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

Everyone, welcome to this fireside chat with BioMarin Pharmaceuticals. I'm Joe Schwartz at SVB Securities. It's my pleasure to be joined by Hank Fuchs, President of Worldwide R&D. How are you doing, Hank?

Good to see you, Joe. Nice to be here.

So maybe we can start by having you give us a quick overview of the key [ initiatives ] the company has for this year and the major catalysts that investors should look forward to for your stock.

Great. Thanks, Joe. It's a pleasure to be here today to talk to you. 2022 is going to be our most productive year yet as we think about the next stage of growth for the company. Late last year, as you know, we were pleased to have received approvals in Europe for VOXZOGO and also in the United States and Brazil. And so it was grateful -- it was gratifying to be able to apply our core rare disease concepts and expertise and scientific principles for the benefit of children with achondroplasia. And now in 2022, Jeff Ajer, our Commercial -- Chief Commercial Officer, is leading the commercial team and enabling access to the VOXZOGO therapy on a global basis. And we've leveraged these same principles to develop ROCTAVIAN gene therapy to treat hemophilia A. And I think the 2-year results that we shared just this past January demonstrated really the transformative potential of effectiveness for the people in our study. The annualized bleed rate was reduced by 85%, demonstrating superiority to Factor VIII prophylaxis in the 112 patients in our study. And this, therefore, is really truly transformative for patients living with severe hemophilia A. For so many of these patients to be able to put aside chronic prophylactic therapy, go through life without experiencing spontaneous bleeds is really something very different for them and very important for them. So when we come to Catalyst for the year, we look forward to the resubmission of our ROCTAVIAN BLA now with the 2-year efficacy data in hand. We continue to work with the European authorities to receive a CHMP opinion in the second quarter of this year. So the first half of this year is a busy year with ROCTAVIAN for us. And then as we think about what's on the horizon, we think about the continued commercial ramp of VOXZOGO, the potential for applications of VOXZOGO outside of just achondroplasia and potentially into other statural conditions, potential positive responses in a regulatory context to ROCTAVIAN. And of course, we have a number of early-stage products advancing in the pipeline, as we detailed at R&D Day. So suffice it to say that the engine is humming at BioMarin, and stay tuned for more detailed results during the year.

Okay. Great. Well, let's start on ROCTAVIAN. And give us any more insight into your understanding of what exactly led to the FDA's decision, that 1-year data wasn't sufficient for ROCTAVIAN filing in the U.S. And sort of related, how will the data that you have in hand resolve those issues that they had, in your view?

Well, if you go back to the Complete Response Letter, they were unable to be confident in the projected durability of the results from the Phase III trial because the Phase I/II trial's result was, to them, very different than the Phase III trial result at 1 year. And they wanted to -- or at 6 months when the interim analysis was reviewed. And they had observed that there were differences in corticosteroid use between Phase I and Phase III, differences in manufacturing between Phase I and Phase III. And they wanted to have a better understanding of the long-term trajectory of Factor VIII than was provided by the Phase I/II study because of that early difference. And in particular, they wanted to see maintenance of effectiveness well after patients had withdrawn from corticosteroids. And so now the vast majority of the patients are off corticosteroids. They're having fantastic bleed control. They remain independent -- the vast majority of the patients remain independent of Factor VIII prophylaxis or Hemlibra prophylaxis. And so I think these data speak quite nicely to, okay, even if there were differences now out at the 2-year mark, you still are seeing fantastic Factor VIII -- seeing fantastic bleed control, fantastic reduction in the need for prophylactic replacement. Really negligible sort of failure rates, I think I've talked about that in the past, that one of the hypotheses that got generated was, well, maybe if you take off the steroids, the Factor VIII levels will fall through the floor and people will be quite vulnerable. The return to Factor VIII prophylaxis rate is quite encouraging. I think we just presented those data at EAHAD. And so I think these data, on the efficacy front, will provide quite a bit of reassurance. Now you also know that, in the background, the agency has been talking about -- and in fact, I was just looking at this the other day. Wilson Bryan, who's the Director of OTAT, was giving a talk about, okay, well, we all recognize the fantastic effectiveness of gene therapies and their transformative promises on the effectiveness front. But his quote was we feel like there hasn't been enough attention paid to safety issues with human gene therapies. And I think that, in general, what you're seeing at the agency is a lot of sort of questioning and wanting to come to grips with what people refer to as the unknown unknowns and how those might influence a benefit-risk balance. Now fortunately, for ROCTAVIAN, they had that advisory committee meeting in September time frame, in the fall or late summer and fall, at the FDA. And for the most part, none of the events of interest at that meeting are events that are relevant to ROCTAVIAN. And for ROCTAVIAN, we think that, that presents a nice balance of clearly demonstrated positives from an efficacy perspective absolving concerns about the difference between Phase I and Phase III, not completely but in the main because there's now 2 years of documented benefit. And on the other side, there's theoretical concerns about safety, but fortunately, nothing has actually broken through on the ROCTAVIAN front to actually warrant a safety concern. So hopefully, that balance is going to be something that the agency processes differently this time around. And of course, we're well into it in Europe. I can't give you the blow by blow about what's going on there, but as I mentioned in my opening comments, we're looking forward to an opinion in the first half of this year.

