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

Hi, everyone. This Eun Yang, biotech analyst at Jefferies. It is my pleasure to host a fireside chat with the J.J. Bienaime, Chairman and CEO of BioMarin; Hank Fuchs, President of Worldwide R&D; and Brian Mueller, Chief Financial Officer. Thanks all for joining us today. So before we start Q&A with the management team, J.J. is going to give us a short overview, and then we'll go into Q&A. J.J.?

Thank you, Eun. We appreciate the opportunity to speak with you today. As you know well, BioMarin is a fully integrated global leader in rare disease drugs, discovery, development, manufacturing and commercialization. Over the last few years, we have built a company designed for significant growth. Our global infrastructure incorporates a strong base business delivering close to $1 billion of revenues annually, a durable and scalable pipeline of innovative products and regulatory capabilities and manufacturing and commercial expertise. And of course, 2 near-term global opportunities in large indications. So taken together, we built the framework for significant growth with the CHMP decision later this month for VOXZOGO in Europe for the treatment of achondroplasia, which is the next near-term milestone. So VOXZOGO with roughly 14,000 eligible treat -- children in European, Middle East and U.S. region is our largest opportunity to date. There is no approved therapy available. VOXZOGO represents an important treatment option for the patient community. The treatment benefit and safety observed to date with VOXZOGO gives us further belief that starting as early as possible may provide the most meaningful outcome for children with achondroplasia, and this will be facilitated by the early diagnosis, which is typically achondroplasia. This is a major contrast to our products for lysosomal storage disease, which requires significant efforts to identify the patients. In the U.S., the November 20 PDUFA action date is on track. Assuming approvals and launches in those 2 key regions, VOXZOGO represents well over $1 billion opportunity. So excitement is building as we approach these regulatory readouts. Briefly on ROCTAVIAN gene therapy for the treatment of hemophilia A., a few weeks ago, we were pleased to have share the news that the European Medicine Agency's Committee for Medicinal Products granted our request for accelerated assessment. And based on our plan to submit the European Marketing Authorization, or MAA, with a 52-week Phase III results later this month. Accelerated assessment may reduce the time frame for the CHMP opinion. Our updated guidance for CHMP opinion is the first half of next year with the understanding that under accelerated assessment, it could happen in the first or second quarter of next year, depending on the various clock stop scenarios. So we will continue to assume base case of second quarter for the CHMP opinion for ROCTAVIAN in Europe with the understanding that it could come sooner than that. Regardless, we are thrilled that European Health authorities recognize the dramatic hemostatic efficacy and transformative nature of ROCTAVIAN for people with hemophilia A. They have been great partners throughout our collaborations, and we appreciate their engagement in the interest of people seeking gene therapy for the treatment of hemophilia A. So we look forward to receiving the CHMP opinion in Europe in the first half of next year and to submit the marketing application in the U.S. to the FDA in the second quarter of 2022. Two weeks ago, we were pleased to share the 5-year update from the Phase II study with ROCTAVIAN. A consistent durable treatment benefit demonstrated throughout year 5 in the high-dose cohort and year 4 in the low-dose cohorts with ROCTAVIAN is a major step forward for the field and for people with hemophilia A interested in treatment with gene therapy. All participants in both cohorts remain off Factor VIII prophylactic therapy and have been off corticosteroids since the end of the first year after treatment. The mean annualized bleeding rates through year 5 in the 6e13 cohort with ROCTAVIAN was 0.7, and ABR reduction of 95% as compared to current standard of care. And the reduction in Factor VIII usage through year 5 in the high-dose cohort was 96% compared to pre-infusion levels where all subjects were on prophylactic Factor VIII treatments. The mean ABR in year 4 for the low dose 4e13 cohorts was 1.7 with a mean cumulative ABR reduction of 92% and Factor VIII use reduction of 95% through 4 years compared to pre-infusion levels again on standard of care Factor VIII prophylaxis. Also of relevance, Factor VIII activity levels declined commensurate with the most recent years observation as they continue to remain in a range to obviously provide hemostatic efficacy. Needless to say that we are encouraged by the durability of effects observed in the Phase II study at years 5 and 4, respectively, and we look forward to sharing more data during an oral presentation at the upcoming International Society of Thrombosis and Hemostasis, or ACH 2021 Virtual Congress between July 17 and July 21. We also have many other programs and early-stage products advancing in the R&D organization, and we look forward to sharing a deep dive on these at our R&D Day later this year. So this is a very brief snapshot of the pipeline. So I would like to turn it back to you, Eun, for questions.

