BMRN - NASDAQ

Good day, everyone, and welcome to the BioMarin Pharmaceuticals First Quarter 2025 Conference Call. Just a reminder that this conference is being recorded. I would now like to hand things over to Ms. Traci McCarty. Please go ahead, Ma'am.

Thank you, operator. To remind you, this non-confidential 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 authorities, 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. In addition, we will use non-GAAP financial measures as defined in Regulation G during the call today. These non-GAAP measures should not be considered in isolation from, as substitutes for or superior to financial measures prepared in accordance with US GAAP, and you can find the related reconciliations to US GAAP in the earnings release and earnings presentation, both of which are available in the Investor Relations section of our website. Please note that our commentary on today's call will focus on non-GAAP financial measures unless otherwise indicated. On the call from BioMarin management today are Alexander Hardy, President and Chief Executive Officer; Brian Mueller, Executive Vice President, Chief Financial Officer; Cristin Hubbard, Executive Vice President, Chief Commercial Officer; and Greg Friberg, Executive Vice President, Chief R&D Officer. I will now turn the call over to BioMarin's President and CEO, Alexander Hardy.

Thank you, Traci, and good afternoon, everyone. Thank you for joining us today for our first quarter 2025 results update. We are pleased to have delivered strong financial performance and revenue growth of 15% in the quarter. On the bottom-line, non-GAAP earnings per share of $1.13 represented a 59% year-over-year increase, reflecting significant profitability expansion, nearly four times the rate of top-line growth. This performance highlights the fundamental value of our transformative medicines and the strength of our business, both of which are key attributes that distinguish BioMarin. These results pave the way for record full year performance in 2025 and boost cash generation for reinvestment in innovation and expansion. Last September, we announced changes to BioMarin's strategy and operating model. Since that time, we have been focused on implementing these changes while at the same time delivering strong growth and profitability. Looking ahead, we expect to see the continued implementation and benefits of this transformation deliver even stronger results and innovation in the coming quarters and beyond. Turning briefly to external dynamics impacting the sector, we believe BioMarin is well positioned to manage through uncertainty across a number of areas. As the preeminent innovator of medicines that treat rare conditions, BioMarin is less exposed to macroeconomic conditions impacting other sectors. Because so many of our medicines are treatments for children, we have limited exposure to policies impacting Medicare, which covers roughly only 2% of our US patient population. In addition, BioMarin's core fundamentals also provide a level of insulation from external unknowns. Increasing cash generation, our extensive global revenue base with approximately two-thirds of our total revenues originating from outside United States, along with our established global commercial, regulatory and manufacturing capabilities position us well in an evolving dynamic market environment. Moving to the specific uncertainties around potential pharmaceutical tariffs, we are analyzing potential exposure and mitigation tactics under multiple scenarios. As BioMarin's medicines address relatively small patient populations around the world, we manufacture products that address these rare indications in single locations, either in the US or Europe. Based on our current understanding, we believe that the global scope of our business model with approximately two-thirds of total revenues generated from outside of United States and a significant level of US-based manufacturing will provide some protection from potential tariff impacts should innovative medicines for rare conditions be targeted. Important to note, BioMarin has immaterial exposure to US tariffs for China, Mexico and Canada across its global supply chain operations and product sales. Turning now to potential new products and expansions. We're making good progress on our innovation strategy. I am pleased to share that we recently completed enrollment in our pivotal Phase 3 study with VOX

Thank you, Alexander. Please refer to today's press release for detailed first quarter 2025 results, including reconciliations of GAAP to non-GAAP financial measures. All 2025 results will be available in our upcoming Form 10-Q, which we expect to file in the coming days. We are pleased with BioMarin's strong results across the business in the first quarter of 2025. First quarter 2025 total revenues rose 15% to $745 million compared to the same period last year. VOX

Thank you, Brian. The team's focus on commercial execution led to another quarter of strong growth across the business. Starting with VOX

Thank you, Cristin. As Alexander mentioned, we recently completed enrollment in our pivotal study for VOX

Thank you, sir. [Operator Instructions] We'll go first to Phil Nadeau, TD Cowen.

Hi. Good afternoon. Thanks for taking our questions. Two financial ones. First on VOX

Thanks, Phil. This is Brian. I'll take both of those. Appreciate the questions. First on VOX

Fair enough. Thanks for taking our questions.

The next question is from Salveen Richter, Goldman Sachs.

