BioMarin Pharmaceutical Inc. (BMRN) Earnings Call Transcript & Summary

Okay. Welcome to the third day of the BofA Virtual Napa Conference. We all would much rather be in actual Napa versus virtual Napa, but that's okay. We are excited -- my name is Geoff Meacham. I'm the senior biopharma analyst here, and I have Aspen Mori from my team as well on the line. We're really excited to have BioMarin with us for this session. And speaking on behalf of BioMarin, we have Hank Fuchs, who's President of Worldwide R&D; as well as Brian Mueller, acting CFO. Guys, are you there?

Yes. Good morning, Geoff.

We are. Yes. Good morning, everyone. Thank you, Geoff.

Good morning. Great. Yes. So the format is, I'm going to hand over to Hank just to say a couple of things to kick off the session. And then the format for this is -- it's client-directed. So of course, feel free to lob some questions into the webcast technology. We're happy to ask Hank or Brian that and then -- and also e-mail or IM me questions. I've been getting a lot of different modalities. But I'll hand over to you, Hank, and then we can get started with the Q&A.

Thanks very much, Geoff. We would prefer to see you in Napa, but we, nonetheless, appreciate the opportunity to speak with you all today on a virtual basis. We're pretty excited. As you know, our late-breaker presentation with the full 4-year ROCTAVIAN results were shared last Wednesday by Professor John Pasi during the World Federation of Hemophilia's Virtual Summit. And to remind you, hemostatic efficacy was maintained at all factor levels from the lowest patients to the highest patients. While there was a shallow decline in Factor VIII levels, which was commensurate with what we've seen previously, we observed continued quality of life benefits and maintenance of the bleed-free status. In fact, all 4 -- in 4 years, all of the patients remain off of prophylaxis with mean cumulative annualized bleed rates of less than one for both dose cohorts. That is the 4 years of follow-up from the 6e13 dose and 3 years of follow-up in the 4e13 dose, respectively. We're so pleased with the clinical benefit demonstrated with ROCTAVIAN that it continues to be durable at the 4 years in accounting. And on our call last week, our study investigators shared stories that gave insights into how dramatically their patients' lives have changed since being treated with ROCTAVIAN with many feeling like they no longer have hemophilia. In fact, it's quite transforming for the clinicians who are now better appreciating the burden of hemophilia because of the contrast between a fully-treated hemophilia patient and a post gene transfer hemophilia patient. It's truly inspirational and a big reason why we're so passionate about the work that we're doing. So we continue to anticipate approval of ROCTAVIAN in the second half of this year based on the August 21 PDUFA action date. I do want to note now, we are now under 2 months from the prescription drug user fee action date in the United States. And so we're going to implement a lockdown on communication of our regulatory status to ensure that everyone has the same information at the same time, and I want to thank you for bearing with us. And I also want to acknowledge that, that's got to be one of the most key questions that people have in their mind. And so having acknowledged that, we can also move on and talk about our brief -- our existing business. And despite the ongoing challenges in COVID, we continue to expect to turn profitable on a GAAP basis for the first time in the company's history, having maintained both our full year GAAP net income and non-GAAP income guidance despite lowering top line GAAP guidance slightly due to COVID. And Brian's on the call, and I'm sure we'll be happy to answer any questions about that. In addition to the achievement of the important financial milestone and anticipated ROCTAVIAN approval remain on track to submit marketing applications for the first approved therapy potentially to treat achondroplasia, the most common form of dwarfism as well as the start of our BMN 307 PKU gene therapy study for phenylketonuria patients, the combination of these key events, in addition to the continued progress of our early-stage pipeline, have had us very busy and energized. And neither Brian nor I nor Traci are ever too tired to tell the story about BioMarin's success that we're having. So with that, Geoff, I'll pause here and hand it back to you for questions.

Okay. Perfect. Yes. Hank, recognizing the FDA commentary, we won't talk too much about that, but I did want to ask you about the -- how the awareness and visibility has, sort of, changed over time? I know for ROCTAVIAN, if you go back a few years ago, there were questions about retreatment. There were questions about Factor VIII levels, but I feel like after 4 years, there's a lot more clarity to the product profile and I wanted to kind of get your feedback on how that's changed in your discussion with some of the practitioners and hematologists that may be among the initial adopters.

