BioMarin Pharmaceutical Inc. ($BMRN)

Good afternoon, everyone. I'm Ellie Merle, one of the biotech analysts here at Barclays. Very excited to have BioMarin here with us. Certainly, a very important year for you with commercial launches and clinical readouts. Excited to have Brian, CFO; Cristin, Chief Commercial Officer. Thank you both so much for joining us.

To kick it off with an overview question before we kind of go into some of the specifics. Just can you give us a brief overview of the key highlights of BioMarin's progress over 2025 and what we can look forward to in 2026?

Yes. Thanks, Ellie. Appreciate it. Thanks for having us. Thanks to those of you joining in person. Really pleased to be talking to you today at this point in the year as we transition out of what was a very successful 2025 for the company and a very exciting 2026. Starting with how we finished 2025, BioMarin grew total revenue at 13% for the full year, and that included 26% revenue growth for VOXZOGO and 9% growth from our Enzyme Therapies business unit. On the profitability side, we've been on a profitability improvement journey over the last couple of years. We've had several quarters in a row where we're growing earnings per share at a rate greater than revenue, and that includes full year 2025, where -- after adjusting for some of the special items that did hit earnings in 2025, we were more than 2x leveraged on the bottom line. And the other big momentum build coming out of '25 is the announcement of the Amicus acquisition, and this kind of sets up perhaps what we're excited about in 2026. So the Amicus acquisition we announced in December. We expect to close it in the second quarter, subject to all the customary closing conditions for an acquisition like that. And that adds 2 high growth or subject to closing, will add 2 high-growth approved rare disease assets to our existing portfolio of more than $3 billion of revenue from 8 rare disease products. Beyond that, within the existing base business, we're expecting to grow revenue within both of our business units at the high single digits, Enzyme Therapies and Skeletal Conditions, both growing at 7%, 8%. We do have a small growth rate headwind on total revenue because some of our royalty and other revenue is decreasing, and that's about a 3% headwind. But the most critical parts of our growth are the business units, and we're excited about that. We're also advancing our pipeline and have a number of pipeline catalysts in 2026. First is the Phase III readout for hypochondroplasia for VOXZOGO. VOXZOGO is currently approved in achondroplasia. Hypochondroplasia is a similar condition and we have proof-of-concept data from an investigator-sponsored study and the Phase III study will be reading out in the first half of this year. Another Phase III readout is BMN 401. This was the asset that we acquired with Inozyme last year, which was our first acquisition of 2025. This is an enzyme replacement therapy for ENPP1 deficiency. And again, data in the first half of the year. We also have clinical stage assets progressing. BMN 351, we shared some data early in the year. This is a second-generation exon skipper for Duchenne muscular dystrophy. At -- we're testing 3 dose levels. And at the middle dose, we shared that we achieved 5% dystrophin expression, which at 25 weeks, which is about halfway through to what it should take to get to steady-state dystrophin expression at 52 weeks or more. That 5% shows us that we could be on track to reach our target of 10% dystrophin expression, which while there are approved products, there's still an unmet need. And while it's a competitive space, this does have the opportunity to be best in disease. So we'll be looking forward later this year to sharing the results from the highest dose, the 12-milligram dose. And then the other clinical program that's advancing internally is BMN 333. This is BioMarin's long-acting CNP, possibly a weekly injection, but what's noteworthy about BMN 333 is that we're designing the product and its target product profile is more than just convenience. We're designing the Phase II/III study to actually be superior in efficacy to both our own drug, VOXZOGO. It's a head-to-head program with VOXZOGO, but also potentially superior efficacy-wise to the competition. So we appreciate that VOXZOGO is facing competition, including a recently approved competitor. But frankly, we're excited to compete. We're confident in VOXZOGO's profile. We have established ourselves in the achondroplasia community and with patients and physicians. We believe that switching will be complicated. We'll continue to have the infant label for ages 0 to 2, where it's most important to start treatment of achondroplasia with VOXZOGO as early as possible, that's published in international treatment guidelines. And then just a reminder, since I started talking about the VOXZOGO competition that we are talking about just 25% of VOXZOGO revenues being in the U.S. that's subject to the competition, which is approximately 7% of our total revenue. So we've got this base business that's growing, including VOXZOGO in 2026. The midpoint of our guidance is $1 billion. So through competition, VOXZOGO potentially reaching blockbuster status and still growing healthily in its fifth year after launch. So that's -- we're excited about all that.

