Traci McCarty - Senior Director, Investor Relations and Corporate Communications Jean-Jacques Bienaimé - Chairman and Chief Executive Officer Jeffrey R. Ajer - Executive Vice President and Chief Commercial Officer Daniel K. Spiegelman - Chief Financial Officer & Executive Vice President Henry J.

Fuchs - Chief Medical Officer & Executive Vice President Robert A. Baffi - Executive Vice President-Technical Operations.

Cory W. Kasimov - JPMorgan Chase & Co. Evan Seigerman - Deutsche Bank Securities, Inc. Joseph P. Schwartz - Leerink Partners LLC Geoffrey Meacham - Barclays Capital, Inc. Andrew Peters - UBS Securities LLC Phil M. Nadeau - Cowen & Co. LLC Terence C. Flynn - Goldman Sachs & Co. Michael J.

Yee - RBC Capital Markets LLC Ying Huang - Bank of America Merrill Lynch Ian Somaiya - Nomura Securities Timothy F. Lugo - William Blair & Co. LLC.

Good afternoon, ladies and gentlemen and welcome to the BioMarin Pharmaceutical, Inc. Conference Call to discuss Second Quarter 2015 Financial Results. 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, Senior Director of Investor Relations at BioMarin. Please go ahead, Traci..

Thank you, Carmen. On the call today from BioMarin, our Chairman and Chief Executive Officer, Jean-Jacques Bienaimé; Dan Spiegelman, Chief Financial Officer; Hank Fuchs, Chief Medical Officer; Jeff Ajer, Chief Commercial Officer, and Robert Baffi, Executive Vice President of Technical Operations.

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.

Now I'd like to turn the call over to BioMarin's Chairman and Chief Executive Officer, J.J. Bienaimé..

Thank you, Traci. Good afternoon and thank you for joining us on today's call. So, for the first half of the year, our global commercial team delivered 32% rose in total BioMarin revenue compared in the same period in 2014. For the second quarter, specifically, total BioMarin revenue was $250.5 million, an increase of 31% year-over-year.

This accomplishment was driven by demand across all BioMarin products, including Vimizim, Kuvan and Naglazyme. Vimizim for the treatment of MPS IVA, or Morquio A syndrome, is proving to be an important contributor to the top-line in its first full year of commercial sales.

Jeff and his team continue to do an outstanding job launching Vimizim into new markets, as well as increasing the number of new patients in each of our commercial product categories. We are energized by the outlook for the remainder of 2015 and beyond. With drisapersen, we look forward to our Advisory Committee Meeting later this year.

And assuming a near-term approval, a potential product launch in the U.S. in the beginning of 2016. With vosoritide for the treatment of achondroplasia, we are pleased to announce today that we have dosed the first patients with 30 microgram per kilogram daily, in now what is the fourth cohort of our Phase 2 study.

We are preparing for discussions with health authorities on design and planning for registration enabling studies, which we hope to begin in the first half of 2016. With our gene therapy product BMN 270, we expect to dose our first hemophilia A patients later this quarter.

We have chosen a dose and currently screening patients for participation in that study. Additionally, our other product pipeline products are on track and expected to produce important results over the next six months to nine months.

This includes data from our study with reveglucosidase alfa for the treatment of Pompe disease, with a conclusion and results from our ongoing Phase 1/2 study of cerliponase alfa for the treatment of CLN2 disorder. And based on our most recent dialogue with health authorities, we continue to be encouraged that this study could support registration.

In the first quarter of 2016, Phase 3 pivotal study results from our study with pegvaliase for the treatment of PKU will be available.

With the commercial business delivering impressive results, we begin the second half of 2015 prepared to accomplish a number of regulatory and clinical goals that we expect will drive significant value creation over the coming quarters.

Achievement of some or all of the catalysts I described will be transformational to BioMarin and more importantly to the patients who rely upon us to develop products where there is no approved treatment option today like Duchenne muscular dystrophy, achondroplasia, and CLN2 disorder.

We feel fortunate to have the opportunity to serve our patients, and we look forward to keeping you apprised of our progress over the coming quarters. Now, I would like to turn the call over to Jeff, who will discuss progress of our commercial products in the quarter.

