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

Good afternoon, everyone. My name is Gena Wang. I'm SMID Cap Biotech Analyst at Barclays. Welcome to our fifth Gene Editing & Gene Therapy Summit. It is my great pleasure to introduce our next speaker, Hank Fuchs, President Worldwide R&D from BioMarin. Hank, maybe I'll hand over to give a brief overview, then I will dive into the Q&A.

Thanks very much, Gena. It's great to be here. and we appreciate the opportunity with just a few weeks remaining in 2021, we look forward to 2022 with great excitement. As the Head of R&D, I'm very pleased with the execution of our pipeline pivot from predominantly ultra-rare disorders to products that address more prevalently affected conditions. Our mission to translate genetic discoveries and transformative medicines has not changed, but the ability to leverage our deep foundational knowledge is changing the breadth and depth of our next-generation pipeline, as you will hear at R&D Day on November 30. We look forward to sharing in great detail the transformation of the R&D engine at BioMarin and the expansive earlier-stage pipeline that sets us up for significant growth beyond our roughly $2 billion base business and our near-term ROCTAVIAN and VOXZOGO growth opportunities. And speaking of ROCTAVIAN, I did want to recognizing this is a gene therapy conference, just get on top of where we are with VOXZOGO. In the U.S., our PDUFA action date is less than a week away, and we're preparing for what may be our largest opportunity to date in a pediatric condition and another example of our pivot to addressing more prevalent genetic conditions. We've been very pleased with the prescription demand in Europe since receiving the EMA approval for VOXZOGO August. And if approved in the U.S., VOXZOGO will also be the only approved treatment for children with achondroplasia. So we would expect families here to be equally enthusiastic in assessing VOXZOGO -- in accessing VOXZOGO as soon as possible. We don't have a lot of more color to add right now until the PDUFA action later in the week, so stay tuned. Soon after the VOXZOGO PDUFA action, another significant catalyst will come to fruition namely the 2-year Phase III data with ROCTAVIAN gene therapy for the treatment of patients with hemophilia A. We continue to expect resubmitting the biologic license application for ROCTAVIAN in the U.S. in the second quarter of '22, after the 2-year data are available on assuming the data are supportive, followed by the expected 6-month review procedure in the United States. In Europe, with the marketing authorization application validated and already under review, we continue to expect the CHMP opinion in the first half of next year, assuming supportive 2-year data, which will be shared with the EMA when it becomes available. We remain confident in ROCTAVIAN's potential to be an important treatment option for those with severe hemophilia A based on the clinical evidence observed to date, demonstrating dramatic reductions in bleeding, freedom from factor VIII utilization and reduction in factor VIII use rates. On the base business, which includes our 7 approved top products, we improved top line guidance for full year 2021 as part of our Q3 update. And despite the -- and that's despite the U.S. loss of Kuvan market exclusivity a year ago. The underlying business is strong and continues to grow steadily given the essential native -- nature of our products. So in closing, the key takeaway is based on what I just described is the BioMarin is poised to take off like a rocket. The base business is driving positive operating cash flows. VOXZOGO, beginning in '22, is expected to contribute significantly to top line growth and potentially ROCTAVIAN soon after, a robust next-generation pipeline that spans numerous therapeutic areas using a variety of modalities, all combine to make a very attractive investment thesis. Our R&D organization has never been more energized, especially as we all emerge from almost 2 years of pandemic fatigue. So we eagerly look forward to 2022 and beyond and prepare for many more transformational events over the coming days. So with that, let me turn it back to you.

So Hank, wanted to ask VOXZOGO in the U.S., as you mentioned, that we only -- 5 days away now from PDUFA date, yes. So on the earnings call, you actually mentioned that in label -- labeling post-marketing requirement discussion with the FDA, and so anything -- any surprise request from the FDA at this point?

I think at this point, they have all the information they need to make their final decisions about labels and approval pathways and post-approval commitments across the whole spectrum of things. So no real surprises at this point. Obviously, it's out for signature. And when that's going on, there's always the potential for new questions to emerge, but stay tuned. It's not that many days away.

