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

Good morning, and thank you, everyone, for joining the virtual UBS Global Healthcare Conference. So I'm Colin Bristow, one of the biotech analysts here. And it's my pleasure to have BioMarin here with me today. So speaking on behalf of the company, we have J.J. Bienaime, CEO of BioMarin; and Brian Mueller, CFO of BioMarin. So J.J., Brian, thank you for joining us today. Before we start, if anyone has a question, there is like a raise your hand function within this video system. But alternatively, feel free to e-mail me directly at [email protected], and I can try and field the question for you. So J.J., good morning. Congrats on the EMA accelerated assessment for Valrox, that was great timing. Thanks for organizing that for us. And I know you have some remarks. So right now, I'll hand it over to you. J.J.?

Thank you, Colin. We appreciate the opportunity to speak with you today. As you said, this morning, we were pleased to share the news that the European Medical Agency granted our request for accelerated assessment of ROCTAVIAN, gene therapy for the treatment of hemophilia A. So to remind you, accelerated assessment was granted because of the therapeutic innovation ROCTAVIAN represents as well as the unmet need if potentially authorized. So given our plan to submit the European Marketing Authorization Application or MAA within 52 weeks using the Phase III -- with a 52-week Phase III results next month. Accelerated assessments may reduce the time frame for the CHMP opinion. Our prior guidance for the CHMP opinion was second quarter of 2022, but under accelerated assessment, it could happen earlier in 2022. I would say that under the various clock stop scenarios, once we are under review in Europe, we will continue to assume base case of second quarter for the CHMP opinion, with the understanding that it could come sooner than that. So regardless, we are thrilled that the European Health Authorities recognized the dramatic hemostatic efficacy and transformative nature of ROCTAVIAN for people with hemophilia A. And we have been wonderful partners through our collaboration, and we appreciate their engagement in the interest of people seeking gene therapy for the treatment of hemophilia A. We look forward to receiving the CHMP opinion in the first half of 2022 and to submitting the BLA to the FDA in the second quarter of 2020. On a related subject, last week, we were pleased to share the 5-year update from our Phase II study with ROCTAVIAN, the consistent durable treatment benefit that was demonstrated through year 5 in the high dose, the 6e13 dose and through year 4 in the 4e13 dose with ROCTAVIAN is a major step forward for the field and for people with hemophilia A interested in the treatment with gene therapy. All participants in both cohorts remain off Factor VIII prophylaxis and have been off corticosteroids since the end of the first year. The mean annualized bleeding rate through year 5 in the high-dose cohort was 0.7, which is a 95% reduction in annualized bleeding rates. The reduction of Factor VIII usage, which is important for payers through year 5 in the high-dose cohort was 96% compared to pre-infusion levels with a prophylactic Factor VIII. The mean ABR in year 4 for the low-dose cohort was 1.7, with a mean cumulative ABR reduction of 92% and a Factor VIII use reduction of 95% of use, again, compared to pre-infusion levels of standard of care Factor VIII therapy. Also of relevance, Factor VIII activity levels did decline commensurate with the most recent use observation, but they continue to be in a range to provide hemostatic efficacy. So needless to say, we are encouraged by the durability of effects observed in Phase II study in year 5 and 4, respectively, and we look forward to sharing more during an oral presenting and the upcoming International Society of Thrombosis and Haemostasis, ISTH, 2021 Virtual Congress between July 17 and July 21. Briefly on VOXZOGO for the treatment of children with achondroplasia, which is our largest market opportunity to date with roughly 11,000 eligible children in the EMEA region and roughly 3,100 in U.S., totaling approximately 14,000 children with achondroplasia, who would be eligible for treatment with VOXZOGO. Release label finished goods are expected to be available in key markets, including Germany, France, Italy and U.S., and are ready to ship to customers within 4 to 8 weeks of an approval. With potential European approval in the third quarter, assuming a positive CHMP decision, followed by the November 20 of this year, PDUFA action date in the U.S., the commercial TV is anxious to launch VOXZOGO later this year. The combined EMEA and U.S. region represents well over $1 billion opportunity. So excitement is building as we approach these key regulatory readouts. We also have many programs in early-stage products advancing in the R&D organization, and we look forward to sharing a deep dive on this at our R&D Day later this year. So briefly on the financials, despite some headwinds from ongoing COVID impact outside the U.S. and in a more limited way in the U.S., we announced a very strong start to 2021 on our recent Q1 call, and we reaffirmed our full year 2021 financial guidance. We recognized $114 million in cash flow from operations in the first quarter, understanding -- underscoring the essential nature of our business to the people who rely on our innovative medicine for treatment. So this is a brief snapshot of the business. I will turn it back to you, Colin, for questions.

