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

[Audio Gap] to achieve its potential and create a lot of value creation for investors. That's our goal. That's how we know we're going to be evaluated. We have got a tremendous sense of urgency to do that, and the team is making really good progress.

Fantastic. Well, let's get into Voxzogo. So talk about the growth trajectory sort of today with respect to underlying patient demand, maybe have manufacturing be a consideration there. And then we'll get into sort of line extensions in the future?

Okay. Great. Yes. So I think Voxzogo has the potential to be in the history books with biotech. I mean, this is the proverbial pipeline in a molecule. And we're only in its first indication. We only have got so far penetrated around 1/3 of achondroplasia globally. So the launch has been going extremely well. It's obviously driving the growth of BioMarin. But really at the beginning of this journey, the achondroplasia launch has been successful. I think that the thing that I'm particularly excited about right now, which is driving and accelerating our growth, as you can see in our Q1 was the expansion of the indication to 0 to 5. We're now having babies being put on Voxzogo within days of birth. The soonest after birth I've heard so far is within 9 days of birth. And this is great from a clinical outcome standpoint, obviously, the earlier start, the more time you have before the growth plates to close. But also, obviously, from a revenue and a competitive standpoint, this is really exciting because if a patient is doing well on Voxzogo, we think it's very unlikely that a parent or HCP would want to switch. And you can see the majority of the growth in patients is now in that younger cohort. And it isn't an expense of the older cohort, they're all growing. And we're really -- again, we're only 1/3 penetrated in achondroplasia. So there's a lot more progress to be had there. And then you mentioned manufacturing. The opportunity in achondroplasia was actually underappreciated by the company. And unfortunately, we didn't have the manufacturing capacity we needed. The team has been really focused on making sure we've got the capacity we need. In the middle of this year, we'll be on track to no longer have supply constrain our results. And actually, our long-term plans for the manufacturing, we're moving them all forward. We've made really, really good progress. So what we said in January would be our peak capacity next year will be actually achieved by the end of this year and the plans in the years out as our life cycle management, which is obviously the next topic that we're going to talk, as we come forward with the new indications, we're going to have plenty of capacity to be able to meet demand.

Great. Before we get into additional indications, talk a little bit about the life cycle management with respect to the injection frequency kind of next-gen Voxzogo?

Yes. That's in our R&D prioritization. I was really pleased to see the merits of the molecule. We did the prioritization base molecule by molecule, what are we most excited about in our pipeline and also what should we stop and reallocate the resources on what's most promising and you saw the results of that in Q1, we announced that. And one of the programs we prioritized was actually the follow-on compound to Voxzogo. So it's BMN 333, which is going to be a long-acting formulation of Voxzogo. It's early on. I'll be clear on that. But we think there's a path to development and approval at least 2 years prior to Voxzogo LOE. The minimum TPP we have in mind, target product profile is at least as safe and effective as Voxzogo, and that's a very high bar, and I'm not sure we'll maybe get on -- touch on that in a moment. But with the potential for once weekly dosing. So I think that is going to be exciting. It's going to be critical from a business standpoint, as we build up in all these indications, to maximize Voxzogo, then we have a molecule coming well before LOE to be able to transition patients in the business over to.

Yes. Can I guess, can you just kind of remind us where you are in terms of the additional label expansions for Voxzogo? What should we expect to see this year? When should we see trials starting as well as design of the pivotal trials?

Yes. So I think this is a very, very important topic to sort of elucidate because I think only a couple of analysts have even hypochondroplasia, and we have all these other indications now planned and making progress on. So hypochondroplasia is the next indication. We're already into our pivotal studies for that. So we'll start the 50-- we're well underway with the natural history run-in study for the registrational study. We've got very, very compelling Phase II results. Actually, the growth values achieved in that were even better than we achieved in achondroplasia and the scientific rationale is clear. We've got very clear feedback from the FDA. So moving into the 52-week treatment arm middle of this year, aiming for approval in 2027 for hyperchodroplasia. So that is in its pivotal studies, and that is well underway. And again, a really, really high confidence, high probability of success, regulatory success with that. Then at Q1, we announced that we were moving forward with idiopathic short stature conditions. This is a huge indication. So achondroplasia, just for folks to know, is about 21,000 patients globally, hypochondroplasia is about the same, around 21,000 patients, idiopathic short stature conditions is about 600,000 patients. We have clarity from the FDA with regard to the end points, with regard to the comparator, with regard to the duration. We have kicked off our Phase II study, and we'll do a Phase II study and then roll into a Phase III. And then we have the pathway conditions. And there was also data on pathway conditions in ISS at the Pediatric Endocrine Society showing really good efficacy and a compelling safety profile. We're in discussions with the FDA about the regulatory pathway unintended for the pathway conditions. That, I think, will be a really pretty straightforward, probably a basket study. And the exciting thing from a commercial and revenue standpoint is this is human growth hormone is already used, but it's very unsatisfied -- unsatisfying results. We have every reason to believe, and we've seen data and it's been shared publicly that Voxzogo is effective. So that will be the next step. So we are with -- with hypochondroplasia, we're on track. ISS is now loaded and firing and next up is pathway conditions. So a whole raft of new conditions, many, many times larger than achondroplasia is ahead of us.

That's very exciting. I guess how do you prioritize additional indications? We saw some results at PES and of course, it looks very exciting. So there's a lot to do.

