BMRN - NASDAQ

Thank you for joining BioMarin Second Quarterly Results Conference Call. Hosting today's call from BioMarin is Traci McCarty, Head of Investor Relations at BioMarin. Please go ahead, Traci.

Thank you, Katie, and thank you, everyone for joining us today. To remind you, this nonconfidential presentation contains forward-looking statements about the business prospects of BioMarin Pharmaceutical Inc., including expectations regarding BioMarin's financial performance, commercial products and potential future products in different areas of therapeutic research and development. Results may differ materially depending on the progress of BioMarin's product programs, actions of regulatory authority, availability of capital, future actions in the pharmaceutical market and developments by competitors and those factors detailed in BioMarin's filings with the Securities and Exchange Commission, such as 10-Q, 10-K and 8-K reports. On the call from BioMarin's management team today are JJ Bienaime, Chairman and Chief Executive Officer; Jeff Ajer, Executive Vice President and Chief Commercial Officer; Hank Fuchs, President, Worldwide Research and Development; Greg Guyer, Executive Vice President, Chief Technical Officer; Brian Mueller, Executive Vice President and Chief Financial Officer. I will now turn the call over to our BioMarin's Chairman and CEO, JJ Bienaime.

Thank you, Traci, and good afternoon, everyone. Thank you for joining us today on this call. We were very pleased with our progress in the second quarter as more families around the world gain access to VOX

Thank you, JJ. I'm very pleased with our commercial performance in the second quarter, resulting in $595 million in total revenues and representing 12% growth year-over-year, including KUVAN and 14% growth, excluding KUVAN. Contributions from our enzyme products in the quarter keep us on track to deliver full year 2023 guidance for this franchise, as well as provide significant contributions to BioMarin's full year 2023 total revenues. Turning to VOX

Thanks, Jeff, and thank you all for joining us today. Echoing JJ and Jeff's enthusiasm for the June 29 Food and Drug Administration approval of ROCTAVIAN, we are extremely gratified that people in the United States living with severe hemophilia A have access to this innovative therapy. Our goal with each of BioMarin's therapeutic interventions is improving health outcomes for people with genetic conditions, and we believe ROCTAVIAN clearly achieves that goal. As we have stated previously, we believe VOX

Thank you, Hank. Please refer to today's press release summarizing our financial results for full details on the second quarter of 2023. Since JJ and Jeff spoke to our revenue performance for the quarter and future revenue outlook, I'll make just a few more revenue comments, then we'll focus on the remainder of our P&L and other key financial updates this quarter. As usual, all results will be available in our upcoming Form 10-Q, which we are on track to file over the next couple of days. As we have previously noted, we viewed last year as a transformative year of BioMarin, laying the foundation of our growth strategy driven by VOX

Thank you. Ladies and gentlemen, we will now conduct a question-and-answer session. [Operator Instructions] Your first question comes from the line of Akash Tewari from Jefferies. Your line is now open.

Hey, thanks so much. So just any update on the 300 patients you've previously had interactions with regarding ROCTAVIAN in the US? It sounds like you won't get commercial product into the distribution centers until late August. But I think you've previously mentioned you're going to see some leading indicators in terms of patients who've actually been treated with the companion diagnostic or have actually gone to a treatment center of excellence. So I'd love any update on that number. And then, I guess, number two, on hypochondroplasia data. Can you comment a bit on why the FDA wouldn't require two years of Phase 3 data for VOX

Jeff, do you want to start with the first question and then Hank?

Yes. Hi Akash, I'll start with your first question. It's absolutely the case that we started with the US launch with an estimated 300 qualified patient leads. So these are individuals that had been in touch with BioMarin through either one of our digital properties or an in-person engagement and had opted into further information. As noted on our approval call a month ago, that list of 300 is top priority for getting back to in different ways, digitally and through our sales force. And I can assure you that the team has been processing those leads in the last month and actively. And as you noted, we expect and in fact are seeing small pieces of signals of demand falling into place from responses to those lead engagements to patient consent forms coming in. So things are really encouraging on that front. And maybe with that, I'd turn it over to Hank on hyperchon and Noonan questions.

