Lynne Brum - VP of Strategic Communications Joshua Boger - President and CEO Ian Smith - SVP and CFO Kurt Graves - EVP, CCO and Head of Strategic Development John Alam - CMO

Geoff Porges - Sanford Bernstein Steve Harr - Morgan Stanley Hari Sambasivam - Merrill Lynch Meg Malloy - Goldman Sachs Annabel Samimy - UBS Yaron Werber - Citigroup Richard Smith - JP Morgan Howard Liang - Leerink Swann and Company Brian Abrahams - CIBC Rachel McMinn - Piper Jaffray

Yes, thank you.

Thanks, Heather. Good afternoon everyone.

This is Lynne Brum, Vice President of Strategic Communications. And welcome everyone to Vertex's second quarter 2007 conference call.

We made significant progress in the first half of 2007 and met major milestones across our product pipeline. In particular, we generated significant data on telaprevir from our global Phase 2 development program, including safety and efficacy data from PROVE 1 and PROVE 2.

This data is enabling us to identify regiments and durations suitable for late stage development. On today's call we will cover second quarter financial results, telaprevir development and pipeline.

Topics will be discussed and expanded upon during today's call by Ian Smith, John Alam, Kurt Graves who joined Vertex earlier this month as Executive Vice President, Chief Commercial Officer and Head of Strategic Development, and our CEO Joshua Boger. Before I turn the call over to Ian, I'll remind you of the following: Information discussed in this conference call includes forward-looking statements which are subject to the risks and uncertainties discussed in detail and in our reports filed with the Securities and 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 second quarter 2007 financial press release, which can be accessed on our website at www.vrtx.com.

Unless otherwise noted, all 2007 expenses and guidance discussed in this call are inclusive of stock-based compensation. As always you can visit vrtx.com to listen to the conference call and view a power point presentation or download a podcast.

Lastly, after our prepared remarks we will accommodate as many questions as time permits. Once the call concludes, our IR team joined by John, Ian and Kurt will be in the office to answer any additional questions you may have.

I’ll turn the call over to Ian.

Thank you, Lynne. My remarks today will be brief, firstly to the second quarter 2007 financial results.

The second quarter non-GAAP loss before certain charges was $95.4 million compared to a 2006 non-GAAP loss of $66 million. The increased loss was due primarily to an increase in development investments of telaprevir, including investments into our commercial supply chain.

Our second quarter GAAP net loss was $117.8 million compared to a second quarter 2006 net loss of $78 million. Total revenues for the second quarter of 2007 were $38 million compared to $30 million in the second quarter in 2006.

This increase in revenue was primarily driven by collaborative R&D revenues and more specifically to contribution from our J&J collaboration. Combining these development-based revenues with continuing HIV product royalties, we expect to continue to receive significant funding that will provide support to our overall R&D investment.

Now to R&D—our total R&D in the expense was $136 million compared to $91 million in the second quarter of 2006. This increase reflects advancement to cost of pipeline, including the investment into the global Phase 2b clinical program of telaprevir, a $19 million investment into the commercial supply chain for telaprevir, the start of the Phase 2 trial of VX-770 patients with cystic fibrosis, and the ongoing Phase 2a study of VX-702 in rheumatoid arthritis.

Our second quarter SG&A expense was $23 million compared to $14 million in the second quarter of 2006. This increase reflects costs associated with building infrastructure that we have undertaken to support a clinical advancement and the commercialization of telaprevir.

Now turning to our balance sheet; we ended the second quarter with approximately $617 million of cash, cash equivalents and marketable securities. And we have $42 million of convertible debt remaining, which is due in September 2007.

In closing, we are re-dating our guidance for 2007 GAAP and non-GAAP loss and our cash, cash equivalents and marketable securities that we originally provided on our year-end 2006 conference call in February 2001. In summary, the substantial clinical progress and investments we have made across our pipeline has been supported by maintaining the strong balance sheet and funding from our R&D collaborations.

I will now turn the call over to John.