Yes. When I started doing this, I think, to some extent, hemophilia was all about the numbers, the factor levels. And now 6 years later -- and again, I think this goes to the -- to some extent, to the transformation that the clinicians have experienced that -- then I have to pay such attention in the numbers, and Steve Pipe was telling a story about one of his patients, like, I don't pay any attention in the numbers. They're not interested in their numbers. They don't care about their numbers. In fact, you want to know about my number, you can know about my number, but I don't need to know about my numbers. And so that's been a big change in the community. And it's, I think, in large measure because the combination of eliminating prophylaxis and eliminating bleeds has not really ever been seen before. And so now you can really focus on the well-being of the patient because it's uncluttered by considerations about how often you have to use factor. So it's really -- it's a profound transformation for this community.

Okay. And just a follow-up to that. When you think about any of the nuances in the recent data, clearly, the bleed rate is the major focus in Factor VIII. But is there anything else so that you'd point out to that would help sort of augment the profile when you start to think about what the label could look like or what the initial commercial strategy could look like?

Well, I think we have all been impressed that there is this decline in factor level numerically as you look at the average trace and whatnot. And the thing you have to keep in your mind, I'd tell about that, is that through a large extent, and this is evidenced by the dot plots that we showed, that the averages are coming down driven more by changes at the top of the list than at the bottom of the list. And what I mean by that is that the attrition of factor expression appears to be lower in patients with lower factor levels. And so that's why I think some people have optimism for prognosticating a sustained benefit for many more years to come than what we have so far observed. And this is not about like what factor level does the spicket open again. That's an interesting academic and scientific question. This is more about how is the patient doing? And are they well-managed presently? And so I think the hemostatic efficacy even at low factor level statement under -- and some level doesn't do enough justice to the profundity of the clinical benefit that, that patient -- those patients who are even in that range, still experiencing profound benefit many years later. And those are our lowest patients. And so I think that's a pretty comforting thing as to think about the fact that the expectations for clinical benefit are really -- can be fairly large.

In your discussion, Hank, with some practitioners, clinicians, have many folks been asking about what would a readministration look like? Is it -- or is it mostly just trying to figure out how durable the Valrox benefit could be?

Honestly, in discussions with clinicians and patient advocates and patients, those questions on redosing and durability don't really come up very much. I was talking to a clinician about this kind of very pointing. I was like, where does that come up in the conversation? And the response was, it's not really just positive decision-making, because if you've initiated a conversation with your clinician about and you are manifesting any interest in gene therapy, you've already processed that it's still relatively in the journey and that you will be making your decision in the face of a substantial amount of uncertainty. And so what I've gathered from the clinicians that, that's more about in this phase of the life of the product about setting expectations appropriately than it is necessarily answering questions about a future which are uncertain or unknown. And there is quite a lot of acceptance about that. It's interesting to me when you see some of these market research thing -- pieces that are being done by other analyst groups, that there is a high amount of interest in gene therapy already in the patient community. So they've already -- they've chewed through a lot of the awareness of these issues, maybe more than most people have given them credit for. And so I think the interest level is a reflection of the burden of the condition and the opportunity for transforming your life for a period of time at a minimum, if not for a really long time.

Got you. Okay. That's helpful. I think, Aspen from our team had a couple more in Valrox. Aspen, can you please?

Yes. So a couple on the WFH update. I guess, first off, maybe you could keep elaborating. It's interesting to hear some of the feedback you got specifically on the 4-year data from WFH, obviously, it was virtual. So couldn't get a whole lot of doctor feedback on that. But -- and then in addition to that, there was maybe a thought that the low dose data at 3 years declined by, maybe, a rate that was a little faster than some people had expected. Maybe you could talk about that and what your read through there is for the overall Valrox profile and durability?