Yes. There's certainly a lot of investor focus for what, as you rightly say, is 7% of your revenue. But yes, maybe let's start there talking about VOXZOGO sort of you outlined 2026 guidance for VOXZOGO revenues. Maybe if you could sort of outline some of the assumptions behind that, both from a U.S. and ex U.S. perspective in terms of what's baked in, in the guidance.

Yes, of course. So VOXZOGO guidance is $975 million to $1.025 billion for 2026. The two most noteworthy swing factors in that range beyond the fact that it's earlier in the year, and it's an estimate at this point in the year, we need to execute and there's natural variability. That's why we estimate a range. But the two largest swing factors are, first, some international market access negotiations that we're in the process of concluding this year. On the low end of the range, that could involve a price discount. But if that's the case, in some markets, including those that we're negotiating in, that's just a short-term headwind because what we could be doing is taking a short-term price discount to actually open up access to more patients over time. So a short-term headwind because of price, but long-term tailwind because you're accessing more patients over time. And on that one, on the high end of the range, it would just assume that the pricing gets negotiated more in our favor. And then the second swing factor is the competitive impact. So on the lower end, that assumes that there will be more VOXZOGO patients switching potentially earlier and at the high end, less switching later. But you can -- again, back to the 25% of revenue and the 7% of total revenue, you can see that our assumptions even around different levels of share loss to competition, it still fits within that $50 million band. So these are not largely material swing factors on what is a $3.3 billion, $3.4 billion portfolio. Also important to note is the anticipation of closing the Amicus acquisition. I talked about how this brings 2 commercial assets into the portfolio. We will, of course, update our guidance at some point, assuming we close after the close. But if you look at the 2025 revenues for those Amicus products, it's over $600 million. So -- and these are high-growth assets. So as we bring in the Amicus assets, VOXZOGO becomes an even smaller portion of our total revenue.

Certainly, probably quite high margins on the Amicus products as well.

Galafold has a slightly higher margin. It's a small molecule. The Pombiliti + Opfolda product is slightly lower. It's a combination product. It does include a biologic -- but we're familiar with some of the cost of goods sold initiatives, second versions of the manufacturing process that Amicus has been working on. So we'll look forward after closing to looking at those opportunities.

I have more questions on that. So first, I just want to talk about VOXZOGO. So what's interesting is there's all this focus on competition, right? But we've talked about how 75% of your sales are ex U.S., which probably will be a lot stickier than the U.S. But then you also have hypochondroplasia, which assuming that the Phase III reads out positively in the first half of this year, which I personally think is a readout that people should be talking about more. But just from a commercial perspective and modeling, like how do we think about -- like this could be launching this time next year. So how do we think about the revenue contribution from hypochondroplasia and the cadence that we could see of that?

Yes. And we will -- we are very much looking forward to the data readout in the first half of this year. And we are, of course, gearing up on our go-to-market plans, and we'll share more about that as the data comes out. But what I think is important to note is that hypochondroplasia, while we believe that it's genetically prevalent as the same as achondroplasia, so we say that there's a total addressable patient population of 24,000 with achondroplasia. The big difference with hypochondroplasia is the diagnosis rate. It's much lower. Estimates are that it's diagnosed at about 30% of patients being diagnosed. So what we've said is that we think that the total addressable patient population is in and around 14,000 for hypochondroplasia. And again, the big reason for that is the lowering of the diagnosis rate. So where our teams are really focused now and will continue to be after launch, after assuming we get a launch is in and around the disease awareness as well as how can we shorten that diagnosis pathway. Right now, kids are getting diagnosed around 5 to 6 years old. We want to see that happen earlier and importantly, make that journey to get that confirmation of diagnosis quicker for them so that they can get on the appropriate treatment. And should we be approved, VOXZOGO would be the only treatment for hypochondroplasia.

