Lynne Brum, Vice President of Strategic Communications Ian Smith, Executive Vice President, Chief Financial Officer John Alam, M.D. Executive Vice President, Medicinal Product Development, Chief Medical Officer Joshua Boger, Ph.D., Chairman, President, Chief Executive Officer Victor Hartmann, M.D., Executive Vice President, Strategic and Corporate Development

Jeffrey Forges, Sanford Bernstein Jason Zhang, Prudential Equity Group Rachel McMinn, Piper Jaffray & Co Hari Sambasivam, Merrill Lynch Meg Malloy, Goldman Sachs Joe Pantginis, Canaccord Adams John Watkinson(?), Banc of America Securities Annabel Samimy, UBS Warburg Steve Harr, Morgan Stanley George Fulop of Needham & Company Howard Liang, Leerink Swann

Operator instructions.: Lynne Brum, Vice President of Strategic Communications: Thank you, Tashiba. Good afternoon everyone, this is Lynne Brum, Vice President of Strategic Communications at Vertex. On behalf of the senior management team, I thank everyone for joining us today. As we get started, I’ll remind you that information discussed on this conference call may consist of forward-looking statements, and as such are subject to the risks or uncertainties discussed in detail in our reports filed for the SEC, including our 10-K. During this call we’ll discuss financial results using both GAAP and non-GAAP financial measures. Additional information regarding our use of non-GAAP financial measures is available in our Q1 2006 financial press release. At this time, Vertex’s Q1 2006 financial press release has been issues. Please visit our website at www.vrtx.com to listen to the conference call and view a powerpoint presentation via the Internet, or download a podcast MP3 file. A replay of the conference will be available via the Internet until end of day May 9th. Today on the call, Vertex’s CFO Ian Smith will review our financial results. Then he will turn the call over to John Alam, Vertex’s Chief Medical Officer, who will provide a clinical update, including development plans for investigational oral HCV protease inhibitor, VX-950. Dr. Joshua Boger, Vertex’s Chairman, President and CEO, will then provide his perspective on VX-950 and other clinical advances in 2006 in the context of Vertex’s long-term goals. I’d like to remind you that on Thursday and Saturday of this week, researchers will present VX-950 data at EASL. For those of you attending EASL in Vienna, we look forward to seeing you at our cocktail reception on Saturday evening. Lastly, before I turn the call over to Ian, I want to mention that our 2005 Annual Report and proxy materials have been mailed to shareholders. There are two proxy proposals. Proposal number one is to reelect three directors, proposal number two is to approve the Vertex Pharmaceuticals 2006 stock and option plan. We’re asking shareholders to register their votes. Our annual meeting is scheduled for May 11th. If you have any questions about the proxy proposals or other matters, please contact Vertex’s IR group. I’ll now turn the call over to Ian. Ian Smith, Executive Vice President, Chief Financial Officer: Thanks, Lynne. We have completed a quarter that is characterized by increased revenues, responded to an increase in development investment and we ended the quarter with a strong balance sheet to support our forward business investment. The Q1 loss before charges for stock compensation and restructuring was $42.2 million or $0.39 per share, compared to a prior year loss before charges of $41.8 million or $0.53 per share. Our revenue increased by approximately $10 million, principally driven by a milestone achievement for the advancement by Merck of VX-680 into the Phase II oncology program. The 2006 R&D investment increased by approximately $18 million, driven by increased development investment to support proprietary programs and $6.4 million of stock based compensation. Our Q1 2006 GAAP net loss was $50.1 million, or $0.48 per share, compared to the prior year net loss of $44.7 million or $0.56 per share. Total revenues for Q1 were $39.1 million compared to $28.6 million in the prior year. A $10 million milestone payment from Merck, of which we recognized $8.8 million in revenue in Q1, was the major contributor to revenue growth. During the remainder of 2006 we expect the revenues from HIV royalties and existing collaborations, including milestone achievements under those collaborations, will continue to drive revenue. Additionally, new collaborations will continue to drive revenue growth in particular to those that are focused on our later-stage proprietary programs. Now to the R&D investment. Our Q1 2006 R&S investment, including stock based compensation, was $75.2 million compared to $57.4 million in Q1 2005. This increase stems, (and it will reflect?) increased development investment to prepare for and conduct later-stage clinical trials (inaudible) hepatitis C and rheumatoid arthritis and the preparation of our first clinical trial with VX-770, which is focused on cystic fibrosis. Additionally, we have made investments into manufacturing and supply chain management of VX-950. These investments have already provided great returns by producing significant quantities of drug. We expect this broad clinical manufacturing investment to increase as we commence with further late-stage and larger studies in the area of hepatitis C. Consistent with our business model, we expect continuing revenue growth to fund a portion of this investment. From a research perspective, we’ve maintained our investment at a level that is relatively consistent with 2005, and at this time such investment continues to be significantly funded by research-based collaborations. Our SG&A expense for 2006 was $12.6 million. This expense is relatively consistent with the prior year, when stock based compensation is excluded. Now to our balance sheet. We ended Q1 2006 with approximately $380 million in cash, cash equivalents and available for sale securities, which compares to approximately $410 million at year end 2005. Additionally, we have $42.1 million in convertible debt, due 2007, and approximately $118 million of convertible debt due in 2011. The 2011 debt has a conversion price of $14.94 and is callable after February 2007. Now to our full year guidance. We are reiterating our 2006 full year guidance, which we originally provided on our February 7th, 2006 conference call. We continue to expect our full year loss, excluding stock based compensation expenses and restructuring charges to be in the range of $165-185 million. We expect full year 2006 GAAP loss to be in the range of $205-225 