That's great. Super helpful. So just taking a step back and from a high level, BioMarin is traditionally being focused on enzyme replacement products, and now the company is sort of undergoing a transformation into -- like a multifaceted biotech company with gene therapy and like a nucleotide small molecules biologics. Can you just walk us through this transformation? And where you see the company going over the next 3 years, 5 years?

So thank you, Colin. So we began the shift from ultra-orphan conditions, ultra-rare conditions to larger, rare diseases several years ago. And we have successfully transitioned the development pipeline to reflect this transition. So we do have a core focus on those modalities, but we remain technology-agnostic when exploring which modality to pursue for a specific condition. For example, we learned a great deal about antisense oligonucleotide therapy through our experience with drisapersen for the treatment of DMD, and we leverage our learnings resulting in the discovery of BMN 351, which is our next-generation oligonucleotide for the treatment of DMD. And in our IND-enabling studies with BMN 351, we demonstrated dystrophin expression levels of between 30% and 50% of normal levels. And this is not microdystrophin, this is dystrophy. And we -- so we increased the levels to 30%, 50% of normal in the quadriceps of the DMD mouse model treated for 13 weeks. So the chemistry for this novel [indiscernible] chemistry, and -- so in this context, we are uniquely positioned. We shouldn't have any safety or toxicity surprises. And this pursuit of scientific excellence is part of the long-term transformation of BioMarin. So what we learned from our experience builds our competence and knowledge for the next-generation of pipeline products. Just a few words also on BMN 307, which is our PKU gene therapy, is another example of how we leverage our experience with ROCTAVIAN to drive greater efficiencies in manufacturing, regulatory views and clinical development. This expertise all contributes to the growth, transformation, we envision over the next 3 to 5 years. Assuming the potential approval and launches of VOXZOGO and ROCTAVIAN, we expect improved margins, continued investment back into the business in the form of R&D, leverage of our global manufacturing and commercial footprint to drive sustainable growth of the commercial pipeline and new products in larger indications. So that's how we envision the next 3 to 5 years of growth and the transformation of BioMarin.

That's great. So I guess, starting with hemophilia, the current Factor VIII replacement products in hemophilia A and Roche's Hemlibra already working very well for many patients. So how would you frame the unmet need that you see ROCTAVIAN addressing?

Well, we've learned from some external research based on hundreds of claims of patients taking Hemlibra in the U.S. last year in 2020, that 60% of patients who used Hemlibra in the U.S. last year were also continuing to use Factor VIII replacement therapy. Actually it was a surprise to us. We thought Hemlibra was a great product, but 60% of the patients, they file insurance claims for factor reducers, and some of them are repeat claims. So it means that they are using it, some of them on a relatively regular basis, which, as you can imagine, adds to the cost of therapy. So it not only highlights the ongoing infusion burden with Hemlibra, but tremendous cost of potential dual therapy. Hemlibra, which is chronic therapy can cost over $700,000 a year in the U.S. So then you have to add some replacement Factor VIII costs on top of that. I would say ROCTAVIAN represents transformational freedom from chronic prophylactic agent infusions, significant cost savings for payers, and most importantly, dramatic liberation from the day-to-day physical limitations brought about by hemophilia A and we have great quality of life data to demonstrate that. So we think Hemlibra has been an important primer for the potential introduction of ROCTAVIAN as the next-generation treatment for people with severe hemophilia A who wants to be unburdened from chronic injections and Factor VIII usage.

Thinking about the sort of subpopulation of hemophilia A, like, who do you think is going to benefit the most? And where do you see the greatest initial uptake?