Okay. Good. And so if we take one back regarding the 2-year data, and I think that, that gets asked also quite a lot by the investors, the history of a 2-year data request initially, FDA asked for a proper control 2-year study, and you've conducted 2-year study with basically minus 1 year in placebo versus plus 1 year in the drug arm. So what was the FDA feedback from this approach? And any additional adjustment you have to do for the statistic analysis?

Well, I think the underlying issue is what is the evidence of durability of effect. And I think the agency recognizes that what intellectually would be the most satisfying to do, which would be to randomize patients from birth to when they stop growing is not feasible, and they've worked with companies to try to strike that what can be done ethically, what will family sign up for with the information they need. So we've provided them a contemporaneously randomized 1-year long study. This look-back study, as you mentioned, which is a pretty valid comparison of 2 years of no treatment to 2 years of treatment, and we've also provided them with longer-term follow-up from our initial Phase I/II patient population. So the amalgam I think, supports together with the biology that durability is sustained, which is a really important principle. The concept here is we want to normalize or as close as we can growth during the growing period. We don't want to have 5-year-old due 10 years' worth of growth in 1 year, that's probably not too healthy for bones, especially the achondroplasia. So I think that's the agency's underlying thinking process, and the evidence we provided them, we believe stands up the argument that chronic therapy with vosoritide VOXZOGO will be -- will therapeutically amalgamate to an important clinical outcome. That's the discussion we've had now as to the agency's feedback about all that, we'll know when the PDUFA action happens as to at what level they assign the importance of those data.

Okay. Okay. Good. So how is the U.S. launch preparation in anticipation of potential approval?

Well, Jeff Ajer's commercial team has been busy at work. I think they know quite a lot about accessing rare patient populations and working with opinion leaders and patient advocacy organizations and working with through the market access team with groups that address payers, they're ready to go. I don't think they're waiting for anything other than the go word at this point. This is a situation where many of the patients are diagnosed either antenatally or soon after birth. And in the main, because there's no available therapy for this, families are very eager to at least consider options. And based on what we've seen in Europe, we see a lot of initial interest getting expressed in countries like France and Germany, where we can pursue name patient sales. And if what we see in Europe is going to read on what we see in the United States, I think the experience should be fairly consistent with what you'd expect it to be for a condition that's -- has a lifelong complexity to it and for which there's no available therapy. That is reasonably high demand.

Okay. So are the patients will identify and concentrating certain centers or certain doctors you can go after in the U.S.? And how different that from Europe?

Well, that's an interesting thing because the field of the genetics is changing as we've been working away here in the sense that genetics is increasingly a diagnostic specialty and therapy often doesn't have a concise home. And that's not -- that's consistent with what we see here in the achondroplasia community. So the genetics may make the diagnosis, but the patient has so many medical problems related to their underlying bone disease that they'll see an ENT doctor or an orthopedic surgeon. And so they are a little bit diffused in terms of their therapy to come. Now what Jeff's team has been -- they know about this. They've been focused on this. And creating interdisciplinary care teams has been a real specialty of Jeff's team with Brineura, we have to bring in surgeons with MPS treaters. So they're quite familiar with it. They're quite familiar with the various referring clinics, subspecialty clinics like ENT and cardiology that will get some of these in pulmonary medicine, who will get some of these referrals. And I think the concept is to create a medical home for these patients, which is obviously in their best interest. And there's a lot of enthusiasm for that in the care community because I recognize that there's this multidiscipline where there's this multidiscipline and complexity, there's also a need for centralizing care and thinking. And that's, I think, where BioMarin can play a unique role, and we have before and we will again.

Okay. Okay. Good. And for the Europe, so I think I mentioned that the pricing -- initial pricing was much higher, like close to EUR 300,000. And a surprising you mentioned there will be lower once reimbursement negotiation completed. Like how much lower you would be expecting? Are we talking about EUR 150,000 that range? Or...