million. This GAAP loss is expected to include approximately $34 million of stock based compensation expense and approximately $6 million of restructuring charges. In summary, 2006 is a year in which we are increasing our development investment to realize the potential of later-stage compounds. Our financial profile and our business model, which have been supported by collaborations, and which we expect to continue to be supported by collaborations, provide a platform for increased investment. This investment will position us to capitalize on our clinical successes and prepare expeditiously to advance our compounds, including and especially VX-950 in hepatitis C. I will now turn the call over to John. John Alam, M.D. Executive Vice President, Medicinal Product Development, Chief Medical Officer: Thanks, Ian. I’m pleased to provide an update today on the VX-950 development plans, as well as discuss other near-term milestones for compounds in Vertex’s pipeline. From where we are today in the development of VX-950, there are really three key questions that we need to address in order to understand more precisely how VX-950 could change the standard of care and transform HCV therapy. These questions are: number one, what is the optimal SVR rate that we can achieve with VX-950 in combination with the currently available therapies? Second, what is the optimal treatment duration for VX-950-based therapy in treatment naïve and treatment-failure patients? And third, what is the role of ribavirin in VX-950-based therapy? In Phase II, our intention is to evaluate viral response in a rigorous set of studies that will answer these key questions about the clinical paradigm for VX-950 and thus reduce program risk in a short period of time. While I am not able at this point in time to describe to you all the specifics of all the individual studies, I can provide you with important details of the program and of the data we expect to gain within the next 9-12 months. This program reflects extensive and ongoing discussions with regulatory authorities and investigators from around the world. We’re very happy with the progress we have made in designing and initiating this program. When the Phase II trials are complete, we will have SVR information from different durations of VX-950 in more than 500 HCV patients worldwide, both treatment naïve and treatment failure patients, providing a robust assessment of the clinical safety profile of VX-950. We will also have information on the right type and duration of concomitant therapy with pegylated interferon and/or ribavirin. With this global Phase II program we are creating multiple avenues for clinical success and more than one path to our NDA. We remain on track to initiate Phase III in 2007 and we maintain our timeline for a 2008 NDA filing. As part of our global program, we expect to evaluate the potential to achieve SVR in treatment naïve patients with a 12-week regimen of VX-950 in combination with pegylated interferon, both with and without ribavirin, followed by no additional therapy. These specific study arms may help to establish 12 weeks as a sufficient treatment duration to achieve high rates in SVR, and also help to understand the role that ribavirin may play in VX-950-based combination therapy. In conjunction with, or in parallel with, the study arms I just described, we also expect to evaluate the potential to achieve the SVR in treatment-naïve patients, with a 12-week regimen of VX-950 in combination with pegylated interferon and ribavirin followed by either an additional 12 or 36 weeks of pegylated interferon and ribavirin. While we believe that 12 weeks of treatment of the combination will be sufficient, these additional specific study arms will help us to understand what additional therapy with pegylated interferon and ribavirin will produce even higher rates of SVR. Should extensions of the 12-week VX-950 treatment with additional pegylated interferon and ribavirin prove to give higher SVR rates, this may signal the need to explore longer VX-950 dosing in follow-up studies in naïve patients. Regardless, we’ll also explore 24 weeks of VX-950 dosing as part of a Phase II program. Specifically, we plan to conduct a major study that will evaluate up to 24 weeks of VX-950 dosing in combination with pegylated interferon in patients who have previously failed pegylated interferon and ribavirin. The planned Q4 start of this Phase II study in treatment failures will be supported by results from six month non-critical toxicology studies which we initiated in March in two species. To date, all clinical safety and non-critical toxicology data that we have generated have been fully supportive of advancing VX-950 in clinical development. We have designed the Phase II program to be robust in terms of the number of patients we will enroll, and the scientific rigor with which we seek to answer key questions on VX-950’s role in future HCV therapy. We expect that the Phase II clinical program will enroll more than 500 patients and will provide the adequately controlled comparisons with standard therapy. The global Phase II program will generate a large amount of safety and efficacy data and by answering so many key questions, will reduce a large amount of risk in a relatively short period of time. Within 9-12 months, we expect begin to get a clear picture of VX-950’s efficacy and safety profile, and therefore its commercial potential. Specifically, within the first quarter of 2007 we anticipate obtaining the first 12-week post treatment information from patients who received 12 weeks of VX-950 combination therapy, and from this gain confidence in the ability of VX-950 to produce SVR, which is the goal of HCV therapy. In addition, by that time we anticipate having treated more than 500 HCV patients with VX-950. With these data, we’ll remain on track to initiate Phase III in 2007, and maintain our timeline for a 2008 NDA. Earlier this year, we said that we expected to be able to get the first post treatment data by the end of 2006. We now believe that we will get this information beginning in early 2007. This is not a delay of the VX-950 program, there has been no change in our NDA timeline, but is a result of our significantly expanding the program. With the expanded Phase II program we have outlined today, we believe that we are reducing risk and creating multiple paths to clinical success. More patients, more trials, more clinical questions addressed earlier. We are in discussions with regulatory authorities regarding the design of the proposed studies, and we expect to be able to provide