Well, we think our ROCTAVIAN will be an attractive treatment options for patients with severe hemophilia A, who feel physically limited by their condition today. So a person who has severe hemophilia A, needs a -- to manage weekly infusions of prophylactic Factor VIII. They have damaged veins from chronic infusions. They have fear or overexertion causing a bleed. They worry about the timing of their treatment of their Factor VIII infusions or Hemlibra with a workout or just daily tasks and managing when the next Factor VIII infusion will be needed. Just to list a few things with -- that people with severe hemophilia A live with today. Anyone who was a break from living life with a constant framework of managing severe hemophilia A will be a good candidate for ROCTAVIAN gene therapy.

Okay. That's great. And as we look at the data, there is some decline in Factor VIII activity over time. How are you thinking about this? So what's the feedback you've had from prescribers and payers regarding how they'll view this? And how are you thinking about payment models, et cetera?

Prior to the data we just released last week or so, this 5-year B control results, we have reached out to many payers, obviously, clinicians to inquire about BioMarin access to ROCTAVIAN because of the tremendous cost savings it will represent for health care systems. What has been encouraging is the focus from the community on durable bleed control and Factor VIII usage because that is what counts in the day-to-day life of a person with severe hemophilia A and the ROCTAVIAN demonstrated a mean bleeding rate of less than 1 at year 5 at the high dose without the need for prophylactic Factor VIII, which is a major advantage for the patient. So these results have been well received. We completed some recent marketing research following the Phase III -- the 1-year Phase III trial and the interest in ROCTAVIAN is even higher than it was a year ago. And as you know, in the U.S., ICER has done an analysis that was even before the Phase III data became available, a demonstrator that as per their analysis ROCTAVIAN would be cost-effective at $2.5 million treatment.

And so when this gets approved, is this -- a couple of things. This is going to be a value-based model. So if the patient doesn't respond, the setup is different. And then just in terms of how you receive the payments, how are you thinking about that? Are you going to [ allow ] payment over time and will that vary by country?

Maybe Brian. Brian, do you want to go over that question -- answer that question?

Yes, absolutely. Thanks. It's a great question. We've spent a lot of time, especially with the delay after the complete response letter in evaluating all of the alternatives. And just to note -- to echo some of J.J.'s comments, while the complete response letter was a surprise and disappointing, it is important to note that we were ready to launch there in August 2019. And that meant not just engage -- being prepared for the marketplace or the patient community, but also payers. We have done extensive payer research prior to then, and payers were already attracted to and very aware of the value of ROCTAVIAN. They're keenly aware of how much recombinant Factor VIII cost their severe hemophilia A patients, that what a single dose of ROCTAVIAN could bring in terms of cost offset. And I bring that up only because the data set at that time because we were filing for that accelerated approval, was much smaller. We had just 7 patients through the Phase II study with 4 years of data and then in the interim look at the Phase III study, that was just 17 patients through 6 months. So now here we are in mid-2021 with a full year of Phase III data, 134 patients, and then the fifth year of Phase II data that we just announced last week. So that's even more real-world evidence, if you will, for payers. But back to the payment model question, we're prepared to offer flexible payment arrangements for what the marketplace may dictate. From our early research and the safe harbor rules do let us have conversations with payers. Our discussions thus far indicate that most folks are not interested in a pay overtime approach in that it is -- the payment systems, the reimbursement systems, they're just not built for that. And that's in the U.S. and Europe. And a single upfront payment seems to be most likely. But payers are interested in the performance of ROCTAVIAN as are we because we want to stand behind the product. So we also do plan to offer some level of outcomes-based agreement. We've had -- most patients do respond directly, I mean, as you've seen in the data with bleed control and reduced prophylactic factor usage, but to the extent there was a lack of effectiveness or lack of response, then we would want to stand behind that. So we'll reveal more details. We were fortunate enough to launch the product for anti-competitive -- for competitive reasons. But that's our belief. That's our understanding. That's how the discussions are going. And another point of anecdote, again, real-world evidence, when Zolgensma launched, as part of their initial press release, they actually launched and announced the special program with the Specialty Pharmacy that offer a pay over time model. Anecdotally, we've heard there hasn't been much uptake in that. So that's another piece of the story that we're observing.

Okay. That's helpful. And actually, that brings me on to a question in terms of in what work are you doing in both the identifying that small percentage of patients who don't respond? And then also, at some point in the future, the efficacy will weigh in. And what work you're doing there in terms of looking options for retreatment?