So I don't know that we've given specific -- I don't have that information in terms of what we expect to do it to experience. But I think at the launch, one of the most important things is get people focused on the value of the product to make sure that, that story is clearly understood. And at least on my side of the organization, that's been one of the key aspects of discussion because I don't think that people fully understand the burden of care as it currently exists, and therefore, what are we remediating when we introduce a medication like VOXZOGO, what value incrementally are we adding. So I think that will sort of unfold over time sort of U.S. pricing, EU pricing and how that sort of stabilizes over time. The European process is quite complex across these many markets and whatnot. So I'll leave it to Jeff to summarize as we get a little further into the market.

So Hank, do you think it's the right way of thinking that at least the initial rough comp in the U.S. would be the Europe current price?

I'm not the right person to kind of respond to that, Gena, honestly. I think that BioMarin has a history of developing medications, which command a lot of value in a medical marketplace because they are truly transformative, and I don't see very much different about VOXZOGO than now. I mean we're -- the concept here and really applies to the general concept of BioMarin, which is when you have such clarity about the underlying molecular defect, and you can stick the key in there and turn the switch and people have to remember the sort of type VOXZOGO as an analog of a natural regulator of bone growth. So hopefully, we can really turn these children's lives into an even more -- I mean they're amazing children as achondroplasia families. And this is a choice for them, and I think it's a potentially transformative choice. And hopefully, that will be recognized in the value of the product commands. And like I said, I leave to Jeff's team and J.J. to give you a little bit more square on pricing details.

Okay. That's fair. And just play devil's advocacy, what if FDA give you a complete response letter? What would you do? Hopefully, this will not happen. Really hope that, we keep our fingers crossed, we hope that will never happen, but what if, yes.

Yes, it entirely depends on what the nature of that complete response would be. And as we experienced with Valrox, it can be hard to discern kind of where on the line of decision they come down. And when they make it black and white, it can be really -- it's obviously really difficult because something relatively subtle can become the thing to focus on. I don't have -- we've talked about durability a lot. And would it be the case that they decided they wanted more information. It might fall in a durability realm. It might fall in an age of initiation of treatment since we have the ongoing under-5 study that is due to complete enrollment. But at this point, I don't want -- on the one hand, I want to signal that we think about these kinds of disaster scenarios as part of managing the process to prevent them. And on the other hand, we're 5 or 6 -- we're by days away from PDUFA. And I don't want to be changing a signal that says that we are confident that they have the package that they need to make a favorable decision, and we'll just have to see. If it comes to a CRL, it will come to a CRL. I want to see what's in the letter and why they decided what they decided.

Okay. I think that's fair. And Hank, what is your view on Ascendis drug? They have a longer half-life for once weekly dosing? And how do you think that will affect VOXZOGO future competitive position?

Well, it's not clear to me what the putative advantage of that is that translates into something that's meaningful to drive evolution in the marketplace. If you look at our effectiveness, it's hard to beat our effectiveness because almost restoring 100% of the loss level of growth that happens. And as I said, it raises a bunch of different questions. If you go faster than normal, that's got its own health-related questions. Our safety profile is really just also injection site reactions that dissipate quickly. And people have talked about hypotensive events. I think we've had 2, out of that -- out of just a lot of years of dosing. So I don't see in the standard realm of things, effectiveness, safety and then the third realm. I don't see that happening. Then third realm is convenience. And we don't hear a whole lot negative about the inconvenience of our product. I mean it'd be one thing if it's complex to administer, there's a lot of dosing challenges and side effects, but that's -- now what we see, in fact, what we see is just an extraordinary level of confidence in safety in the product. And we are in direct dialogue with the patient community about like, okay, if there were enhancements to the product, what would you like to see? So we have that mapped out for ourselves. We also keep our eye on the field of long-acting medication has been around for a long time. And we've been doing some -- we keep it quite -- relatively quiet. I mean there's no reason to get noisy with it because it's not really a problem to solve in the moment. But we've been doing work in the field of extended half-life delivery. And should it become more apparent that that's what the community needs. I think we'd be in a position to accelerate that. So Ascendis is sort of a medium slow -- not a fast follower, medium slow follower. And I'm not sure what their net contribution will be.

