Traci McCarty - IR Jean-Jacques Bienaime - CEO Dan Spiegelman - EVP and CFO Jeff Ajer - EVP and Chief Commercial Officer Henry J. Fuchs - EVP and Chief Medical Officer.

Philip Nadeau - Cowen & Company Matthew Lowe - JPMorgan Christopher Raymond - Robert W. Baird Navdeep Singh - Goldman Sachs Chris - Citi Catherine Hu - Barclays Lee Kalowski - Credit Suisse Joseph P. Schwartz - Leerink Swann Stephen Willey - Stifel Nicolaus Andrew Peters - UBS Joshua Schimmer - Piper Jaffray Ian Somaiya - Nomura.

Good afternoon, ladies and gentlemen, and welcome to the BioMarin Pharmaceutical Inc. Conference Call to discuss the first quarter 2014 financial results and then some launch progress. At this time, all participants are in a listen-only mode. Following the prepared comments, we will conduct a question-and-answer session.

As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, Traci McCarty, Director of Investor Relations at BioMarin. Please go ahead, Traci..

Thank you, operator. With me today from BioMarin are, Jean-Jacques Bienaime, CEO; Dan Spiegelman, CFO; Hank Fuchs, CMO; Jeff Ajer, Chief Commercial Officer; Robert Baffi, Executive Vice President of Technical Operations.

Before we get started, let me remind you this is non-confidential presentation containing 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.

Now, I'd like to turn the call over to J.J. Bienaime, our CEO..

Thank you, Traci, and good afternoon and thank you for joining us on today's call. We had a very productive first quarter led by the U.S. approval and launch of VIMIZIM and very strong growth in revenues of our other commercial products.

We are also very pleased to have received the EU approval of VIMIZIM on Monday, [indiscernible] our commercial team to get started on another successful launch in a region that is home to approximately half of the MPS IVA patients. In a moment Jeff will review the sequence of events that will rollout as part of the EU launch.

In the U.S., our commercial team keep the ground running upon receiving FDA approval of VIMIZIM on February 14, as evidenced by the broad and accelerating demand we're seeing.

At the end of Q1, we had 17 patients on therapy and as of the most recent information from yesterday we now have 50 patients receiving commercial VIMIZIM and over 120 more patients into BioMarin Patient and Physician Services or BPPS channel, and who are either on commercial therapy or waiting commercial VIMIZIM in the U.S.

That means that eight weeks after the launch, we already had more patients seeking to obtain VIMIZIM in the U.S. than we currently have on commercial Naglazyme in the U.S. after nine years on the market. The commercial team is doing a fantastic job and we expect both the U.S. and now the EU launch to rollout and reach our self-targeted plan.

I would also like to acknowledge the work performed by our technical operations group in coordinating the production, release and distribution of VIMIZIM to enable a rapid launch in the U.S. Similar efforts are in place to expedite the launch in EU and the rest of the world. Manufacturing is one of our core competencies and our combined U.S.

and Irish manufacturing facilities are now capable of supporting nearly $2 billion of product revenues. While we are in the early days of the launch of VIMIZIM in the U.S., we are extremely pleased with the momentum we are seeing.

Early indicators of patient demand give us confidence we can achieve our previously stated revenue guidance of between $60 million and $70 million for the year.

Even more importantly, we believe that the long-term potential of this product is very exciting and we have increased confidence that VIMIZIM will allow us to grow BioMarin revenues to over $1 billion over the next several years, especially considering that we have already identified approximately $600 million of potential VIMIZIM businesses around the world.

In addition to the launch of VIMIZIM in the U.S., solid operational progress drove strong financial results. We achieved total revenue growth of nearly 20%, including over 20% year-over-year growth of Kuvan. Naglazyme revenues continue to grow double-digit, more than eight years after approval.

This is a testament to the long life of enzyme replacement therapy products and the continued strength of the ultra-orphan pricing model. Turning to development activities, we are now [indiscernible] the decision to modify the entry criteria for the randomized discontinuation portion of the PEG PAL [indiscernible] program, the BMN 302 Study.

This decision is based on data from the Phase 2 study and emerging data from the BMN 165-301 feeder study. The findings suggest that immunologic reaction to PEG PAL plays a strong role in determining speed of titration, dose required to lower blood Phe concentrations and safety.

Under the new entry criteria for BMN 165-302, we intend to leverage those patients who have relatively weaker immune response to PEG PAL, who therefore achieve Phe reductions faster at relatively lower doses and with relatively fewer side effects.

We expect that by using this criteria, approximately two-third of patients will meet eligibility criteria for the randomized trial and we believe that optimizing the entry criteria for BMN 302 will increase the probability of success and of achieving both Phe lowering and neurocognitive functions [indiscernible] to support full regulatory approval.

Hank will discuss program modifications in more detail shortly. Based on the changed protocol, associated review of proposed protocol to the regulatory agencies and preliminary BMN 301 with the FDA and requirement for additional patients, the Company now expects from the enriched BMN 302 Study to be available in Q4 '15.

While we see the delay from our prior expectations, we are still confident in the commercial opportunity for PEG PAL, and more importantly the viability of this therapy for adult PKU patients, and we are still planning on addressing the entire adult PKU market with PEG PAL. Hank will provide more details on PEG PAL in a moment.

Additionally, Kuvan continued double-digit growth mitigating part of this delay. The remainder of our development pipeline continues to make good progress and the guidance we had previously provided regarding regulatory progress, planned enrolment completion and data release for all of our other programs remains unchanged.

Between now and the end of the next year, we expect to have potentially pivotal clinical data on three programs, PEG PAL for PKU, BMN 701 for Pompe disease and BMN 190 for Batten disease.

In addition and also by the end of next year, we expect to have proof of concept data in patients for BMN 111 for achondroplasia, expect to complete enrolment in BMN 673 and to file INDs and start clinical work in Sanfilippo B Syndrome and in our Hemophilia A gene therapy programs. We made great progress in the first quarter of 2014.

We are very pleased with the pace of the U.S. launch of VIMIZIM and look forward to the EU rollout over the coming weeks and months.