Thank you, Ian. I will begin today with telaprevir.

I'll briefly summarize our recent progress and provide perspective on our goals for the remainder of the year. The start of Phase 3 is our top corporate priority, and I know it's of high interest to many of you.

Year-to-date important pieces of data have emerged that have guided our thinking on the Phase 3 trial design, specifically supporting 24 weeks as viable total treatment duration for study in Phase 3. The most important of these supportive data is the post-treatment analysis we reported today for the 12 plus 12 arm in PROVE 1.

This analysis showed a twelve-week post-treatment relapse rate of less than 10% on the patients who completed the 12 weeks of telaprevir-based treatment followed by 12 weeks of pegylated interferon and ribavirin, and were undetectable at the completion of this dosing regimen. With the current therapy of pegylated interferon and ribavirin administered for 48 weeks, relapse rates of 20% to 30% are typical and have been sighted often in the medical literature.

So, as you might expect, with a relapse rate of less than 10% we're very pleased with these data, and this low relapse rate suggests to us that 24 weeks of total therapy with telaprevir regimen is appropriate for further study. Support for continued evaluation of 24-week treatment duration also comes from the PROVE 1 interim data we reported at EASL in April.

These data suggested that it may be possible to clear the HCV virus in some treatment-naïve patients successfully with only 12 weeks of telaprevir-based combination therapy, and represented the first evidence that shorter-duration therapy could potentially be achieved in patients for genotype 1 HCV. Within the PROVE data there was an additional important finding with respect to the slope of viral decline.

In PROVE 1, 80% to 90% of patients receiving telaprevir had a rapid viral response to RVR. Several published Phase of pegylated interferon and ribavirin have demonstrated a strong correlation between rapid viral response and the ability to shorten treatment duration in genotype 1 patients.

Taken together these data, and in particular the recent analysis that demonstrates that low relapse rate in the 12 plus 12 arm in PROVE 1, point overall to an evaluation of 24-week total treatment durations with telaprevir treatment regimens in late stage development. We expect the further data from PROVE 1 and PROVE 2 will be presented at the AASLD meeting this year.

In addition, certain data from PROVE 1 will be presented at ICAAC in September. Next, let me tell you where we are focused in the third quarter.

We told you that we should begin discussions with the FDA in mid-2007. All available data today was recently submitted to the FDA, including post-treatment SVR data from the 24-week telaprevir-based regimens in PROVE 1 and available 12-week data from PROVE 2.

A meeting has been scheduled with the FDA to review these data. In summary, transition to Phase 3 is our top priority and we look forward to updating you further on this exciting program.

Now, to our other development opportunities. While we are currently focusing our research at Vertex on telaprevir, we also have a pipeline of product candidates with opportunities in a number of other serious disease areas.

First, VX-770 is an oral drug we have in development that may address underlying genetic defect and cystic fibrosis due to mutations in the genes and coating the CFTR protein. As planned, in the second quarter we initiated a Phase 2 clinical trial of VX-770 in patients with cystic fibrosis.

The Phase 2a clinical trial is a randomized double-blind, placebo-controlled trial of VX-770 and is designed to evaluate the safety and pharmacokinetics of VX-770 and how it effects certain biomarkers of CFTR protein function. We are targeting enrollment of 36 patients.

We are also advancing VX-702 for the treatment of rheumatoid arthritis. We’re conducting a 12-week Phase 2 clinical trial in approximately 120 patients with rheumatoid arthritis in the background of methotrexate.

Enrollment as we complete, and we expect to update it from the Phase 2a study by the end of the third quarter. The results on the Phase 2a trial and the thorough QTc study, which is also underway, will determine whether we initiate a larger Phase 2 trial on the background of methotrexate.

Finally turning to our collaborated programs, our collaborator Merck is targeting the development of Aurora Kinase inhibitors in a broad range of cancers and is currently evaluating a lead candidate MK-0457 or VX-680 in a large Phase 2 trial in treatment-resistant leukemia. In terms of our collaboration with GSK, under-development and commercialization of novel subtype sodium channel modulator, GSK has recently discontinued the preclinical development of VX-409 for the treatment of pain.

