for a while now. 2. Key Strategic Goals: 1. Wants to build on telaprevir and potentially enhance profile and life cycle of telaprevir based regiments. 2. Establish foundation for potential HCV franchise and beyond forefront of shaping new STAT-C combinations for patients. 3. Potentially displace pegylated interferon and/or ribavirin in future regimens without compromising on SVR biological cure rates. 4. Elevate hurdles even higher for competition that is trying to follow Co. on telaprevir and now will have to follow with STAT-C combinations. 5. Capitalize on global growth opportunity Co. now has in its expanded HCV development portfolio. 6. With this transaction, believes Co. has significantly strengthened ability to pursue each of these goals outlined in short and long-term. 1. This would not be only collaboration Co. pursue overtime aimed at building and sustaining leading position in HCV, but based on Co.'s assessments, unique attributes of assets it acquired, believes this acquisition could allow Co. to leap ahead once again while keeping eye on growing and protecting latest stage asset as it moves to transform organization into fully integrated pharmaceutical co. 3. Telaprevir: 1. Over past year, has advanced telaprevir's profile in combination with pegylated interferon and ribavirin. 1. Now well into Phase III pivotal trials. 2. Expects to complete telaprevir dosing in pivotal trials over next few months. 2. Telaprevir's potential profile is already shaping up as potentially differentiated and attractive with unprecedented SVR rates in 24-week response guided regiment and being only protease inhibitor to date to show impressive SVR rates across all treatment failure sub groups. 3. Has been well tolerated in majority of patients. 1. Showing potential to be dosed twice daily based on ongoing clinical study evaluating twice vs. three times daily dosing. 4. Has potential to set new and high standard of care in field. 1. This is case irrespective of this transaction. 5. As Co. looks past potential launch of telaprevir, believes there is opportunity for further advancement of combination therapies for this important and highly prevalent disease with powerful STAT-C combination regiments. 1. Through combination of telaprevir and other direct acting antiviral agents. 4. STAT-C: 1. STAT-C, acronym for specifically targeted antiviral therapy for HCV. 1. Combinations of STAT-Cs in particular may have potential to: 1. Further increase in SVR rates, even shorter treatment durations. 2. Provide opportunity to enhance HCV therapy through removal of interferon and ribavirin from regiment. 2. These improvements each one of them and collectively, first with telaprevir regiments and then potentially with telaprevir based STAT-C combinations, could drive significant increases in HCV treatment rates over next decade. 1. This is true if Co. is fortunate to eliminate or significantly reduce need for interferon in regiment. 5. Business Perspective: 1. Acquisition of ViroChem's polymerase compounds potentially moves VRTX beyond first to market telaprevir based co. to: 1. Strategic long-term player in field with potential ability to reshape basis of competition and successful in implementing strategy. 2. Create novel STAT-C combinations that could help Co. build on its foundation. 3. Establish a leading franchise in hepatitis C. 2. Transaction enables to pursue robust life cycle plans for telaprevir that may enhance telaprevir based regiments and positions to drive category expansion beyond initial transformation that telaprevir could bring to market. 1. HCV, disease area with tremendous unmet medical need and potentially one of highest therapeutic growth areas in industry over next 5-10 years. 1. Now in solid position to capitalize on exciting opportunity globally. 3. This is forward-looking clinical and commercial strategy aimed at building multi-drug franchise with what Co. hopes will be best combination regiments for patients in HCV. 1. Beginning to combine telaprevir with complementary STAT-Cs in clinic, starting soon positions telaprevir and VRTX, if Co.'s programs are successful to be leader in multiple stages of future HCV market development and evolution. 4. Given late stage development for telaprevir and data on hand, it is clear that Co. is best positioned to move forward with STAT-C combinations as long as it is diligent and smart about stepwise development work ahead. 1. Holding standards high on criteria Co. used to select STAT-Cs to combine with telaprevir. 6. Other Details: 1. Over past year and half, has reviewed number of collaboration opportunities to combine telaprevir with STAT-Cs at various stages of development. 1. These …