Jeff?.

First, a recent mutation analysis must be available that is specific to identify exon deletions. Second, interpretation of mutation analysis, which may require involvement of a geneticist, must be made to determine if the deletion is in fact exon 51 skip amenable.

Based on the findings from market research, coupled with our experience in DMD clinics to-date, it is clear that considerable work remains to identify with certainty boys that may be suitable candidates for exon 51 skip treatment.

Now and going forward, our priority will be to ensure that DMD patients have received or will have proper genotyping coupled with an interpretation of mutation analysis.

This effort is similar in some respects to the market characterization we did ahead of our Vimizim launch and is the normal course of action when preparing for the successful launch of a therapy to treat a rare disease.

Moving now to cerliponase alfa, previously we have said that we thought that there were approximately 400 to 600 prevalent cases worldwide, but also that we believe CLN2 to be under-diagnosed. Those numbers reflected estimates in the U.S. and EU, which is only a subset of our commercial territories.

Given the broader reach of our commercial infrastructure and based on more recent input from expert clinicians, we now estimate prevalence in our markets to be between 1,200 children and 1,600 children, and estimate that the incidence is Morquio A-like or about 1 in 200,000.

Given the current limitations on early diagnosis and low awareness in general of CLN2 disorder, we assume that the initial treatment eligible market would be far less than half of the known prevalent population.

However, we also believe that if cerliponase alfa is shown to stabilize function and improve longevity in children who could benefit from treatment, we could significantly increase the treatable prevalent population over time.

As a result of intended future disease awareness and screening programs, we expect the future incident population eligible for cerliponase alfa following registration could be substantially higher than current estimates of about a third of the identified patients. In closing, the commercial team delivered strong results in the first half of 2015.

Total BioMarin revenue in the second quarter grew 31% year-over-year and increased 32% for the first half of the year compared to the same period last year. I am very pleased with the level of demand we are seeing for Vimizim across all of our commercial regions.

We look forward to continuing our commercial efforts in the U.S., EU and other international markets. For the remainder of the year, the commercial teams will focus on driving market penetration of Vimizim in substantially all marketed regions and continuing to deliver revenue growth across our commercial portfolio.

We will continue to ramp up our commercial preparation in advance of a potential approval and launch of drisapersen in the U.S., as well as market characterization activities related to the CLN2 patient population in our global territories. Now, I will turn the call over to Dan, who will review quarterly results..

Thanks, Jeff. Earlier today, we issued a press release summarizing our financial results for the second quarter and first half of 2015, and I refer you to that release for full details.

Starting with top-line results, as mentioned, total BioMarin revenue for the second quarter of 2015 was $250.5 million, an increase of 31% year-over-year, driven by strong sales of all our commercial products.

As Jeff mentioned, one of the most significant drivers in the quarter was the increase in commercial patient demand for Vimizim representing approximately 29% in new patients and revenue growth of about 20% quarter-over-quarter, excluding forward buying in the first quarter.

In terms of operating expenses, R&D expenses increased in the second quarter to $157.9 million compared to $107.7 million in the second quarter of 2014. The year-over-year increase, which was consistent with our expectations and with our prior guidance, was primarily due to the continued advancement of our multiple clinical programs.

In addition, R&D expenses for the second quarter of 2015 included drisapersen, our three Phase 2 exon skippers; BMN 044, BMN 045 and BMN 053, as well as some earlier stage DMD development expenses, while the prior year comparison period does not.

Similarly, SG&A expenses reflected the continued expansion of Vimizim, and increased to $101.5 million in the second quarter compared to $68.1 million in the second quarter last year. Recall that Vimizim launch was just beginning in Q1 2014, with global sales ramping up at the end of the second quarter of 2014.

Turning to bottom-line operating results, non-GAAP net loss in the second quarter was $5.4 million compared to non-GAAP net income of $10.1 million in the second quarter of 2014. We reported an $82 million GAAP net loss in the second quarter compared to GAAP net loss of $33.5 million in the second quarter.