In its place GSK selected a backup compound for development. We look forward to continuing to update you on data coming out of our programs throughout the year.

I’ll now hand the call over to Kurt.

Thank you, John, and hello everybody. I am very glad to have the opportunity to be speaking with the investment community on behalf of Vertex.

It's only been a little over a week that I have been onsite in Cambridge, but I wanted to tell you a little bit about myself—why I joined Vertex, and what I will be working on. I joined Vertex from Novartis where I reported to the CEO.

There I was the Global Head of our General Medicines Business and a Chief Marketing Officer for Pharmaceuticals. I was also a member of the Pharmaceutical Executive Committee and I chaired the Global Operating Committee.

So, why did I join Vertex? Well, it's probably obvious to you.

Vertex has a very well-deserved reputation as an innovator in drug discovery and development. I was drawn to the company’s demonstrated commitment to great science, its promising pipeline and its real commitment to innovation and transforming lives with new medicines.

The biggest near-term draw for me obviously is telaprevir. Telaprevir is the kind of opportunity that is truly rare in this industry, and I look forward to working with John and the rest of the team to progress telaprevir to Phase 3 with the FDA’s input and doing everything necessary to prepare the company, prepare the market, and prepare telaprevir for a successful launch.

In addition to building a best-in-class commercial organization around telaprevir, I will also be heading up Strategy Development and our Business Development functions at Vertex. So, that’s a little about me and my role.

I look forward to meeting some of you during your next visit to Vertex or at the investor conference this fall. Joshua, I will now turn it over to you.

Thanks, Kurt and welcome. This has been a quarter of rapid advancement across all aspects of our business.

We are facing new opportunities and we are facing new challenges. The transition to a large international Phase 3 trial for telaprevir will be a major step.

We are taking a pragmatic approach to advancing our clinical program. To that end, we are focused on straightforward dialog with the FDA as we work to reach agreement to start Phase 3.

We are also focused on defining the market opportunity for this compound. We are maturing as an organization.

We gained significant experience conducting telaprevir’s global Phase 2 PROVE program. This is as far as we know the most comprehensive Phase 2 program ever run in HCV, involving approximately 100 centers in the United States and Europe.

We have enrolled more than 1,000 patients, and parallel we are working to secure a supply chain that spans the globe to ensure a robust launch. And we are growing.

We hired two new pharmaceutical leaders to the executive team. You met Kurt Graves, who you just heard from, and we hired Amit Sachdev, who is our Senior Vice President, Public Policy and Government Affairs.

We are on a commercial trajectory and the knowledge and experience they bring to Vertex will be invaluable as the company advances. In addition, our Board recently promoted Lisa Kelly to Senior Vice President of Human Resources and appointed her to our executive team.

Her leadership and impact across the business, including employer relations and recruiting, will be critical as we advance. We are building the company on telaprevir.

We are also an innovator in drug discovery. We have other molecules in development to provide opportunities for us to build a pharmaceutical company.

The rest of our pipeline is progressing as we further reduced risk in the telaprevir development program. So, stay tuned for more of the Vertex story.

It’s a very busy time for us and I thank you for listening. Lynne, back to you.

Thank you, Joshua. Now, we will take questions.

Heather?

Thanks very much for taking my question, and I appreciate the data here. So, I guess I will ask the obvious question which is what’s the denominator?

You told us that less than 10% of patients are relapsed. Patients who reach end of treatment are detectable or relapsing.

But, can you help us go from a 79 patients in arm C who were actually enrolled through the 11% of patients who dropout in the first 12 weeks. Give us a sense of how many dropouts in the second 12 weeks, how many withdrawal from protocols?

And then what sort of breakthrough rights you are seeing, so we can stop trying to understand what we can work towards these real SVR rates. Thanks.

Thanks Geoff for the question. So, I can’t give you the specific numbers, because as we have said from the beginning of the year in terms of specific data from the PROVE trails, because of the state of development, because of where we are and the scope of the studies.