Super helpful. So continuing on that train of thought, so we saw your update on BMN 307 yesterday, that the FDA wants you to conduct additional preclinical studies before the clinical hold can be lifted. So can you give us any sense of how long you expect it to take for you to complete this latest request? And then, what did you provide to the FDA? And why do you think it didn't satisfy them completely?

Well, a little hard to know the answer to that really because they kind of just tell you black, white sometimes. And when we had first gotten the kind of hold letter from them, their information requests seemed relatively straightforward and didn't fall into the category of, wow, this is going to take a long time to work out. And we provided all that information to them, and then they came back and they said they wanted additional studies. And exactly how their thinking evolved, they don't share with us. They just shared they want additional animals. And I think that they would -- they really want to dig into these preclinical findings. They now have a sponsor who's kind of on the hook. If you go back to the advisory committee that I was talking about, Dr. Venditti presented that these findings were not novel as of 2016 before they approved Zolgensma. I think what you -- taking Dr. Wilson Bryan's comments in the context, I mean, I think they really want to push the envelope on the frontiers of understanding the safety of these gene therapy products. So they now have a sponsor that's on the hook for doing their bidding for them. And so I think they're pushing the envelope on what can be done preclinically to try to sort these things out. I don't -- we haven't kind of -- we just got this. Sharing this information as it's fresh because it's relevant, and we have some wood to chop with them in terms of, okay, what specific studies, what specific hypotheses would you like further interrogated. We have some ideas about that. I think we think that these ideas are chasing preclinical findings more than they're chasing clinically relevant findings, but they are the final arbiter of all this stuff. So we'll work with them to see that -- if we can put some experiments in play that will address their concerns much more concretely. It'll take us a while to come to ground on all of that. That's why we said several quarters before you should expect information from us about what exactly that's going to look like.

Right. Will you have to meet with them and ask them whether what you're considering doing is on target? Or will you seek out their further advice? Do you need to do that, do you think?

I'd like to. I'd like to collaborate with them. My sense is that unless you're working for Pfizer, Moderna or somebody else, that you're not going to get -- I don't know that they're holding in-person meetings or even Zoom meetings, particularly. So their attention seems, at least on the CBER side, pretty focused on other things than non-COVID things.

Makes sense. Could there be any read across to Valrox given you're approaching a very important inflection point with the FDA there? Do you think they're turning the screws everywhere they can to make sure that they stress test everything? I mean is there any reason why a PKU gene therapy would be different than a Factor VIII gene therapy?