more information on specific studies in the next couple of weeks. In addition to the Phase II program I have outlined above, I want to address a specific question that has emerged about the potential to dose VX-950 alongside ritonavir. In the second half of 2006, we expect to being a multi-dose drug/drug interaction study of VX-950 and low-dose ritonavir. We are aware of the potential to boost blood levels of VX-950 with ritonavir, and in fact we have already conducted a single-dose drug/drug interaction study of healthy volunteers to being to evaluate this hypothesis. Although the results of the single-dose study do suggest that co-dosing with low-dose ritonavir might have a future role in some HCV patient populations, these results do not otherwise substantially change our clinical plans as we have outlined. Now, I would like to address the manufacturing program for VX-950. We began increasing our manufacturing capability in mid-2005, based on our anticipation of a broad Phase II program and rapid clinical advancement of VX-950. With these activities, manufacturing scale-up is well in hand. To date, we have made more than 400kg of drug substance, almost 900lbs of drug and more than 230kg of tablets, almost 500lbs of tablets for the Phase II studies I have just described. The current scale of manufacture is approximately 70kg batch size for drug substance and 50kg batch size for drug product. We have begun manufacturing VX-950 drug substance for table registration batches for Phase III studies. We know how to make this molecule on a large scale. But by mid-year in aggregate we will have produced approximately one ton of drug substance and more than two tons by year end. In addition, we have selected our commercial manufacturers for drug substance and drug product. The current batches of drug substance are being manufactured by the commercial supplier and (technology trends?) which are the commercial supplier of VX-950 tablets is underway. We’ve established a supply chain that we believe will support future clinical and commercial demand for VX-950. I’ll now turn to other compounds in the pipeline. First our oral anti-cytokine for rheumatoid arthritis, VX-702. Last month we announced we announced that in the 350 patient Phase II VeRA Study, VX-702 demonstrated clear effects on the signs and symptoms of RA, and was well-tolerated. We believe that data from the study provides strong support for our plans to move forward in clinical development. We are planning to begin a Phase II study to evaluate VX-702 in combination with methotrexate. In RA patients that will be at least three months, it could be six months in duration. This study will profile VX-702 in the treatment paradigm that is now routine for RA therapy. We look forward to presenting the results of the VeRA study at a medical conference and further defining the profile of this oral anti-cytokine. Turning to our cystic fibrosis program, in March we entered into a new collaboration with a Cystic Fibrosis Foundation therapeutic to accelerate the clinical development of our first CF compound, VX-770. As part of this agreement, we will receive approximately $13.3 million in development support through to the end of 2007. We have opened an IND and are on track to initiate clinical development of VX-770 in Q2 2006. The first clinical study will be conducted in healthy volunteers, then we expect to progress the clinical studies in patients with CF by the end of the year. Finally, I’d like to discuss our VX-680 oncology development program, which is continuing to rapidly progress through the clinic, including the start of Phase II development which we announced earlier this month. The start of Phase II development was marked by the enrolment of patients with advanced colorectal cancer. The open-label non-randomized study will enroll approximately 20 patients, and is being conducted at major cancer treatment centers in the U.S. Other ongoing clinical studies include a Phase I study of immunologic cancers, and a Phase I study of VX-680 administered to patients in solid tumors, refractory to prior chemotherapy treatment. Looking ahead, we expect Merck to initiate soon a second Phase II clinical study of VX-680, this one in patients with advanced lung cancer. We believe that the overall clinical development program demonstrates our efforts to establish the role of VX-680 in a broad range of solid tumors and immunologic cancers. In June in Atlanta, researchers will present the first clinical data for VX-680 in solid tumors at ASCO. I look forward to continuing to update you on our clinical progress throughout the year. I will now turn the call over to Josh. Joshua Boger, Ph.D., Chairman, President, Chief Executive Officer: Thanks, John. As you heard, there is a lot going on in Vertex right now, from all aspects of the business. With continued execution, we’ll have important news flow and data throughout the rest of the year, positioning us to enter 2007 with an advanced pipeline of potentially transformational products. If you take VX-950 as an example, the advances of just the past year are stunning. In the spring of 2005 we began to share with you the first very exciting clinical data for VX-950. Since that time, we have completed two additional clinical trials, the results of which have illuminated the opportunity to redefine the treatment of a serious and highly prevalent disease. We expect that by early 2007, approximately 500 patients will have been dosed with VX-950. The studies we have described today plus additional studies we have planned, provide us with multiple avenues to create value with VX-950. There are more than 3 million patients in the United States with chronic hepatitis C. We estimate there are about 800,000 of those patients who are already diagnosed and are candidates for VX-950-based treatment regimens. VX-950 is our highest priority. We believe it is a tremendous commercial opportunity for VX-950, we have an obligation to development VX-950 as quickly as possible. Late-stage development of VX-950 is a significant undertaking. Vertex has the resources, talent and infrastructure to succeed and we are committed to doing so for patients, physicians and Vertex shareholders. In addition to VX-950, our pipeline of Vertex-led and collaborator-led products continues to advance. We expect to gain clinical data this year that will help us to define the potential of drugs targeting large medical areas, such as rheumatoid arthritis, cystic fibrosis, cancer, HIV and pain. Stay tuned for data from these programs throughout the year. Lynne, back to you.

