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

Good afternoon. Thanks for joining us. We're pleased to have Jean-Jacques Bienaimé, Chairman and CEO of BioMarin with us. And with that, J.J., I'm going to turn it over to you for any opening comments, and then we'll jump into Q&A.

Thank you, Salveen. Good morning or good afternoon to everybody here. So 2020 was an eventful year for BioMarin, and we look forward to many important developments in 2021. So we were pleased to have announced 2 weeks ago that the benefit of treatment with vosoritide for achondroplasia was maintained for over 2 years in children treated in our Phase III study. A cumulative high gain -- height gain of 3.52 centimeters was observed at year 2 compared to untreated children. So we are encouraged about the prospect of vosoritide approval this year based on these results. So I just want to highlight that actually -- it's likely since the patients are going to be diagnosed -- most of them are diagnosed before birth. I mean, they probably will be treated for around 16 years or so, so 8x as longer as this 2-year period. So if you multiply 3.52 by 8, you're getting close to a 1 foot potentially of extra adult height assuming that the benefit is linear over time. And as you know, actually, it could be underestimated because we only treated patients over 5 years of age. And the growth velocity is the fastest in the first 5 years of life. So again, we're very excited about these results. And as you know, vosoritide is our next potential product approval and will be indicated for children with achondroplasia, which is a most common form of dwarfism. So marketing applications in -- post the United States and Europe are currently under review by health authority, setting the stage for potential approvals in the second half of this year. So the early feedback we have received from the European regulatory authorities has been very positive, and they have complemented us on the quality of our filing. And also, they have mentioned that an inspection of our manufacturing facility is not necessary for approval, based on the previous inspections of facilities of BioMarin that they have done. So vosoritide represents a tremendous opportunity, as we will be the first potential pharmacologic therapy approved for achondroplasia, which is a condition that impacts over 20,000 children within our current commercial footprint. The launch preparations for the U.S. and the primary markets in Europe are well underway, with a prelaunch focus on disease awareness to physicians, caregivers and disease burden to caregivers and advocacy groups. Briefly on ROCTAVIAN gene therapy for the treatment of hemophilia A. We look forward to sharing top line 1-year results from our 134 subjects Phase III study in the next -- in the very distant future. This is the largest gene therapy trial ever implemented in history in any indications. So this is going to be a quantum lead in available information on ROCTAVIAN. And I would say that based on the dramatic bleeding control observed to date with ROCTAVIAN, we are optimistic about the approval fast-forward but the phase III results, obviously would determine the time lines and the next steps. So we plan to submit the marketing applications in Europe in the second quarter of this year and share the 1 year Phase III results with the FDA as well and then determine when we can file in the U.S. Concurrence with next steps for vosoritide and ROCTAVIAN and the continued commercial expansion of Palynziq or PKU, our early stage pipeline is progressing well. BMN 307 gene therapy for PKU is in the play with an efficacy goal of achieving normal p-levels. We are also completing preclinical studies with BMN 331, which is our gene therapy candidate for the treatment of hereditary angioedema, our third gene therapy product candidate, representing another large market opportunity. This year, we anticipate earning meaningful non-GAAP income as well as positive operating cash flow from our base business, and we plan to provide 2021 financial guidance during our fourth quarter 2020 results as usual. Beyond that, based on the potential approval of vosoritide in the second half of 2021 and ROCTAVIAN thereafter, should long-term Phase III data be supported, we believe that the growth in revenues and the profitability would come back in 2022 and accelerate in 2023. So this is a brief overview of some of our key carriers. And I will turn the call back to you, Salveen, for questions.

Thanks, J.J. So 2020 brought about some COVID-19 impact to your business. And you got this surprise Complete Response Letter from the FDA for ROCTAVIAN, your gene therapy for hemophilia A. How has the company adapted and grown in order to better position you in 2021 to address these challenges?