Yes. I mean, that's a good question that some work that our early research people are looking into, trying to better understand what is it in those patients that the patients are not responding, how different are they, what are the biological mechanisms that prevent Factor VIII expression in those patients. And we haven't cracked that nut yet. But also, what's -- because what's interesting is that we are indeed looking at potentially down the road, having some retreatment strategies because as you say it's unlikely that gene therapy as of today for hemophilia is going to be a lifetime cure. But we do need to better understand what's behind, first of all, what's behind patients, some patients, very small percentage, and that's probably less than 5% are not responding at all and what's behind the DK over time of the Factor VIII expression. So -- and also it's unclear that because you don't want to come up with [ a reachable ] strategy to reach the patients who were refractory to initial treatment won't respond either, and then that's not a winning strategy. So however, we believe we have already demonstrated at least 5 years of efficacy here, we believe, on some projects. So it's likely that the drug would last at least 7 to 10 years in most patients. But -- and so we'll see in 7 to 10 years, if we have -- we actually have some ideas about even potentially retreating the patients with ROCTAVIAN using preconditioning regimens to allow the patient to be retreated. We don't have any data yet. But actually, we have not even primary data to show this is feasible. But in any case, allowing the patients to avoid chronic therapy for at least 5, 6, 7 years, it's extremely valuable for these patients that are allowing them to live a normal life for over the years is extremely valuable. That's why we believe there is so much value in ROCTAVIAN at this time.

Great. So obviously, you just received the accelerated assessment from the EMA. Can you just talk about how that interaction and process has differed from the FDA? And do you just -- what assurances or greater conviction you have that this is going to be a more predictable regulatory process?

Well, I guess your question is behind the fact that we are filing next month -- we're planning to file month with 1 year data. It just is based on several interactions we've had with European Regulatory Authorities, including a pretty recent one. And then this morning, announcing that we had accelerated assessment that's been granted, whereby the European authorities have told us that based on the -- what they know about the Phase III trial, the 1 year data, I really believe that we have enough data and information to file. Now by the time -- even with accelerated assessment, by the time they make their final decision, I would say, at the earliest, in the first quarter of next year, they will see the 2-year data. So they know it's coming. And based on the -- and then they obviously will look at it before making a final decision, but they are not concerned about their ability to evaluate the value of our filing ROCTAVIAN just based on the 1 year data. And also, we are pretty confident in the 2-year data based on the -- we already had 17 patients when we announced the 1-year data with 17 patients that had 2 years of data already, and they demonstrated some pretty significant bleeding control at 2 years. So we're not worried about this.

Fantastic. So maybe shifting on to achondroplasia. So can you discuss the unmet need there? And just frame the market size and opportunity for VOXZOGO?

Yes. I mean, there is no approved therapy today for achondroplasia in the world, except in Japan, where Japan has approved the use of steroids for achondroplasia, but -- although they know that after -- sorry, steroids and growth hormone, sorry, although we know that growth hormone effects go away anywhere after a year or so. But for them, another extra years of growth is just probably valuable, is better than nothing. But nowhere else in the world is there any approved therapy for achondroplasia. This is a -- so these patients have no alternative today except for actually many of them they do what's called limb extension surgery. So they break the bones of the patients, the legs of the patients and they -- and then allow -- and then they create a gap between -- in the fracture of the bones so that there would be new bone formation to allow the growth of the bone and increase the lengths of the legs. It's painful surgery, expensive, dangerous. So that tells you what patients are willing to do to go after the issues created by their -- the fact that their height is significantly below normal, I would say, 5 standard deviations below normal. So based on our marketing research, there is -- we know there is a huge unmet need. We also have had a very large and multiyear effort behind defining the natural history and the burden of illness behind achondroplasia, which has not been very well-characterized before. And BioMarin started doing this several years ago. And it is foundational to our value proposition, and we will communicate about this as we launch VOXZOGO. As I said, we have an estimate that the EMEA region of about 11,000 eligible patients there, which is 3x the U.S. size almost. And actually, in Europe -- in some countries in Europe, 80% of the patients undergo limb lengthening surgery, which tells you, again, the extent of the unmet need. So the potential for VOXZOGO to keep -- or to help children with achondroplasia return to an average growth trajectory for several years is a dramatic opportunity for those that are seeking treatment. And the earlier a child is treated, the better, in our experience because the -- your growth velocity is the -- is at its maximum the day you're born. So your growth velocity is much higher in your first 5 years of life than later. So your growth velocity you're born, that is max, it goes down, goes down, goes down, and then it goes back up right during puberty, around 12, 13, 14 years of age. But it is something that decelerates from birth. And again, that's why the loss -- the potential loss of growth is the highest when the patients are the youngest, and this is why we believe that the payers will be keen to see treatment of their kids with VOXZOGO once it becomes available.