Thank you Joshua. Tashiba, we are ready for our questions.

Operator instructions.: Q – Jeffrey Forges, Sanford Bernstein: Thanks very much for taking the question. Just a couple of follow-on questions on the 950 program, it’s been very helpful. Could you give us a little sense, John, of the control arm, what you expect to have in the Phase II study and then where that might lead to in Phase III? Specifically, could you address whether we need to wait 18 months after the last patient has entered the study to establish the benefit based on 12 months of standard care plus six months to a CR? Then secondly, whether you’ve had any discussions yet with the regulators about pulling back the SVR point from six months to three months based on the more sensitive assay? That would be helpful, thanks. A – John Alam: Thanks, Jeff. With regard to proceeding to Phase III, as we’ve talked about, our plan for moving to Phase III will be based on the follow up data on the VX-950 specific arms. The primary reason to have the control arm in the Phase II study in treatment naïves is to look at the safety comparison, specifically within the first three months of dosing, of a combination of VX-950, pegylated interferon plus or minus ribavirin is relative to pegylated interferon and ribavirin. We will follow out the control arm and we will have the SVR comparison to finish out the study and have the full result, bt the driver and the decision to move into Phase III will be based on the safety comparison to the control arm, and then the follow up data and the SVR data within the VX-950 containing arms. In terms of defining SVR, by three months or six months of follow up, as we have said our expectation is for registration, that the endpoint will be six months of follow-up. That’s the precedent that’s been stated and we don’t believe that that will change, and our plans for NDA in 2008 does not contemplate anything otherwise for the registration endpoint. Q – Jeffrey Forges, Sanford Bernstein: But, John, just to follow up, do the plans for filing in 2008 incorporate an 18-month SVR endpoint for the control arm then in the Phase III, because presumably the control arm is relatively what it needs to be? A – John Alam: Could you just clarify that question a little bit more? For Phase III, the 2008 NDA filing does not depend on or does not assume that the control arm data in Phase III, if there is a control arm in Phase III, would include all the follow up data in that arm for the filing of the NDA. We will have all of the SVR data from Phase II including in the control arm before the end of 2007. Q – Jeffrey Forges, Sanford Bernstein: Do the regulators endorse that approach, you not having that control arm? A – John Alam: We anticipate having the discussion of what our Phase III program would look like and the specifics of the endpoint and the plans through to NDA with the FDA at an end of phase II meeting which we would anticipate early in 2007, based on the first follow up data from the Phase II study in the treatment naïve patients. Jeffrey Forges, Sanford Bernstein: OK. Thanks very much.

Can we have our next question please?

Your next question comes from Jason Zhang of Prudential Equity. Q - Jason Zhang, Prudential Equity Group: Thanks. Two questions for John. Number one, I know you guys when you try to design your trial you look carefully at the clinical and the biological evidence for your design. The question I have is what biological and clinical data you have to support your new design, which is VX-950 for 12 weeks, put in combination with pegylated interferon and ribavirin, but then follow up with either 12 weeks or 36 weeks of pegylated interferon and ribavirin. What benefit would you gain from that? And what clinical data do you have to support that? A – John Alam: Thanks, Jason. You had two questions, do you want me to answer that question now? Q - Jason Zhang, Prudential Equity Group: OK, the second question is the decision that you have to make to go into Phase III, because if I just do my calculations here, the SVR data in the first quarter of next year will be only from the VX-950 12-week arm. You wouldn’t have SVR data from the next two or three arms which is VX-950 12 weeks, either 12 weeks or 36 weeks (inaudible). So I guess your decision would be just based on SVR data from your VX-950 12-week study no matter what data you have from the next few arms? Is that fair? A – John Alam: Actually, the answers to both questions are related in many ways. Because the core of the program for the treatment naïve population is in fact the 12-week treatment arm. We believe that all of the clinical and biological evidence that is available with the VX-950 as well as with pegylated interferon and ribavirin, particularly in patients who achieve rapid viral response and what that means in terms of efficacy or response rates, and the ability to shorten treatment durations. Putting all of that together, we continue to believe that in fact 12 weeks of treatment with pegylated interferon plus or minus ribavirin will be sufficient to induce a high rate of SVR in patients who are treatment naïve. So, on that basis, that is why in fact we believe that we will be – with compelling data in that arm we would be able to move into Phase III. The additional treatment arms are – in certain ways, the rationales are somewhat different. What they provide is an additional assurance that if, in fact, it is a longer duration of the pegylated interferon and ribavirin to stimulate the immune system more than the 12 weeks that we have in the core arm of the study, if that leads to a higher SVR rate, we find that out. That will help us design any future clinical studies. But again, we believe that the 12 weeks of treatment will be sufficient without the additional 12 weeks of pegylated interferon and ribavirin. The longer duration arm is really to address a specific question that may be required in certain quarters, given what we know that the current treatment paradigm is, of 48 weeks of pegylated interferon and ribavirin, what would happen if you simply added VX-950 in the initial phases for the first three months? Would you get a higher SVR response rate or not? It answers a question that as I said I think in certain quarters is being asked, and we may need to address and answer in our development program, so we’re trying to get it out of the way early in the program so it doesn’t really hold up the development path later on. Q - Jason Zhang, Prudential Equity Group: OK, so I guess to really make that decision, you have an SVR rate I guess in your mind, which you would consider sufficient to convince the FDA to initiate a Phase III. I don’t know whether it’s fair to ask you what that particular SVR rate – what you consider sufficient, going forward? A – John Alam: Jason, you are correct, we do have a rate in mind that we consider sufficient to go forward. Q - Jason Zhang, Prudential Equity Group: Are you in a position to disclose that? A – John Alam: At this time, I’m not. Jason Zhang, Prudential Equity Group: OK. Thanks.