Thank you for the overview. So let's just start with ROCTAVIAN because you provided a 5-year update. So ABR, annualized bleeding rate, continues to be quite good, 95% reduction. And also, you mentioned the Factor VIII activity declined commensurate with the most recent years observation, but continue to remain in the range of hemostatic efficacy. So based on the year 4, is it reasonable to expect that Factor VIII levels are kind of a low double-digit percentage?

That's not unreasonable, Eun, but I think that one of the key questions is going to be, what is the observation of year 4 hemostatic efficacy mean for the to-be commercialized product, from an American perspective, because the U.S. FDA had this issue about -- the issue of the complete response was, what is the future trajectory? And so what I think the year 4 data for the 4e group tells you is that you can expect good hemostatic efficacy through 4 years as long as factor levels are at or above where they were in the 4e group. And what we showed in the N=17 population that has been followed with the to-be commercialized material for now 2 years, they were above where the 4e group was at the same time point 2 years. So I think that that's why we have increasing confidence that the 201 4- and 5-year data help address the concerns of the FDA in terms of trajectory and material compatibility, et cetera. And I think that the prognosis here, we -- it's really hard to -- if you really want to answer the question of what do you predict -- how long it's going to last, the to-be commercialized material with the steroid regimen that we use, it's really tempting to want to make a prediction, and we have a lot of internal data about that. But I think where we kind of net out on that is probably on sort of -- if you look at it economically, the durability is likely to be longer than J.J. can charge for it. And the durability is likely to be longer than all patients have that would be sort of too short for making it worth your while to take gene therapy. So we're very encouraged by the extent of durability that we've seen so far. And again, none of these patients are back on prophylaxis, and that's telling you something there. And these are severe hemophilia patients. They'd be having a lot more breakthrough bleeding than we're currently seeing if they were not on prophylaxis.

So what is J.J. likely to charge for ROCTAVIAN?

We -- obviously, we will announce the price when the product is approved, but it will be your -- anyway, we're doing an extensive reimbursement pricing research and also there's been an ISR analysis last year actually, before we even have the Phase III data that say that they believe that the product would be cost-effective in the U.S. at $2.5 million for treatment. So it is a good benchmark.

Okay. So given the durability and it could last for years, I mean, is there some room for you to actually consider higher price than $2.5 million?

I mean...

Intellectually.

Intellectually, yes. So we'll see. We'll see where the -- I think before answering that question, I'd like to see the 2-year Phase III data, which we'll have at the very beginning -- or end of this year, beginning of next year. So at that point in time, then we'll make a final decision on the pricing.

Okay. Hank, you basically touched on what FDA is looking for and your 5-year data is addressing some of their concerns. So in second year data, year 2 data from Phase III, is there something FDA is specifically looking for? Or is it just more of the larger number of patients trending the same way in Phase II and kind of aligning with the Phase II data?