Great. And can you just talk -- give us a bit of color on the commercialization, launch preparation?

I mean, Brian, do you want to take that one?

Yes, absolutely. Thanks. And just to expand maybe on a couple of points J.J. made. So you asked about the marketplace and understanding of achondroplasia. J.J. mentioned the full burden of illness. There is still some disease education to do out in the marketplace, which we've done before because several of our other products were the first therapy for a particular condition. So we've done this before, and this is part of the VOXZOGO launch. But by all means, beyond short stature, achondroplasia comes with other significant comorbidities, including spinal cord compression, sleep apnea, bowed legs, permanent sway of the lower back, obesity. So educating the marketplace and physicians about the full burden of this illness is a significant part of the launch preparation. There is work that we're also doing to establish a medical home for achondroplasia patients. That's a big part of the market preparation. Again, not unusual for BioMarin, when we've launched the first approved and marketed therapy for a disease like achondroplasia and VOXZOGO. Achondroplasia patients today do not necessarily see a consistent set of physicians. They may see a geneticist. They may see a pediatric endocrinologist or other skeletal dysplasia centers. We think establishing a single medical home in a treatment home for folks, both the patient community as well as the treatment community to get familiar with achondroplasia and ultimately, VOXZOGO and how to treat it with the product is a big part of the launch preparations as well as just understanding the marketplace ourselves. This is a large marketplace. J.J. mentioned these patient numbers, particularly in Europe, which is hopefully, first up for an approval. That market is 3x the size of the market in the U.S. So our own understanding of where these patients are, again, where the treatment centers are, are the major elements of the launch. And then preparing the marketplace for our robust data set. We've got 2 years of our Phase III data, the natural history data that J.J. mentioned. We'll have the 0 to 5 study that -- just 0 to 5 years of age, which should be available early next year as well as the long-term data from the Phase II study. So having that robust data set available as part of the launch is another key element.

That's great. And I may add -- sorry, Colin, also as compared to our enzyme replacement therapy products, achondroplasia is diagnosed before birth for most patients. So the BioMarin commercial teams can focus directly on promoting the treatment with VOXZOGO. They're not going to have to find the patients and has been necessary for Naglazyme, Vimizim or our other products. So we can be pretty right away more efficient working with treating physicians.

Okay. I guess the same question on VOXZOGO regarding just conceptually how you're doing about pricing, payment models here?

I mean, payment model, I mean, this is chronic therapy. I mean this is not chronic therapy for life, but it's chronic therapy for the first 15, 16 years of life. So -- and actually, it's an important component of our pricing decision because, although the treatment is not a lifetime treatment, the benefit is a lifetime benefit, which actually allows more flexibility on pricing. So we've done a -- extensive payer research in the past year on VOXZOGO in the U.S., Europe and some other countries. And so we believe that, that there is a potential for interesting pricing for VOXZOGO. I think we have guided towards between U.S. -- Europe and the U.S., between $100,000, $200,000 a year of treatment. Obviously, not the price of enzyme therapy for ultra-rare disorders, but more like a Kuvan or Palynziq pricing, which so far has been well received by payers.

Fantastic. On the competitive side, in ACH, there are others out there. There's obviously Ascendis, Pfizer, et cetera. Could you just give us your thoughts on these competitive assets? And how you see yourselves as being differentiated?