We expect sales of VIMIZIM to help BioMarin reach over $1 billion in total revenue over the next few years, and as we stated before, we believe the successful commercialization of VIMIZIM can be the basis of BioMarin achieving operating profitability.

Thereafter, as VIMIZIM and our other core products continue to grow and as new products from our robust pipeline are introduced, we expect substantial revenue growth and increasing profitability.

Next, Dan Spiegelman will review the financials for the first quarter, Jeff Ajer will then provide more detail on the VIMIZIM launch and our commercial products, and Hank Fuchs will provide an update on our R&D programs, before we open the call for questions. Now, I would like to turn the call over to Dan..

Thanks, J.J. Earlier today, we issued a press release summarizing our financial results for the first quarter of 2014, and I refer you to that release for full details. Following are some key highlights. Total BioMarin revenues delivered strong growth in the quarter, increasing 18.5% compared to the first quarter of 2013.

This result was driven by double-digit growth in sales of all three of our major products, a 15.4% increase in Naglazyme, a 20.2% increase in Kuvan, and a 13.5% increase in the royalties we received on Aldurazyme.

Based on these growth rates, we expect to be up on the high end of our full year revenue guidance of between $650 million and $680 million. Turning to bottom line operating results, we reported a non-GAAP net loss of $1.7 million for the first quarter compared to a non-GAAP net loss of $8 million in the first quarter of 2013.

We believe non-GAAP net loss is the best measure of our operating results because it excludes non-cash accounting expenses such as stock-based compensation, contingent consideration and interest expense. We also reported a GAAP net loss for the first quarter of $38.1 million versus a loss of $39.8 million in the first quarter of 2013.

Importantly, we ended the first quarter with cash, cash equivalents and investments of over $1.1 billion. Turning to operating expenses, R&D expenses of $86.2 million in the first quarter were relatively flat compared to $83.7 million in the first quarter of 2013 and were $11.1 million less than R&D expenses in the fourth quarter of 2013.

This was primarily due to the timing of study starts and we anticipate R&D expenses will rise over the coming quarters as enrolment in BMN 701, 673, 190, 111, all our various studies accelerates. SG&A expenses increased to $60.1 million in the first quarter compared to $51.1 million in the first quarter last year.

The increase was driven primarily by increased VIMIZIM sales and marketing activities and increased stock-based compensation expenses.

In addition, please note that operating expenses in the first quarter included an $8.8 million gain, in other words a reduction in expenses, on the termination of our corporate headquarters lease due to our purchase in Q1 of the San Rafael Corporate Center.

Without this gain, R&D expenses would have been $92.3 million and SG&A would have been $62.8 million. As noted, we expect our R&D expenses to accelerate materially during the year as BMN 701 begins and our other clinical studies mature.

It is typical for clinical program enrolment and expenses to increase as the study progresses and we expect that for our various programs. SG&A is also expected to increase modestly as we launch VIMIZIM in Europe and other parts of the world following approval.

In terms of 2014 financial guidance, it remains unchanged from the guidance we provided at the beginning of the year.

However, based on Q1 revenues and actual Q1 spending, we believe that we are likely to be at the high end of the range in terms of revenue guidance and the low end of the range for R&D spend and for GAAP and non-GAAP net loss, but we are not changing guidance at this time, we will re-evaluate it at the end of Q2.

Now, I would like to turn the call over to Jeff who will provide an update on our commercial progress..

Thanks Dan. We are very pleased with the news early Monday that EC had approved VIMIZIM and our commercial team is moving forward to rollout a strong launch in that region. Before I touch on some of those details, I'd like to review some specifics related to the U.S. launch. As J.J. said, we are thrilled with the pace of the program.

The commercial team has executed its plan resulting in $900,000 of commercial sales in the first six weeks of launch. For perspective, this is more than twice Naglazyme sales in the first six weeks of its launch. Keep in mind, there is no retail or wholesale trade stocking of VIMIZIM. Revenue numbers reflect actual patient infusion requirements.

During these early days of the launch, we believe the most meaningful metric is patient starts. Recall that our priority following U.S. approval was to switch EAP and clinical trial patients to commercial drug.

We now have the majority of both patient groups progressing through key stages in the BioMarin Patient and Physician Services or BPPS channel and can expect them to be reflected in patients on therapy later this year.

At the end of the first quarter, there were 17 patients on commercial therapy, and as of April 30 there were 50 patients on commercial VIMIZIM in the U.S., France and Argentina. But potentially more important, there are over 120 patients that are signed into the BPPS channel in the United States.

Patients who sign up for BPPS are interested in obtaining the drug and our conversion rate of patients who sign up for BPPS is extremely high. Interest in and acceptance of VIMIZIM by physicians and patients has been strong. The reimbursement landscape in the U.S. has so far presented no material surprises.

Turning back to EU preparation, the commercial team has begun taking the initial steps for launch in that region. The team is staffed up, trained and has been waiting approval and are ready to launch. One of the gating factors for launch of VIMIZIM in the EU is the availability of labelled product for different markets. Commercial product with the U.K.

label is in our warehouse, released and available to ship now and will be followed shortly by German labelled and then other labelled product. Market access and reimbursement plans are in place for each individual market and will be executed against as quickly as possible following approval.

Our target pricing for EU is consistent with that previously disclosed for the U.S. We expect discounts variable by market and impact of reference pricing systems relative to published prices as we proceed in a resulting price [indiscernible].

Some highlights regarding expectations for major markets include availability in France under the approved ATU early access program. This allows commercial VIMIZIM to be used for naive to treatment patients while we work through the reimbursement process. Already a number of commercial patients are on treatment in France through the ATU program.

In Germany, we will settle list price and expect patients to be able to be treated at that price while we work through the reimbursement process there. We expect those patients transitioning from clinical trials and naive to treatment patients to be approved for reimbursement in Q2.

In the U.K., National Health Service has invited NICE to evaluate VIMIZIM through the highly specialized technologies process, and we are in process of facilitating that evaluation. In parallel, we intend to apply to NHS for interim funding to be commissioned for VIMIZIM reimbursement.

In Spain, hospitals are expected to approve funding for patients on a named patient basis while we apply for formal reimbursement and work through that process. In addition, we are aware of patients in certain markets for which access to commercial VIMIZIM is being requested on a named patient basis.