Thank you, Jason. May we have our next question please?

Your next question comes from Rachel McMinn, of Piper Jaffray. Q - Rachel McMinn, Piper Jaffray & Co: Yes. I’m just wondering can you actually go through the specifics here on the trial design? One is it sounds like the FDA actually hasn’t approved the protocol. Is there anything in particular that’s holding up the protocol? Can you just confirm that it sounds like you’re going to have two 12-week arms with and without ribavirin, and a 24-week arm and then a 36-week arm, is that the way we should think about the study? A – John Alam: We are on track to initiate the large Phase II trial in treatment naïve patients within Q2. As I said in my prepared remarks, we do expect to have a 12-week treatment arm within our Phase II clinical trials. Again, all of that is on track. But beyond that, I can’t actually go into any of the specifics of the details. As I said, also in my call, discussions with the regulatory authorities are ongoing and we do expect to provide further specific details of the study design and study designs in the next couple of weeks. Q - Rachel McMinn, Piper Jaffray & Co: Then just two quick questions. Is the 500 patients that you’re talking about here, is that specifically in naïve, or does that include the non-responder trial? A – John Alam: It includes the trial in patients who have previously failed pegylated interferon and ribavirin. Q - Rachel McMinn, Piper Jaffray & Co: Then with the ritonavir comments that you made, you’ve already done this initial dosing profile, or this initial dosing study. Do you have a sense now whether or not you would have the potential to lower the dosing frequency of VX-950 or even potentially lower the dose? How do you think that’s going to impact your Phase III design? A – John Alam: Yes we have completed a single-dose drug/drug interaction, a pharmacokinetic interaction study. We do have that data and we do have a sense of the level of impact in terms of the dosing of VX-950 that ritonavir would have. We will need to confirm that in a multiple dose study, because the interactions do change somewhat with ritonavir going from single dose to multiple dose. We plan on conducting that study as we said in the second half of this year, but we do have a good handle at this point of, in the single dose, the level of interaction. The results are such that we don’t think – it doesn’t impact our clinical plan in our path to NDA as we have outlined substantially. Q - Rachel McMinn, Piper Jaffray & Co: So should we take that to mean that you’re not going to be developing VX-950 with ritonavir in the current Phase II plan that you have? A – John Alam: Absolutely not. It’s more just one of the risks of substantial dose changes that might be applied with ritonavir. It’s a comment with regards that, we have a handle of what level of impact there would be, and the level of impact is such that they don’t substantially change the strategy that we’re taking in our current clinical plan. I think, Joshua, you may want to make a comment? A - Joshua Boger: Maybe we’re answering a question that you and others aren’t asking, which is always difficult. One of the questions we certainly had was if ritonavir combination has a large enough effect on VX-950, would it potentially require you to restart your whole development program based upon that? What we told you today is the answer to that is no. There may be some upside potential that will be added on to the program, but what we’re commenting today on is first of all, we’re on top of this potential, we have it built into our Phase II, and it doesn’t in a negative way affect our NDA plan. Rachel McMinn, Piper Jaffray & Co: OK, that’s very helpful. Thank you.

Thank you, Rachel.

Your next question comes from Hari Sambasivam from Merrill Lynch. Q - Hari Sambasivam, Merrill Lynch: Yes, thank you. A question for John. It’s actually on VX-702. You’re going to be starting your combination study with methotrexate very shortly. I’m just wondering, in terms of a larger picture question here, could you give us a sense of where you think VX-702 might fit? Just in terms of differentiation versus other available DMARD agents that are taken orally, whether is be sulfasalazine or hydroxychloroquine or something like that? And how would you go – you know, I’m just trying to figure out as to what could you demonstrate that could be different from those agents, and what else are you planning to show with this particular Phase II? A – John Alam: Thanks, Hari. Our overall profile, or what we’re targeting for VX-702, is again in combination with methotrexate because that is where the primary opportunity in rheumatoid arthritis stands today, and that is a treatment paradigm that’s most commonly used both with oral drugs and with the injectable anti-TNS(?) agents. What this next trial is going to address is the level of both the clinical safety profile and the efficacy as measured on signs and symptoms in this specific treatment paradigm of use in combination with methotrexate. There is a, as you know – the movement in the field has been increasingly to move away from using methotrexate either as monotherapy or with the weaker DMARDs such as sulfasalazine and plaquenil. Movement is really toward adding anti-cytokine therapies, because both in terms of tolerability and efficacy, the anti-cytokine therapies have shown significant improvement there. What we don’t have is an anti-cytokine therapy that’s also an oral agent, and that’s the opportunity and the potential for VX-702, is to bring the anti-cytokine paradigm on to a combination with methotrexate, but do it in an all-oral combination. Hari Sambasivam, Merrill Lynch: Thank you.