Well, there certainly are reasons. I mean Factor VIII is a secreted protein. PAH is an intracellular protein. So there may be more concerns about cellular damage from accumulation of PAH than there are from secretion. You've got a lot of room in the secretion compartment for absorbing the transgene product. I mean another key difference obviously is that there was a safety signal generated preclinical for 307, which has not been generated for Valrox. You know that we reported late last year some efficacy data from a Valrox-like vector. It was constructed to be almost identical to Valrox, except for there was a little protein tag stuck on it that enabled us to measure. This is actually an important and somewhat nuanced piece. One of the problems of doing preclinical work, and this has been going on for a while and all the way back actually into protein therapeutics, which would elicit animal -- which would elicit immune responses in animals, so you really can't -- it's very difficult to do long-term studies in preclinical species with human proteins to the heterologous stature. And in fact, in preclinical studies with ROCTAVIAN, we do illicit immune responses in lower and higher animal species. That necessitated us to go to, in the case of 307, immune-incompetent animals, which was they lack cancer surveillance. So no surprise. Now the -- so the workaround that we did with ROCTAVIAN was we developed a construct that wasn't immunogenic, but it was otherwise identical to the Valrox construct. We presented data on long-term durability from that at ESGCT. It wasn't explicitly commented on in the abstract, but there were no safety findings in that study. And so I think there's a potential difference between 307 and ROCTAVIAN. I mean the other obvious difference is that 307 is on hold and ROCTAVIAN has multiple studies in the field that are open for enrollment. And we have another gene therapy that's also open for enrollment. So as of today, I'm just going to describe it. The one thing I can predict the FDA will continue to be is relatively conservative because if they are something other than conservative, that would be upside. But I do think that the FDA is in a particularly conservative mode right now. And so just the fact pattern of those were the differences for 307. That's the vector that's been tagged to be on hold. The other vectors are proceeding and don't have those same safety signals.

Right. Okay. I'm getting a lot of the same questions from folks real time, and people are asking whether there's any risk to the Valrox filing based on these safety concerns. So I had kind of already asked that, but maybe you could put that to bed.

Well, I don't -- I think at this point, predictions are going to be like -- I mean, what I can tell you is our targets are -- this is what we aspire to do. This is what we believe. We don't have to do more studies. We don't -- it's all about a paperwork thing. We're in the write-up phase of the 2-year data for the FDA. Nothing we've received from them says that there isn't a pathway to a filing on our schedule, so we're proceeding as if things should be in good shape. And again, reminder is the safety issues for 307 are very distinct from any other considerations for ROCTAVIAN. So is there a potential for a read-through? Is there a potential future bump in the road? Those are all in the prediction category. And given the FDA's recent track record in conservatism, they're not unreasonable questions and just I don't think anybody really knows. I doubt [ Dr. Marks ] can answer that question either.

Yes. Okay. That makes sense. So last question. I was already planning to ask you this, and it's come up from some others who noticed it, too. So there was some data at EAHAD that showed that one of the patients in the Valrox program developed salivary gland carcinoma, which I think was deemed not related to treatment. Can you just talk about how that was adjudicated and whether there's any more work to be done there?

Yes, yes. So the Friday after Thanksgiving, it's like the perfect time to find out about these things.

It's like getting [indiscernible] right after Christmas.

So we've known about this for a little while. And even though the event was deemed by the investigator as unrelated, we ended up reporting it to global health authorities for purposes of just transparency because of the same kinds of questions that you are all asking. You could imagine agencies wondering about them. Nobody wants to look back and go, well, why didn't you tell us about that then kind of thing. But -- so it was reported as an unrelated serious adverse event. And it's now been several months, and it's not like we're on clinical hold for that or anything like that. Remember that the uniQure case did result in a clinical hold. What we did procedurally in the course of evaluating related -- you start with the investigator's assessment. That's the procedural component of this. But then we, as a company, do an internal assessment. We actually have a lot more data, obviously, than an investigator does to assess causality. So we looked at things like preclinical evidence of parotid accumulation of vector. We looked in this individual to look at his salivary excretion profile of vector. Maybe this guy had just a massive dose in his saliva for reasons that we didn't know. We looked at the biology of asthenic carcinoma and to whether there was any evidence that these are more vulnerable somehow in a Factor VIII context, promoter construct, expression constructs. So after a thorough internal review, we decided let's get an independent data monitoring committee in the same time frame to also look at all of these data, both the investigator's assessment of the case, our additional assessment of the case and the independent Data Monitoring Committee's study which, to remind you, is composed of hemophilia clinician experts, statisticians who are charged with safe and appropriate ethical conduct of a clinical trial. Everybody concluded to date, unrelated, we all are interested in genomic analysis of the tumor if we can get the tumor. And maybe later, we'll learn something different. But I think the expectation at this point is that that's an unrelated adverse event. And I think the larger context of these things is that we've got 134 patients that we've now dosed with ROCTAVIAN, now almost 150 patients counting -- this was a Phase I/II patient. He was dosed like 5 years ago. The expectation is we're going to start to see adverse events in this population, not all of -- most of which are not going to be related to gene therapy. And we -- and this again goes back to Dr. Bryan's comment about shining a light on safety. It's going to take a lot of work to try to dissect what could be drug-related from what's just sort of background noise. I think this one, judging by where independent folks have come out, where agencies have come out in regard to the response to the report, has seemed to fall into the unrelated category. And people are willing there. And I think this is going to be one of the challenges of human gene therapy over time, is to just try to sort out which of these things actually could be related and which of these things are not related. The good news is we have really very low event rates, 134 patients over 2 years of follow-up. I mean the cancer incidence in this population has got to approximate that or be much greater than that really. So I think we feel good about the fact pattern and the process that we undertook and the fact that we've been transparent with health authorities and scientific societies. Everybody is looking at this sort of stuff. And so far, everybody is saying keep going.