This includes Turkey, Middle East, Brazil and Colombia. In Latin America, we are encouraged by the number of patients seeking therapy. At the end of the quarter, there were over 70 patients with prescription seeking named patient access in the region.

The timing for patients to be approved under these named patient programs is variable but the first patients could begin to be treated by the end of the second quarter. In addition to approvals in the U.S. and the EU, we have a number of international registration filings in process.

VIMIZIM has been filed and is under review in Brazil, Canada, Australia, Mexico and most recently Japan. In short, the commercial team is fully prepared and ready to execute a strong global launch of VIMIZIM.

We continue to believe we are on track for our full year target of $60 million to $70 million in VIMIZIM revenue and 350 or more VIMIZIM patients on therapy. Now, turning to our base commercial product, our press release and the comments from J.J.

and Dan have already described the excellent results last quarter, so please turn to the release for detailed results. In the commercial portfolio, the one item I would like to highlight is Kuvan where sales of $45.2 million in the first quarter of 2014 increased by 20.2% compared to the prior year quarter.

This reflects the continuing increase in underlying demand as measured by patients on therapy. The Kuvan business continues to benefit from steady levels of new patients being referred for a response trial and the positive impact of the field-based clinical coordinators to support patients for effective trials.

Kuvan powder for oral solution was also launched during the quarter. This new formulation of Kuvan may be helpful for very young patients and older patients who are intolerant or have difficulty being compliant with the tablet formulation.

The availability of Kuvan powder in Q1 2014 contributed to sales growth and will be a growth driver going forward. We remain bullish on Kuvan growth prospects quarter to quarter throughout 2014. In closing, I am very pleased with the level of demand we are seeing for VIMIZIM, both in the U.S. as well as in other regions.

The results we're seeing from the U.S. launch are testament to our experience and foundation of bringing ultra-orphan drugs to patients expeditiously. Our established brands continue to deliver strong revenue growth which we anticipate will continue through 2014. Now, I will turn the call over to Hank Fuchs who will review the pipeline..

Thanks Jeff. Overall, our clinical and research programs are progressing extremely well and we are on track to meet our expected timelines in four of our five clinical programs and our two IND programs. The one program timeline that is changing is PEG PAL, and as J.J.

described, we believe that by enriching the entry criteria for the Phase 3 study, BMN 165-302, we increase the likelihood of the program's success and finally the utility of PEG PAL for adult PKU patients.

As always, our ultimate goal is to bring the most robust label forward for the most patients who can benefit from PEG PAL, no matter the time it takes for them to achieve maximum therapeutic benefit. We've achieved the original enrolment target in the feeder study, BMN 165-301, with PEG PAL.

Our prior to substantially gearing up enrolment in the pivotal randomized Phase 3 trial called BMN 165-302, we evaluated our Phase 2 data and the emerging data from the 301 feeder study with PEG PAL.

As been previously established, immunogenicity to PEG PAL, which is a bacterially derived protein, is responsible for transient and self-limited side effects. In addition, immunogenicity to PEG PAL leads to the need in some patients for higher doses administered more frequently.

With the additional data from BMN 165-301, the feeder study, in hand, analyses confirm that the immunologic reaction to PEG PAL plays an important role in determining the speed of titration, the dose required to lower blood phenylalanine concentrations and safety.

Given this new information, we intend to modify the entry criteria for BMN 165-302, the randomized discontinuation design trial. We hope to leverage those patients who have relatively weaker immune reactions to PEG PAL, who therefore achieve Phe reductions faster, at relatively lower doses and with relatively fewer side effects.

Under the revised entry criteria, patients will need to demonstrate a pre-specified reduction in blood Phe from PEG PAL during the 301 feeder study prior to entering into the randomized discontinuation trial. By using these criteria, it is expected that approximately two-thirds of patients will meet eligibility for the randomized trial.

Therefore, the Company will increase enrollment in the feeder study in order to enrol the targeted 120 patients in the 302 randomized trial. Patients who do not demonstrate a reduction in blood Phe after 24 weeks in the 301 feeder study, will enter a parallel study to accommodate the longer time frame necessary for safely reaching maximal benefit.

To summarize, we feel that enriching the entry criteria for the randomized trial is the right thing to do.

We believe that PEG PAL can be an effective therapy for a large percentage of adult PKU patients, no matter the time it takes to titrate the dose and we look forward to continuing to advance this program with the goal of demonstrating robust Phe lowering and neurocognitive benefits for all patient studied. As J.J.

mentioned, based on the changed protocol, associated review of proposed protocol and preliminary 301 data with the FDA and the requirement for additional patients, we now expect the data from the enriched 302 study to be available in the fourth quarter of 2015. We recently completed a meta analyses of outcomes in adult patients with PKU.

This study is important because it focuses on adults, the initial target population for the treatment with PEG PAL. The study also captures relevant and new information published since the time of Kuvan's original approval.

Medically significant in attentiveness is the most predominant psychiatric problem in PKU patients, but anxiety and depression were found to affect 22% and 17% of patients respectively as well. Seizures occur in 10% of PKU adults and tremors occur in 29% of PKU adults. Symptoms were worst among the more poorly controlled patients.

For example, seizures occur in 21% of patients who are characterized as sub-optimally treated compared to 3% of patients who are more optimally treated. Interventional studies demonstrate substantial improvement in anxiety, depression and mood disorder, but of course long-term compliance with medical food prescription is very poor.

In summary, this meta analyses describes the substantial burden of phenylketonuria, the relationship of blood phenylalanine levels to poor outcomes and the benefit of modifying blood phenylalanine concentrations. It is for this reason that PKU clinicians and patients are so eager to collaborate with us to develop PEG PAL.

Turning now to the remainder of our clinical pipeline, we're happy to report that all the programs are moving forward as expected and we anticipate numerous development milestones over the coming 18 months, including data readouts for BMN 111 in achondroplastic dwarfism, BMN 190 in Batten disease, enrollment completion of BMN 673, the molecular targeted PARP inhibitor, BMN 701 for late onset Pompe disease, and the filing of two IND candidates, BMN 270 and BMN 250.