Yes. Thanks, Jeff, and thanks, Akash, for the inquiry. In terms of the duration of the hypochondroplasia in contrast to achondroplasia in which the FDA has been very interested in two years of data, we've lined up with the FDA that a one-year study would be support -- sufficient for registration. And I think that's driven by the comfort level they're gaining on the durability of VOX

Next question please.

Your next question comes from the line of Salveen Richter from Goldman Sachs. Your line is now up.

Good afternoon. Can you help us to understand the confidence in ROCTAVIAN guidance for the second half in the context of the US and EU dynamics? Thank you.

Maybe I'll start and I'll let -- I'll have Jeff going this. I think as Jeff said in the prepared remarks, based on the net price of ROCTAVIAN in the US, which is close to $2 million, the midpoint of our guidance $100 million would be only 50 US patients. We are counting in non-US, ex US patients. And also just something that's special about VOX

Yes. Thanks, JJ. I think that's exactly right. And thanks for the question, Salveen. The other couple of things that I would add are we're now seeing multiple pathways that we expect to open up for ROCTAVIAN revenue. I mentioned progress in all of Germany, Italy and France, which are priority European markets for price and reimbursement. Remember, I've been quoted on numerous occasions saying typically takes 12 to 15 months to get through that process. We're now just a couple of weeks away from 1 year since approval. So we should be getting to the end of the process in some or all of those markets between now and the end of the year, opening up a pathway for treating patients. Also the named patient markets I've quoted, Saudi Arabia and Argentina that we've been working diligently but quietly on in the background. And finally, the United States where we got our approval at the midyear point takes a couple of months for product availability and for start-up activities. But in the US, our experience has generally been that we can get patients treated pretty quickly after approval. So all of those things add up to channels for being able to treat patients and I think add to the confidence of being in that revenue guidance range.

Thank you.

Your next question comes from the line of Geoff Meacham from Bank of America. Your line is now open.

Hey, guys. Thanks for the question. Just had a few. So for ROCTAVIAN in Europe, I know it's been a few months since you tweaked the access strategy in Germany. Are there any metrics you can give us, either activated centers or diagnostic volumes? I just want to get a sense for the progress since you've had a shift in the reimbursement strategy. And then on VOX

Hi, Geoff, maybe I'll start with the question about Germany and ROCTAVIAN. As JJ quoted on our approval call, we've actually got a really robust funnel of patients now that are in process for eligibility testing going through the CDx testing process, following eligible patients via CDx, go through liver health testing in minutes, a prescription and reimbursement approvals. So with -- as JJ quoted a month ago, approximately 60 patients, I view that as a really healthy patient funnel starting. Recall last fall, we said we estimated about 40 early adopter patients in Germany. So we're at 1.5x that number, and that's before we get through the formal federal price and reimbursement process. Those patients are making progress inside of the funnel. And I understand it's frustrating not to see them popping out the other side as treated revenue patients, but I'm confident that they're making progress and that we'll get there, particularly if we can come to an agreement with the federal authorities on price and reimbursement. Maybe I'll turn that over to Hank on the VOX

Thanks, Jeff. With a lot of the genetic conditions when there is no treatment, there tends to be no diagnosis. And now with achondroplasia gaining so much traction, patients with hypochondroplasia are identifying themselves or families with patients with hypochondroplasia are identifying themselves than getting themselves forwarded to treatment centers for identification, and in the case of Dr. Dauber's study, referral into his study. And I think a lot of that is driven by the phenotypic similarity of achondroplasia and hypochondroplasia, to your point about mechanistic similarity. And our expectation is that this will begin to extend into other skeletal disorders as more clinicians and more families recognize CNP as a natural regulator of bone growth. And I think this is a process that could lead us to many additional indications. And as I said in the call, stay tuned for further updates on the regulatory strategy that will enable ROCTAVIAN to -- VOX

Great. Thank you.

Your next question comes from the line of Chris Raymond from Piper Sandler. Your line is now open.

Hey, thanks. Just a couple of questions. First on the VOX

Thanks, Chris. We have Greg Guyer, our Head of taking new operations here, who's going to answer your VOX

Yes, Chris, thanks for the question. And just maybe to clarify a little bit about what Jeff was talking about is that currently, we're able to supply VOX

So again, there's no manufacturing issue. There is a -- in terms of the manufacturing details in the drug substance, we manufacture ourselves here in California. The fill-finish is done by outside supplier. As you know, outside suppliers, there's a lot of lead time when you want to increase the volume. And that's what we're facing here because VOX

No, all stated. Thank you.