Yes. So the impact of the ROCTAVIAN CRL and the potential approval delay as well as COVID-19 had definitely an impact on new patient starts during 2020. That may continue into 2021 due to the prolonged epidemic. However, we do expect, as I just said, to earn substantial non-GAAP income and generate positive operating cash flow in 2021. Longer term, we believe that the challenges of COVID-19 and the potential delay of ROCTAVIAN will not impact our future revenues and profitability growth from our operations. The only unknown today is a specific timeline for our potential vosoritide and ROCTAVIAN opportunities as meaningful contributors to the business. With regard to how we say we have adapted to COVID-19 impact specifically, clinics have been successful in pivoting to virtual ways of working just as our internal teams have. The use of some level of telemedicine to care for patients will likely reduce the impact of the next wave. And hopefully, the vaccines will roll out very quickly, and all this will be history by the end of the year. So as a result of clinics reestablishing their routine patient care, we see encouraging signals of stabilizing revenues, coupled with clinicians ramping up their diagnostic efforts and the patient interactions, both of which will contribute to growing patients enrollments and starts as we look forward. So we say that in the early days of the pandemic, there were some disruptions in patients' ability to go to infusion centers as well as new patient starts, obviously, depending on the regions. There were more impact in Latin America, for instance, than -- and some European countries than in the U.S., but we worked quickly to arrange for in-home infusions where possible. When the viruses die has actually accelerated the move from in-hospital infusion to home infusion for most of our products. I think the agility of our commercial team has been impressive as they have found new ways of working to support the patients around the world. And also in October of last year, for the first time in the U.S., we were able to start several forensic patients at home, which we had never done before the virus.

Right. Could you talk about your business development strategy on the board here as you look to grow the pipeline? So gene therapy is -- obviously, you're focused for the company, and you recently announced a collaboration with DiNAQOR to go into rare genetic cardiomyopathies. Can you walk us through the rationale here? And then I'd love to touch on Deep Genomics post that?

Yes. So I mean, gene therapy, as you say, is a clear focus for BioMarin. The reason why we did the deal with DiNAQOR is because we believe there is a huge unmet medical need in hypertrophic cardiomyopathies. As you know, the onset of the disease is in the 20s. It's a very debilitating disease and eventually a lethal disorder, and the current therapy is mainly palliative. So there is also a clear genetic deficiency in a segment of those patients, and there is no approach to correction that's underway for these patients. So I think that's why we thought this opportunity would be very exciting because this is potentially the largest gene therapy opportunity that we can see here. So it's translatable to a large population. Genetic cardiomyopathies are over 100,000 patients in the world. Also, there is a -- for the development pathway, there is likely to be an ability to discern effects through standard cardio biomarkers like echocardiographies, BNP, et cetera, which will allow us to have proof-of-concept of efficacy without having to do a very, very large trial. So -- and of course, it does leverage our gene therapy know-how. So that's -- these are all the key reasons why we executed this deal.

And then you more recently announced a collaboration with Deep Genomics to leverage their artificial intelligence drug discovery platform. What can AI offer you that traditional approaches haven't? And can you provide us some sense of where you might go with this toolkit?

Yes. I mean, this is going to allow us to investigate the regulatory elements of the genome. And by far, the largest amount of genetic information is in our genome. There is a potential to increase or decrease gene expression by targeting a control element. So we're going to be iterating chemistry and the biology in a complex milieu to understand and optimize regulation of gene expression. So I don't want to give you some specific indications, but this is kind of the stuff we're going to be looking at. We're going to be looking at optimal choice of specific portion of regulatory sequels within the genes to target good applications for AI. So there's a lot of genomic data available and as the -- this is a type of situation where the AI approaches works for its best. So we are very, very excited about this collaboration here, but more to come. It's early but more to come. Yes.

And just generally, how busy are you on the B2B side? And are there other technologies you would like to bring in to support your internal R&D efforts?