The specific data and the numbers we are going to be presenting at various scientific conferences. In particular, we pointed to with PROVE 1 and PROVE 2 that the majority of the data would be presented at AASLD.

The objective of this release was really to bring you up-to-date in terms where we are from PROVE 1 and PROVE 2, and we’ve come to in terms of the overall our assessment of the duration, and where we are headed in terms of product the profile. I think the low relapsed rate here, which we have sufficient numbers to be confident that we are in that less than 10% range, provides a lot of assurance from our perspective in terms of that and appropriate duration is 24 weeks of treatment.

The second part of the discussion is and which is the first major conclusion from the very low relapsed rate. Again, keep in mind that the relapsed rate after 48 weeks of interferon and ribavirin is 20% to 30%.

So, as we kind of set up the expectations internally for these data, we felt that if we were under 20% than 24 weeks would be in appropriate duration. Obviously, getting to less than 10% is that much more supportive of that concept.

So that’s the first part. That it does support duration.

I think the second part is a, you have to look the sum total of the data the PROVE 1 and PROVE 2, which is where we’re headed in terms of the product profile from an SVR standpoint. And the basis there comes from what we've already reported, which is a very high rate on-treatment response, an 80% to 90% rapid viral response, getting to undetectable within the first month of treatment and overall discontinuation rate or discontinuation rates for adverse events of around 11%.

A low breakthrough rate its 7% overall, but most of that actually happened in the patients who never got to undetectable. The breakthrough rate after patients become undetectable is in fact very low.

It's well under 5% and it's in the range of around 2%. If you take all of that, and when you complete treatment and you are undetectable and you haven’t broken through that the relapsed rate in those patients is very low, it's under 10%, you can come to why it supports the overall notion of being able to increase SVR rate with a treatment duration of 24 weeks.

Now, what I am not going to do is actually calculate the specific number for you, because it is, we put all the information out there to be able to do that. If people want to walk through this specific calculation we are happy to do that after the call.

John, I just walked through it now, and so, if add up what you talked about 11% discontinuation rates to AEs. A couple of percent due to breakthroughs after RVR, 7% of the patients who don’t get to RVR, and then 5% for everything else protocol violators, treatment withdrawals that get to about 25% who dropout prior to getting to end of treatment.

And then I start thinking about the 10% of that number as being the patients who relapse. Is that the right way to think about it?

I think in very rough terms you are absolutely headed it in the right direction. The real conclusion as I think you've come to that the base of case of SVR with a low relapsed rate is we are -- but first of all, again 24 weeks of duration treatment is an appropriate duration.

We don’t necessarily need to go longer than that, because the patients who aren't relapsing giving more interferon and ribavirin don't really necessary do anything for them. So that’s the first conclusion.

Again 24-weeks of treatment duration and then beyond that in terms of where we end up with the ultimate SVR rate it clearly is going to be about in Phase III of optimizing management of side effects and managing discontinuation to getting treatment, getting patients to a full duration of treatment. But from a purely anti-viral standpoint, we have a high response rate, low breakthrough rate, low relapse rate, all of which are very consistent with that we can achieve an increase in SVR rates from where we are today.

Thanks, I will get back in the line.

Okay.

Thank you. Just very quickly, is it fair to assume that since there is also telaprevir which is used between week 12 and 24.

A toxicity or drop out rates couple what you have seen -- what we've seen from peg ribavirin in the past?

Yes, I think, a rough number of with interferon and ribavirin is 3% to 5% discontinuation for every three months on treatment and that's been relatively consistent.

And I just kind of, I don’t want to the turn foresee give guidance for '08 but just given where the company's balance sheet, which is a little less than two year's cash if you use this year's burn rate. Do you expect next year to be in a comparable burn rate or up or down from that level?

It's very difficult to give guidance right now for 2008. Steve as you may expect we need to see where the problems are.