Yes. The -- you can make math models of the data points, and we put them in there and when we chose the word commensurate, I think that was partly also in an acknowledgment of the fact that there's quite a lot of variability there. The standard deviations on these numbers are. I mean not lost on anyone that there's a fair amount of variability, both between patients, but also within patients. And on our call, in fact, Professor Pasi talked about one of those patients who just on one particular day, had undetectable factor level, and we got them back and like the next day had -- it was in the mild range. So people are acclimated to their being variability in the factor. And I think that's a big part of why people are moving their eye away from just thinking about factor to answering a very fundamental question about how's that patient doing? And so I think the read-through from the 40 at 3 years is that if you've been dosed with 16, you've had a result that was higher that it's going to take you a while to drift down yet. And so don't want to make too much out of the shape of those curves and really call our attention instead to how the patients are doing, which is maintained at that phenomenal. And you're right about the virtual segment. I mean that's the thing I noticed that I missed the most, is just going between meetings and running into people. And I remember actually last year, I ran in a guy young, who started this journey in gene therapy. I would say it's a somewhat skeptical person, and I think he maintains his skepticism overall, but I now see that as just being careful clinically. He asked a question at last year's meeting about how do we set expectations for our patients. And I think that was indicative of the right way of thinking about how to talk to patients about these things. And I think that what you may not see as well is because we have a lot of medical education programming going on, both through symposia that are at the meetings, but also other venues and forms that we create to share awareness in the period of Zoom, there is a lot of connection that's going on. And as I said before, the patients have been processing awareness of this for quite a lot longer anyway. And so their voice is fairly strong in this community. And I think there's a lot of awareness growing in the patient community as well. All of these are encouraging and exciting things. And like I said before, INSPIRE are interested in bringing a potentially transformative therapy to patients. I think there's a lot of connections starting to be made here.

Okay. And then you mentioned earlier that numbers don't matter so much. How the patients are doing, whether or not they're bleeding or -- I mean, it's not like they're obviously not. But I guess going forward, do you think that when we're considering the competitive landscape in the gene therapy in hemophilia space rather than focusing on the Factor VIII levels, do you think that it does make sense to dote and compare bleed rates? Or is there maybe another metric that you think might make sense, to say, to stack up between 2 different therapies?

I mean this to me feels a little like you have 2 drugs that have the same objective response rate or 2 drugs that have the same cholesterol levels. One of those 2 drugs, the objective response rate turns into a survival benefit, and the other one doesn't. Or one of those drugs turns out to have a lipid-lowering benefit, but no cardiovascular outcomes benefit. It seems to me that in those circumstance, what typically happens is that the clinical outcomes vastly on Trump, anything related to surrogate, even surrogate superiority. So I think one of the things that I was -- that I noticed, in particular, with this -- like I said, the docs are undergoing this transformation. They start skeptical. And now we have evidence that you can go 4 years without bleeding and not on prophylaxis. They would -- it took them 4 years to believe that. Now there -- their thing is, I don't want to look at factor numbers and whatnot. I don't know how to interpret factor numbers. I know how to interpret the clinical status of my patient. So I think what John Pasi said or alluded to on our -- the call that we hosted was something like, unless you're 100% bleed free at 4 years or -- you're not in the game. So that's how I think about this competitively.

New standard. And Hank, from a -- from a life cycle management perspective, obviously, you have the launch ahead of you, but what would you say for ROCTAVIAN indication base? Is it expanded to hemophilia through different age cohorts? Is it more on the AAV5 delivery system? Just a word on that.