As previously discussed, we consider this non-GAAP measurement to be an important barometer of our operating results, as it excludes certain volatile non-cash expenses, such as stock comp expense. Moreover, it is non-GAAP profitability in 2017 that we are targeting if we are able to obtain early approval of drisapersen.

To help investors understand the financial and accounting bridge between our GAAP and non-GAAP results, we have provided more detail on how non-GAAP results are determined in our financial press release. With respect to guidance for 2015, there is no change in full-year guidance at this time.

It is worth noting that we are trending to the high end of the range on total revenues due to good progress and growth in Vimizim and Kuvan, as well as to the high-end of operating expenses due to the continued progress of our pipeline and the expansion of our DMD program.

As a result, we still expect to come within our guidance range for bottom-line operating results as measured by our non-GAAP earnings. GAAP earnings will likely be at the wide end of the range due to increased non-cash stock comp expense driven by increases in our share price in 2015. In closing, BioMarin delivered an exceptional second quarter.

Our legacy products continue to perform even with the expected seasonality for Kuvan and lumpy ordering patterns in Latin America for Naglazyme. Jeff's global commercial team has hit its stride bouncing the strong launch of Vimizim, while maintaining meaningful sales of our other products. With both the U.S.

and EU filings of drisapersen accepted, we look forward to the opportunity to meet with the advisory panel with the goal of getting drisapersen approved and available to boys with DMD. We continue to believe our early approval will take us to profitability on a non-GAAP basis in 2017 with growing profits after that.

Now I'd like to turn the call over to Hank to provide an update on our pipeline products and plans for the remainder of 2015.

Hank?.

Thank you, Dan. The second quarter was an especially busy quarter for the R&D organization. The regulatory team focused on preparing and filing the best possible new drug application and marketing authorization application for drisapersen in the U.S.

and the European Union, and we're pleased to learn that both applications were accepted for review at both agencies. The FDA has granted drisapersen Priority Review status, which is designated to drugs that offer major advances in treatment, or provide a treatment where no adequate therapy exists.

Drisapersen previously has been granted Orphan and Fast Track status, as well as breakthrough therapy designations by the FDA. In the FDA's filing communication, the agency informed the company that it is currently planning to hold an advisory committee meeting to discuss the application.

We cannot confirm a specific date at this time, so keep you apprised when the advisory committee date is confirmed. Please note that information pertaining to a tentatively scheduled meeting is not publicly releasable until notice of such a meeting is placed in the Federal Register. To remind you, the U.S.

and EU filings are based on three randomized placebo-controlled trials and two long-term open label studies in total consisting of more than 300 patients in which some boys have been treated for more than three years.

Our conviction that drisapersen can provide a meaningful treatment benefit to boys who are amenable to an exon 51 skipping therapeutic is based on the totality of evidence obtained from these trials. To recap, two trials demonstrated improvements in six-minute walk test and patient's whose baseline rise floor time was less than seven seconds.

A third trial included patients whose baseline rise from floor was not restricted resulting in the inclusion of a much broader patient population.

However, six-minute walk test improvements were evident one year later in the group of boys who had received continuous drisapersen for two years compared to the group of boys who had received placebo for one year and drisapersen for one year.

Additionally, boys who have been treated for over three years in a separate ongoing extension study maintained their six-minute walk test distance, in contrast to published natural history controls.

Treatment with drisapersen seldom is accompanied by adverse events requiring drug discontinuation, and the most common adverse event consists of injection site reactions. We're hopeful that in the near term drisapersen will be made available to these boys, who suffer from this devastating genetic disease.

We also plan to launch studies in very young boys and non-ambulatory boys shortly as part of our efforts to provide a comprehensive assessment of the effects of drisapersen. We currently have three Phase 2 studies under way for treatment with other exon skippers, notably BMN 044, BMN 045, and BMN 053.

In these studies we are looking at various doses and delivery methods in an effort to provide the most efficacious and safest dosing regimens to patients who may benefit from our next exon skipping products. We're evaluating data from these ongoing studies to determine next steps.