Okay. Now switch to ROCTAVIAN hemophilia A program. So we will have 2-year data very soon. Hank, should we expect some time around JPMorgan time, you will share the data with investors?

Well, I don't think there's anything structurally different this year as opposed to last year. So I think last year is a good guide to the timing. I mean, you got to -- we did a 52-week analysis and how much later is a 104-week analysis. It's pretty exact. So I think that's about the same, the time frame.

Okay. And what kind of data package that you think with the 2-year data that you think that, that's sufficient for FDA resubmission?

Well, for both agencies, I think the thing that they're the most interested in, obviously, is the annualized bleed rate because that's the clinical outcome of interest and the amount of factor VIII utilization. And I think there will be some eyeballing of the factor VIII level itself, how detailed that story needs to be told either for the FDA or for the EMA will be the subject of further discussions at an FDA pre-submission meeting and during the course of our interaction with the EMA. And could range from purely a sort of top line short submission or a more detailed report. And we are prepared for everything. And the more detail they ask for potentially the longer it takes to assemble. But I don't think that we're anticipating much different than what I said in my opening comments, a CHMP opinion in the first half of next year and an FDA action in the second half of next year, contingent on the data being favorable. So I think that's kind of the lay of the land.

Okay. So then if, say FDA wanted, I think you are not ready -- and like how soon you will get that feedback. And if they need some additional like -- okay, maybe I'll rephrase it. Your expectation of FDA feedback second half this year under what assumption is that, do you need additional data collection or will be based on the current data. If FDA ask for more data, when -- how soon do you expect FDA to tell you?

That's a very good question. So in the last lap, we would have hoped that they -- what I mean by that, the first cycle of submission that we -- that led to the complete response letter, you go through series of paces designed to answer that question with some degree of definite certainty so that we can guide people about what to expect, and we had an end of Phase II meeting we had a presubmission meeting, we had a mid-cycle meeting and all of those things, the lights were blinking green, green, green. I think when we look back on our interactions with OTAT, they have a very quiet way of raising concerns, but they don't have very tractable mechanisms for discussing concerns. And then what they do is they sort of issue complete response letters in which they, for the first time, communicate their concerns. We're obviously going to try to be ahead of that and try -- we have the 2-year data to have some form of interaction with them where we listen even more carefully than ever before and try to draw them in a little bit more things. We're doing so well that in the first cycle that there was no real need to do more sort of buttoned up all the way to the top of the organization connection with them, plus which it was in the middle of COVID. So that precluded a lot of connection at the top layer where you might be able to discern more clearly some of those little tweaks and whatnot that they have going on. So we'll endeavor to get that feedback as soon as we can, Gena, but they have their processes, and we have to figure out how to make their processes work for us as best as we can. And then until you have more clarity about -- again, it's that same fine edge, what was it that caused you to say no instead of yes, until you have that, you can't really know how long it's going to take to deliver the data. I'd say based on the interactions that we've had with the EMA, I think it's -- as with VOXZOGO, it's basically the same fundamental question, which is get us comfortable that what you see in a small number of patients over a relatively short period of time is what's going to accumulate over time in the patient population reflects FDA conservatism or higher bar or whatever, but it's basically the same issue. And I hope with VOXZOGO, the EMA leadership indicated that the answer was adequate. And hopefully, the FDA makes a favorable decision for VOXZOGO. And similarly, the EMA is pretty far into their review, and we have every reason to believe that we can get there from here, provided the 2-year data are good. So that's the dynamic, then we should be okay.

Okay. So if -- because this is a resubmission, so it will be 6 months follow-up, right? And then can FDA still host AdCom to discuss the data before making a final decision?

I believe so, yes.

Okay. Okay. And then how soon do you think that they will inform -- like make announcement if it will be at AdCom?

Well, typically, I'm not really experiencing the resubmission game. We tend not to have to do that at BioMarin. We've been more or less with one -- notable exception, we've been more or less in the first cycle every time. So typically, they're supposed to notify you of their intent when you file something. And I would imagine that the procedure, although I haven't really dived into it just yet is going to be somewhat similar in the U.S. on a resubmission as first cycle submission, which is to say that if they know from the get-go that they want to have an AdCom, they usually are pretty forthright about declaring that.