That is an itch we're definitely trying to scratch in our dialogue with them. And something that I think is really important to try to understand more specifically. And we're trying exceptionally hard, given the communication challenges and the goalpost shift that they inflicted on us late last year with really no -- with negative warning -- with negative time warning, like what I mean by that is that we didn't find out about their request, their requirement for 2 years of data until after Dr. Marks had told our Head of Regulatory that we're going to receive a CRL. I'm not even sure he knew that, that was in the CRL itself, to be perfectly honest. So given our -- given the history that OTAT has, so it's not just us by the way. You've heard this from Sarepta and all kinds of companies that are having communication -- and the FDA is saying they're having communication challenges with sponsors. So we're endeavoring to work really hard to make sure that we understand and they understand what the key issues of consideration are. And I think that's why the RMAT designation is also very important because it's a whole new additional regulatory pathway for additional resources to be deployed to support the ROCTAVIAN review. It enables us greater time of access. So the question that you're asking, Eun, is very much front and center on our minds of discussion with them. And I think it really boils down to again the sort of the concept of, okay, there were differences between the Phase I material and the Phase III material and there were differences in the steroid regimen news. So how much can we rely on the 201 long-term data, given that there were differences in Factor VIII outcomes between Phase I and Phase III? And where I think the 201 data come into play is to say that the -- whatever those differences are in the steroid regimen or the manufacturing that led to a lower -- slightly lower initial trajectory of the Phase III product compared to the Phase I product, given that all of that is out of your system by year 2, the onward trajectory is really determined by kind of where you're starting at year 2. And that's actually a pretty remarkable thing. When we talked about consistent commensurate with prior years, it's pretty amazing, actually, to see how consistent this is. So I think there's a lot more predictive confidence and predictability as a result of the 201 data much longer in time. And I think pegging where we are at the 2-year mark with the to-be commercialized material is really going to sort of help the agency think about where durability should be expected to go.

So Hank, at the recent investor conference, you talked about BioMarin looking into vector optimization. So can you talk about -- can you elaborate a little bit more on that? And where are you in those works and when we can expect some update?

Yes. Yes. I mean the context for this is I think you could make an argument that it was observable that gene expression wasn't going to be lasting at the 2-year mark or at the 3-year mark. But what we were observing back then was we're still at -- the factor levels that were well in the hemostatic efficacy range now at 4 and 5 years were confirming that that's the case. And so there really wasn't a huge apparent demand, if you will, for next-generation approaches. But I think the consistency decline in year-over-year does warrant taking a closer look at next-generation opportunities. Now we've always had some radar. And we've been investigating issues about why Factor VIII declines over time. And it's not -- there's not a simple, easy answer to who needs to be redosed and why and how you go about it. So we have a lot of different strategies underway to address some of the components that we understand in terms of maybe novel capsids or even potentially integrating vector designs, et cetera. They're all kind of in this research exploratory phase because it's going to be several years before the demand rises to the level that it would warrant the kind of development effort that you have to do to make a next-generation version. So really, what we're doing is we're learning a lot about the biology of expression control over time so that we can design next-generation assets that address the bulk of the population who need next-generation assets. And that's a big stay tuned to the field because everybody is going to be working on this. I think our big advantage in all this is that by being first, we're going to have the most data in terms of describing what those trajectories are and understanding, if we can, who has faster trajectories, slower trajectories, et cetera.

Okay. Moving on to vosoritide, PDUFA date in November. You're not still expecting a panel, correct?

Not still expecting a panel, Eun. And importantly, given that the CHMP opinion is expected in June and the European Commission's approval of the marketing authorization in the late August, early September time frame, that will be in launch, an actual launch well before the PDUFA date. So I think the global momentum for VOXZOGO, which -- we would understand the buzz kill of an Advisory Committee. But no, there's no sign that the agency -- they had their Advisory Committee in 2018 and basically said, do everything that BioMarin did, and we did.

So you sound very -- Hank, you sound very confident that you will get positive CHMP opinion this month?

Yes. Eun, you don't want to guarantee these things because there's a lot of intercurrent events that can happen even between now and the CHMP meeting later in this month. But based on the traffic that we see between the company and the EMA, yes, we're planning for what happens in July.

Okay. Right. So...

And if I can -- very important, if I may, because although again, we are pursuing U.S. approval, and we anticipate getting U.S. approval, hopefully, by the end of the year, the European approval is actually more important the U.S. approval because it unlocks a much larger patient population over 3x the size of the U.S. market.