Is there any comment, Hank? Yes?

Yes. On 331, yes, Chris, we do have very clear criteria for staffing, and note would be taken that at this stage. One option could be before reaching those top criteria to raise the dose. AAV5-based therapies have a pretty good safety profile. And so we could contemplate raising the dose. Another thing I'll mention is new -- and I'm not going to be very specific about this just yet, but we -- with as much ROCTAVIAN data as we have, we have some new insights about optimizing gene expression in patients treated with gene therapy. And we're working very closely with the Data Monitoring Committee and the investigators of the study to incorporate those insights. And if neither of those two are successful, of course, we would meet a stop criteria. But it's still a little bit early for that program. And as we resume dosing and obtain more data, we'll provide further updates.

Thank you.

Your next question comes from the line of Robyn Karnauskas from Truist Securities. Your line is now.

Hi. Thanks. I'll be quick. So three questions. Number one, we heard compliance is very high in VOX

Maybe start with a question on compliance with VOX

Yes, thanks, Jeff. In regard to the hypochondroplasia question, one study we've interacted with the Food and Drug Administration and have a pretty clear picture of their requirements which would be satisfied with one study. And the reason for not requiring longer-term follow-up as regards randomized placebo-controlled period is their growing satisfaction with durability. In fact, maybe to go even a little further, depending on where achondroplasia is at the time of the regulatory action on hypochondroplasia, even further follow-up may no longer be required for hypochondroplasia. So we had a great dialogue with the FDA. And in so far as there's an excellent safety track record for VOX

Yes. One follow-up, sorry. So there's so much fixation on when you'll dose patients in Europe. And I was just curious, like have you thought about like letting us know earlier or during the Analyst Day? There's some expectation on that. So maybe give us clarity on when you might give us timing of that and how much color you would give because there's excitement, but we're yet to see the dosing.

Yes. Actually, one -- Robyn, one of your financial analyst competitor had a recent call with a German physician. That German physician announced on that call, but revision that, that is scheduled to treat his first patient, I think, on August 30th or 31st. So that looks like this one is probably a given. And then the possibility that we would treat also our first rest patients by the end of August [indiscernible]. And then after last September should be when we're going to start really getting some real traction on patient treatments and revenues.

Great. Thank you.

Your next question comes from the line of Phil Nadeau from TD Cowen. Your line is now open.

Good afternoon. Thanks for taking our questions as well. Couple more on ROCTAVIAN. JJ, during your prepared remarks, you mentioned the consent form received in the US as adding confidence to the guidance. Can you go into a bit more detail on that comment? Is that simply the 300 patients that you knew of as of the time of approval? Or have there been incremental consent forms received over the last month?

I'll let Jeff answer that question. We -- I don't want to believe that. We already received 300 patients consent form. We haven't, but they're starting to roll in and -- but maybe Jeff can provide some more color here.

Yes. Thanks for the question, Phil. So these are really independent sets of patients. The 300 patients that we've quoted are qualified leads means we have a lead. We've qualified that lead to be a hemophilia patient, not a sales rep at a competitor company, for example. And we're following up those patients have opted in for further information. Patient consent forms, on the other hand, are usual vehicle that we use for all of our programs, including for ROCTAVIAN in the United States, to conduct patient intake into our case management system. So any patient that's come in with a patient consent form has been in touch with our case management system and has opted in for further services, depending, that patient consent for might be coming in from a hemophilia treatment center along with prescription or might be coming in independently as patient-directed interest. And in that case, we would connect them with the sales rep for follow-up. So it's a mix, but it's really, really good that we have patient consent forms coming into our case management system. That's how it always begins for us with all of our programs, including Roctavian.

Would you care to disclose how many patient consent forms you have?

Not at this time. Thanks for the effort, though.

Got it. And then in terms of the centers themselves, what do they need to do in order to make ROCTAVIAN available for a patient? In general, do they -- does there -- is there a formulary committee that has to accept ROCTAVIAN as a therapy? Any other committees that you have to talk to or get permission from before a center can bring ROCTAVIAN to its patients?