Thanks for taking our questions and congrats on all the progress. This is Tommie on for Salveen. Just wondering if we can get an update on your interest and maybe timing for BD after all of the meetings that you had in January. And when we think about the data that you'll give us for BMN 333 this year. Can you maybe characterize the level of detail we'll get before you kind of present the full data at Congress next year? Thank you.

Thanks very much, Tommie. I'll handle the question on BD and then hand over to Greg. So we're continuing to be very excited about the potential for BD, for BioMarin, based on our strong capabilities and also, obviously, the state of the capital markets. We've been approaching it very methodically. We've got a great team and capabilities in place. We've got a very clear strategy, which we outlined and communicated to the outside world last year. And we've been looking systematically at opportunities. And just to reiterate, what we're looking at is things which are completely lined up with what BioMarin is really good at. So genetically defined conditions, we're looking at clinical stage assets in particular as well as obviously earlier assets, but we've always done that. And particularly highlighting ones that are aligned with our business unit structure where we really think we have a strength and a right to win. So, yes, everything is very much on track. We continue to focus on doing at least one business development deal this year. We're looking forward to providing updates as when that makes sense. And obviously, as the market continues to develop, it only creates more value from our perspective and makes those deals even more attractive from an investor standpoint. And with that, I'll hand over to Greg.

Thanks, Alexander. With regard to BMN 333, just as a quick reminder, we have an ongoing Phase 1 study. It is in healthy volunteers, not in patients. So the primary purpose of this study, of course, will be to look at single dose safety, but also the PK profile. That is the data. Again, we're actually marching right through the study very efficiently. We're several cohorts in at this point. And we anticipate before the end of the year that we'll be able to provide a top line update with regard to whether or not that data is supportive of us moving forward. The more detailed PK data and totality of the Phase 1, we anticipate in the first half of next year, we'll be releasing that publicly.

The next question today will come from Joseph Schwartz, Leerink Partners.

Hi. This is Jenny on for Joe. Thank you for taking our question. I think for previously, you guys have mentioned that VOX

Yes. Thank you so much for the question, Jenny . This is Cristin Hubbard. So a great question about the penetration of VOX

Thank you. And up next is Akash Tewari, Jefferies.

Hi. This is

Yes. Thanks for the question. This is Greg Friberg. These observations or class effects for the ASO categories. And so from that standpoint, we're not surprised to see at high dose levels in some of our toxicologic studies that we're seeing some of these end organ toxicities. We're watching them very closely. And in fact, we selected a chemistry type, this phosphorothioate instead of other available chemistry classes because we do believe that this is a case where it's all about opening that therapeutic window. Again, there's two ways to address the therapeutic window. One is to limit toxicity. The other way is to drive the potency of the molecule. And we've engineered this molecule to try to really take advantage of like we talked about previously, this novel skip site and some other chemical factors, again, that get the drug where we want it to be. Those are the open questions, I think, for almost any molecule in the space and we're watching patients very closely for a variety of toxicities. We will be presenting our data from our six milligram per kilogram cohort in the second half of this year. And you can expect in addition to dystrophin assays on muscle biopsies that we would present the totality of our safety data that's available at that time.

The next question today is from Jessica Fye, JPMorgan.

Hey, guys. Good afternoon. Thanks for taking my question. So BioMarin continues to execute across the business. However, the market seems worried about long-term competition for VOX

I'll start on the commercial execution here in the near-term. And then if you want to talk about some of the life cycle management, I think that would be probably a nice add. But thanks for the question, Jess. So I certainly recognize where you're coming from in terms of the market perception. And what I can really say is that with VOX

Yes. Thanks, Cristin. And from an R&D perspective, we are going to continue to try to leverage, again, that 6,000 patient year, it's about 4,000 individual patients and growing experience to actually put the data out there with regard to how we're improving the health and wellness of these patients with achondroplasia. We get caught up in, I think, AGV numbers sometimes, but we have to remember that the burden of disease that we really want to address are things that go well beyond that. And so data with regard to craniofacial volume, foramen magnum size, body proportionality, quality of life data and of course bone strength and bone integrity, these are the kind of data that we will, we have already put out, but we're also going to continue to grow and put out. What patients and their families want is they want a safe and dependable drug. And we think that that's exactly what VOX

Should we expect the same endpoint for 333 in a pivotal trial as for VOX

So we're envisioning that we will do a comparative effectiveness study versus VOX

Thank you.