But I think to give you a sense of; I think the question you are really asking is how do we finance the company with sort of significant investment? And the way that I would answer that is that right now we are very strong with $617 million of cash to invest in the program.

We will need more capital before we launch this drug. But our capital will be directed towards building inventory, building commercial infrastructure and launching the drug.

If that’s the need for capital that’s when we will go out and acquire that capital and that's how we will finance the company.

So basically just so, I was just trying to understand, you think you really need more capital prior to beginning a Phase 3 trial?

I don’t want to go out and raise the capital before we actually need it. And the need is about launching this drug, building inventory and building commercial infrastructure.

I think Phase 3 is a good marker for saying we're well on the way to in that course.

Great, thank you.

Hi yes thank you. Two questions John I am just wondering could you give us a bit of sense post EASL have you thought about how you might manage the drop outs whether if they are related to like GI issues or other issues.

Is there a program that you have thought about that might actually help you, reduce the number of drop-outs; that is first issue. Second question I have is in your discussions with the FDA are you talking about non-respondent populations as well or are you going to be primarily talking about the naïve population.

And if you are not talking about the non-responders, I am just wondering at what stage do you bring up that discussion with the FDA in terms of registration?

So I will answer the second question first. This first meeting this quarter will be a exquisite discussion where will be reviewing the data out of PROVE 1 and PROVE 2 which are obviously both studies in treatment naïve patients.

And so where we and so there will be no data out of PROVE 3, which is the treatment failure, study in that discussion. Where we ultimately slot in the non-responder discussion is going to be based on that first discussion and where we otherwise go with the telaprevir development program.

In terms of management of discontinuations, we have what we've learned from the data to at this point are where we're seeing the side effects are in terms of increased overall the nature and the adverse events of side effects that we are seeing or what's consistent with a known about interferon and ribavirin. Where we see a higher incident is in terms of skin events, GI events and some increase in the incidents of anemia.

It's the skin events and the anemia are the once that are driving the higher levels of discontinuation in telaprevir containing arms. I think we have actually understood much better where we are.

With those we have a rash management plan that we had instituted in our current trials, which we are going to continue to modify as we head towards Phase 3. We do also have an anemia management plan, which is built of what's known with ribavirin and interferon.

With a higher level of perspective do keep in mind that our discontinuation rate for adverse events was 11% over 12 weeks. It's about -- after 12 weeks of treatment if you take in all this continuation the overall discontinuation rate is as about 5% higher that still the majority of patients do complete the great majority, it is not in many instances its primarily its a trade off, it's a tolerability question.

And as we come in to it's a benefit risk. If with the data that we are going to be having out of PROVE 1 and PROVE 2.

I think our biggest leverage point in Phase 3 is going to be the bill you'll be able to say to the investigators and to the patients that if you do complete the regimen then there is a potential for benefit and that gives a motivation to stay on and complete the treatment that we didn't have in PROVE 1 and PROVE 2.

Thank you.

Thanks, Hari. The next question please.

Thank you much. I've got two quick ones one is I realize you are about to have your meeting with the FDA, but as you know given over that that have you on track to start in the fourth quarter of this year.

And then secondly in terms of the ribavirin arm planning. Are you planning to discuss potentially in addition to standard of care plus shorter duration treatment with ribavirin?

So in terms of the our target and objective continues to be to initiate Phase 3 before the end of the fourth quarter, exactly the time line and how we get there and the specifics of the process I can't talk to at this point it's really the first day meeting with the FDA will be to review the data that we have generated from PROVE 1 and PROVE 2 to this point and then we'll take it from there. And you have to clarify the second question I didn't quiet get the question Meg?

I am sorry, I was wondering if you would consider at least one arm of the study that would in gender shorter duration of treatment with ribavirin as one means to ameliorate the side-effect issues?

No, we are not in a position to really modify the dosing of ribavirin and interferon. So we would not contemplate that.

Okay, thank you.

Thanks Meg. Next question please.

Hi, really quick question. I know you didn’t answer the number of patients that were included in that replace rate calculation.