Yes. I mean, we're always on lookout for things. We always evaluate opportunities outside. And we've done several deals last year -- early-stage deals because we do believe that this is where we can generate the most shareholder value. So we will bring in other technologies if they allow us to, for instance, improve delivery in the case of gene therapy, improve delivery of gene therapies or allow us to affect retreatment with gene therapies, improve the gene therapies retreatment visibilities. These are the things that come to mind. Or other indications that are large orphans that have a significantly unmet need for where we can be either first-in-class or best-in-class. So there is -- and I think it's likely that our BD activities will accelerate as we move forward. We have a goal of 2 INDs per year, starting end of this year, moving to 3 to 4 R&Ds per year in the horizon of 2025. So some of this will be coming from internal research, some of it will come from BD.

Right. And J.J., how are you thinking -- and you touched on this a little bit, but how are you thinking about achieving GAAP profitability at this stage? How should we think about short- and long-term margins? And I assume that the 2 potential upcoming launches have significant impact on this outlook here.

Yes. So I would say, again, despite the impacts of COVID-19 and the ROCTAVIAN delay on our near-term financial outlook, we believe that if we do launch ROCTAVIAN and vosoritide, revenue and profitability growth will resume during 2022 and significantly accelerate in 2023. So from an operating margin standpoint and with the understanding that we have not provided long-term guidance beyond 2020 at this time, we believe that the ROCTAVIAN and vosoritide are approved and the revenues ramp up over the next few years, we will see significant margin improvement here. That is based on more favorable cost of goods from both ROCTAVIAN and vosoritide, which should help bring our historical legacy enzyme replacement therapy higher -- which has a higher cost of goods of around 20% down into the mid-teens in the 2025 horizon. So R&D expenses will continue to grow, but start to shrink as a percentage of sales, and all of that will be dropping to the bottom line. And in terms of SG&A, the infrastructure for our worldwide commercial operations has largely been built now. We support close to $2 billion of sales today. We are ready to launch our next 2 potential products, as you know, vosoritide and ROCTAVIAN, again, but without providing specific numbers, the math on overall margin improvement with sales and marketing included as well, we are in probably the 30% to 40% range of operating margin. So pretty healthy margins, especially as revenues potentially ramp up significantly.

When you put this all together, where do you see the company in 5 years?

So after adjusting again for the effects of the ROCTAVIAN delay and the short-term COVID-19 impact, we believe that we can still get close to $5 billion in revenues goal in 2025. Although it may be pushed out somewhat depending on the timing of potential ROCTAVIAN approvals. If it doesn't happen in '25, it's likely to happen in '26. And as we stated previously, by 2025, we believe the current base business will continue to grow and with potential contributions from vosoritide and ROCTAVIAN, we anticipate that BioMarin can be significantly profitable on a -- very significantly profitable on a GAAP basis in 2025. So in the very short term, this year, as you know, we have already guided to kind of flattish revenues in '21 versus 2020. This is mainly related to 2 things, and the main one is the fact that this is going to be the first full year of Kuvan generics in the U.S., although we -- that business is going to go down only 1 year and then after that it's going to stabilize. And then I would say starting next year in 2022, the growth -- the anticipated growth in Palynziq will supersede the loss of business in Kuvan generics in the U.S. and then actually our PKU franchise will start growing again. So we'll be solidly GAAP profitable in 2025, with a growing pipeline moving to 3 or 4 INDs per year.

So, J.J., on ROCTAVIAN here, the 1 year data, as you mentioned from the Phase III program is expected imminently. Can you help frame for us what we should look for here when you announce the data? And what is clinically meaningful?