The next question comes from Paul Matteis.

Hey. Thanks so much for taking my questions. I had one for Brian and one clinical question. Brian, I wanted to just clarify as it relates to VOX

This is Greg. Maybe I'll take the 333 question because it's a quick answer. Yes, we are looking for superiority and growth dynamics from a higher exposure of CNP.

Thanks, Greg. Thanks, Paul, for the question. Mine is likewise a quick answer because and it's a great question when you talk about demand increasing and not seeing the same correlation in revenue for these couple of quarters. We are not observing -- not seeing any pricing dynamics. It's truly just the lack of correlation market by market. That just happens to show up here in Q1 and possibly in Q2, no price factoring in.

Makes sense. Thanks very much.

The next question is from Eli Merle, UBS.

Hi. This is Jasmine on for Eli. Thanks so much for taking our question. So what's the latest on timing for VOX

Thank you for the question. This is Greg Friberg, again. With regard to the Noonan's, Turner and SHOX basket that we have as well as idiopathic short stature, both of those protocols are open for enrollment and are continuing to progress. We anticipate that we will have data from those programs that would enable us to begin pivotal studies in 2027. So we remain on track for those goals. With regard to the role that 333 would play in additional indications, just as a reminder, we still are working through with 333. Once we've moved beyond healthy volunteers, there will be both dose ranging as well as the effectiveness studies to come thereafter. And that's the agreement, again, that we referred to with the FDA. A long way of saying that these reveals of information are actually going to line up quite nicely so that we can make decisions when we have the complete profile for 333 to determine what the future plans would be. Right now the discussions with 333 that we've been talking about have been achondroplasia related.

Thank you.

Thank you.

The next question is from Cory Kasimov, Evercore ISI.

Hi. Thanks for taking our question. This is Adi on for Cory. Wanted to ask you if you can share how the US versus ex-US sales have evolved in the first quarter for VOX

Yes. Thank you so much for the question. This is Cristin. And as you know, last quarter, we gave specifics on precisely that, which is the US versus outside US revenues for VOX

Okay. Thank you. I'll jump back in the queue for the rest of the question.

We'll go next to Gena Wang, Barclays.

Thank you. I have two sets of questions. First one is regarding also the VOX

So thank you, Gena. First question, with regard to 333, you're correct. We will have PK data of all the species. So we'll have not only BMN 333, but also free CNP levels. Our goal for that study is to see multifold increases in sustained exposure levels for free CNP. And that data will then unlock what comes next. That next study, while we call it one protocol, which it is, it is a multipart protocol that involves both a dose ranging portion as well as a comparative effectiveness portion. And so in that regard, the data that we'll be revealing later this year will be the ungating to move into those patients with achondroplasia to do that dose-ranging study. To pick that final dose, again, that will be in the comparative effectiveness side. On the growth hormone side, I think, you've actually framed it quite nicely. We would not be surprised at all to see that if you combine growth hormone with CNP and achondroplasia patients, that you would see an increase in AGV at 6 or 12 months maybe even out at two years. But historically the challenge for growth hormone hasn't been about those short-term benefits. It's been about whether they translate into meaningful increases in final adult height. And as you mentioned, they've been transient. That's been the challenge. This is, of course, why growth hormone isn't actually routinely recommended by expert guidelines or regulators around the globe except for some unique regions. We also should remember that growth hormone really in this discussion of height is really not the most important measure that we should be talking about. This health and wellness of the patients is, of course, the most important factor. And we haven't seen that with growth hormone, at least to this date that the kind of evidence beyond height could be achieved in patients with achondroplasia. On the contrary, growth hormone really has added problems for patients. There's been acceleration of bone age. We've seen worsening proportionality at different times of course. I mean you just look at the label, there's cardiovascular and metabolic disturbances. And then 1 unique factor that's been brought up by some of the treating physicians, things like tonsillar hypertrophy that don't seem like they'd be a big deal in most children actually in children with airway obstruction can be a very challenging problem. So clearly, these need to be watched very closely with regard to growth hormone. What we're very pleased about with VOX

Thanks, Greg. Hi Gena, this is Brian. I'll take your question on VOX

Thank you. Up next, we'll take a question from Kostas Biliouris, BMO Capital Markets.

Thanks for taking our question and congrats on the progress. Maybe one question for Greg on BMN 333. There is a recent presentation by Children's National Hospital at ESPE that shows that there is no really meaningful correlation between VOX

Thanks for your question. I think when we talk about VOX

Thank you.