But would you be able to give us some color on, how many of those patients who were undetectable had discontinued. They were undetectable and remained undetectable through that period of study.

And did you get a sense of to what extent RVR is correlated to those patients who are undetectable and if you can get those details here will we be able to see some of the set tick act?

So in terms of the number the relapse rate that we are providing is in the patients who complete the 24-week regimen, the 12 plus 12 regimens and were undetectable at the end of that period. So, it’s a different comment I mean you’ll learn more about the outcome in the patients who were early discontinuation at the upcoming scientific meetings.

So as you know, that given the presentation at the EASL, patients can achieve SVR with 12-weeks of treatment, because that was the result that was presented at EASL. And in fact John McHutchison had mentioned in that setting that there were patients who had discontinued even prior to 12-weeks, some of who had achieved an SVR.

But it’s clearly whether or not you get through an SVR and relapse or not is dependent on the duration. When we went from 12 weeks where three out of nine or about a third relapsed, we extend the duration after 24 weeks, we do bring the relapsed rate down to less than 10%, which is the data that we’ve been talking about.

In terms of the second question, I think you will get a full set of results at the various meetings. There will be certain data presented out of PROVE 1 at ICAAC, but I can't speak today as to what specifically would be presented at ICAAC versus at AASLD.

Thanks. Also just a quick question on VX-680, will Merck be having any data at ASH this year?

It’s too early to comment on that.

Okay. Thank you.

Thanks, Annabel.

Yeah, hi. I wanted to follow up John just one several of the previous question.

So, just to make sure we understand it. To recap at the end of 12 weeks of the triple therapy, 70% of patients were undetectable.

And than you're expecting roughly 3% to 5% discontinuation rate just background on peginterferon and ribavirin, plus whatever are the dropouts, the protocol terminations there might be. Do you have any historical data you can share with us as what happened between 12 and 24 weeks under standard of care in term of end the treatment?

I mean if you start 70% I would presume that’s going to go lower over the next 12 weeks. Can you share with us what the background is?

And then the other side of that is of the patients who actually discontinued therapy between 4 and 12 weeks. What would you expect, how many of those might achieve SVR, even though they're discontinued early.

May be based on the Phase 1b data that you've had. I don’t if you're comfortable with that.

No. The second question, I am definitely not comfortable going into that.

I think again, and in terms of the first question I will just come back to again. We put out all of information of where we headed in terms of the data and in terms of I think ultimately the product profile.

I am happy to walk through some of the more detailed, specific questions one-on-one, because it will just be easier to do. In terms of your first question we provided that.

I mean I talked to that earlier. I mean it pretty well know that the discontinuation rate for every quarter, for every three months of treatment with interferon and ribavirin is between 3% to 5%.

And just for astonishment, is there a certain SVR rate in which you would not be willing to go on an IIT basis, in which you are not going to be comfortable moving to Phase 3? Is there some kind of a magic low number that you want to see, irrespective of discontinuation rate or the relapse rate?

No, our decision, again as I said the criteria that we had set up in terms of looking at whether or not a 24-week treatment duration was appropriate to take into Phase 3, which is all the question about duration of treatment. What’s appropriate duration was based on looking at what we know about relapse rates with interferon and ribavirin, which is 20% to 30% after 48 weeks of treatment, which made it that 48 weeks of treatment was considered an appropriate duration for interferon and ribavirin that if we were lower than 20% that 24 weeks was going to be an appropriate duration.

And that was obviously would be a good result. I think being under 10%, we are obviously very pleased with that result, because I think it’s a very strong support that 24 weeks treatment duration would be sufficient.

I think in terms of the question of -- and at this point otherwise where we stand is we are taking all this data, and it is again, it’s all the data, it’s the safety data that we have to this point, the high rate of RVR, the low breakthrough rate and now the very low relapse rate we put all of that information together, we are going to reviewing that with the FDA in a meeting and then based on that moving forward.