Yes. I mean, I think the 2 lowest hanging pieces of fruit are the AAV5 seropositives, if there's any way that we can make ROCTAVIAN available for them. And we've excluded patients who have had inhibitors, and there's quite a lot of literature. That's about 25% or 35% of the patients, by the way, and more as you get older. And we've excluded inhibitors, and there's a lot of evidence that actually gene therapy would be a good way to reverse inhibitors. So we'll be getting those studies underway. So those are -- that's about -- that almost has a 50% increase or maybe a doubling of the size of our -- tripling the size of our ROCTAVIAN, forget exactly how that math works, but big opportunities there. And then, yes, we'd like to get into younger age patients. There's obviously the barrier of potential for gene dilution as you go into younger and younger and younger patients. And we have a few ideas about how to do that and when to do that. It's interesting. We're learning a little bit from Palynziq. In Europe, we have an indication to -- that starts at age 16 and if we can get young adults transitioned on to the more definitive form of therapy before they go away to university, our commercial team, in the case of Palynziq, believes that, that's going to be a really key advantage. And similarly, if you can transition a child from prophylactic factor replacement, which can be accommodated in a parent-child kind of a context, if you can transition that job before he goes away to college or university, that's a big advantage. So that moving earlier, I think there is some feasibility there and some interest there, for sure. I think off the top might -- I think there's patients with preexisting liver disease that we haven't really sort of dived into exactly how to tackle that, but that's an area of really important interest. Maybe stop there. Sorry, one more to add. The concept here is to replace prophylactic therapy and so there can be the -- there are the odd patients that are not as severely affected who are on prophylactic therapy that are important. So maybe some of those are some of the life cycle thoughts.

Just a question on the webcast. I don't know -- I'm not sure you can comment, but the question is, can you comment at all if you still expect to have an inspection in the first half of this year?

Yes. That's going to -- that's a good question to illuminate the thing that I said at the beginning, which is now that we're under 2 months away from PDUFA, I think our answer to these types of questions is going to be, we're on track for our PDUFA 821. At any given day during a regulatory review, there's a lot of stuff that goes on, and it could be really difficult to interpret and that gets magnified as you get closer to the finish line. So I think the next big announcement from BioMarin is going to be about the action date.

Okay. All right. No worries. And then another question from the webcast. How do you guys think about factor levels on utilization? Would this be for patients less than 5%, let's say, that are severe or could other patients go on as well?

Yes, that actually -- that ties to the question -- to the comment I made earlier about how and, again, this is where the numbers are imperfect and the clinicians are aware of patients who have the bleeding phenotype. And maybe it doesn't fit exactly. They don't fit exactly into the severity classification scheme for whatever reason. And so if you're consuming a lot of factor, I would say you're a good person to instead of keep buying fish at the fish store, learn how to fish. That is to say, instead of being constantly either high frequency on demand or prophylactic therapy, you really should be a candidate for ROCTAVIAN. That's the group that we studied.

Okay. Let's switch gears. We may have a couple more on ROCTAVIAN from the webcast, but let's switch gears to vosoritide. So just a question at the onset. Have you guys been able to meet with the FDA regarding the filing? And what's been the feedback thus far at this point?

Yes. We had face-to-face meetings actually with the FDA prior to the lockdown, might have actually been kind of the week before. And it was a great meeting, net all of our objectives. The main consideration being to confirm with the agency that the information that's been collected to date would stand as an adequate data set to initiate review of the application. And so -- or is my head of regulatory, likes to say, they waved to sign in for the filing. And we reached some very specific and concrete agreements with them about the content of the filing, the inclusion of the pivotal randomized trial, the trial with a 10 -- minus 13 p-value. The inclusion of 5 years of treatment data from the original open-label extension study. The inclusion of patient level natural history data for both population and individual patient level matching so that we could compare the effects of treatment with vosoritide to the untreated natural history over a longer period of time than our pivotal trial. And finally, we agreed to provide safety information on children under 5, unaccompanied by the efficacy information from that completed trial is that trial won't complete until after the application has been reviewed. And they were all -- that was all part of the package that was discussed and agreed on the agency. And so the team did the same basic thing with the European health authorities as well, got the similar basic set of agreements. So our strategy has been created one global dossier. It's much more facile to work that way. And so we achieved that objective. And now we're busy writing up our reports and putting the finishing touches on the submission. We said we'd submit in the third quarter, and we're tracking pretty well to that.

Okay. That's helpful. And when you think about the opportunity to sort of maximize the benefit, clearly, the bigger opportunity would be in pediatric patients. Just talk through, Hank, the bar there for efficacy. Is it higher in this population versus a more mature population? And how do you think that's going to play out from a commercial perspective?