I did want to highlight BMN 701 for the treatment of late onset Pompe's disease because progress is encouraging. We're happy to report that we are screening our first patient in the Phase 2/3 switching trial and expect to begin enrollment any day. As a reminder, patients in this study have been previously treated with alglucosidase alfa.

The primary endpoint is maximal inspiratory pressure as we believe this is a direct measure of respiratory muscle function and is likely an important indicator of 701 for effectiveness in this setting. The study will be conducted using our new higher producing [saline] (ph). We expect this study to complete enrollment in the first half of next year.

In closing, our pipeline is unparalleled in the orphan drug industry. I believe our track record of developing and commercializing therapies to treat serious medical conditions is also unmatched.

We are energized by the prospect of moving all of our development compounds forward and look forward to keeping you apprised of our progress over the coming months. And with that, operator, we would now like to open up the call for questions..

(Operator Instructions) The first question is from Phil Nadeau of Cowen. Your line is open..

Hank, I want to explore the change in the PEG PAL trial a little bit further.

First, would you be willing to discuss what the pre-specified hurdle for inclusion in the randomized discontinuation portion of the trial is?.

I left it a little bit vague because we haven't been through the FDA, but our expectation is that the cut point that we'll use will be such that roughly two-thirds of patients will be eligible and one-third of patients will go into the parallel study which explores potentially higher doses given over a slightly longer period of titration..

Okay, and then second on the rationale for the change. I guess it's a little unclear to me exactly what would spur it.

It does seem like if you're seeing [indiscernible] two thirds of the patients, you probably hit a statistically significant result on the primary endpoint, so is it that you want to see a higher magnitude of Phe reduction on the label or is it something with safety we're including those one third of patients in the randomized discontinuation trial, there were maybe some sort of side effects [indiscernible] reactions, whatever that you want to avoid?.

No, I think you got it exactly, Phil. The randomized trial is our first shot at achieving neurocognitive outcome and therefore we want to make it our best shot. And so the idea of including those patients who had better Phe reductions drives better likelihood of hitting the neurocognitive endpoints..

Okay, and then just last question for me.

Given that you are sort of enriching the trial for patients that are known to respond to the drug, do you think that's in any way going to change the FDA's criteria for what they want to see in order to license the product? So it does seem like you're sort of stacking that in your favor, so will the FDA now more emphasize on neurocognitive endpoints or outcomes or do you think Phe reduction could still be sufficient for initial approval?.

A couple of comments. I mean first of all the FDA discussions are not yet held and I mentioned that we need to be talking to them about the program. I think the idea of enrichment is an idea that the FDA likes the idea of focusing drugs in patient populations, and I don't think that it's going to cause them to raise the bar.

In fact, part of the reason that I mentioned this recently completed meta-analyses, because I think that's an important element of let's call it the water landing in case we don't actually hit neurocognitive in the first randomized trial.

So it increases my confidence that should we hit Phe alone, that the endpoint is, that the drug will be registrable. So in summary, the idea of the enrichment is to optimize the chance for hitting not just the neurocogs, still need to talk to the FDA, but we think this increases the overall likelihood and therefore value of the product for patients..

The next question is from Cory Kasimov of JPMorgan. Your line is open..

Actually Matt Lowe in for Cory today. Just wondering if you could help us better understand just the [indiscernible] steps when you're transitioning the VIMIZIM patients to commercial patients, just the steps that you need to go through there, that would be great..

There's a couple. The first is for naive patients, these things can happen in parallel but we need to arrange for naive patients to be having assessments and then starting what will become hopefully weekly infusions for life. So there's a little bit of time and scheduling involved with those patients and the clinics that are going to treat them.

In parallel, we need to work through reimbursement and those reimbursement systems would differ depending on where in the world that patient reside. In addition, we have early access patients in the U.S. and clinical trial patients all over that are transitioning to commercial therapies.

So those patients, we have the advantage time-wise of skipping the step that I just described of getting them onto schedule for assessments and onto treatment. The EAP patients in the U.S., no surprise, are the fastest of the different groups to commercial therapy.

The clinical trial patients you might think would also be very rapid to commercial therapy. They have the additional step involved of scheduling and then completing an end of study visit.

That is not a huge step but it is an additional step in the process, takes a little time and we are working through that for essentially all the clinical trial patients in markets where we can transition them..

That's helpful, thank you.

And then I think you touched on it quickly in your prepared remarks, just any additional detail you could give us on the early feedback from payers with the launch of VIMIZIM?.

So the best early feedback from payers right now is in the United States where we've had a couple of months on the market, and so far there are no surprises relative to our expectations in the United States, United States generally being what we think is a favorable and a relatively fast market to get reimbursement.

So we've taken the steps that we intend to do, providing payer education, meeting live to present with more Q&A in VIMIZIM to the big commercial and government payers. The payers that have published coverage criteria so far have done so according to our label, no surprise. More patients require a prior authorization, no surprise.

Patients that we've submitted for reimbursement where there hasn't been a coverage determination issued, we have the ability to work those patients through on an individual basis and we're doing that.

In the EU, our team is with a new approval in hand, our team is busy scheduling meetings with payers and doing the things that we need to do to get those reimbursement system processes going. We've actually been busy over the preceding months preparing those processes..

And the next question is from Chris Raymond of Robert Baird..

I wanted to just make sure I understood your answer to I think Phil's question, Hank.

So can you just clarify, so did the 301 study hit its primary endpoint?.

The 301 study primarily was a safety study to characterize the safety of dose escalation. I think what you're maybe getting at is why the change..

I guess the question is, did it show a [indiscernible] Phe reduction?.

I'm not going to comment on the magnitude of the Phe reduction observed in 301.

What I will affirm that still, comment that I did affirm I'll repeat, is that we are reasonably confident we're going to hit a significant reduction in blood Phe and what we are aiming to do here is to increase the likelihood of hitting neurocog by increasing the magnitude of Phe reduction even further..

Okay. And then just by my math or just looking at the upsizing of the enrollment, it sounds like it's roughly 40 more patients if I've got that right.