Okay. Okay. Good. And then quickly, we have 2 more minutes. I wanted to discuss about PKU gene therapy, the clinical hold. So first, maybe what data did FBA requested? And then when do you expect to be able to collect those data and to move to the next step?

Yes. I think we have most of the data that they've asked for. And as well, they've asked also for some how are we going to evolve the informed consent and the protocol given these data. So they're thinking pretty holistically. It's not just about a provision of data. It's also about how do you implement the findings from the trials. And as far as the scope of the data, at the advisory committee that they held in August, you got a real fulsome flavor of the kinds of information that are really available. And I think what they expect are some assessments of the distribution of the types of integrating events that happen like what kinds of genes were the integration is in front of. I think they like to understand clonality. That's a really hot topic in the field and what evidence do you have that speaks to clonality I think there are a lot of technical issues related to the conduct that are also some nice to have in terms of positive controls, negative controls and those sorts of things, different orthogonal techniques to better understand the integration in a more quantitative way. I think we feel pretty good that we have most of that data available and it's really a matter of packaging it up and now that we've gotten the feedback from the FDA, what they're looking for, put the package together and put it in front of the agency in a way that responds as closely as we can to their IND hold. Now of course, this is also one of these things where you may not get it exactly right or in focus the very first time. Remember, the FDA sees lots of applications, and they have lots of different ideas. And they can't always just tell you, just do what company X did. So sometimes, whether it's a format or it's a content, then you have to go back and forth. The nice thing here is the FDA has a 30-day obligation. So when we submit something that we believe is in response within 30 days, we'll know whether it was acceptable to the FDA. I don't have a specific time frame to guide people to just yet, Gena, because we're still in the midst of just pulling together that time line. But I feel like we have what it takes to get ourselves off hold and restart it. So I think that, that should be there for more of a paperwork process than, oh, my heavens, there's a 12-month study that we've got to do. I don't think that's what we're talking about.

Okay. Okay. That's very good. I think the last question I just remember, Hank, I wanted to ask your thoughts on Pfizer's clinical hold? And then that was 150% factor VIII level they are using chromogenic assay. And to me, it was a little bit surprising. And would love to hear your thoughts do you read that as a positive or negative to your program?

Well, it's a little confusing. And I think confusion in the gene therapy field right now is not a generally positive thing. I don't think it's all that unexpected in the grand scheme of things because we have some people that are our expressers, but they weren't so high and for so long that we had to do what apparently they had to do, which is give anticoagulants as a chronic matter and go on clinical hold and have a protracted dialogue. So it feels like there's maybe more going on. I don't know that they've disclosed much more than those 2 basic or 3 basic facts, overexpression, therapeutically requires ancillary therapy, and we're on hold. So I could hypothesize about how that happened, where that came from. I think one of the areas that I personally have a lot of questions about our potency assets because we've been hearing about that for a while. AveXis had a question, a lot of questions around their potency assays. The DMD drugs had some questions around -- gene therapies have had some potency questions. And we know that, that's -- from that, that's really key issue. And with these dose response curves, it's not impossible to imagine that if you think we were giving 6e, but you gave 7e, you might be off. And of course, that's what the FDA not necessarily tying it to specifically the potency, but that's what the FDA said to us, the results that you got in Phase III are meaningfully enough different from the results in Phase I/II that, that's something -- we hypothesized that something changed, and therefore, we want to use the Phase III to-be-commercialized material to judge the durability, not anything else. So I think there's something about dose in this whole field that everybody needs to understand a little bit better, but I can't put my finger on just how that affects ROCTAVIAN except to say that fortunately for us, we'll have our 2-year readout shortly.

Okay. Great. Well, thank you very much, Hank. We keep our fingers crossed, and hopefully, we have a good news in a week. Thank you.

Yes. Thanks.

Yes. Okay. Bye-bye.