Yes. So we're going to show now the transient annualized bleeding rates, which is the clinical endpoint from a data set of 134 subjects. So that should provide good insights into the magnitude of effect with ROCTAVIAN at 1 year following bleed control, also Factor VIII expression level will be important especially across such a large number of subjects and given the variability observed to date in gene therapy products for hemophilia A. As you know, the -- this is a 52-week study that -- in 134 patients, again, the largest gene therapy study ever implemented. It is powered to demonstrate superiority versus standard of care as a primary endpoint of annualized bleeding rate. So we believe that this is achievable -- an achievable efficacy bar based on observations to date. And I just want to highlight that in your recent reports on BioMarin, you did highlight the results that were observed in terms of ABR and Factor VIII levels in the Phase II trial, the interim Phase III trial. What I just want to remind the audience here is that even in the interim Phase III study, with just 16 patients or so at 6 months, the Factor VIII levels, even with what we believe was a suboptimal steroid regimen, were actually between the high dose and the low dose of the Phase II trial. So at 6 months, again, the Factor VIII levels on the low dose in the Phase II trials were lower than our interim Phase III results of the Phase III. And despite that, if you go back to what we've demonstrated with the Phase II trial, despite those lower levels in the Phase II trial, if you look at the 3-year data, so the bleeding -- the average -- actually the median ABR in the low dose the 4e13 of study, Phase II study, the median ABR was 0. And the average annualized bidding rate was 0.5, 3 years after treatment in a study where the Factor VIII levels were lower at 6 months than they were in interim Phase III. So obviously that bodes well for the Phase III results and for the durability of effect here. So I just want -- so the mean reduction of annualized bleeding rates in the low-dose Phase II trial at 3 years was 85%. The reduction -- the mean reductions from baseline in Factor VIII infusion, in Factor VIII -- replacement factor VIII resumptions was a reduction of 94%, went from 155 infusions per year to looking at a table here to an average of 8.4 per year. And this was in the study that had Factor VIII results lower than what we show in interim Phase III with a suboptimal steroid regimen. So for all those reasons, we're pretty excited about sharing the results with all of you in the not too distant future.

So where do you think the impact of changing the -- well, I guess you did not change the steroid regimen, but you have a more strict directive as to how to use it on an as-needed basis. So what do you think that does to the curve for the Phase III data set on the board?

Yes. So we're going to find out soon. But however -- so what we've done is that we realized when we did the interim Phase III analysis over a year ago that indeed the clinicians were not following the steroid regimen protocol. They were starting the steroids too late, and they were stopping the steroids too early as compared to what it was done in the Phase II. You're starting the steroids at about 10 weeks after treatment on average as compared to, if I remember, like 2.5 weeks or so in the Phase II trials. So since we have educated the clinicians, the investigators about this, I think the steroid regimen start went from 10 weeks to around 4.5, 5 weeks, so a significant drop. And also we don't have the Factor VIII results, so we don't know exactly what it will do. What we know based on the safety monitoring is that the liver function elevation is definitely reduced in the last 100 patients of the Phase III trial as compared to the first 20, 25 patients. So -- and the steroids regimen should have an impact on the early Factor VIII expression within the first 6 months to a year, I think steroids -- most patients are -- they don't take steroids after a year. So I mean, the long-term impact of the steroids on the Factor VIII level is probably going to be minimum.

And post this data, you are going to approach the 2 regulatory divisions. So with EMA, is -- are they just looking for the 1-year data from the Phase III? Or is there anything else that they need? And then for the FDA, what do you expect the nature of the conversations to be? And what exactly are they looking for when they say they want in your data?