Okay. Great. And then one more question on ROCTAVIAN relative to the steroid use. It seems like you've already shown that there's, longer term, little difference between how they're used on-demand or prophylactically. Why are you doing the Study 270-303? What more will that tell you? Do you think the FDA will want to see this? Or they'll come to the same conclusion that you have based on the most recent data that you've reported that shows that patients pretty much end up in the same place?

Well, I think our motivation to do this additional study didn't really spring from a regulatory context because we believe that the benefit/risk proposition of what we've already demonstrated is sufficient to warrant a positive conclusion. And as I said, the wrestling contest is really less about effectiveness at this point. All of our patients or almost all of our patients are off corticosteroids. And this notion that there's a great and a poor steroid regimen, and with a poor steroid regimen, when you take them off, the people are going to fall through the floor. At EAHAD, we reported there were only 4 additional out of the 134 patients who resumed Factor VIII prophylaxis after 2 years. That's like only a total of 6 out of 134 over a 2-year period. So 128 people are successful even 2 years and counting later. So pretty good steroid so far. Our question is can you do even better. Now with continued declines in Factor VIII, one of the concepts could be, well, the higher you can get people, if there is going to be continued decline, maybe starting higher lasts longer. And so a little bit this experiment is kind of about the 5- and the 10-year bet more than it is about the 1-year bet or the 2-year bet. No health authority has asked us for these data as part of the approval package so far, so we think that the principle that I was talking about, which is they make a benefit/risk decision on the basis of the data that you have collected. They can always ask for more, but so far, they have -- that's not been a question area of theirs. And so we view this as information to be available to the marketplace soon after to facilitate physician decision-making about how to use corticosteroids in the future.

Okay. That's helpful. And so I've asked you this in the past, and I was just wondering if you have any latest thoughts on what factors might predispose patients to respond [ less ] to ROCTAVIAN or -- and [ as a point ], do you think you'll -- we'll ever know and be able to monitor or manage that clinically?

I don't think there's been any real kind of big breakthrough in all that. I mean I think the sort of notion of can you find a subgroup that's faster, slower, higher initial transduction, lower initial transduction, don't seem to find all that. And we've looked a lot of different ways. We've done this elegant molecular profiling of sort of a dose delivered based on peripheral blood mononuclear cells, and it doesn't seem to correlate with height of peak expression or durability of expression. So the challenge scientifically with gene therapy is you start with this complicated particle outside the body, and then the end result is transcription of this Factor VIII. But there are so many steps: receptor binding, uncoating, nuclear translocation transcription, molecular processing of the pre-mRNA. All of these steps, each of which is going to have some intrinsic human variable component, we're doing a lot of work to try to pin down each of them in the pathway, and that's hard to do because a lot of this had to be done preclinically. So I don't think -- we've made a lot of scientific progress in testing hypotheses, but we really haven't come up with a here's what you should know about who's going to respond better or worse in terms of gene therapy. Fortunately, as I said, 128 out of 130 patients are -- or, sorry, only 6 patients have returned to prophylactic therapy. And so the extent to which there's like a complete swing and a miss or a swing and a miss that happens over a relatively short period of time, not a very large problem in the grand scheme of things.

Yes. Okay. Super helpful. How about for VOXZOGO, the other statural conditions you alluded to study? Can you talk about those some more? Which make the most sense? And how impactful could that be for patients?