Your next question comes from Meg Malloy of Goldman Sachs. Q – Meg Malloy, Goldman Sachs: Thanks very much. This is a question for John. I just want to make sure I understood what you said with respect to the six months tops, I think you said you’d have on VX-950 in Q4. Then I thought I heard you say that as part of the Phase II program, you will assess the possibility of looking at a longer duration of treatment with VX-950. I was wondering if you could elaborate on how you might assess that? A – John Alam: There are two specific things. One is that the six month toxicology studies have started, and they started in March. A separate statement was that we anticipate starting the Phase II study in treatment failures in Q4 of this year, and that study would likely evaluate treatment durations of VX-950 of up to six months duration. Then the six month toxicology studies would obviously support going up to six months duration in that additional study. Q – Meg Malloy, Goldman Sachs: OK great. So it makes sense, I guess, the first place you might look at longer duration treatment would be in treatment failures, and then you’ll have the data to support if you wanted to study it in naïves as well, right? A – John Alam: You’re absolutely right, Meg. Meg Malloy, Goldman Sachs: OK, great. Thank you.

Your next question comes from Joe Pantginis of Canaccord Adams. Q - Joe Pantginis, Canaccord Adams: Hi guys, thanks for taking the call. VX-702, can you give us your views or perception on the 702 data, especially regarding the very mixed responses on the street surrounding the ACR20s that you saw, though this was only a monotherapy study for three months and you did hit your endpoint? Thanks a lot.

Thanks for your question, Joe. A – John Alam: I’ll take a crack at that, and it’s interesting the way you phrased your question, we all smiled around the table. It’s a meta-question you asked, asking us to comment on the way the three of us understood the data. Just as a matter of record, going into the study, several months leading up to the study I certainly said over and over again that we were looking for statistically significant ACR20 scores between 40-60%, and I said in the last few months before data was available that I didn’t really care what the number was between 40-60%, given that it was a three month study, and you’re on a kinetic curve of expected increasing benefit with time, and three months isn’t long enough. Well, we got a positive result, we got a statistically significant on clinical effect, and I think we hit the ball out of the park in the biggest perceived risk in the whole p38 area, which is on liver toxicity, where clearly we didn’t have a toxic signal. That, I think frankly, should have been perceived as a stunning positive. I can’t comment on the psychology of the street, I’ll just say that what our expectations were was that, in terms of the biggest toxicology risk in the program, we hit the ball out of the park. On the efficacy side, we met our endpoint in a study that, going into it, isn’t long enough to fully assess the clinical effects of the drug. So we’re pretty pleased. Joe Pantginis, Canaccord Adams: Thanks a lot.

Thank you, Joe.

Your next question comes from David Witzke of Banc of America Securities. Q – John Watkinson(?), Banc of America Securities: Hi, this is John Watkinson(?) for Dave. Most of my questions have been answered already, but I had a quick question on what’s your comfort level of the three-month SVR predicting the six-month SVR? How tight is the correlation between the two? A – John Alam: This is John Alam again. In terms of registration, we are using six month follow up data to – I mean, our assumption is that we would use six month follow up data to demonstrate SVR and that’s what we would need to demonstrate for approval and NDA filing. The three-months follow up is really a comment on what data we would use to make a decision to go to the FDA to an end of Phase II meeting and move to Phase III. So that is more our risk, than necessarily a regulatory risk of whether three months or six months would be acceptable or not. In that respect, what’s clear from a series of studies that have been presented over the last couple of years, is that 95% of the patients who are going to relapse do so, or more do so within three months of follow-up. There are very few patients who will relapse between three and six months of follow up. From our standpoint of trying to make an assessment of what our SVR rate is, we’re going to be 95% accurate by using three-month follow up data. We may be off by a few patients here and there, but it really doesn’t change the outcome in order to be able to again make a decision to move towards Phase III. But again, we are not assuming that the FDA for registration, or other regulatory authorities for registration, will move that six month time point and we will need to provide that data for an NDA package. The last comment is that we will, in all of our studies, whether we make decisions based on three-month follow-up or not, we will follow all patients for six months and in the Phase II program, we actually anticipate following patients for at least one year post treatment. Q – John Watkinson(?), Banc of America Securities: OK. So we will get sort of information on three-month SVRs on all the arms in the Phase II trial? A - Ian Smith: John, I’ll take that question, because it’s more about disclosure strategy I think. We’re not making a decision on our disclosure strategy at this point in time. John Watkinson(?), Banc of America Securities: OK. That was helpful. Thanks.

Thank you, John, for your question.