Yes. So what we -- I mean, what we're going to do when we get the results, we're going to review the results with the different stakeholders in the hemophilia community in greater depth. We're going to have discussion with the EMA and the FDA about whether the data is strong enough to support review and approval. Again, the EMA has so far told us that they should be satisfied with 1 year of data. But again, once you get the data, I think it could generate some more questions, but at this time, we are planning to file next quarter in Europe, very likely, assuming, again, the data are as good as we anticipate. So I think the FDA focus is going to be on whether the trajectory of the Factor VIII levels when patients are off steroids, is sufficiently durable to support a positive inclusion of benefit. The FDA review is really hung up on the potential steroid confining effect on Factor VIII levels in the short term. So I think we're going to look at the data, and we're going to sit down with the FDA and see if we can file with the 1-year there or not or if they stick to their request for 2 years. At the same time, whatever they decide, I think what's going to be interesting, though, I mean, I'm going back to the comments I've made about the Phase II data in terms of annualized bleeding rate, clinical endpoint, which was dramatic reduction at 3 years with Factor VIII levels that are lower than when we observed in the interim Phase III. I would say what we hope is to be able to show the results that are such that we can demonstrate that the likelihood that we're going to still observe a very significant annualized bleeding rate reductions at 2 years after we have 1 year, it's going to be very high. And consequently, where even if the FDA does still request the 2 years, it will impact the timing of the drug, but I would say the probability of success, we -- hopefully going to be able to determine it is extremely high once we have the 1 year data, but all this is to be determined.

And on the commercial side, you have been talking to a lot of hemophilia-based stakeholders, the leading physicians here. How has the complete response in any way impacted physician interest in ROCTAVIAN or potentially the payers' willingness to support a premium price here?

Yes. I mean -- so actually, we're going to be coming now to the market with even more data and more information about ROCTAVIAN than we were seeing they were planning to have a year ago, obviously, because we initially were planning on launching with like data on 20 patients and here it's going to be 134 patients with -- over a year of randomized placebo control, randomized trial as compared to 6 months of data on 20 patients. So very different selling proposition here. So we think that this is going to -- actually going to refine and enhance the product profile here for patients, for physicians and payers. And we haven't seen anything so far that demonstrates payers' reluctance to reimburse for ROCTAVIAN. Actually also, as when we -- soon after we got the CRL, ICER came up with an analysis that stated that ROCTAVIAN would be cost-effective at $2 million per treatment. So -- and ICER is not generally trying to make things look favorable to the pharmaceutical manufacturers. So ideally, we're going to be launching into an environment that is even more welcoming of treatment options that enable the patient's liver to make their own Factor VIII to prevent bleedings, thus keeping them out of the hospitals, eliminating reliance on weekly prophylactic regimen. And this scenario is very supportive of a premium pricing, given the ABR, again, the clinical annualized bidding rate results observed to date. And we continue to hear percent from our investigators, the life-changing impact of ROCTAVIAN -- the life-changing impact ROCTAVIAN is having on patients, which is the most important aspect and continues to support our goal to make this therapy available to patients as soon as possible. So what sometimes doesn't come through in somewhat sterile analysis of numbers is the impact of a new therapy on patients. We continue to think that gene therapy is an important option for patients to address their needs and while improvements in product offerings like bispecific antibodies or extended high flight factor replacement, it is worth highlighting that gene therapy does not exclude patients from subsequently switching to another mode of therapy in case they don't respond to our products. And in point of fact, it's very difficult for patients to fully appreciate the benefits of gene therapy until they have experienced it, as we are told by the patients we have treated so far. They're telling us that the experience is transformative. One patient in our trial described his experience, and I am reading a quote for that patient, "I no longer have bleeds or pain in my ankles. I can go to the gym now and weights train without worrying about getting injured or having to infuse. I don't stress as much about bleeds as I used before -- I used to before I had gene therapy. My body feels good physically. I feel like a new, improved and transformed version of myself." So these are actual patient words. Another one described his experience as having a new lease of life. So this is pretty exciting feedback on the impacts ROCTAVIAN is having on the quality of life of these patients.

Great. So moving over to vosoritide here. You talked about the data -- the 2-year data that was provided recently in the clinical meaningfulness. Why do you think the FDA reiterated its recommendation of the 2-year data in the letter to you regarding approval? And how does this dataset you just provided answer that question?