Yes, yes. Well, the playbook back in the day from growth hormone is they pursued a bunch of indications: SHOX, Turner syndrome for example. Many of those indications are individually collectively small. We could do that. We could go after this mutation, that mutation, this mutation, that mutation. Other end of the spectrum, the other thing that growth hormone then did was something called idiopathic short stature, kind of don't care how you got there as long -- if it's not growth hormone deficiency, we're going to call you idiopathic short stature. Now this was before molecular biology was invented practically. Now we have a much greater understanding of genetic contributors to statural impairments. And so one idea is across a basket of genetic conditions, can you improve stature in children who are severely affected? Andrew Dauber, who's the Chief of Pediatric Endocrinology at D.C. Children's, had, had this on his radar for a while. In fact, his attitude, [indiscernible] achondroplasia, that's the most severe mutation to study. You should be willing and amenable to studying other genetic contributors. As long as it's not pure growth hormone deficiency, the biology and the genetics argue that this is going to be a dominant axis of amelioration of statural impairment. So he has a study ongoing. At R&D Day, he reminded everybody about the design of the study. He gave sort of the Cheshire Cat. Stay tuned. Coming soon to a theater near you. I'll be presenting some data. He's enrolling really well. And I think this will give us our first glimpse at non-achondroplasia indications. Exactly how we proceed from that is yet to be determined, partly because we have some -- we want to see what those data are. We want to evaluate, are mutation-directed programs smarter? Or is there a more general approach to the problem? And so we're still mashing that around internally. I think the excitement for me about this is just the prevalence of severe statural impairment. If you take a growth curve and you say the idiopathic short stature population [ we find ] is 2.5% lower standard -- 2 standard deviations is 2.5% of the population. Well, 3 standard deviations is 1% of the population, and 4 standard deviations is 0.1% of the population. So that would be the prevalent number, but 0.1% is a very, very large population, subpopulation of idiopathic short stature. And in those subpopulations, very clear that there are genetic contributors to that. So I think the opportunity to leverage the knowledge gained from how this pathway works in specific genetic conditions might be applicable to a panoply of genetic contributors to statural impairment and, particularly, at the most severe end of the statural impairment spectrum. So that's what's exciting to me about VOXZOGO, future direction scientifically.

Interesting. So in about the last 2 minutes, I need to ask about the rest of your extensive pipeline. What's exciting you the most that we'll have data in the foreseeable future that will help us appreciate why you're so excited about it? You have so many programs. So which of -- which 1 or 2 of these would you point to if I asked you that?

Well, 255 is in the clinic, and there's -- I mean, just a super simple way of describing this problem is there's a ton of kidney stones out there that are oxalate-mediated. So if you can reduce oxalate excretion, theoretically, you can alleviate a pretty significant morbidity and progressive chronic renal disease. And we're busy at work advancing that through dose-finding, safety studies, evaluating surrogate biomarkers, demonstrating PD effects on targets, demonstrating safety, and we hope to be very competitive in that area. It's a very, very, very large opportunity obviously. So very excited about that. Next step is going to be our Duchenne familiar chemistry, phosphorothioates but a different target in the pre-mRNA for skipping. Dramatic skipping results in comparison to first-generation antisense oligos. So if we can achieve the tissue concentrations with our new molecule that we had achieved for our old molecule, drisapersen, the difference in the amount of skipping that you achieve is just orders of magnitude different. And we really should be looking at not an argument about whether 0.1% skipping is therapeutically relevant but looking at like double-digit levels of dystrophin, which are unequivocally associated with better performance outcomes for patients. I could go -- I love all of the assets preclinically. I love them all. 331 for hereditary angioedema has skip. These patients, they don't know when their attacks are going to happen. And they're running around with chronic burden of chronic therapy, and they'd really like to be off chronic therapy. But then there are these surprise attacks. So what they really want is no attacks and no prophylaxis, and that's what gene therapy offers as a promise. Those are a few I consider keeping me going.

When might we see -- last question. When might we see -- start to see some of the data that might get people to pay more attention to 351?

Well, I don't think we've put a peg in the sand in terms of that time line. I think we're coming around the corner in terms of the pre-IND enabling work, feeling pretty good about all of that, putting the finishing touches on the preclinical package and the [ trans ] to clinical plan. So stay tuned, and we'll be able to hopefully provide a little bit more specific guidance about when.

Okay. Great. Super appreciate all your insights today, Hank. It's always a pleasure. Thanks so much.

Likewise, Joe. Good to see you. Take care.

Take care.

Yes, bye.