And final question and you are comfortable that you are going to mandate or you institute a few protocol changes in the Phase 3 relative to what you have done in Phase 2. And you are comfortable that FDA is going to back you up on that without asking for another sort of abridging Phase 2 study?

I think at this point your assumptions on the Phase III study design should be that there will be a control arm, 48 weeks of interferon and ribavirin and a arm of 12 plus 12. And than beyond that which we have, obviously we have a full set of data support and than beyond that that’s what the discussion with the FDA in terms of the design will be.

Great, thank you.

Thanks, Yaron. Next question please.

Yes good evening. Could you provide a little more detail on the twice daily dosings that you plan to do and when you expect to complete those please?

We are anticipating starting a twice daily dosing study within the second half of this year. We continue to be on track for that.

It’s a simple design rather than the two tablets every eight hours that we have in the current regiments. And that will be the core regiment that will take into Phase 3.

This study will be looking at three tablets twice a day compared to the two tablets every eight hours, in particular looking at antiviral response rates and breakthrough rates over 12 and 24 weeks of treatment. It is a first study.

We are very comfortable as we have said with the treatment regiment that we have today, going out in particular in the 12 plus 12 regiment. We have data now, obviously, with that regiment in large study that we can achieve high response rates and low break through rates.

So, again we are very comfortable with that regiment. This additional study really it’s an exploratory study to see whether we can further improve on that.

And just remind me. You are going with TID in the Phase 3 rather than the BID regiment?

Yes. Our plan would be to go absolutely with a every eight hour regiment in to Phase 3.

And when do you expect to get data given that 12, 24 weeks trail?

Next year.

Okay. Okay, thank you.

Thanks, Richard. Next question please.

Thanks very much. John you've been talking about the relapse rates at the end of 12 weeks a post treatment follow-up.

Do we know that, that is right measure? I guess the greater question is do we know for this drug SVR 12 is very similar to SVR 24?

We have a tremendous amount of data. The kinetics of relapse rate fundamentally shouldn’t be different than, because we are, remember that the tail-end to this therapy and the second half is all interferon and ribavirin.

There is really no reason why the kinetics of relapse should be any different after regiment than with traditional interferon and ribavirin. If anything, when you bring the duration of dosing down from 48 down to 24 weeks of interferon and ribavirin, your relapses occur even earlier.

And what do know is that close 95% of the relapses that occur by 12 weeks of follow-up. So, we are pretty confident that these data will hold up.

Well, obviously that pending. We are obviously following these patients and we will in short have the 24 week follow up as well.

The data we do have to this point is in the 12 week arm out of PROVE 1, the patients that you saw had an SVR 20, and they’ve obviously been followed out to 24 weeks at this point. And all six of the patients who had an SVR, originally 12 have an SVR 24, and all the relapse, the three relapses that occurred, occurred prior to 12 week.

Great, thanks. So, also the prescription for this relapsed rate is for patients who have completed 24 weeks of therapy and who at the end of the treatment.

I assume these all also patients who had RVR?

All most all. Not all.

Not all. But I thought only if they had RVR they could stop treatment.

There were some. There were a small of number of patients who chose to stop at 24 week.

Okay. Great, and there are we, for a consolidated data.

Is it possible from on time line perspective to see data from the PROVE 2 study the 12 plus 12 arm?

If you step away from the specific scientific conferences where what we had said is that SVR 12 data from the 12 week arms from PROVE 2 we would have within that early in the third quarter. And at that point we would obviously have the 24 week end of treatment results from the 12 plus 12 arm in PROVE 2 and then the SVR 12 data would come 12 weeks after that.

Okay so it’s close.

That’s not right.

Okay.

Well, so it's a long way of saying I don’t know whether it will be presented at ASLB or not.

Okay, can I just a quick question on the VX-667. I think the second generation or kinase inhibitor.

Can you talk about a formulation used in the Phase 1 trial?

No, we and Merck have not disclosed specifically how that compound is being administered.

Okay. Thanks very much.

Thank you, Howard. Our next question?