Yes. That's been the focus over the last 5 months is accelerating those plans. So the existing plans, hypochondroplasia, how can we actually complete those studies and the regulatory process quicker. And then, ISS is the largest, and obviously, it's a diagnosis of a range of different short stature conditions. And getting clarity from the FDA on that was really important. So that, I think, represents probably the most challenging to navigate. Obviously, a very large population. You want to make sure that you've got a very compelling value proposition because you don't obviously want to erode the value that you've created in these other conditions. I mean, the reality is that achondroplasia, the pathway conditions, the level of the severity of the disease is much greater than the majority of ISS patients. So figuring out what is the proportion of the ISS patients that we're going to be targeting in our study and again, we have that clarity now.

I guess last question here. How do you think about, do you have age expansions, you have additional indications? How does this impact the competitive landscape?

Yes. As we're successful, we're attracting competitors. People see the potential of these diseases. We're establishing -- I mean, there's no treatment options in achondroplasia or hypochondroplasia with a first. And so it's inevitable, there's going to be competitors. The big thing is getting into these diseases, establishing a leadership position, creating a lot of data, quality of life data, safety data to really establish yourself prior to competitors. When and if competitors come, they will start in the older kids. If they're lucky, they'll be able to get down to 0, but they won't start out with having the indications from both. And all of our market reach shows that a patient is -- a baby has started at birth, within days of birth and is doing well on Voxzogo, which the majority of patients do very well. The patients and the health care provider are very reluctant to switch. So just in terms of the competitive dynamics and what's important to both patients and caregivers is really, very clear also for our market research that safety is a nonnegotiable. So a really established safety profile where you're dealing with pediatric rare disease, that is a nonnegotiable. Then it's efficacy. And only when those 2 things are equal, then it's convenient. So I'm just -- I mean, I think that probably makes sense to people logically, but it's really important to understand those things. So that's why BMN 333. That's why the minimum target profile is as safe and as effective as Voxzogo, which is not a low bar than convenience.

So I'm assuming that as you target the larger indications, ISS and others, you'd want to have the once weekly 333 fully derisked. I mean, is there a way? I wasn't sure how you prioritize the optimization of dosing with label expansion in a meaningful way?

Yes. We'll share more about what the different indications and the sequencing will be for 333. But we obviously want to go a faster market as quickly as possible. If its target profile looks as compelling as we think it is and the preclinical data we've seen, then we want to go as quickly as possible. There are other indications, which I haven't mentioned, which we also think CNP could be really important for us. So this is -- again, this is very much still where only the -- potential of Voxzogo. And it's also probably worth highlighting that the FGFR 3s, ISS and the pathway conditions, mechanistically, there's no scientific rationale. So competition won't be able to follow us into those indications as well.

Makes sense. Well, let's switch gears to Roctavian. So over the course of the past couple of years or spend the clinical investment and now that you have the commercial investment, you're in a few major geographies and you're just starting to see some traction there. But I think investors have been anticipating this for a while. So help us with where this fits today and maybe in the future in BioMarin strategy for -- obviously, not as core as likely as Voxzogo, but overall growth?

Yes. I think investors should look at Roctavian as a sort of covered bet. Certainly, that's the way we look at here we are in Vegas, covered bet. I don't really know. I'm not a big gambling person, so I'm probably not using that. But what I mean by it is that in terms of our plan and our long-range plan, Roctavian is not core to that plan. The guidance that we gave this year, we have a very conservative view on Roctavian, and we're not dependent on Roctavian results. We'll see whether Roctavian manages to take off. I think there's obviously patient and physician interest in the proposition of living with hemophilia without being reminded, you're constantly getting treatments. And I think that's a compelling proposition, but that site readiness and patient level reimbursement in multiple different geographies is proving to be challenging. So what we've said is, either that we're going to see this ramp and it's going to take a little bit of time to a reasonable level of sales or we will contemplate either divesting it or partnering it. So we will see, but it's -- again, BioMarin with or without Roctavian a really compelling proposition.

Yes. And just remind investors of the geographies that you're still -- wouldn't say investing in, but you're following closely. I think you're not -- you're probably not going to invest in global launch at the -- based on levels that you did?

That's right. We need to see the proof of concept from a commercialization standpoint. I mean, obviously, you need to -- whilst this has been a long journey, and I think a source of pride to have the first gene therapy in hemophilia A is not an insignificant accomplishment. We have to be very focused now about proving the commercial value and the return to investors from this. So we have decided, in this first 5 months to really focus down on 3 geographies where we have national level reimbursement, that's the United States where you have 275 million lives, where payers have said, I've got a policy in place to cover Roctavian. Germany, where we have national level reimbursement and price. And Italy, where we have since January national level reimbursement and price. So now we want to see in those geographies, can we see the patients go on therapy at the bottom of the funnel. So a very focused effort around that, pulling through patients at the bottom of the funnel.

Can you speak a little bit about the commercial spend right now and how you might see that moving forward?

Yes. We're spending about $50 million or so, a quarter on Roctavian. It's not -- around half of that approximately, Brian, right, is marketing and sales. The remainder is R&D. So that is -- obviously, there's long-term regulatory follow-ups required. We have to follow the patients after the clinical studies, et cetera, et cetera. So it's about 50% of the $50 million per quarter. One of the options that we could have is and that we're exploring right now is if that ramp is a lower ramp, so not even a revised expectation but something smaller. Is there a level of promotion, which is attractive from a profitability standpoint? So I think that might be -- with a very focused effort, that might be a path forward.

Helpful. And I guess if you're thinking about as well the 340B centers and the sites, what's the hold up there? Are you seeing any progress in terms of their discussions and actually getting patients on treatment? Because we saw a patient treated in Wisconsin was it?