And feel free to not answer this question. But based on your commercial work and seeing how many patients are diagnosed today and getting a sense of awareness because presumably, these patients see that achondroplasia patients get VOXZOGO, how are you thinking about whether there could be an initial maybe bolus of patients next year? And from a revenue contribution, how we should think about that?

Yes. I think that in the centers where you have KOLs or they've been involved in our clinical trials, for instance, that's where you're going to see those that already know who those patients are, and we could expect quicker adoption in those particular centers. But the truth is these patients are spread out. They're being seen by pediatricians. They might be in endocrinology offices. So that's where you get a little bit of a slowing relative to that bolus. So I think it kind of normalizes into what I would argue would be a normal launch curve, but recognizing that the total addressable patient population will be lower because of that diagnosis rate.

Makes sense. And of course, longer term, I know you're running sort of the CANOPY Phase II trials in ISS, Noonan, Turner and SHOX. How are you thinking about the opportunity set there?

Yes. So to remind you, so we are -- as you said, we have the CANOPY trials that includes hypochondroplasia, but in these other conditions, including ISS, Noonan, Turner and SHOX. This is an area where we have said that the bolus that -- that total patient population size across those four is 385,000. But what we had said is that we would only expect to get a very, very small fraction of those patients and those that are the most severe. So I want to remind you, these are Phase II trials. We're currently enrolling them and are very much looking forward to seeing how the data turn out next year.

Yes, exciting readout. Going back to the Amicus conversation, how should we think about any -- like you already have a global rare disease sales force of commercial operation. How much more spend do you need to support these revenues? And basically, I'm asking kind of how much of the top line just goes directly down to the bottom line?

Yes. Thanks. Great question, Ellie. Maybe I'll start and Cristin can talk about how we genuinely believe that these two medicines in our hands have the potential to reach more patients because of our global capabilities and reach. But to your point on OpEx, first of all, we need to get through subject -- get through the closing period and actually engage with Amicus and get to work on the integration. But based on what we know about their business, first of all, there's a significant amount of capabilities that they've been able to leverage and be successful with through the growth of these assets. I mean, speaking of switching, they're in the switch market themselves on both of these assets, and they've been very successful in switching patients to Galafold and Pombiliti and Opfolda. And so we plan to preserve and grow those capabilities and continue to use those to drive the sustained growth in these Amicus medicines. We also think there'll be a level of investment required. We'll get some leverage from the global BioMarin commercial infrastructure, but as Cristin will touch on, if we get into improving diagnosis or expanding the global reach, some of that will take some direct investment. So there's a level of investment in OpEx, but we also believe that the complementary nature of the business model means that there's going to be operational and -- operational expense synergies as well. So -- but that's work to do after the closing, and we'll talk more about it when we -- after close.

Okay. Got it.

Do you want to touch on the expansion?

Yes. Just on the expansion or acceleration, I should say. I mean what we want to do is make sure that we, first of all, do no harm and continue the trajectory that those medicines are on today, but then we're thinking about how do we inflect that curve. And the ways in which we think we can do that is to accelerate and deepen penetration in the countries in which they already are. So Galafold is currently in 40 countries. Pom-Op is in 15. We have a country footprint of nearly 80. And so we're looking today at where can we drive deeper penetration in the countries that they already are and importantly, to expand into our country footprint. So teams are currently looking at which markets would we want to go into first and looking at the cadence following that.