Turning to another highly anticipated event in the quarter, the release of top data (22:18) from the Phase 2 study with vosoritide for the treatment of achondroplasia. In this last week, we began enrollment of the fourth dose cohort treating patients with 30 micrograms per kilo daily, and a dose that we hope will demonstrate catch-up growth.

The opening of that study arm was made possible by the findings of the Phase 2 study third cohort results announced earlier in the second quarter.

To remind you, the results of the Phase 2 third cohort with 15 micrograms per kilo daily demonstrated a good safety profile of vosoritide, as well as a mean increase of 50% in annualized growth velocity compared to patients as their own natural history controls.

Administration of vosoritide improved growth velocity by 2 centimeters per year, representing a 50% increase from pretreatment levels. As we have stated, achieving a 50% increase in growth velocity essentially return subjects to their normal growth rate.

The median increase of annualized growth velocity was 2.65 centimeters per year or an approximately 66% increase over baseline. These results give us confidence that vosoritide demonstrated a drug effect and served as the basis for taking the 15 microgram per kilo daily dose forward into Phase 3 development.

All eligible children in the first two lower-dose cohorts in the Phase 2 study have now been switched to 15 micrograms per kilo per day, so we're collecting a robust set of data. In summary, we're very pleased that 15 micrograms per kilo appear safe and efficacious, and that we can enable it moving into registration studies.

We're preparing for discussions with health authorities in the most efficient path forward to begin those studies. In addition to the fourth dose cohort underway, we plan to pursue the initiation of a study in patients younger than five years old to explore providing an earlier treatment options to children.

One final comment on how we are thinking about the role vosoritide can play in alleviating some of the multiple health complications related to achondroplasia.

While the Phase 2 endpoint in the most of the conversation center on growth velocity, we believe that this measure is a lead indicator of improvement in many of the severe complications associated with achondroplasia.

We believe the treatment with vosoritide will impact bone proportionality and thereby address other orthopedic, neurologic or other – or respiratory manifestations.

We further believe that earlier intervention with vosoritide may significantly curtail under-recognized complications that are result of achondroplasia, such as foramen magnum compression, sleep apnea, spinal stenosis, et cetera.

Next, an update on another program expected to achieve its next milestone later this year, the ongoing Phase 1/2 study of cerliponase alfa for the treatment of CLN2 disorder, a form of late infantile Batten disease. We look forward to concluding the study at the end of the year ensuring results shortly thereafter.

Based on our most recent dialogue with health authorities, we continue to believe that this study could support registration.

Importantly, we hope to open another study with cerliponase alfa in siblings of children who have been diagnosed with CLN2, but have not yet displayed symptoms of their disease, to learn if decline in their cognitive and motor skills can be prevented. This will be a small study, and we hope to open it in 2016.

Turning to our gene therapy product, BMN 270, we expect to enroll our first hemophilia A patient imminently. We are very enthusiastic about this program because of its potential to provide long-term therapeutic benefits to patients, who currently require daily prophylactic treatment for their hemophilia.

We will let you know when the first patient is enrolled, which we anticipate to occur in the very near term. We also recently provided an update on one of our programs with talazoparib, our PARP inhibitor for the treatment of patients with BRCA 1 or BRCA 2 mutations.

In late July, we were pleased to give an update on our Phase 2 ABRAZO study for the treatment of patients with deleterious germline BRCA 1 or BRCA 2 mutations, and locally advance in our metastatic breast cancer.

We announced that the ABRAZO Phase 2 trial had met the study's' protocol-specified threshold for documented tumor reduction using RECIST response rate criteria, allowing for the expansion of enrollment in the study from 70 patients to 140 patients. The ABRAZO study includes two cohorts of patients with BRCA mutated breast cancer.

The first cohort consists of patients, who have initially responded to a platinum-containing regimen then progressed, while the second cohort consists of patients who have received more than two prior chemotherapy regimens for metastatic disease.

The ABRAZO study is the first reported data showing tumor reduction from a PARP inhibitor and breast cancer patients previously treated with a platinum regimen. If successful, single agent efficacy in a salvage setting potentially could support registration, adoption and use by patients who have exhausted therapeutic options.