It's a great and an important question, the notion of site readiness. And unfortunately, there's no kind of simple one-size-fits-all description. Some HTCs are connected to a larger health care system. In those cases, an HTC might tap into the administrative procedures that you mentioned, like formulary, for example, and maybe also pharmacy services from the larger institution. And in other cases, you have hemophilia treatment centers that are more or less standalone and do all of that on their own. So site readiness looks different depending on what is the size capability of the HTC and are they connected or not with a larger health care institution. Just a reminder, the infusion of ROCTAVIAN is a relatively trivial step. But the more important things are issues like the administration, formulary, for example, navigating payer interactions, product handling of a very frozen product that has a high value, for example, patient eligibility testing and counseling to determine if there's a patient with interest and if so, moving them forward in the process and then the follow-up following administration, which we talked about on the approval call. So lots going on there. None of those things involve a big hurdle. It's mostly a bunch of smaller things that need to be done and a whole list of them for -- that is rather bespoke for each hemophilia treatment center, and our team is on it.

Great. And then last on that follow-up that you just mentioned, how onerous are the liver enzyme and factor monitoring requirements? Is that something that you can make very easy for the patients?

Blood test. Liver function tests are on a panel that probably most of us do once or twice a year. It's a simple blood test. At the same time that, that simple blood test is being taken. That blood can be used for factor expression levels.

The patients do that? Do you want to --

That's right. So for a lot of patients, it's as simple as going to a very nearby lab testing facility. In the case of patients that don't have convenient access to that, we have programs to assist.

Perfect. Thanks for taking our questions.

Your next question comes from the line of Joseph Schwartz from Leerink Partners. Your line is now open.

Great. Thanks so much. Our checks in Germany indicate that there is still some uncertainty about how many and which sites will be able to administer ROCTAVIAN there. So I was wondering if you could talk about how this rule-making process works and how you expect it to play out. Is this part of the reimbursement negotiations which you're expected to wrap up in September? Or is this something separate? And then in the U.S., our checks underscore the important contracting with the sites that the initial ordering and longer-term follow-up on patient performance can be done reliably. So I was wondering sort of a follow-on to Phil's question, if you can give us any insight into the extent of contracting that you've been doing with HTCs in the U.S. Thank you.

Hi, Joe. Let me start with Germany. So you've heard me talk over the last year or even longer about the hub-and-spoke model for treatment the major markets in Europe have been rallying around. And that's the hemophilia treatment community in Europe, not BioMarin is a driver behind that. So the notion is that, in Germany, for example, the largest and the most capable hemophilia treatment centers would be hub centers for both screening and testing patients and that there would be smaller, less capable hemophilia treatment centers that would be spoke centers. And those spoke centers would probably do all of the screening and recommending of treatment. The treatment would be done at the hub center and then likely back to the spoke center for a follow-up after treatment. There may, in fact, be a little bit of uncertainty on the entire list of who's the hub and who's the spoke. But from a practical perspective, we're focused on engaging with all of the significant hemophilia treatment centers in Germany. And it doesn't really matter very much from a kind of promotional perspective which centers do infusions and which centers refer for infusions on Germany. You mentioned contracting, and I'm not sure exactly what kind of contracting you're talking about. In the United States, there would certainly need to be an agreement reached between a treatment center and a payer on the level of reimbursement for ROCTAVIAN, which might involve a patient-specific contract between a hemophilia treatment center and a payer. We think that that's likely and not a big barrier at all to proceed with the treatment. There might also be contracting between spoke sites, to use the analogy, spoke sites and hub sites in the United States, if there's a desire on the part of a hemophilia treatment center to refer one of their patients to a more capable center or one that's further along in site readiness for treatment of ROCTAVIAN. All of those things are possible. I haven't personally heard that there are any barriers to proceeding due to contracting. If you've got something more specific, stock.

No, that's good.

Sorry, I may add, Joe, as gave some of our investor aisles. Basically, all patients in the U.S. will be treated with ROCTAVIAN in hemophilia treatment centers are chemo treatment centers that are receiving 340B discounts, basically statutory for the centers. Let's take around -- it will be initially more than 20%, and it might go down to 17.5%, whatever. But let's round it to 20%. That's 20% of the WACC cost. So a WACC is $3 million a patient. So 20% is $600,000 that will go in the pocket of the HTCs per patient. So you might have this information -- or you might find this information interesting.