Well, vosoritide acts on the growth plate, which closes in late adolescents. So if you're asking about that facet of treatment, the treatment is really only applicable to children who are still growing. And in fact, even within that spectrum, the over time natural growth -- pattern of natural growth is there's a lot of growth from 0 to 5 years of age and then there's a much more gradual rate of growth, and that rate of growth itself declines into late adolescents. And in achondroplasia individuals, that late adolescent growth is not accompanied by an adolescent growth spurt because their growth plates are diseased. And so the real -- the best benefit is going to be if you start really, really early. And this was a point that was addressed quite well by the FDA's advisory committee when they convened in 2018 for discussion purposes. And that's why they campaigned for safety data in children who are under 5 being an important consideration of the dossier. They're basically saying the FDA, we're going to be willing to extrapolate on the basis of biological data from efficacy in over 5 to under 5. The thing that we want to make sure is we didn't get the dose wrong. This is the FDA's advisory speaking to the FDA. We just want to make sure that it's going to be safe to use in young children with achondroplasia. And so that formed the structure for the dossier, which I think informs your question, which is the earlier we can treat the better. And then we can get the benefit of the full 13, 14, 15, 16, 18 years of growth that a child has in front of them. That's the ultimate positioning in the achondroplasia world.

I can -- this is Brian. I can comment on some of the market opportunity further, if you'd like.

Perfect.

Yes. So with achondroplasia being the most common skeletal dysplasia, we estimate that there's approximately 22,000 patients -- children in our global commercial territory with achondroplasia. So definitely a larger patient population than the ultra-orphan diseases that we grew up with as a company. And also, I think, compelling on the commercial side is the -- Hank mentioned the importance of treating early, but the early diagnosis is really important on the commercial prospect front because most achondroplasia children are diagnosed prenatally or shortly after birth, which means they will be known to the health care system and easier to find and treat. And just, again, to point back to our legacy base business, that's significantly different than the launch factors when we, say, launched Naglazyme for MPS VI 15 years ago, ultra-rare disease, not well understood. So the disease education and finding patients was the key factor. And so not only are we talking about more patients here, but should be easier to find.

That's helpful, Brian. I want to go back to a question on the growth plate. Is there -- Hank, as you treat more patients, are there any theoretical safety concerns in some of these younger patients that have a healthier and more open growth plate? Is that something that maybe is kind of post-approval type of analysis or something that you'd have to formally go back and look at? Or is it captured by the package that you have thus far?

Well, it's like any new medicine. I think the goal of the registration program is to answer the most salient questions that inform benefit and risk, at least in the time period of the submission. And so like I said, I think people are comfortable that the healthier growth plates were going to respond affirmatively as of the treatment. The concern had -- the theoretical concern, which actually turned out to be real, is that the PK of the drug would be different as a function of age. And the -- it was -- this is actually a phenomena that's been known in neonatal medicine for a while that the doses that are used in neonatal medicine are often higher, say, weight adjusted than they are for older-age patients. And so that's why we did the study. The way that we did the study, which is to say we chunked it into 3 different age groups. Had a sentinel group in whom we measured the PK before then randomizing patients into the larger study. And what that taught us is that there is a difference in exposure to the drug after injection in 6 months to 2 year olds compared to 2 year olds to 5 year olds and compared to 5 year olds and older. And so we had to raise the dose in the younger children. So that wouldn't have led to -- if we reduce the same dose, it wouldn't have led to a safety problem, it would have been suboptimal efficacy. But we also did it carefully and quantitatively, that is to say, we kind of knew exactly what the target was and we approached it from under the target rather than over the target. And so I think now having established a relationship with PK, so exposure and the sentinels are teaching us that, that exposure is well tolerated. I think we can be increasingly comfortable about the tolerability of the proposed regimen in children. And this is an important thing to have established because, as I said, and Brian mentioned, most of these kids are diagnosed early. And so to have the opportunity to intervene early, if that's your choice, can be a real advantage.

Okay. That's helpful. And I know for any powerful brand, I know there's -- obviously, it's a pretty competitive field, you have a number of players that are earlier, you being first to market is really important. But when you think about product attributes, what do you think would be a component of your data that could lead to something a little bit more sustainable in terms of the competitive advantage aside from, obviously, time to market?