Your next question comes from Annabel Samimy of UBS Warburg. Q - Annabel Samimy, UBS Warburg: Hi, good afternoon. I had a question regarding VS-950 and the second Phase II study that you’ve designed. I’m still a little confused about the purpose of continuing with the trial for 36 weeks on follow up, with only pegylated interferon and ribavirin rather than continuing them on the full treatment including VX-950, given that you’re trying to answer the question of whether a three month duration or a six month duration is going be optimal for these patients? A – John Alam: Hi, Annabel. Again I’ll take a short at that, and Josh may want to jump in at the end as well. As I said earlier, our view is if you look at all of our data, with VX-950, and including the specific viral kinetic data, the time it takes for patients to go undetectable, and compare that to treatment durations required to get SVR, with various regimens of interferon and ribavirin and pegylated interferon and ribavirin in different patient populations, the data would indicated, if you look at it from a virologist’s perspective and the rates of decline in viral load, that 12 weeks of treatment with a VX-950 combination will be sufficient to obtain SVR. Now, there are perspectives in the hepatology community that bringing down the total body viral load to 10 or 100 copies of virus total in the whole body, this is not concentration in the blood, is not enough; that you need to have something more than that which only pegylated interferon and ribavirin for certain durations give in terms of giving the immune boost to clear out the last handful of liver cells that are infected with the virus. Now, we don’t actually believe that it needs that and that’s why we believe that 12 weeks of treatment will be sufficient. But there are people who believe that you need this longer duration of pegylated interferon and ribavirin – you don’t need viral suppression, you don’t need to bring the viral load down any more, you just need this immune stimulation to clear out those last few infected liver cells. What we’re doing in having that additional arm is basically to address that risk or that question, and it gives us additional likelihood that in fact, whether that’s true or not, and if it turns out to be true that you need that little longer duration of treatment, we have to answer and we have it built into the study. A - Joshua Boger: Imagine the other way around. Imagine that we don’t do this on this as it were standard of care extension now, and we get what everyone would consider to be a very high – maybe even extremely high – SVR rate. We’re still left with the question coming from, you know, smart people with experience in the disease, ‘Well I wonder what would happen if you just treated for another three months with pegylated interferon and ribavirin’. We don’t want that to be hanging over the NDA and hanging over the Phase III design, we want that to be a question that is answered much earlier. It really is a matter of risk lowering, addressing legitimate questions rather than us hedging our bets. We strongly believe that it’s going to be three months analysis for the vast majority of naïve patients. Q - Annabel Samimy, UBS Warburg: Right, I can appreciate that. I was just wondering – it still doesn’t answer why you wouldn’t think to keep them on VX-950 for the full six months, just to answer the question of what would have happened if you treated them with VX-950 combo for six months rather than just three months? A – John Alam: At this point, we have three months of toxicology data and the six month toxicology studies started in March. So it is later this year that we’ll be able to go to longer durations. So again, in the treatment naïve population, we don’t believe that we would require longer durations of treatment with VX-950. A - Joshua Boger: Essentially, we are interested in allowing a test and having a test of this hypothesis that there is something special about interferon in very long treatment periods. WE don’t believe it, but we are willing to conduct the tests. As John said, to actually have VX-950 along in that same regiment to test a hypothesis would actually be somewhat confusing in the hypothesis. I think there is the data out there, the literature, that actually suggests that in patients who respond quickly, there isn’t any increase in response from very high response rates already, in a particular study that shows 88% SVR with standards of care in patients that respond very quickly to the initial antiviral treatment - that is in six months – and 80% if they’re treated for an actual year. So numerically it’s going in the other direction, we’re addressing a real concern and a real issue that has been raised a lot, and that’s how we’re designing this Phase II program: to be responsive to a variety of risks or a variety of opinions while still driving our own viewpoint of (based upon?) data, always responsive to data, that it’s going to be three months treatment and out. Q - Annabel Samimy, UBS Warburg: OK. And a quick question on VX-702: are you conducting the combo trial in DMARD failures or treatment naïve patients? A – John Alam: It would be in patients who are already receiving methatrexate and have had an inadequate response. Annabel Samimy, UBS Warburg: OK. Great. Thank you.

Thank you, Annabel.

Your next question comes from Yolanda Johnson of Morgan Stanley. Q - Steve Harr, Morgan Stanley: It’s actually Steve Harr. I think someone put the wrong name in. Two questions, one for you, Ian, on R&D guidance. Obviously this is a bigger program than many had expected say three to six months ago. Is there any need to change or update your expectations on research and development going forward? Then, John, I just want to confirm that as you give out this 2008 guidance for an NDA filing for VX-950 that that is in the treatment naïve population, the treatment refractory population would trail that number to some degree? A - Ian Smith: First, Steve, your first question: we reiterated our guidance in our prepared remarks today. So no need to change guidance. A – John Alam: The 2008 NDA filing will assume data on both treatment naïve and treatment failure patients in the label. Q - Steve Harr, Morgan Stanley: So you would look at your six months worth of treatment and the treatment refractory from your Phase II data, and potentially try to get that in the label? Or do you expect that you would have time to initiate a second registration afterwards? A - Joshua Boger: The Phase III program would be in treatment naïve patients. The plan is to run the Phase II study that we are starting later this year to run a sufficiently large study that in fact it would allow us in the second line (inaudible) pegylated interferon and ribavirin that that would be sufficient to add an adequate and well controlled trial for that indication, and to have that information in the label. Steve Harr, Morgan Stanley: Great. Very helpful. Thanks.

Thanks, Steve.

Your next question comes from George Fulop of Needham Company. Q – George Fulop, Needham & Company: Thanks for the update. Can we turn our attention to the upcoming presentations and can you highlight what we might focus on, especially some new data what (inaudible) the presentations at the ESAL and DDW regarding VX-950? Thank you. A - Lynne Brum: Yes, this is Lynne. Later this week, we do expect to comment on our ESAL data disclosure. I think broadly speaking, we have talked about some of the gene profiling that we caught in the poster, some of the sequencing data coming out of our clinical studies and thirdly it’s well known that we have a late-breaker presentation on Saturday out of our combination Phase I study. Those three will be disclose by Vertex as we proceed through the weeks. There will be different ESAL embargoed deadlines for different types of data coming. John, you want to say anything about it? A – John Alam: I think there is a lot of clinical data that will be presented there. I think it’s worth a trip to Vienna. But to be consistent with the ESAL embargo policy, I can’t actually go into what’s new in those presentations. Q – George Fulop, Needham & Company: OK, auf wiedersehen.