Very much so. Thanks again.

Your next question comes from the line of Paul Matteis from Stifel. Your line is now open.

Hey, thanks so much for taking my question. On VOX

Yes, good question. I'll start on the VOX

No. And by the time hypochon comes, this supply issue will not be one -- we'll have plenty of supply.

Yes, we're not going to get hypochon -- the hypochon condition next year.

Just meant younger patients, but okay, thanks.

Younger patients, but already, I guess, the current consensus is significantly above the top of our guidance for this year of $440 million. And we are very comfortable with -- we have enough supply to significantly beat the current 2024 consensus, whatever the patients are. Jeff, do you want to add anything to...

Yes. Maybe just a couple of metrics to put it into perspective. At the end of Q1, we advised that there were 1,500 patients on treatment around the world; the end of Q2, 2,000 patients on treatment around the world. That's a big increase quarter-to-quarter. And we've guided that our supply plan just through the end of this year allows for hundreds of additional patients to gain therapy. So internally, how we're looking at this is the overall demand is not a big surprise. It's just coming sooner and the uptake is coming faster in markets that we're gaining access to. So gaining access sooner, faster uptake in those markets than we were planning on. We still need and want that patient base to grow. And so it doesn't fundamentally alter our launch of this drug. This is a really good growth trajectory for us. We're just bumping into some ceilings in certain places. And where that's happening, we're prioritizing, keeping kids that have started or will start, make sure that we've got continuity of supply because what we really don't want to have happen is for kids that have started supply to go off therapy. That much on VOX

And the warranty.

We've got the warranty. So those are differentiating factors. I can't speak for the other manufacturer. But we're moving as rapidly as possible. And I think the steps that we've taken so far would be consistent with that desire to move fast.

And several payers have already signed a warranty contract. That means that I presume they are intending to cover VOX

Thank you.

Your next question comes from the line of Gena Wang from Barclays. Your line is now open.

Thank you for developing my questions. Maybe just follow Paul's comment -- question and also JJ, your comments. Maybe for ROCTAVIAN 2023 revenue, first, do you expect most revenue from Germany or US.? And regarding U. payers, what is the feedback on one warranty program since you just mentioned? And how many centers and lives under the coverage right now are in place? Second question is regarding the VOX

Maybe I'll start, Gena, and I'll let JJ fill in. In terms of revenue expectations for ROCTAVIAN and where, as I noted, in Salveen's question, part of the confidence in our guidance is not only the U.S. approval that we received when we did the price that we've named for the United States, but the fact that now almost 12 months from the conditional approval in Europe, we're approaching that period of time where you would expect we would be able to finish getting through formal price and reimbursement processes, at least in the initial major markets in Europe. That together with what I've described on a couple of occasions to questions is what we think is a rapid start in the United States. And even the possibility of named patient sales in other markets, those channels give different opportunities for patients to get treated and contribute to revenue. In terms of percent coverage and lives, actually, we don't have coverage policies issued in the United States yet, at least that I'm aware of. Those policies can take anywhere from 1 to 12 months to issue. I've seen some draft language around coverage policies that have not yet been issued that would indicate that those coverage policies will be consistent with either a label or a clinical trial inclusion criteria, which -- both of which would be fine. We haven't seen those coverage policies start to be issued yet. So I can't comment on what percent of covered lives in the United States. And maybe I would turn it over to Hank for the questions on Voxzogo and hyperchon.

Yes, Gena, the sixth month prospective run-in study is important to document baseline annualized growth rate prior to randomization into the study. As we talked about before, one of the things that we observed in the growth disorder area is that, that knowledge of that baseline growth rate is really important to be able to interpret subsequent changes in growth velocity and is important for randomization purposes. The study, as I mentioned, is an 80 participants, which is a little bit smaller than the study of Voxzogo in achondroplasia, where we are expecting a relatively similar magnitude of effect. Of course, that can be tuned depending on what that baseline AGV run in is for the baseline population. But just to remind you, in the 110-patient study of VOX

Thank you.

That concludes the Q&A portion of our conference call. We will turn it back to BioMarin's CEO, JJ Bienaime, for closing remarks.

Thank you, operator, and thank you all for joining us on the call today. Outstanding execution across our business led to record revenues in the first half of 2023. We reached more children with VOX