Yes, that makes sense, certainly. A lot of synergies there. So we look forward to the updated guidance because I believe I think it's much more accretive than people are appreciating. So I'll leave it there.

I appreciate the support.

Maybe just turning back to sort of the commercial dynamics. I guess, following PALYNZIQ's recent label expansion, how should we think about the impact of the near term on revenue in 2026 and over the longer term?

So we're really excited about the expansion, the adolescent expansion that we just received in PALYNZIQ. It's really exciting for these patients. So this is in 12- to 17-year-olds because what we know to be true about the adult population is that this really brings down the Phe levels to within normal range and allows you to have a normal diet. You can only imagine how that must feel for an adolescent who wants to be included with their friends, wants to eat like their friends and wants to make sure that their condition is under control. So if we look at the adult population, just to give you relative commercial sizing, we have about 7,000 patients that are eligible for PALYNZIQ and that are not yet lost to follow-up, meaning that they're being seen in clinics. More patients as adolescents are actually in clinic, and that is in large part because their parents are having to manage this and ensure that they're staying both in clinic and adherent to therapy. So we think that there are about 1,500 patients in the U.S. who would be eligible for PALYNZIQ. And so we're really excited to bring this opportunity to them and ensure that not only can we lower Phe levels once they get up to their maintenance dose, but importantly, lead a normal life and set them off in the right direction into adulthood.

And maybe just on the revenue side. So PALYNZIQ continues to grow strong even before this label expansion grew at over 20% the last 2 years. And so -- and the medicine was approved in 2017. So that's just a good indicator of its gradual and continued uptake. And for the reasons Cristin noted, while this opens up a new segment of the population, because of that parental oversight and the benefit for adolescents in their lifestyle, we actually think we'll get deeper penetration within that segment, which we are excited about as an opportunity. But since you mentioned revenue, it is important to note that PALYNZIQ has a very gradual and steady dosing induction and titration phase where patients could be at a very low dose of the medicine for several months, up to 6 to 9 months or more until they get to the steady-state efficacy dose. And those smaller doses mean less revenue. So even if we're adding adolescent patients this year, you may not see it in revenue until next year. But again, chronic therapy for life, just like most of our other products. So once they're on drug, it's a steady revenue contributor.

And yes, we've certainly heard the feedback from physicians that once patients have finished the titration that the adherence is very high. Earlier today, we had PTC here who is launching SEPHIENCE. Curious kind of what you're seeing on your end in terms of any impact to PALYNZIQ?

Yes. So in terms of direct impact to PALYNZIQ, we are not seeing an impact in terms of patients switching from PALYNZIQ over, especially those patients that you would see at their maintenance dose, they've reached their efficacy and they're really content on therapy. What I think is really interesting, though, about having another option out there for patients is what we've heard PTC saying is that they're seeing some of those lost to follow-up patients that are now coming back into the system and being treated with their drug. And what that only does is that actually starts to enhance the patient population if you're bringing in that 60% of lost to follow-up patients, if you're bringing them back in the clinic, the hope would be that whatever therapy they're on is efficacious. If that one is not, they might then choose another therapy, which could be PALYNZIQ. So we see it as a real opportunity.

Makes sense. Heading into the Phase III data for ENPP1 this year, what are your expectations for data? And then also, how should we think about the commercial opportunity?

So we're looking forward to that reading out here in the first half, so very soon. This, of course, will be looking at normalizing pyrophosphate levels as well as having a functional endpoint, which is a radiographic endpoint. So we'll be looking to see improvement in both of those in the pediatric population. This is another one of those areas that ENPP1 deficiency, there are no current treatments for it. And so again, something that is in the sweet spot of BioMarin being that it would be the first and only therapy for the treatment of ENPP1 deficiency. We estimate the total addressable patient population to be anywhere from about 2,000 to 2,500 patients globally. Now this is something where the publications, it's unclear what the actual prevalence is. But as we've seen on our MPS products that when you have a medicine, you start to see more, the diagnosis rates increase and you start to see more of these patients coming. So for now, we think it's about 2,000, 2,500, but that number could grow over time with an efficacious therapy.