Hi, guys thanks for taking my question. There has been a lot of variability among recent studies both of direct antiviral in third generation and interferon.

How well interferon behaves both in the short term and with a little treatment to (inaudible) study recently. They show us I think about a 60% rate of undetectable rate of week 12 whereas you guys have seen 40% every 12 improved studies.

So I am just wondering, how do you synthesize all this data, in terms of shaping your expectations for the efficacy of the control arm in the Phase 3. And can you give us some sense of what those expectations might be?

Thanks.

I can’t actually; I’m not going to speak to any of the other specific results. The control group in this study to this point has actually I think been very consistent with what you would expect for genotype-1 HCV population in particular in a US patient population.

There is no, I can't talk to any specific other study. In our study it’s been very, very consistent and we have clearly shown, whether it’s at week four or at week 12 the RVR rates and the week 12 results are very much in line with the various registration trials and other trials with Pegasus in particular and Pegasus in [Cope] I guess that have been reported.

So I think we are very comfortable with what we are seeing and the patient population that we have enrolled in to PROVE 1 and in fact in the PROVE 2. In terms of the Phase 3 trials our expectations of SVR rate ultimately there is between 40% and 50%.

If you have a balanced patient population between the US and Europe what tends to happen is that if you have a majority of patients at the US, the response is going to be at the lower end of that. If the majority of the patients are from Europe the response rate is in the higher and range of the 40% to 50% But I think we can, we have all the information it’s all available to plan the Phase study appropriately

If you remind us what's on the taxable rates you might expect after 24 weeks of standard care alone in this population?

Around 60%.

Right, thanks.

The whole trick there I mean the whole comment with interferon and ribavirin is that you can get patient to undetectable in the blood, but you can't get them to an SVR unless you go out 48 weeks of treatment. Even with that of the patient who are undetectable at the end of 48 weeks of treatment 20% to 30% are still relapsing.

Makes sense, thanks.

Okay.

Thanks very much. I wanted to ask a couple of questions on PROVE 3.

How are you thinking about the non- ribavirin arm for PROVE 3 to skip in the recent findings in PROVE 2? And I was wondering if you could just talk about the criteria for patient continuing on in the PROVE 3 trial?

So the PROVE 3 trial has three telaprevir containing arms, two of which do contain telaprevir, interferon and ribavirin and yes there is one arm that has 24-weeks of telaprevir and interferon without ribavirin. There were as we look at the PROVE 2 data.

Yes in terms of treatment-naïve it clearly supports having ribavirin in the treatment naïve population. At the same time the level of antiviral response in the no ribavirin arm was still significantly higher than the level of response in the standard of care arm.

I think there is clear potential for that arm. Some of the specific side effects that we have seen at a higher incidence with teleprevir and interferon and ribavirin.

Our comparison of care are lowered in incidence in without ribavirin and the discontinuation rate was lower so there may be certain contacts where the no ribavirin arm, their overall benefit risk ratio may still support that no ribavirin arm. And I think the treatment failure context where the benefit risk ratio may ultimately be very different then in a treatment naïve population still warrants the studying of that arm.

Then PROVE 3 as PROVE 1 and PROVE 2 there are specific [dialogic] failure stopping rules that have been built in to protect the patients from the development of higher levels of resistance at the point that they have clearly shown an inability to either become undetectable or remain undetectable. So there are specific viral stopping rules in that study both for the controlled arm and the telaprevir containing arms that are specific to PROVE 3, and I can't comment on the specifics of that.

Okay, and one last question PROVE 2. Can you say how early in treatment the absence of ribavirin the non-ribavirin arm when you compare that to the ribavirin arm?

At what point did that certain materially impact into antiviral outcomes with it relatively early or really latter in the 12-week regimen?

Let's talk about that after the data are presented it would be much easier to do.

Okay, alright thanks.

Thank you Rachel and thank you everyone for joining us tonight in the Vertex second quarter conference call. I am going to end the call now and invite everyone who has further follow up questions to please contact us back at the office.

Thanks a lot tonight for joining us tonight