So can you maybe talk, is that the largest component of the delay, of the one year sort of delay or is there some other driver there that we should be thinking about?.

[indiscernible] to correct your math but I think it's a few more implications than that, but that is only one of the components of the delay.

Because the study, the feeder study had already managed eligibility criteria, it's enrollment criteria we have to reactivate it at sites, and because this represents a change that's important to the design of the pivotal trial, we want to make sure that we give the FDA a chance to see and react to it.

We're talking to you all relatively early in the cycle because once we reach the decision to change the design of the trial and incur a timeline delay, we thought that that was important for you all to know that.

So there's still a little bit of work to do to figure out exactly when things are going to happen or our best estimate as we said here today is that we'll have data 4Q15..

Okay, and if I can sneak one VIMIZIM question in, I think I've heard you guys say in the past that Brazil and Turkey will allow traditionally named patient sales after U.S. approval, but I think I heard you say that 50 paying patients are from U.S., Argentina and France.

Can you maybe give some color on what's happening in Brazil and Turkey?.

Yes, happy to. And you got that right, the 50 patients are from the U.S., France and Argentina presently. It is possible to get named patients sales going in Turkey, Brazil, also Colombia and Middle Eastern countries, and with the U.S. approval we've been busy getting that process started. That process takes a little time to work through.

So initial patients need to get through – get into the system as that system exists in each of those countries and then it takes a little while. I'm very confident that by the end of Q2, we will be reporting sales from a number of those named patient sales markets.

They just had not hit yet by the dates that we were reporting commercial patients yesterday..

The next question is from Navdeep Singh of Goldman Sachs. Your line is open..

Just a few questions on PEG PAL and one on VIMIZIM.

So just making sure, the FDA, did they require this amendment to the PEG PAL study due to any safety issues, right Hank?.

That sounds right. You cut out just sort of in the middle of the question.

Could you give me that again?.

I was making sure that the FDA, did they require this amendment to the PEG PAL study?.

No, we're initiating this..

Okay, and then maybe can you discuss how strong the immune reactions were in the one-third of patients?.

The way I'd characterize the overall immunogenicity of PEG PAL and the clinical [indiscernible] of it is to say that like with our recombinant human derived products you can detect antibody in everybody, and like with our recombinant derived human products, PEG PAL elicits hypersensitivity type reactions in under 10% of patients using the most modern criteria that are applied nowadays, pretty sensitive criteria for the occurrence of hypersensitivity reactions, we went through that carefully at the VIMIZIM AdCom.

So, the fact that hypersensitivity rate is comparable for the PEG PAL as it is for recombinant human, GALNS, VIMIZIM, is actually an amazing accomplishment because we essentially turned a bacterial protein into having the tolerability profile of a human protein.

The majority of these events are like with the recombinant human proteins, enzyme replacement therapy they are self-limited, generally mild to moderate in severity, the majority of – the very large majority of patients can resume therapy, a few patients have one or two or three recurrences of the hypersensitivity symptoms, but the majority of patients can resume therapy, only very few patients are interrupting therapy substantially as a consequence of these hypersensitivity reactions.

And so overall, that's a picture that's pretty darn impressive in terms of having turned what's fundamentally a bacterial or foreign protein given chronically into something it looks like our chronic enzyme replacement therapy..

Okay, that's super helpful.

And then on path to FDA approval of PEG PAL, has that changed? I was previously under the notion that you could get kind of an accelerated approval for PEG PAL on Phe reduction and now that doesn't seem to be on the table, and is the FDA now requiring you to show a neurocognitive benefit for FDA approval?.

No, I apologize if I confused that. No, let me state it very clearly.

Everything that we know says that accelerated approval is still a very viable option for PEG PAL and the new meta-analyses results that I'm reporting to you are substantiating that the underlying belief that we and the FDA, that we have and that the FDA would have to have, that is to say that blood Phe is a reliable marker of poor outcome in patients.

So, no, we are not changing, there's no news today about a change in the FDA's stance as it pertains to approvability of the drug on the basis of Phe alone and our belief that we actually fortified our case for accelerated approval as it comes back.

The reason to push harder to have, to enrich the study to take a year's delay, to increase the likelihood of hitting neurocog is because it's just better to have it in the products label from the get-go if we can achieve that, in the products' label from the get-go. I mean you can tell, doctors from an academic perspective, they get it.

I mean they understand that this relationship between blood Phe and poor outcome, it's primarily so that when doctors and patients are applying to their payers, the evidence is powerful, we're trying to eliminate any and all resistance to the adoption and utilization of PEG PAL for the appropriate patient..

Okay, thanks Hank.

And then just a quick one on VIMIZIM, Jeff, how long is it taking to convert a patient from a clinical trial on to commercial VIMIZIM?.

Variable, our experience so far is in the United States and as I mentioned previously, one of the gating factors is scheduling and then conducting an end of study visit, which includes a pretty robust set of assessments. Those assessments are going to be very important when we get around to analyzing longer-term outcomes from this study.

So that's the biggest gating factor. We've got a lot of patients from the clinical trials in the United States that have already been through that assessment and a number of them have already progressed to commercial therapy. So, I am better than pleased with the progress that we're making.

We're working through all these patients one at a time which was exactly our expectation..

The next question is from Yaron Werber of Citi. Your line is open..

This is Chris in for Yaron.

Could you speak a little bit more about what the gating elements are for reimbursement in Europe? And then on the PEG PAL studies, can you just confirm that there were no changes to the endpoints in the Phase 3 study due to what you're changing today? And also for the parallel study, is that endpoint going to be the same as well?.

This is Jeff. I'll field the gating factors for reimbursement in Europe question first. As we have discussed on a number of occasions, the reimbursement environment in Europe is heterogeneous. There is essentially a different system in each of the EU markets.

They are all different, they all have different timing, they all have different points of emphasis, and in each of those countries we have to go through a parallel process of working through that market's reimbursement system. So I tried to give a couple of highlights in the discussion today about how things work.

I mentioned that in France we've got essentially the [indiscernible] being approved through the ATU system which allows us to start naive to treatment but not clinical trial transition patients while we work through the formal reimbursement system.