I mean I'm overwhelmingly biased in this regard because we're months away from initiating registration in any competitor that you're talking about. I don't think they've even dosed in a chondroplasia patient or not a lot. And so if you were to tick through the list and say, okay, where are we vulnerable from an efficacy perspective? Well, we restore physiologic growth. And in fact, one of our experts told the FDA that the thing that he likes about vosoritide in comparison to growth hormone -- for growth hormone deficiency disorders is that growth hormone doses catch up burst of growth at the beginning, which is gratifying to the parent, but it's not really the healthiest of bone because it formed too fast. And then growth hormone kind of wears off. You don't get the sustained effect of growth hormone. It goes in contrast in achondroplasia with vosoritide. You get restoration of physiologic growth and, impressively, that sustained. So not sure I see an efficacy opportunity to beat us. Safety, I think there are several zeros in front of any even observable frequency of side effects, meaning very, very low -- very, very well tolerated drug. Convenience for patients, our patients are happy with the daily injection. Compliance is fantastic. There are no real complaints. It's not like people are coming to us and saying, we like this product offering better, or this product offering better. These needle sticks these days are fairly innocent things. It's kind of blinking you're done. So I don't know how I would advise somebody to catch us. And I think you're too far behind. The scene on the generic side of this.

No, that's right. And just the last question kind of on the commercial setting would just be the -- what are lessons to be learned from other more recent launches for you guys from just patient awareness and visibility. In other words, what can you do ahead of the rollout to help accelerate the launch either engaging with KOL? Or what's your perception of sort of depth of awareness in the -- among the prescriber population?

We're -- again, I'm a little biased where we go, it tends to attract interest because our approach is what's the basic molecular defect and what's the most fundamental way to turn that around and gain a large amount of signal in terms of clinical responsiveness that would propel rapid registration and uptake. And so we're -- we tend to address more scientifically inclined medical audiences. They're seeing a rare disease tend to settle to centers and the centers tend to be more academically inclined and interested and mechanistically what's going on and turning that around. So -- but what we've learned is that formula of using scientists' science to drive a medicine -- science to drive awareness of the medical complications of the condition and the opportunity for new therapy has been really the glue of Jeff Ager's commercial organization and it knits tightly with our development and medical approach to commercialization. So I think for the most part, you're going to see us keep doing that because there's an enormous amount of demand for that in the medical community and in the patient community is to understand fundamentally like what went wrong and how do we fix it and how do we know that we're on the right track. I know the business organization has been doing a lot to address this question, it might be just sort of hear Brian speak about leverage and thinking about how to build sustainability into our business model. Brian?

Yes. Thanks, Hank. It's a great point. And yes, I think probably 2 things to say there. Maybe just to elaborate on some of that launch preparation specific about what we've learned. The other learning that we're going through right now is related to ROCTAVIAN launch prep and that is for discussion. So of course, we're committed to doing any marketing to patients before approval. But there are some safe harbors in the regulations that let us talk to payers preapproval. And so with ROCTAVIAN and that value proposition and the new technology that we hope to bring to the hemophilia A community, we started payer discussions there along late last year. And those have gone really well. Those are -- we've learned how that can really help prepare for a successful launch. And so I would again envision using a page out of that playbook for achondroplasia and vosoritide as well beyond the disease in medical education that Hank referred to. And then, yes, on the leverage side, we've built a commercial organization that can support up to $2 billion in revenue today. We took a small 5%, $100 million, adjustment to our revenue back in -- revenue projections for 2020 back in April due to COVID patient demand disruption. But by and large, they're close to that $2 billion, selling into over 70 countries. So looking forward to another brand in the rare disease market. Not only do we have that global reach, but the corporate infrastructure and global marketing efforts that we've now been able to replicate brand after brand. So the hope is that vosoritide is the next chapter in that story.

Okay. And just a follow-up from the webcast for you, Hank. So just to be clear, are you guys expecting a label with a broader age range, including less than 5 years old? Or is there some sort of restriction?