Well, because this has been an ongoing theme from the FDA since they first engaged with us many years ago on the development of the product, presumably to address the issue of durability of effect, and this is mainly related. The root cause of that is a growth hormone experience. Years ago, growth hormone was tried in achondroplasia and was effective in about 6 months to a year and then the effect disappeared. So here, we have a very different set of data. We are optimistic based on a lot that we've done that our global development program, which has 4 levels, is going to be sufficient here to convince the regulatory authorities. So we got a Phase III trial with the 1-year and the 2-year data. We had the Phase II trial out to 54 months, showing durability effect for 54 months compared to matched historical control. We have a natural history study to document very precisely where the patients untreated go over time. And we have almost completed a 0 to 5-year-old study, which will -- which, by the way, is a randomized placebo-controlled trial with 3 cohorts of different ages from 0 to 5. We believe that all this to provide the data would be needed for approval, and we are encouraged that the FDA accepted the NDA. They could have sent us a refuse-to-file if they really had a major problem with it. And they didn't. So that means they are willing to consider our filing. I would say -- and the 2-year data here, I mean, it's not exactly that the 2-year that they were hopeful to have, but the 2-year data here is very encouraging to answer some of their questions. So -- because it demonstrated consistent growth trajectories that we observed in the Phase II. So we are prepared to provide this 2-year update to the health authorities, by the way, should they request that during the review.

And on the infant/toddler study that you mentioned, how are those studies progressing? I know there was a bit of -- there was some COVID impact with regard to some of the cohorts? And when could we see initial data there?

so the enrollment was obviously slow during the COVID-19 last year, but we do expect to complete the enrollment of the final cohort within 5 to 6 weeks. So it's basically done. In the last cohort, we had -- the first cohort was 2 to 5 years old and 6 months to 2 years, and this is the third cohort, 0 to 6 months. And so the 2 -- the first 2 cohorts were completed already a few months ago. This is the last cohort. So this is going to be a 1-year trial. We're not going to get results before -- in about a year or so, slightly over a year from now, but we're pretty excited about it.

So moving to the PKU franchise here. You talked about the generic entrants that are coming in versus Kuvan. Can you describe what you've been seeing in terms of erosion thus far and what you see as the cadence of erosion in the near term? And when you might see the tail of the Palynziq launch is progressing in the context of this?

Yes. So obviously, there's lots of exclusivity in the U.S., again, it's U.S. only, by the way, not Europe or ex-U.S. It began only at the beginning of Q4, so it'll be a little premature to observe or comment on meaningful trends or the materiality of share loss. I mean, we have been losing share. But there is nothing surprising, nothing unanticipated. And we did expect our revenues would step down. So we do expect erosion, continued erosion. This year is going to be the first full year of the U.S. generic impact, but we anticipate that a great majority of Kuvan adults will switch to Palynziq, given its superior efficacy as compared to Kuvan. As you know, we have barely scratched the surface of the adult PKU market with Palynziq, and 40% of our current Palynziq users are switching from Kuvan. We are optimistic that this trend will continue, whether it is switching from Kuvan or from generics. So by the way, the patients we lose to Kuvan generic, they are not lost to our PKU franchise. They are not lost to BioMarin because we anticipate to get the vast majority of them back either on Palynziq or fully down the road on gene therapy. So they are a growing number adult patients who seek to optimize their outcomes with Palynziq to further reduce their p-levels and to have a normal diet or close to normal diet. And for many patients achieving these results is unattainable with Kuvan alone. So as I just said, a significant percentage of our U.S. Palynziq users were former Kuvan users. So we believe in the U.S., we will ultimately capture a significant portion of the adult PKU market given Palynziq's demonstrated efficacy and patient satisfaction to date. And again, going back to the patient's experience that I talked about with ROCTAVIAN, same thing, we're getting the same comments and feedback from patients when they go on Palynziq. They say this is life-changing therapy for them.

And when -- maybe you could comment on the gene therapy program for PKU and how that's progressing and when we might see first clinical data?

