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

Sorry, in the U.S. or in Europe?

In Europe. Then we can go to the U.S. later.

I mean again, so the study is again 134 patients. So it's going to be quite some leap in the amount of available information for ROCTAVIAN here, going from 16, 20 patients at 6 months to 134 patients in 1 year. By the way, this is the largest gene therapy trial ever implemented in history. So we're going to have a lot of data here. Now the key end point is annualized bleeding rate at 1 year. And the study is very well powered to show a difference. And also we powered the study to show superiority over standard of care, which is today still recombinant Factor VIII infusions 2 to 3 times a week. When we designed the trial, we anticipated the baseline ABR would be around 3.5. We observed based on ABR that we have now in the Phase III trial in the first 120 patients or so, 115 patient of Phase III trial is 4.6. So in a sense, the study is even more [ overpowered ] than we thought. And the ABR in the interim analysis at 6 months was 1.5. So all this points to -- highlights to you the success in terms of demonstrating superiority over standard of care in reducing ABR at 1 year. We believe that should be enough to convince the Europeans to approve the product. Now the U.S. FDA, we have discussed this with them. We have discussed the prospective statistical analytics plans with them. But I would say when we have the data in January, we will sit down with the FDA hopefully sometime in Q1 and see if we can convince them to file just with 1 year of data. We don't know yet if we can. It will depend on the strength of the data, not only of ABR, but probably also on the Factor VIII zero curve at 1 year, the trend as compared to the Phase II study and all those things combined. So I cannot -- so that, I would say, the regulatory pathway is a little clearer in Europe than it is in the U.S. But if we are able to convince the FDA that 1-year data is good enough, we could -- we will file also in the U.S. within Q2 of next year, and we could get approval at the earliest in the U.S. in late '21, end of next year. If they want 2 years, it will be approved late '22. In Europe, with the filing -- the refiling in Q2, anticipated EMA -- sorry, CHMP opinion in Europe in late probably Q1 or late Q1 '22 and approval by the EMA in Q2 '22. So if the FDA sticks to the 2 years, we'll be launching in Europe about 6 months before U.S. We don't believe there's going to be an issue in terms of pricing because it takes a while to launch in Europe and you initially launch only in countries where there is no pricing negotiations. There are high-priced countries like Germany, which would not have any negative impact on the anticipated U.S. price.

So since you received the Complete Response Letter from the FDA, have you interacted with the FDA? And if so, did conversation on the possibility of a filing based on 1 full year data in patients...

Yes, we've had the discussions, as I say, but they have not told us that we could file with 1-year data yet. It will depend on the data.

Okay. And then moving on to PKU gene therapy. So you mentioned that you enrolled about 2 patients. So when do you think -- I mean with the pandemic, patient enrollment is a little bit more in fluid situation. But when do you think we will expect data? And if you have any comments on recent homology data. And based on that data, I think, it's really early and small data, but do you think you can see some differentiation between your product versus theirs?

Yes. So we have -- [ first things first ], we have treated 2 patients so far. And the protocol calls for -- we treat 2 patients, then we observe them for 8 to 12 weeks and then to determine if we need to go to a higher dose or not. So we will make that decision by the end of the year, early next year, by January, so we'll decide whether this dose is good enough to become the dose for a registration trial or whether we need to increase the dose. We treated these 2 patients at 2e13. If it's not good enough -- and again, we don't have any data yet, too early. The next one will be 6e13, equivalent to the ROCTAVIAN dose. And -- but we cannot do that before January anyway. So -- but despite the COVID-19 situation, we have been able to enroll those 2 patients in the past few weeks. So obviously, it did slow us down because we were supposed to enroll the first patient back in late March, and we had to -- we lost 6 months because we had to -- actually we were about to [ enroll ] the first patient in London where your background picture is. And the patient could not be treated with [indiscernible] infused and then the shelter-in-place came in and the hospital shut down and we had to restart the trial in another place. But that has happened now. So we believe that even with COVID-19, we should be able to treat the next 2 patients if we need to go higher again in Q1. And then depending on where we go on the dose, I mean, I would say, for sure, we should be able to communicate to you by the second half of next year as to what is going to be the dose we are taking to registration because we are shooting for Phe normalization, that we normalized the Phe levels in mice 1 month after treatment. We hope to be able to do the same in humans, remains to be determined. So regarding our competitor, it's unclear what their dosing strategy is because it appears that they are taking a dose forward in their registration trial that is lower than the effective dose observed in their initial trial. And it's unclear whether it is due to product supply limitations or safety. But regardless, the data observed today it is not better than the Phe lowering that we achieved with Palynziq, which is considered today to be standard of care. And we believe that they only had 2 responders out of 6 patients treated, who achieved Phe levels at about 4 to 5x normal levels. So there is no -- it's not near normalization of Phe levels. I would say that Palynziq efficacy is better than that today. Another key differentiator between us and our competitor is that we are treating our patients, our first 2 patients in a clinical program with a product coming from our commercial -- or to be commercial facility at commercial scale. And we understand they treated those patients at a 500-liter scale, which would not -- probably not be enough for commercialization. So consequence -- and those issues of change in the scale are important as we've seen recently with what happened with Sarepta and the FDA. So again, we are aiming for normalization. It looks that our competitor is not to -- which is a very high bar, but we believe that we want to be better than Palynziq.

So based on your -- so far based on your interactions with the FDA on ROCTAVIAN, what do you think the FDA will do, one, the duration of durability for PKU gene therapy?

Are they going to want 2 years or so? I mean it's hard to tell. It's too early to tell because it will depend if we're able to show normalization of Phe 2 to 3 months after treatment and it stays that way up to a year, I don't know if they're going to want to see 2 years. Possible, but I would say that might be good enough. But it's too early to tell at this time, but it's possible.