In Germany, as I mentioned previously, VIMIZIM is expected to have sales of less than €50 million per year in Germany. That allows us to establish a list price and essentially begin treating naive patients and clinical trial transition patients fairly immediately after we do that.

In parallel then we'll have to go through the formal price and reimbursement negotiations with GBA and that will last somewhere between nine months and a year.

In the U.K., we're going to have to go through a NICE appraisal and for these types of products, there's now not very much evidence of how that works, what the criteria are that NICE uses and how long that takes, but there is a path. So we will go down that NICE pathway with VIMIZIM.

In parallel there is a possibility, not a guarantee but the possibility of getting a temporary funding commissioned by the National Health Service or NHS and we are in process now of pursuing that. It's not easy to tell how much time that's going to take. So those are just some examples from the few biggest markets in EU..

And then as far as the changes to the PEG PAL program, none of the changes they were making necessitate changes in the endpoints of either study. So the outcome measures for both studies will remain the same..

The next question is from Ying Huang of Barclays. Your line is open..

It's actually Catherine for Ying today. A couple of questions, one on VIMIZIM. I think you mentioned over some of your patients are seeking therapy in Latin America and the first patients should start – I guess start in 2Q. I think we talked before that the full year guidance doesn't actually include any meaningful revenues from these regions.

Can you just walk us through how we should think about the add to the guidance for the full year? And then also, when you expect to go to approval in some of these other countries you committed for, like Brazil, Mexico, Canada, Japan? And then also one on PARP inhibitors actually. Some of the other developers are using combination.

Do you have any plan to combine BMN 673 with another agent, and also how you think about any other indications?.

So we'll take those in pieces. This is Dan.

On the guidance piece, to be honest I'm not sure where your confusion or where the misunderstanding came from, but the $60 million to $70 million and the 350 patients has always been guided to as a worldwide revenue in patients number, and that while the United States is the first country being launched in, is an important part of it and likely disproportionate in 2014 than full over time.

These revenue numbers assume material patients on therapy in United States, Europe and in our various other markets. So, no change to guidance..

Part two of that question was approval timing. So we've been reporting that we've got registrations filed in a number of international markets and we will be disclosing over time when we get those registrations and that allows us to go commercial in those countries.

A reminder that we're talking about, Canada, Australia, Mexico, Brazil and Japan, and what I would say is minor impact from those markets for revenue in 2014 except for Brazil where we think we'll be able to get started early with named patient sales and we'll keep you apprised of registrations as we receive them..

As far as the PARP inhibitor, we do have some plans to enter Phase 1 combination studies. Those will be principally conducted by academic colleagues. We do note that other companies are undertaking studies in combinations.

Combinations with PARP inhibitors are difficult, and so we prioritized instead focusing on monotherapy indications, not to say that we're not interested in combinations, it's to say that we are prioritizing our monotherapy indications.

Specifically we have a Phase 3 program in metastatic germline BRCA mutated breast cancer that we're actively enrolling and we were the first company to initiate a randomized Phase 3 trial of a PARP inhibitor as monotherapy in breast cancer.

Other indications that we're exploring, as you know we talked about having response activity in small cell lung cancer, look for an update on progress against that target in the ASCO timeframe.

We've also indicated that we want to evaluate the possibility of treating patients with germline BRCA mutated breast cancer earlier than when the disease is metastatic. So, look for study starts to occur in the new [indiscernible] setting.

And finally we've identified the possibility of finding patients with other DNA repair deficiency states as potential patients that are amenable to 673 therapy. So look forward to a start of a monotherapy study in patients with DNA repair deficiencies.

So those would be the kind of additional activities that will unfold over the next weeks to months in the 673 space..

The next question is from Lee Kalowski of Credit Suisse. Your line is open..

So maybe just first a quick question on VIMIZIM, as we think about the U.S. uptake, just as far as the BPPS that you said in the press release, just wondering about how we should be thinking about those 120 patients.

Would they not be relatively rapidly going on therapy and is there any reason why given the lack of alternatives, a BPPS patient might abandon and not go on therapy? And then just a quick question on the base business, as far as Naglazyme is concerned, it looks like a pretty strong quarter.

I guess how should we be thinking about that for the remainder of the year? I think you previously had guided for 290 to 310.

Is that sort of still how we should be thinking about it?.

So I'll field the Naglazyme question first. As Dan stated, no change to the guidance on revenue.

I would state that Naglazyme increase in sales are consistent with the kind of year-to-year patient growth we've been experiencing which is encouraging steady patient growth and we had a strong order pattern across the board from different markets than the United States – sorry, in international markets, but other than that nothing remarkable about Naglazyme, just another good strong quarter for Naglazyme.

With respect to the United States, you asked about both the timing and conversion rate of patients enrolled into BPPS. So we announced that we've got in excess of 120 patients in that channel, some of which have already progressed to commercial therapy and are represented in that total number of 50 on commercial therapy.

There is variable timing in the United States because essentially every different patient has a different payer and we have to deal with each payer separately.

So, I guided before, some of these payers issue an approval in timing of days to a couple of weeks and other payers will take months to get through their hurdles and questions and issues, although in the United States we're pretty confident that we'll get through those hurdles and issues with just about every patient.

In terms of conversion rate, I would qualitatively call it very high. Once we get patients into the BPPS system, our conversion rate is extremely high, we don't tend to lose them..

The next question is from Joseph Schwartz of Leerink Partners. Your line is open..

One of my questions have been asked, but I was curious if you could just tell us how 302 study for PEG PAL is powered on a neurocognitive benefit, does that change at all with the proposed changes?.

So there's no change in the endpoint or the analysis strategy and what I'll say here is that we design the analysis to be hierarchical, meaning that we analyze Phe first, because that's the endpoint that's going to support accelerated approval, and if that's successful then we analyze for neurocognition, and as I said before, we think it's highly likely that we're going to hit the blood phenylalanine endpoint in the randomized trial.

And as far as what we're looking for, I don't have the exact specific details but what we have observed previously is that in patients with medically significant inattentiveness treated with Kuvan, we observed about the same effect as that observed that's caused by drugs used to treat inattentiveness in patients without PKU, in other words patients with ADHD syndrome.