We are encouraged to have seen anti-tumor activity in patients previously treated with platinum regimens. This was an unprecedented finding in BRCA metastatic breast cancer, which may provide a further treatment option for these patients.

We also provided updated guidance for completion of enrollment of our pivotal EMBRACA study, which we now estimate will be in the first half of 2016.

To remind you, EMBRACA is a Phase 3, open-label, 2:1 randomized trial to compare the safety and efficacy of oral PARP inhibitor talazoparib versus protocol-specified physician's choice in patients who have locally advanced and/or metastatic breast cancer with germline BRCA mutations.

Since the study started, a newly completed review of published data suggest that median progression-free survival is lower than originally estimated for the control arm in this patient population and that fewer than the originally estimated 430 patients may need to be enrolled in order to achieve the targeted hazard ratio. As J.J.

mentioned, our other pipeline products are on track and are expected to produce results over the coming few quarters, and including reveglucosidase alfa for the treatment of Pompe disease and in the first quarter of next year results from our pivotal study with pegvaliase for the treatment of phenylketonuria.

So with that, operator, we would like to now turn the call open for questions..

Thank you. And our first question is from the line of Cory Kasimov from JPMorgan. Please go ahead..

Hey, good afternoon, guys. Thanks for taking the question. Good quarter. I have two questions for you on your hemophilia program.

First, have you ever disclosed how much you had to manipulate out of the factor VIII gene or the AAV vector itself to get this construct? And then secondly, can you remind us how this trial is going to roll out in terms of patients per cohort, and how long you have to wait between cohorts assuming you had – if you had to go to a second one?.

Hi, Cory. We have disclosed quite a bit of detail about the manipulations of the gene at a somewhat high level. We've shown experiments that have looked at alternative capsid types without naming the capsid, and we've looked at alternative cassettes, alternative codon optimization schemes.

So we've taken people through that data, although we haven't given you the next level down details for competitive reasons on some of the very, very specific elements of the constructed cassette.

As far as the rollout of patients, since we're not actually in the study and I'll keep my comments to a relatively high level and that's simply to say that the design of the study is driven by a desire to minimize the amount of time spent at relatively inefficacious doses; or stated a different way, the starting dose was chosen with the idea of demonstrating sustained factor VIII activity in the plasma of treated patients.

As to how many patients it will take to establish that efficacy or conversely to establish that the dose is too low and to go up is still under final, final, final design.

So it's a little premature still, although as I mentioned in my prepared remarks, we do expect to start that imminently, at which time we can consider giving a bit more updates in terms of what to expect..

Okay. Thanks, Hank. I'll hop back into queue..

Yes..

And our next question is from Robyn Karnauskas from Deutsche Bank. Your line is now open..

Hi, guys. This is Evan on for Robyn. She apologizes she is under the weather today. My question is back to the DMD program, so I know I touched on this prior in some discussions, but from what I remember, Prosensa had agreed to start a confirmatory trial prior to filing for approval.

Can you just help me better understand and remind me kind of what changed in the eyes of the FDA to not necessitate that? Thank you..

Yeah. Hi, Evan. And I don't intend to communicate that the FDA has changed anything in their eyes....

Okay..

...other than that they've filed our submission. What Prosensa had communicated was that they had believed that the FDA would be agreeable to a confirmatory program that consisted of two principal elements.

The first was a open-label treatment study with drisapersen with matched natural history controls, accompanied by a second key element, which is a placebo-controlled study of another exon – of another skipper of another drug.

And what we have said is that, first of all, that the specific design of a confirmatory study can really only be finalized once there has been adequate review of issues that have been identified during review.

And as you know, although the submission has been made and the FDA has filed the submission, we're still relatively early in the review process. So we are not now able to identify what the final design of the confirmatory study is.

What we have said is that the discussion range includes both what the FDA, with Prosensa added, had identified as agreeable to the FDA and the possibility that something else might be done or that something else is not any higher a burden than what has been previously communicated.

The final thing I'd remind you about is that we are also currently under file and review at the European Medicines Agency. And it would be our hope and goal to attempt to have confirmatory studies, which are more similar than different around the world.