Your next question comes from Howard Liang of Leerink Swann. Q - Howard Liang, Leerink Swann: Thanks. For the Phase II program for VX-950, will you start all of the treatment arms in treatment naïve patients at the same time? In other words (inaudible) patients? A – John Alam: Again, the specifics of the Phase II program, between the treatment naïve and treatment failure of the global program, which will include work we’ll do both in the U.S. and in Europe, the specifics of that, of exactly how we’ll parse specific study arms and where we conduct that we will – as we iron out all of the specific details, we’ll talk to. The treatment failure patients are part of a separate study again which will – that study will start later on in the year, because we do expect to evaluate longer treatment durations of VX-950 in that study. Q - Howard Liang, Leerink Swann: Can I ask a question about VX-770: what would you envision the Phase II program to be and what would be needed for registration for that particular patient population? A – John Alam: At this stage, there is still work and discussion with the Cystic Fibrosis Foundation, therapeutic group, the CFF therapeutic group, on some of the details of the proof of concept studies that we would hope to initiate near the end of this year, the early part of next year. There are a few major pass(?) with a potentiator compound like VX-770, one is to go into a very specific group of patients with specific mutations that have defects in the channel function that are directly amenable to VX-770 treatment. That’s a relatively small group of patients, then there’s a broader group of patients who have some amount of CFTR on the surface, but unlike the first group of patients, don’t have normal levels of CFTR and their defect is more in getting CFTR to the surface of the cell membrane. But a percentage of those patients are likely going to have enough such as a potentiator would still be helpful to those patients. We plan on doing proof of concept studies both in a limited group of patients and in the broader group of patients in 2007. I think the design of registration studies and really the duration of studies for approval will be driven by the results in those studies. Howard Liang, Leerink Swann: Thank you very much.

We have a follow-up question from Jeffrey Forges of Sanford Bernstein. Q – Jeffrey Forges, Sanford Bernstein: Thanks for taking a follow up you guys, I jumped in here. A quick question, I’m curious why we didn’t get started on the six month animal tox study sort of three or six months ago. I’m a little surprised here we’re only starting in March. And then related to timing, could you give use some clarity on when we should really expect Phase III now to get underway? Previously we’d said we were starting by the year end and now it looks like 2007, but I’m really trying to get when that realistically is likely to be – is that mid year? Q2? How much of a postponement in the Phase III start date are we talking about here? Then I’m still confused on the 500 patients. Is that 500 between both the naïve and the experienced patients? Or is it 500 in just the naïve? Thanks. Sorry about the laundry list. A – John Alam: It’s 500 patients total in the Phase II program, that includes both naïve and patients who failed pegylated interferon and ribavirin treatment. In terms of Phase III, there is no postponement. We have said all along that our Phase III study start would be in mid-2007 – what I said in my remarks today is our plan is that Phase III starts in mid 2007 and I provided more specificity in that respect, but there’s really no change in our timing. More importantly, I think, our timeline to NDA in 2008 is unchanged, so there are no changes in terms of the plan. What we’re providing is actually more details in specificity of what we would be doing in Phase II than allowing us to go into Phase III. What you mainly heard is that, relative to six to nine months ago with the progress we’ve made in the clinical program and the results we’ve obtained, we feel we have the opportunity to run a substantially larger Phase II program than we had originally envisioned. That’s what we’ve been working with both investigators and regulatory authorities on designing that Phase II program, the Phase II studies, and we have expanded the scope of those studies up to those 500 patients or more in the various Phase II studies that we plan on conducting at this point. To turn to your first question, again I think we’ve been pretty consistent that we would start the six-month toxicology studies after the three month toxicology studies are completed, analyzed, which is the normal course of toxicology programs in order to really define your safety margins for ongoing clinical studies. That is to complete both the toxicology program and actually what we also have is really some very good data in terms of what our therapeutic concentrations are in man. The two combined really allow you to plan your chronic toxicology studies appropriately in order to get the safety margins that you’d need often for an NDA filing. If you don’t get that right, what you end up doing is taking very expensive, very long studies and having to redo them again because if you don’t have the right no-effect levels and the right safety margins in your package, you’re going to have to do them again, and that would end up delaying your NDA. So yes, we took the time to complete the three month toxicology study, and evaluate them, but I think in terms of the overall program, it actually decreases the timeline risk by having it started at the time we did. A - Joshua Boger: I think what you’ve heard, actually, is the evidence of that. A new piece of information about our program is the fact that we believe now that we’ll be able to have a treatment failure patient study that actually gets completed and is successful, could form part of the still 2008 NDA label, so there’s no hit on any timeline by doing these six month toxicology studies when they normally and properly are done in good drug development. Others who maybe have drugs that have to be treated to every patient for six months would be making other decisions. But since we believe that the bulk of the patient population out there – the vast majority of potential patients for VX-950 are patients who are naïve to treatment. That’s where we focus and yet we’ve given up nothing on the timeline to get information on treatment failure patients by running the toxicology studies properly this way. So there’s been no delay. Q – Jeffrey Forges, Sanford Bernstein: Thank you very much.

Thank you, Jeff, for your questions and thank you everyone else for your thoughtful questions tonight. The IR team, along with John and Ian, will be here a little longer to take any further follow up questions you have. We hope you stay tuned for ESAL and for any other updates on our VX-950 program. Thank you for joining us tonight.

Thank you for participating in today’s teleconference. You may now all disconnect.