Thank you.

Mohit Bansal from Wells Fargo is up next.

Hi. This is Cerena on for Mohit. Thanks for taking our question. I wanted to ask a question about BMN 351. In terms of the muscle dystrophin data expected in the second half. Is that 10% dystrophin level the only goal that should inform the future course of action for this molecule or would you be looking at a bar for other parameters as well? Thank you.

Thanks for the question. What we will have once patients have reached the six month time point is we, of course, will have a totality of safety data and PK on a variety of species. And that includes not only the drug, but the muscle content of the drug because we're doing muscle biopsies. We'll also be able to look in the muscle at the skip product and the dystrophin. So all of those factors will be there. We have actually released an illustrative example that was connected to our release today of a model that we put forward. And that model shows us that what we're going to see at the 25, 26 week time point are dystrophin levels that when predicted out at steady state are going to rise two to three-fold. And so they'll give us a line of sight whether that 10% at steady state will be achievable. We are also measuring in the study functional outcomes, which I think is the real question you're asking. The challenge, of course, with functional outcomes is you need to wait until, of course, to reach steady state of the drug. We're looking at North Star, we're looking at six minute walk test. We're looking at stride velocity 95C, all of those measures. We do anticipate that those will take longer than this initial first look. I also want to remind the audience that this is the first data from our six milligram per kilogram cohort. We also have completely enrolled our nine milligram per kilogram cohort. Again, as in a relay race, that's trailing behind in terms of time. But our goal here is to identify a molecule that not only has potent dystrophin induction, but also can, of course, be administered safely in a chronic fashion.

Our next question is from Olivia Brayer, Cantor Fitzgerald.

Hey, good afternoon. Thank you for the question. Greg, just wanted to clarify a comment you made earlier. Will we not see any level of Phase 2 data from other short stature indications until 2027 or could we actually start to see some initial clinical characterization and maybe select patient groups just to help derisk some of those new VOX

Why don't I take a quick stab just to clarify. With regard to the short stature conditions, obviously, I mean, the Dr. Dauber study with VOX

And, hi, Olivia. It's Brian on your profitability question. Thanks for that. Yes, we are pleased with this strong start to the year on the bottom-line with the $1.13 of earnings per share growth. Again, we are expecting, while revenues are planning to increase in the second half of the year, we are also planning to increase investments in both R&D and SG&A over the course of the year. But by all means we are confident in the full year EPS guidance with this strong start to the year. And we do believe that will continue. In terms of earnings power, I would point you to our long-term guidance that we remain confident in, at least today, excluding any potential impact of pharmaceutical tariffs. So whether it be the goal of $4 billion of revenue by 2027 or our 40% and growing non-GAAP operating margin target next year. We didn't give long-term earnings per share guidance, but you can do the math along the trajectory of our OpEx line item goals over time and see that we are expecting significant earnings per share growth over the next several years and this year being at 22% at the midpoint of our guidance is the trajectory that we're talking about.

Okay. Thanks, guys. That's helpful.

We have reached the end of the Q&A session. Our final question today will come from Vikram Purohit, Morgan Stanley.

Hi. Good afternoon. Thanks for fitting me in. We just had two quick clarification questions on BMN 333. Apologies if these topics were discussed and we missed it, but just to make sure we understand. So for the pivotal program plan to initiate in 2026, would the bar for approval necessarily be superior efficacy versus VOX

Yes. Thanks for the question. Just to clarify, the announcement today, again, was that we had reached agreement with the FDA and we're continuing to work with regulators around the globe. The study that we referred to that would initiate in 2026 is a combined Phase 2/3 study. And in that regard, we are doing dose ranging as well as the final comparative effectiveness versus VOX

And everyone, at this time, there are no further questions. I'd like to hand the conference back to the CEO for any additional or closing remarks.

Thank you, operator, and thank you all for joining us today. As we described, our first quarter performance highlights the fundamental value of our transformative medicines and the strength of our business, paving the way for record performance in full year 2025. In the face of external dynamics that are creating uncertainty across a number of areas, we think we are well positioned. We remain laser-focused on what we can control, investing in the expansion of internal and external innovation, leveraging our extensive global revenue base and our commercialization capabilities, and most importantly, continuing to deliver increasing value creation to all of our stakeholders in 2025 and beyond. We thank you for your attention. We look forward to speaking with you soon.