So the data, as we said, we started with a low dose. We -- I think we have communicated in the past, and we will continue to do so that we will give you data or some data when we believe we have reached the dose that we will take to expansion for pivotal trials. We have, so far, only treated 2 patients. I think we're going to -- it's a very rigid protocol. We should be able to treat 2 additional patients in the second cohort this quarter. And then when we see some significant reduction, we will communicate to you. But again, the objective for us is to normalize -- with gene therapy is to normalize p-levels. And this is what we did in PKU mice. We absolutely normalized their p-levels within, I think, 3 weeks-or-so to 4 weeks of infusion of treatment. And this is the goal that we have here for gene therapy, PKU gene therapy with our patients.

And hereditary angioedema could be your third program here or asset to enter the market at one point with gene therapy. Where do you stand right now with that program? And what attracted you to that as the next disease area to target?

Yes. I mean again, this is AAV5 gene, similar to what we do in ROCTAVIAN, delivered to the liver, similar to ROCTAVIAN, which is made in our own manufacturing facility. So all this is leveraging what we've been investing in, in the past few years. So [ HPE ] is attractive as it requires chronic therapy. Prophylactic therapy is effective, but compliance is tough, as you know, and the breakthrough events for these patients are horrible. Biosimilars are helpful also, but they require compliance and they are not natural. So what we're doing is we're doing toxicology studies right now to characterize the safety and the magnitude of achievable gene expression to support dosing in humans. Preliminary human data to characterize whether sufficient expression can be safely achieved is our goal. Again, we anticipate filing the IND in the U.S. by the end of the year.

Great. So one question, J.J. As we see these options therapeutic modalities increasing number, which we just saw gene therapy enter, we're now seeing gene editing, and there's other approaches that are coming down and optimized viewpoints here. How are you thinking about 2 areas? One is your base business of lysosomal storage diseases and what you might want on that front? And then 2, would you look to bring in one of these technologies that you maybe don't have down the road, like gene editing versus gene therapy?

That is possible, let's say, universe that we are scanning all the time and interacting with some key players in that field that it will be -- our adjacent technologies to gene replacement therapies. That's, obviously, very potentially complementary to what we have been doing. So -- and also here, again, one of our strengths is our manufacturing ability -- abilities to manufacture complex proteins and not to manufacture gene therapy products. Again, an advantage of our PKU program is that we are treating the patients with commercial-scale product manufactured at commercial facilities, so we eliminate some of the potential variability here. We can -- so we can leverage our manufacturing expertise. We can also add our own expertise to the design of the vectors. So we can move through early-stage development to human study very quickly as we got to do with our ATU product, for instance. This is just examples where our expertise in genetic disorders, coupled with our manufacturing ability is leverageable across different platforms and into larger indications.

And maybe you could just talk as well about your work here on next-generation AAV capsids related to tissue tropism and where you stand with kind of creating that next-generation?

Yes. I mean, so this is -- there's still -- it is complex. There's still work ongoing there. It's not ready for prime time, but this is an area where we are definitely investing, continuing to invest. Everybody is eager to find the next-generation capsid, and we are too, and we're working hard on that, whether it's reduced immunogenicity, whether it's different tropism, better tropism, whether it's also a better ability to transect a larger number of cells is all things we're working on at this time in our research team.

Okay. Well, one last question here. As you look to your early-stage pipeline, what are you most excited about that's in...

Yes. So besides the stuff we've already talked about, obviously, in gene therapy for hypertrophic cardiomyopathy, I think that's potentially a very exciting and large indication. So I'm very excited about that. And also, I'm very excited about a couple of late-stage preclinical products that we are -- we have not disclosed yet, which I think are very exciting, and hopefully, we can talk about it sometime before the end of the year.

Great. Well, with that, thank you very much, J.J., for your time. Really appreciate it.

Okay. My pleasure. Thank you for inviting us to your conference.

Thank you. Bye.

Goodbye.