And so part of coming to a final agreement on the design of the confirmatory studies will be our efforts to achieve that unifying objective..

Great, thanks. And one quick follow-up with BMN 111.

Have you seen anything else that has given you, I guess, more indication that proportionality is going to improve from what we saw last month or back in June now?.

Nothing new to report....

Okay..

...in the six weeks since the last time..

Perfect. Thanks so much. Appreciate it. Congrats on the quarter..

Yeah. Thanks..

And our next question is from the line of Mark Schoenebaum from Evercore. Please go ahead..

Hi, guys. This is John (34:20) filling in for Mark. A couple quick questions if I may. So on the hemophilia program, I was wondering if you could comment similarly to how you threw out the 50% growth velocity sort of benchmark for BMN 111.

Is there a benchmark that we should look out for that you feel is clinically meaningful, so in terms of percentage of normal factor VIII levels? And then, can you comment on – just given the fact that – the sort of controversy between re-dosing for AAV gene therapy? How important do you think it is to be first in class for this therapy? And then, just really fast, I noticed that you've had a non-GAAP P&L in your press release.

Do you anticipate reporting non-GAAP OpEx going forward and providing non-GAAP guidance in the future? Great. Thank you..

Hi. This is Hank. So I think I'll start with the first two questions, and I'm going to duck the third one or hand it somebody else who is able to handle that.

So the benchmark of hemophilia effectiveness, I guess, the context I'd put on that is that physicians talk about hemophilia as mild, moderate, severe, where they talk about the breakpoint for being considered severe hemophilia being under 1% factor expression, and there are varying breakpoints for the distinction between mild and moderate hemophilia.

I guess what I'd say is more is – the more you can express, the better you are. The further north of 1% you are, the less vulnerable to spontaneous bleeding you are and the less on-demand therapy, therefore, you will need to require. Variably people talked about that target level being in the 5% to 10% factor VIII expression range.

I don't know that we've necessarily ourselves landed discretely on a specific target range and given how discussion of this sometimes goes, I'm not sure we're ready to specifically, precisely identify a target, but rather frame it in terms of the distinction between severe hemophilia and others is above and below 1% factor activity level, and we want to aim as high above that 1% mark as we can get.

As far as re-dosing and the importance of being first, I guess, the comments I would make are, it's BioMarin's desire to, where possible, to be both first and best. We believe we're going to be first in the clinic, and we've done a lot of work to try to be best.

And part of that wanting to be first and best in this particular case is the potential limitation that if you've already received a treatment with AAV, you may not be able to receive a treatment with the same capsid type at the same dose.

I will say, however, that these kinds of considerations are, at this stage, a little bit more theoretical than practical for the reason that nobody has any experience treating anybody with factor VIII gene therapy, and we plan to be first anyway. So hopefully, that gives you a little bit more context around how we're thinking about the program..

Yeah. That's helpful. Thank you..

For non-GAAP, Dan?.

Yeah. So the format of information we provided in the press release is a format we intend to do for the foreseeable future. In terms of guidance, we do currently give non-GAAP bottom-line guidance, and for 2015, we're not planning on changing the details of the guidance.

We provide and will consider whether additional granularity to that is useful in 2016, and the final thing I'd say is that the 2017 non-GAAP profitability is the target we've set forth several times, if we're able to achieve an early approval of drisapersen. So we'll continue to be focused on that financial metric..

Great. Thanks, guys..

And our next question is from Joseph Schwartz from Leerink Partners. Please go ahead..

Great. Thanks very much.

I was wondering, have you had your oral arguments yet in the patent interference proceedings? And if so, how do you think that they have gone, and I'm referring to the DMD patent landscape of course?.

Yeah, I mean, I don't know if you're referring to the deadline that Sarepta had to provide a response to the order show cause.

They've done that, and there is nothing that changes our assessment of the proceedings in this respect, we believe that the PTEB stands a (39:36) position on the method of use claims as set out in the order to show cause is appropriate.

We think we could see a decision on both the method of use and the composition of matter proceedings as early as the end of August. But since there is no deadline for the PTEB (39:57). to act.