Labeling is very advanced in the process feature. I think what we start out with is a recognition of the biology and the community's interest and essentially extrapolating that biology, and we recognize safety is an important fundamental question about benefit and risk for this portion of the population. We think it's rational for the product to be used in that population, but exactly how that gets translated into a label is a subject that's down the road from now.

Okay. That's helpful. Let's push gears to Palynziq and to gene therapy. So the question really is how do you think Palynziq's clinical profile holds up when you consider the cheaper generic Kuvan, and maybe down the road, more effective in convenient gene therapies?

I'll start medically and if Brian has some financial or commercial comments, he can chip in as well. But first of all, Palynziq is indicated for adults in the United States and for patients holding 16 in Europe. And so sapropterin and Kuvan is the only available option besides medical food for children with proteinuria. But when you get into adulthood, because Kuvan, sapropterin and generic sapropterins will all be required to be taken as an adjunct to medical food therapy, Palynziq offers the opportunity for much better fee reduction in a much broader range of a patient population. And even in spite of fairly substantial amount of protein intake, in fact, in our Phase III trial, patients essentially resume normal protein intake. And so I think that given the complexity of complying with sapropterin and medical food, given the narrowness of the target population and whom it works relatively to Palynziq and given the magnitude of the benefit of Kuvan relative to Palynziq, I think Palynziq offers a much better profile. The only disadvantages of Palynziq are the induction titration periods, you've got to be committed for about 6 months. But after that, 99% of patients comply and stay on Palynziq. And it's -- obviously, it's an injectable as opposed to an oral. And that's a challenge to retention, but I think the facts speak for themselves in terms of retention. So I think Palynziq is an awesome offering compared to sapropterin and generic sapropterin. And I think it's going to be tough for a generic company to win in this space because there's so much connection that has to go on between the PKU clinician, dietician and patient. And you put medical food in the middle of that and things start to fall apart because it's a horrible form of therapy. So then thinking about gene therapy, I think, on some levels, Palynziq gets the community unstuck off of medical food into more modern approaches to therapy. And I think gene therapy just takes that a step further. It's really impossible to speculate about the sort of the curve of adoption of gene therapy compared to Palynziq. I think at this stage of the journey, we're excited that we can have both offerings. We have all 3, we have Kuvan, we have Palynziq, and we're working on making 307 available. And I think when you think about the numbers in phenylketonuria and over time in phenylketonuria, we've only marginally penetrated the phenylketonuria community in terms of offering our solutions to patients. And so I think having these more advanced medicines in the tool chest enables us to access progressively higher fractions of that population. So I think that the gene therapy is a nice addition to the Palynziq core component. And we'll experience a little bit of transition from Kuvan in adults to Palynziq. But I think over time, you're going to see us really build a bigger and better and stronger PKU franchise. I mean we -- our commercial team created this and they're dead set on making the most out of it.

Yes. I can answer that. Yes, absolutely. A good set up there, Hank. So not only is the overall PKU market large in, let's just say, U.S. and Europe, where we believe there's approximately 30,000 patients. We are already established in that market, having the only approved therapies for PKU and being in that market for over a decade back to Kuvan. And as Hank mentioned medically, there's also sort of this nice sequence commercially of the potential for 3 PKU brands. Kuvan has been around a while, but noting that we are losing market exclusivity in the U.S. next year, but that's a great time to have an offering in Palynziq that reduces fee and liberalizes diet even more. We think that there's 8,000 adult PKU patients that are in the clinic and not on Kuvan today. So those are patients that are seeing physicians and represent good candidates for Palynziq and then over 19,000 patients, the adult PKU patients out of the clinic. And they may be out of the clinic because they don't like being told when they go to the doctor that they need to be put back on their very restrictive diet. So the promise of Palynziq there with more diet liberalization maybe to bring those folks back to the clinic. So still a lot of marketing to do on Palynziq. And then as Kuvan becomes more mature and Palynziq continues its launch to have the potential to offer a gene therapy as yet the next-generation project, our product really does seem to set up the overall PKU life cycle for the company pretty well.