Well, the main differentiation, we're years ahead of them, and we have extensive physician data demonstrating benefit here. Ascendis is at least 5 years behind us, probably more like 6 now. So far, the only human data they have provided is healthy volunteer data with 1 single injection. So it's very hard to actually tell what it is going to be there. But I think what it would be bringing to the party is superior to VOXZOGO here. The future will tell, but the fact that our patients -- we've had a several year extension now to our -- not only our Phase II trial, and also we have an extension to our Phase III trial, which was reported 2 years, and I would say the adherence to treatment is extremely high, like over 95%. So it looks like the patients or the parents our care givers are comfortable with 1 subcutaneous injection per day. So again, also, we now have demonstrated the effect of VOXZOGO over many, many years of treatment and these 5 years of treatment. We also have shown we have radiographic evidence and biomarker evidence that there is no increasing -- or acceleration of bone aging, which is important because you don't want to give a treatment to these patients and make them grow much faster for 2 years and then you accelerate their -- the closure of their growth plates, which would be a problem. We've demonstrated that this does not happen with VOXZOGO. So all this combined, we're pretty confident in the value of our product.

Great. You touched upon margins a bit at the beginning, but maybe we could just break out a little bit. And could you just help us understand the margin progression from VOXZOGO and ROCTAVIAN, just breaking out [ the team ] and how we should think about that over time?

Okay. So Brian, that's your cup of tea.

Yes, thanks. This is a fun topic to think about from the company as we look forward to this next transformation as we launch these potential blockbusters in ROCTAVIAN and VOXZOGO. So first, let's think about cost of goods sold because we built our base business today, again, roughly $1.8 billion in revenue largely through the ultra-rare disorders in the form of these enzyme replacement therapies for the mucopolysaccharidoses. And these are very complex enzymes. Recombinant human enzymes made in our mammalian cell culture process. And again, these are ultra-rare disorders. So although we've scaled up to meet the marketplace, we're not talking about the large scale that would come with a larger patient population. So with both VOXZOGO and ROCTAVIAN being these larger opportunities and getting more scale from the technology, the know-how that we've built over the years, we do expect that ROCTAVIAN and VOXZOGO will have lower natural cost of goods sold as they launch and ramp up. So where today our cost of goods sold is in the low 20%, leading to high 70s percent gross margins, we would expect as ROCTAVIAN and VOXZOGO become more substantial components of our revenue base that, that COGS will drift down south of 20% into the mid-teens is the goal. And so with that and with these large revenue opportunities, it's also where we have the opportunity to improve margins across the board. Traci mentioned to you before the call, our commercial footprint. We've got sales in over 75 countries. We've got boots on the ground in over 50 countries. That's the SG&A infrastructure that we built for the long term. It supports not just the $1.8 billion of revenue today, but the launches of VOXZOGO and ROCTAVIAN. Those launches will require some additional incremental investment because the disease areas are new. You asked about preparing the marketplace for achondroplasia -- or for VOXZOGO, we know that hemophilia A is already a very competitive space with lots of big players in the recombinant prophylaxis of Factor VIII market. So some incremental investment, but definitely leveraging that infrastructure. So we would expect as sales are increasing, SG&A might increase on an absolute dollar level, but definitely improving as a percentage of sales over time. And as our P&L matures over the next few years, we'd expect our SG&A and our overall operating margins to look like our larger biopharma peers do today in terms of the total P&L. And then there's R&D, where, again, we think it's absolutely critical that we continue to fund an innovative pipeline. You've seen and heard some of the early-stage licensing that we've done over the last year, those are the clinical programs of the future. And we think it's important to continue to fund that innovation, continue to grow our pipeline that will lead to additional product launches for the rest of this decade to grow the top line, and that will come with some investment. But we do expect leverage from R&D as well. We've built this high-performing R&D infrastructure. And while again we'll increase R&D investment over time on an absolute dollar basis, we will expect margins to improve in R&D to settle down as a percentage of revenue. So pretty excited to think about. Definitely, VOXZOGO, ROCTAVIAN launches are a key part of it. But margin improvement, we're pleased with our goal of this year, even where we've got some headwinds of having operating profit or we call non-GAAP income of a substantial level as well as our goal of positive operating cash flow. So that's for the base business. So the opportunities that we have from a P&L and cash flow standpoint with ROCTAVIAN and VOXZOGO is very exciting to us.

That's very helpful. And you mentioned business development. Just to expand on that a little bit. How are you guys thinking about that now? What are -- what areas of interest to you? Any preference on deal size or stage?

I can start with that, J.J. if you'd like?

I mean, look -- yes, why don't you go on the roll, go for it.