It could be later in the third quarter or even in the fourth quarter before we have an actual decision, but we are pretty confident there will be a decision by the end of the year, and that's for the U.S. at this time. In Europe, as you know, there already was a decision in 2012 that was in favor in Prosensa, which we inherited.

So, in a very strong position in Europe..

Great, that's super helpful. Thank you. And maybe one more on drisapersen.

You mentioned the need for genotyping, can you talk a little bit more concretely about that in terms of the proportion of the market that you think that's prevalent is being actively followed, and what proportion of them are already genotyped? And if there's anything that you can do ahead of launch in order to help streamline that process, or do you need to wait until after potential approval?.

Sure, Joe. This is Jeff. I'll take that one. So, what we think we know based on market research and our activities and inside the clinics to-date, doing market characterization activities is, we believe that more than half of patients have had genotyping done.

But the physicians are reporting a gap in their awareness of whether those patients are amenable to exon 51 skip therapy.

So we have some work to do to better characterize what is the gap due to? Is the gap due to incomplete or old testing results, or is the gap due to there not being a sufficient driver or to warrant physicians to determine if their patients are exon 51 skip amenable, and so that I'm not being opaque here, having a drug that is on the market or poised to come on the market would probably be a driver that would cause physicians to say, if I don't know, I better check.

And yes, there are things that we can do to drive the market to be aware of what is required to test and interpret for exon 51 skip amenability, and then for us to go out and try to help drive the market through those steps so that when we get to launch there are patients identified wind up and ready for therapy and that indeed is the ultimate goal..

And it's not too dissimilar to what we've been facing in other areas. So in terms of properly identifying patients in the MPS field, we have to do that over the years, I mean, again, as Jeff mentioned today, there is not much of an incentive to genotype these patients because there is no available therapy and I think this is going to change.

And I don't think there is any technical reasons why this could not be done. We just need to – this is what BioMarin is about. We're very good at helping the healthcare professionals, better identify the characteristic of their patients and then move them on to therapy..

Okay. Great. Thanks..

And our next question is from Geoff Meacham from Barclays. Your line is now open..

Hi, guys, afternoon, and thanks for taking the question. A couple on drisapersen. Maybe you guys – if you could help us with where you are on a global basis with manufacturing and hiring of sales and reimbursement specialist.

And then do you expect to have any additional follow-on data, extension study data, et cetera, from the Phase 2 or Phase 3 before the AdComm, and I have one follow-up on vosoritide?.

Thanks. So our Head of Technical Operations is Robert Baffi is available.

I mean, Robert, you want to take on the first question on manufacturing readiness for drisapersen?.

Yes. So where we are is – both the API manufacturer and the drug product manufacturing has gone through the necessary validation for commercial product.

All that data was summarized and submitted in the various applications both in the U.S and Europe, and we are now under review with those in both agencies and so nothing really unusual from a manufacturing perspective..

And, Jeff, do you want to talk about the reimbursement and sales force?.

Sure. So sales and reimbursement organizational readiness in commercial is on track on the numerous dimensions that we need to prepare for, including sales and reimbursement specialists. Our strategy on sales is to have an incremental buildout of our rare disease sales capability, and we are on track to do that.

That will happen at different points in time depending on the geography.

And in terms of reimbursement specialists, well, right now, one of the dimensions of commercial preparedness is to do all the things that are required to be able to file for and get a price that is appropriate and a positive reimbursement decision essentially all the markets that we operate in.

In the U.S., you're right, we need to have case managers ready and with a phone headset on day one of launch, and we will indeed have those people ready to take phone calls..

Hank, I mean, it was a question on safety extension?.

Yeah. Well, there's a question on whether there would be any new data presented prior to the advisory committee not knowing exactly when the advisory committee is going to be.

It's a little bit difficult to answer that question, but I would say substantially the data that has been presented is the data that is going to be available for the advisory committee. So I wouldn't expect anything substantively new to appear between now and the advisory committee..

Okay, thanks. That's helpful. And then real quick, Hank, on vosoritide.