It's Aspen again. Maybe to follow up on that and zoning on the gene therapy 307. How are you guys thinking about the competitive landscape there in terms of the other competitors developing gene therapy? And how is this discussion different than maybe the one you had over the past few years about Valrox versus its competitors? Is there anything that you would highlight there to -- I don't know, maybe I guess, avoid the new pickiness that kind of happened over the last couple of years with the Factor VIII goals?

That's an interesting 2-part question. I was reading the CEO of Pfizer sort of a health care conference earlier in the month. And somebody asked them about how are you going to be competitive in the gene therapy space (considering it far behind the one)? And his answer was, manufacturing capacity. We're going to -- we're building a plant in North Carolina, and we're well underway to having leading capacity. And I was thinking, I'm glad that we made the decision about -- I think it was 4 years ago to build a commercial facility and to include -- to be commercialized material into a clinical trial that we could then be registrational because that works really well for health authorities. And so yes, we got that memo about capacity and capability a few years ago. And I think that we're going to carry that forward as a key part of our competitive advantage now. Having demonstrated that you can get to -- LUXTURNA was nice and clearly, Novartis has obviously made a lot of progress. But we're talking about much bigger patient populations and much bigger expression levels and much more clarity. I mean, I think the interesting part about your question about the surrogate endpoint is that we're the first company that has a gene therapy for which you can actually measure a surrogate endpoint. So it's caused there to be a lot of focus on that. I think the good thing with PKU gene therapy is what people will focus on is fee levels, and we should see substantially lowered fee levels and sustain for a really long period of time. So I don't think that's going to be nearly the challenge in PKU that it was in ROCTAVIAN's development. So I think our competitive advantage wells down to both our manufacturing capacity and our knowledge of the PKU -- excuse me, space and the fact that we've been down this road with the agencies internationally now and have that institutional knowledge that is a critical expeditor. I think all those 3 things stack up, that group is going to be in the pudding in terms of when people get across the finish line.

Hank, this is Geoff. Yes. Just a final sort of follow-up last couple of questions. I mean, you -- obviously, for PKU, that's kind of the next wave here. And as you move forward from a regulatory perspective with Valrox and vosoritide, what do you think from an R&D capacity and depth perspective? Is there earlier stage? What are you most excited about? And maybe what's the potential for licensing and product acquisition at this point?

Well, I think the DiNAQOR partnership, it simplifies a lot of the answer to question that you're talking about. I think the ability to extend ourselves through others becomes a critical unbottlenecking of the BioMarin engine of capability. To some extent, that's been part of our journey that so far is our ability to extend ourselves into different areas. We weren't a gene therapy company, we were an enzyme company. And so with measured steps that we take, we extend ourselves. And we've been working on muscular diseases for a while in the lab, and then we came across this group with cardiac muscular disease opportunities, and that started to feel right. Another capability that we've developed is around expression. And I think one of the things that DiNAQOR valued about BioMarin was we can get a high degree of expression. One of the things that interested us, we had internally been interested in the cardiac space because there are -- just in the hypertrophic cardiomyopathies, there are 300,000 genetically-determined cardiomyopathies and patients -- and good -- and they concentrate into what are called haploinsufficiency disorders, which means that they're caused by having a defect in one of their parents genes. And so they're amenable to gene addition to restore to normal levels, but you have to deliver a lot of gene to a lot of -- and get a lot of expression to overcome the clinical phenotype of those haploinsufficiency disorders. So that was a match made in heaven where their biology complemented our core technology capability. And I think that's a muscle that we have manifested in the past. That's how we got ROCTAVIAN. And I think we're going to see more and more of this. The exciting part of that is gene addition in haploinsufficiency insufficiency disorders, I think that's going to be a new potential avenue for much bigger expansion of the platform.

Okay. That's helpful. Well with that, we're out of time. So I want to give some room for the next group. But guys, really appreciate the conversation, really super helpful Q&A.

Terrific. Thanks, Geoff.

Yes. Thank you so much, Geoff. And everybody, really appreciate it.

All right. Take care, guys. Talk to you soon. Thanks. Bye-bye.