Okay. So then on to hemophilia A, in PKU, you have already 2 approved product, Kuvan and Palynziq. So do you think the FDA bar for PKU gene therapy -- could it be higher potentially acquiring cognitive improvement and anything like a clinical functional improvement?

No. No, I mean so far, they've approved several products. Two of ours, we've got -- demonstration -- direct demonstration of clinical efficacy just based on Phe levels. So we believe that will stay. And at the same time, I mean, the efficacy of Kuvan -- Kuvan only works in half the patients and does not allow the patients to go back to normal diets and doesn't normalize Phe levels. Palynziq does get Phe levels significantly down. Most patients -- the minority of patients do get to normal Phe levels. They all go way down like 60% or so compared to where they were at baseline, but it's not a cure, and it's not normalization of Phes. And Palynziq is a complex product to use with titration, with potential side effects in terms of allergic reaction, severe allergic reaction. So obviously, there are available therapies in PKU, that is correct, but there is unmet medical need, where the value of the onetime treatment would be very high, especially in patients that have neurocognitive impairment because of their disorder.

Okay. And then I think in the past, you mentioned that currently ongoing Phase II PHEARLESS trial for PKU gene therapy. There is a potential for approval based on the expansion cohort. But based on your experience with ROCTAVIAN, do you think that for PKU gene therapy approval you may need Phase III data?

No, it's likely that we're not going to file. It's unlikely we're going to file with 16 patients with -- if that's your question. What we can do there would be we're probably going to do like we are doing right now with ROCTAVIAN, do at least a 1-year trial with a significant number of patients to show -- I mean, in case that there is some variability in response to take care of all the issues. So as I said, we filed with 16 patients in the U.S. with ROCTAVIAN because we were encouraged by the regulatory authorities to do so and because we met the increased [ arbitrary levels ] that we had with the FDA in terms of 40% of the patients with 40% Factor VIII expression level at 6 months. So in retrospect, you can say that was pretty aggressive to file only with 16 patients, but we would not have done it if we had not been encouraged to do so. And in retrospect, anyway, we would be in the same situation as we are today if we had to file with 1 year.

Okay. And then moving on to Kuvan. So based on your full year guidance, I'm looking at -- probably this question could be more appropriate to Brian. Midpoint of Kuvan guidance implies that you are expecting like a 30% decline in Kuvan sales quarter-over-quarter. So first question is, is your expectation for Kuvan sales to decline -- is that in line with your expectation?

Yes. Thanks, Eun. I'll take that one. So yes, as you pointed out, the -- looking at the guidance in Q3 year-to-date revenues, that implies a 30% reduction. But just a reminder, that's global Kuvan revenue. And although most of the revenue from Kuvan globally is in the U.S. because Merck Serono had not invested in Kuvan and BioMarin, just started to invest in Kuvan in the few years since we've owned -- bought the rights back. So if you -- there's some European revenues in that denominator. So it's a little more than 30% in the U.S. But what's important to note is that we're in the early days of the generic entry, with it just commencing in the beginning of October. And with there not being very many good analogs to model a generic entry for a product like Kuvan, we think there's plenty of reasons to believe it could be different from that typical big pharma, big brand patent cliff. It's an orphan disease. It's dispensed in sort of a unique specialty pharmacy way. And with Kuvan comes the typical BioMarin sales and marketing support network, our clinical sales specialists in the field that are part of the Kuvan brand. So there's reason to believe that it could be different, and we're watching it closely. Although as you noted, we are expecting some significant erosion. So we'd encourage you to wait, what's just a couple more months, until we report on year-end, Q4, where we'll explain the dynamics that we're observing thus far. And then, of course, we'll give 2021 guidance at that time, and we'll elaborate as to what the assumptions are there. In the meantime, the #1 generic defense that we have, since we have another PKU product on the market, is converting Palynziq adult patients -- I'm sorry, Kuvan adult patients over to Palynziq. That's been our primary efforts over the last year. And we've been successful. We've learned that about 35% of new Palynziq patient starts are transitions from Kuvan. So we're making good progress there. That will continue to be the effort to drive value, not just for the company, but because Palynziq has a much more dramatic Phe lowering effect, it's going to be better for those adult patients.

And can I ask you a question the other way around? So what percent of all the patients on Kuvan have switched to Palynziq so far?

I don't think we have -- we haven't reported on that data. I know -- we believe there's probably about 2,000 adult patients on Kuvan. That's the actual U.S. and Europe. So yes, I don't have that handy. I apologize.

But if you look at what we communicated earlier, we -- I think we have reached over 1,000 patients just in the U.S. with Palynziq, the start there. So it is a significant amount of switch. That will be continuing, especially because someone told us earlier the new prescriptions of Kuvan are way down. I mean that's normal because we are not trying to get any new prescriptions for Kuvan because they would go to generics. We only -- now we are focusing entirely our new patient starts on Palynziq. There is no value in us promoting Kuvan anymore. So the new prescriptions will go down for Kuvan in general, but it makes sense because generic companies don't promote their drug. So the good news, and that's actually good news for us long term because all -- we believe that all the adult new patients trial start will be Palynziq starts or most of them. And also, we believe that the patients that we will be losing to generics, eventually, we will get the vast majority of them back on Palynziq. So in a sense, they are not lost to BioMarin. And that's why we believe that although our PKU franchise revenues will go down next year, they will start going back up in 2020.

Okay. So J.J. and Brian, thanks very much. Our time is up. So thank you for your participation, and have the rest of a great day.

Thanks. Bye.

Thanks, Eun. Good talking to you. Bye.

Thank you. Bye.