So that's the basis of the pairing assumption, I don't have the exact specific numbers with me..

Okay.

And then can you give us any color on the types of patients that are signing up on [PS] (ph) and are these patients worthy in terms of any particular characteristics such as age or weight or anything like that?.

Sure. So, a lot of these patients are coming straight out of the clinical studies and the early access program. So they are characteristic of the adults and pediatric patients in those programs respectively.

Otherwise I think we've said expectations previously that we expect the early patient referrals to be open towards pediatric patients, and so far we think we're seeing that..

The next question is from Brian Abrahams of Wells Fargo. Your line is open..

This is [indiscernible] calling in for Brian. I have a couple of questions on BMN 673 related to the previous question. You have a collaboration with Myriad to develop the next generation companion diagnostics beyond BRCA.

I was wondering if you could give us an update on the timeline for such diagnostics entering the clinic and how you plan to incorporate that into your currently ongoing or planned clinical files and what the regulatory path might look like as a follow-on to BRCA studies?.

So generally, I don't think I've given this. We've given a specific date for the anticipated start of the clinical trial. And as far as the regulatory path, our working belief is that it would end up being a companion diagnostic in the U.S. like other companion diagnostics. That is to say it has come out of a PMA certified lab.

As you know, Myriad has now initiated that process to become a co-diagnostic for BRCA testing. So in the DNA repair deficiency diagnostic setting, we're working with a company who are gathering experience on how to get a companion diagnostic approved in the context of a drug. So we're leveraging that experience in the HRD space.

We don't plan to incorporate the test to the ongoing trials, because the ongoing trials pertain to patients with no mutations in DNA repair, BRCA mutation. We would apply it to the future trials, and again as I said, we haven't pinned down a specific start date for that, although it is our next priority of studies to begin..

Okay. Another follow-up question related to the previous question is the combination therapy with 673, you have mentioned the combo therapy with chemo agents like [indiscernible].

I was wondering if there is a good scientific basis for combining 673 with targeted therapies like PI3-kinase inhibitors?.

There is a lot of rationale and there have been both preclinical studies and there's an ongoing clinical study of the combination of PARP inhibitor and a PI3-kinase inhibitor ongoing and we evaluate that and keep an eye on that.

As I said before, our focus is more on the registration enabling pathways because those are going to be the ones that drive initial market adoption and utilization, but the rest of the program does have other elements including combinations to chemotherapy as well as combinations with novel targeted agents as well..

The next question is from Stephen Willey of Stifel. Your line is open..

Just a quick question on Batten actually, just kind of wondering, I know that you're treating on the patients at the top dose and I think you've alluded to the [repeatidy] (ph) of response in the animal model, so just kind of wondering if you're seeing anything at this point that would maybe inform you as to whether or not you believe this may have some kind of registrational capacity?.

As you know, the trial has been open label trial and yes we have indicated that we are dosing at top dose levels now and you know that it's a rapidly progressive disease.

We have commented that our interactions with health authorities have given us reason to believe that should the results warrant, that this single trial could serve the Phase 1, Phase 2 and Phase 3, all at once.

Now, we haven't given any specificity around what we would have to show to achieve that outcome, but it at least is plausible in the first instance to talk about this trial as putting registration.

And as to the part of your question that pertain to what are we seeing so far, what I want to say about that is this trial is an ongoing trial and I'd be very reluctant to talk about preliminary data.

Just to remind you, I mean these are very sick children and their families are dealing with a lot and the last thing they need to be dealing with is a bunch of rumors and preliminary interim unpolished results. So we're going to be very careful about keeping the data confidential until it's ready to be talked about in a more formal way..

The next question is from Matt Roden of UBS. Your line is open..

This is actually Andrew Peters in for Matt. So just a first one on VIMIZIM.

Of the 70 patients that are seeking treatment in Latin America, do you have a breakout of kind of country by country basis and if there are any difference in the kind of reimbursement process in any of those countries? And then just one for Hank on 673, has the enrollment been consistent with your expectations, is it then faster, slower, kind of just given the relative infrequency of the mutation?.

So first on Latin America and the demand for VIMIZIM through named patient channels is indicated by numbers of prescriptions written.

No, we don't breakout country by country but we'll note that all of the countries that we are expecting to be represented, that means Brazil, [indiscernible] and Argentina, actually are, each of those countries has a different system that needs to be worked through by those patients and their physicians and patient advocates for them to get access to VIMIZIM.

And as I mentioned earlier in kind of a broader sense, it takes a while for those patients to first get into that system and then make it out of the other end with a payer that's willing to come to BioMarin and purchase VIMIZIM. I will note that we reported that of the 50 patients on therapy, Argentina is represented in that group.

So that is an indication that the first of the named patients have made it through the end of that process as of the end of April, and I also mentioned that I'm pretty confident that we'll be naming other countries when we get back together again next quarter..

I would just add that we have great experience with Naglazyme in these countries, which is going to be very helpful in getting these patients on reimbursed therapy and we don't anticipate that there will be any significant differences here between VIMIZIM and Naglazyme in those countries..

And on the enrollment issue, the enrollment question what I want to say is, things are about as expected. Trials always finish faster than they start and we're in no different situation.

One of the things I did want to comment about though, because you asked about BRCA, you asked about the rarity of the tumor, and I think it's kind of a sweet spot question for BioMarin because we're quite accustomed to working in the rare disease setting and providing all the support that's needed.

One of the particular challenges with this tumor, with this indication in this tumor is that although there are guidelines for BRCA testing around the world, there is not general adoption utilization reimbursement for BRCA testing, and we certainly bring a willingness to bring that to the equation.

One of the questions that's gotten raised is, how do we deal with when we identify a potentially eligible trial patient with the fact that we're also making a diagnosis, not for the patient but for the family.

And so one of the things that's occurred to me is that we as a company are actually quite uniquely well suited to be the partner of preference for these kinds of patients because we are in the business of genetic diseases, and I think that's something that when we work with our clinical investigators, they appreciate about working with us very much.

We bring a lot of knowledge about finding rare diseases and dealing with families who have gotten potentially bad diagnoses in their germline DNA. So to recap, starting as we expected which is lower than where we'll finish.