Absolutely. Brian, heading into 1Q, I know that your business is particularly subject to some seasonality with ex U.S. orders. But can you remind us just for modeling purposes, how we should think about any specific setups into 1Q?

Yes. Thanks. I appreciate you bringing that up, Ellie. It's important to reemphasize for those tracking. So if you look back over the years, we've historically seen kind of a ramp over the course of the year, specifically in Q4 and then a step down in Q1. Hard to call it true seasonality. As you know, from quarter-to-quarter, it's often these -- the variable timing of some of the large international orders that can cause some volatility quarter-to-quarter. That tends to just increase at the end of the year. It could be, for example, most of our customers outside of the U.S. are these single national health care system payers. And so it could be them consuming their budgets for the year, stocking for the next year. So we've definitely observed that. And yes, so this year coming out of Q4 '25 into Q1 '26, I'd say it was just a bit exacerbated on the international order front. We also saw something that we haven't have observed as acutely before, which was a bit of U.S. inventory stocking. It's not much. We're talking about going from an average of 2 weeks of inventory on hand to 3 weeks. We don't have big pharma stocking and buy-ins, but that small amount on our larger products is enough to make a difference. So overall, we expect revenue to look from a trend standpoint in '26 at the quarters similar to '25. For VOXZOGO specifically, we expect -- and for total revenues, but VOXZOGO as well, we expect Q1 to be a low point and for VOXZOGO on par with last year. Again, it's just these timing dynamics. Two last things. We do point to full year guidance and performance is the best measure for this exact reason, some of this quarterly volatility. And what's also important is that every quarter for each of our marketed and growing commercial products, we're steadily adding patients, which at the end of the day is true demand. We don't have material price volatility. That means you need to tease through revenue growth in terms of whether it's price or demand through patient additions. So when we see that nice steady growth of new patient additions across the portfolio across the last several quarters, and then you look at some of the, at times, noisy order patterns, we get comfortable that it is just timing.

Okay. But that's a helpful reminder in terms of 1Q. Lastly, I mean, I think the Amicus deal is a great deal from an M&A perspective. What is your further appetite and capacity to do further business development?

Yes. Thanks. Very important because it remains a key part of our strategy. What's most important is, of course, getting through the Amicus closing, paying very close attention to the integration and making sure that we're successful in protecting and growing their business. We did share -- we are levering up for the Amicus acquisition, and we shared a deleveraging strategy. Because of the complementary nature of the two businesses, because Amicus reached operating profitability on their own, the deal is actually operationally accretive early. We're taking on a significant interest expense load with the new debt. Part of that is why we do expect the deal to be dilutive this year, but accretive in the first calendar 12 months after the acquisition and substantially accretive beginning next year. That leads to a rapid deleveraging strategy. So we said that our target deleveraging is less than 2.5x within 2 years after the acquisition. That was really important to go on record. We were a first-time debt issuer in the leveraged debt markets. But I'll share if you do the math, which it sounds like you've done, you can see that the two companies' combined EBITDA actually has us on a path to delever even faster than that, which means we are able to replenish firepower at a greater level and earlier. So while the priority will be integrating Amicus and commencing on this deleveraging strategy, we will continue to look for opportunities on the BD side. And different from the Amicus transaction, we'll now be focused on pipeline clinical stage transactions. So we're excited about our internal pipeline, but recognize that building long-term shareholder value is most closely correlated with building long-term expected revenue growth. And so bringing on derisked clinical stage assets that have a clear view for investors to revenue growth is where we'll be focused.

Yes, absolutely. Great. Well, Brian, Cristin, thank you so much for the time today and sharing your insights.

Thank you, Ellie.

Thanks so much, Ellie. Appreciate it. Thanks, everyone.