Yes. No, so -- and it follows my last comments around our optimism in the value proposition and the prospects of ROCTAVIAN, VOXZOGO with those now being on relatively the near-term horizon. We don't feel the obligation to buy revenues and do larger scale M&A. Of course, [indiscernible] is looking and paying attention, but that feels like less of an obligation because we've got ROCTAVIAN and VOXZOGO pretty close to launch. And by the way, large scale M&A, especially with today's valuations is expensive. You're paying a premium on top of an already rich valuation. Those assets that are close to commercialization often come with some development expense to get them to the finish line. So there's still required investment. And there's risk. So that's how we feel about large scale. I mean where we have been focusing and where we've been very successful over the last couple of years is early stage in-licensing. And we've got a track record for this. ROCTAVIAN itself was a very early stage, very modest upfront payment and look at the value that we've built out of ROCTAVIAN. We've done this over time, too. The Pfizer asset tells that up, which was acquired through Medivation. BioMarin developed that asset. We made a small acquisition about 10 years ago, LEAD Therapeutics. It was about a $25 million investment, and we sold that asset to Medivation for over $450 million. So we've got a good track record of taking in early-stage assets, wrapping that BioMarin know-how in developing those through the clinical process, and that -- we'll continue to do that to feed the pipeline.

Great. J.J., anything to add to that?

No. Again, I mean, we've executed last year buying early stage deals, some of them we didn't even disclose. As Brian said, we believe this is -- so by the way, now it's more than ever in the history of BioMarin. As Brian highlighted, we believe this is the way to build significant shareholder value. I mean, buying a late stage asset, first of all, as Brian said, we want to conserve cash at this time, although we are generating cash, but if we wanted to do a large acquisition -- related acquisition, it would be dilutive to shareholders in the short term. I would say, generally, this is the way you build value with early-stage. With late stage, you need major synergies between your existing commercial infrastructure, regulatory and development infrastructure and what you're acquiring to generate some significant shareholder value. So I would say, I'm not saying that's impossible. And obviously, we have -- we are one of the most successful independent rare disease companies that operates around the whole world. We're able to get drugs approved and marketed in over 70 countries around the world successfully. So it does attract some retention and interest from other biotech companies that sometimes are 1 or 2 products that need a partner, especially outside of the U.S. So we might end up doing something around there. But at this time, our focus is on early-stage development like the DiNAQOR partnership that we announced last year. We should believe it's going to generate some very significant shareholder value because this is gene therapy for hypertrophic cardiomyopathy, which is huge unmet need. There are very large potential indications for us and for gene therapy.

Okay Great. And I'm consciously getting towards the end of time. Maybe just a more of a high-level question. As we kind of move into this post-COVID lockdown world, what changes in efficiencies to the way that you've been operating the business are going to be here to stay, be it commercial, manufacturing. What can you tell us there?

I would say it's mainly going to be commercial and development. Manufacturing, I think this COVID-19, I don't think is going to have a major impact on that. But again, Brian, do you want to elaborate on this a little bit?

Yes, sure. I do think there's -- absolutely. And I do think that a minimum, across all of the operations, there's a new sense of resiliency. The fact that we were able as well as many other companies in the industry, very impressive to keep manufacturing going, including the early days of the pandemic when things were fully locked down to keep not just manufacturing operations and the plants running, but our supply chains did not miss the shipment. So I do think that there's proven resiliency in the supply chain and manufacturing that will move on as well as some G&A synergies, right, just like most others here on the call today are from home. We've been working from home. And so while we look forward to coming back and collaborating together, there is a new efficiency model available to us in the future for learning new ways to work. But BioMarin, as J.J. touched on, it's likely commercial where there's the most synergy. Our folks already -- there's more telemedicine happening. And if you could picture a certain regional sales rep that might have to travel to 2 cities or 3 cities across the week, and instead, they can do virtual appointments, there's just more efficiency there. There's the medical scientific conferences, which some have committed to staying virtual because it's been very effective and less global travel. So I do envision a more efficient commercial operation post COVID.

Great. Thank you. Well, I think that's pretty much at the end of our time. So J.J., Brian, thank you so much for joining us today. This has been fantastic. Thank you to everyone who's been listening in. If anyone has any follow-ups, you can reach me at [email protected]. And with that, have a great day, everyone.

You too. Thanks for having providing us...

Thanks, everybody. This is great.

Bye.