We're overcoming some of the challenges of the rare disease setting and the fact that where BioMarin I think gives us a competitive advantage in that regard..

Great, that's very helpful, appreciate it..

The next question is from Josh Schimmer of Piper Jaffray. Your line is open..

Is there any chance to look at any interim data from the 111 study before the second quarter of next year?.

Yes, there is any chance. As you know, we've said, we plan to – I was practicing my [11] (ph) answer – we said we would enrol during the year, we said it's about a six month end point, so regarding the middle of next year.

It could go faster if we see efficacy faster, lower dose cohorts, but it could also go slower if the predictions from animals are off. And so, we're still on track thinking we're going to finish enrollment by the end of the year and guide the data in the middle of next year. It is one of our most exciting programs.

I mean achondroplastic dwarfism is not just a problem of stature, it's also fairly medically significant complications. And so, as with our other programs, we're really keen to make a difference in this condition as well..

The next question is from Ian Somaiya of Nomura. Your line is open..

Just had a couple of questions. I want to start off with congratulations, great start to the New Year. On PEG PAL, I was hoping to get the commercial impact of the changes to the enrollment criteria in the 302 study.

I mean are we to now expect that a third of the patient population will be no longer eligible for the drug? Just want to make sure that's not the case..

I want to remind you that in the rare orphan disease space, generally the practice to literally just label the product according to the eligibility of the one pivotal clinical trial.

So for example, the Morquio trial that we just got registration for VIMIZIM on the basis of worldwide, excluded patients who couldn't walk 50 meters, excluded patients who could walk further than 325 meters, and there is no place between the U.S. and Europe where the product's label specifically excludes the use of the product there.

The way we handle that typically is by the conduct of ancillary clinical trials to support the widest possible labelling and the broadest possible adoption. I mentioned that the patients who don't fit neatly into the randomized bucket will continue to gather safety and efficacy data in those patients and studies conducted in parallel.

Obviously we haven't had the discussion with the FDA yet about the design change, and of course this is subject to final decision-making at the time of labelling, but I think it's a reasonable expectation to have, that we'll figure out a way to make the products available to all patients with [indiscernible]..

So I mean I guess in your opinion there is no downside with any changes except for the one year lost in terms of development time?.

That's essentially the trade-off. Take a year longer but increase the odds of getting the neurocognitive outcome. Again, not so much for initial registration as much as definite registration ultimately adoption..

Alright, and can we talk about that a little bit, what the impact of neurocognitive benefits would be on adoption and potentially even from a pricing standpoint?.

Maybe I'll start and Jeff or J.J. want to make a comment, but as I said, most clinicians already get the connection. So it's not as if they require substantial amount of proof. Most patients experience the benefit but the thing that today's patients are most focused on is not having to be told that they need to be taking medical food.

So their principal, the patient's principal benefit will be perceived in being allowed to use PEG PAL and not having to be reminded about the need for medical food intake, and I think that's a compelling value proposition right there. I don't know if Jeff or J.J. want to add about sort of the next levels of utility of neurocognitive data..

So the neurocognitive data, as Hank mentioned before, will be really important in working through payers for reimbursement. We've already demonstrated with Kuvan that we can get reimbursement for PKU without having that demonstrated neurocognitive benefit on the label.

But having the prospect of having that on the label would really make it faster and easier with payers.

The other thing that I'm extremely interested in with respect to PEG PAL is the roughly 50% of PKU patients that aren't being treated in a clinic today and those are almost entirely adult patients that aren't in a PKU clinic because they don't see any value in going to PKU clinic and actively treating their PKU.

If we have the tool available to reach out to those patients and say, we not only have a Phe lowering therapy but that Phe lowering therapy will give you a neurocognitive benefit. I believe we have a powerful draw to start recovering some of that Q4 lost opportunity in the United States..

You got a question on pricing, I mean obviously – and it's kind of premature to talk about pricing here, but should we demonstrate that neurocognitive benefit in addition to the Phe lowering benefit, that can only be good for pricing..

In fact I'll just ask one last question on VIMIZIM, just related to the BPPS.

What portion of patients failed to get into it? I mean what are the typical reasons why a patient would not make it into the BPPS, are there any?.

Patients need to make, and the clinics that treat them, need to make an affirmative decision to be treated with in this case VIMIZIM, but it could also be Naglazyme or Kuvan in the United States, and with a prescription for one of our drugs, that prescription gets sent into BPPS and that starts the enrolment process.

Essentially the patients need to make an affirmative decision, they want to be treated, their clinics need to agree with that, write a prescription and send it in. With respect to Naglazyme, we are highly, highly penetrated of the known patient population in the United States, and I would expect that we will be so with VIMIZIM also..

Thank you, and at this time, I would like to turn the call over to Mr. Bienaime for closing remarks..

Thank you. So let me summarize that we're managing BioMarin for the long-term. Our fundamentals today are as true as they have ever been for the Company. We are extremely pleased with the pace of the U.S. launch of VIMIZIM and we do expect the EU launch to be just as strong.

Total BioMarin revenues delivered strong growth in the quarter, increasing nearly 20% compared to the first quarter of last year, and we expect to be at the high end of our revenue guidance for the full year.

So we believe that [indiscernible] PEG PAL [indiscernible] program will provide the results needed to pursue full approval with both a significant reduction in blood Phe levels and associated neurocognitive benefits.

So [indiscernible] now at the end of the year, we expect to have stable clinical data on three programs – so by the end of next year, sorry, PEG PAL for PKU, BMN 701 for Pompe, and BMN 190 for Batten's disease.

In addition, we expect to have proof of concepts also by end of next year in patients for BMN 111 for achondroplasia, to complete enrollment in BMN 673 in BRCA mutated breast cancer, and to file IND and start clinical work in Sanfilippo B Syndrome and Hemophilia A therapy programs.

So we expect our proved products to achieve over $1 billion in revenues over the next few years, driving us to profitability and beyond. Thank you for your continued support and for joining us on today's call. Bye..

Thank you. Ladies and gentlemen, this concludes today's conference. You may now disconnect. Good day..