For the fourth dose cohort, can you just maybe remind us of the sequence of events here? I know you haven't really talked to FDA about a pivotal, but when you look at the catch-up to growth claim, if you want to call it that, do you view that the higher dose as almost a separate product, if you will, when you look at the dynamics and what you could accomplish versus the 15 microgram?.

I don't know if I'd call it a separate product that it's – oftentimes medicines are administered in different strengths to deal with different degrees of particular clinician.

We think the 15 microgram per kilo dose in the long term will satisfy the vast majority of patients, but for a variety of reasons, not the least of which is delay in initiation of therapy.

There could be reason for certain patients to need to be treated at a higher dose, and we wish to investigate the safety and the ability to achieve that objective prior to commercialization of the product..

Okay. Thanks..

And our next question is from Andrew Peters from UBS. Your line is now open..

Hey, guys, congrats on the quarter and thanks for taking my question. Question for Hank on hemophilia. In the past you've highlighted potential for liver enzyme elevation is something that you could see in the studies.

Can you just describe how you to plan manage these and what degree and/or frequency would you think is acceptable from a safety perspective as you kind of move forward with higher doses or with any of the doses? Thanks..

Well, the plan to manage potential hepatitis is to – where liver enzyme elevation is to monitor for its presence early and to be ready at the drop of the hat to intervene, if there are trends in elevations that are found early.

And as far as what would be clinically significant, I think the way to think about that is that so long as there isn't meaningful attenuation of factor VIII expression, then we would consider mild transient elevation of liver function tests to be of no real practical consequence.

Now, of course, that could be different if the degree of liver inflammation is itself associated with other sequelae besides loss of factor VIII expression that's not been observed in clinical trials for factor IX to-date, so we don't expect that.

So our principal expectation really is that we want to reduce the extent to which a mild degree of liver inflammation interferes with sustaining factor VIII activity and achieve that by monitoring liver function tests frequently during this study as well as intervening quickly if it's observed.

I should mention that there's some other obvious things that we're doing. For example, we're not enrolling any patients with active hepatitis in this trial, but I think that kind of goes without saying..

Great. Thank you..

And our next question is from Phil Nadeau from Cowen & Company. Please go ahead..

Good afternoon. Thanks for taking my questions. First a commercial one on Vimizim. Based on your comments, you kind of suggested that there was no stocking orders in this quarter as opposed to last quarter. But in the past quarters you've also suggested that when a patient outside the U.S.

is initiate a therapy it's very customary for them to get several months of products upfront.

So kind of curious, I guess, this is the first quarter where there just weren't that many patients who did that, or is it simply the level of stocking that was down in Q2 compared to Q1?.

That's exactly it, Phil.

In the first quarter, there was about $5 million of obvious stocking orders, which is not alarming or a problem in anyway, but it doesn't reflect kind of the more immediate demand, and you're right in saying that in each of the quarters there's orders that come in from this country and that country, where they're buying several months worth of inventory.

What I meant to say or what we should have said for Q2 was, there was nothing obvious in material that we were calling out in Q2 pointing to forward buying..

Okay..

And that moreover that the small amount of net forward buying there was less than the carryover from the prior quarter. So we didn't have any net additional forward buying..

Okay.

And the $5 million that was basically stock last quarter, is it something that bled out this quarter or is that kind of bleed out over the subsequent quarters, kind of where does that both stand today in the channel?.

That would bleed out over a period of several quarters..

Okay. Got it.

And then just two on the pipeline, what's the most recent update on the achondroplasia IP?.

Achondroplasia IP?.

Nothing new since we noticed you of it in the last call..

Okay..

Yeah. But we are in discussions with the IP holders, and we believe we can come to resolution in the future..

Okay.

So the professors still in discussions with you?.

We don't want to disclose who the IP holder is..

Right. Okay. And then last question for Hank, I don't know if you're going to want to answer this, but there was a tentative AdComm scheduled, I believe, for November of Thanksgiving week. We've all kind of been guessing that that is to review the DMD drugs.

Do you have any information that would dissuade us of that notion or can you simply not confirm or deny that that's going to be the week?.

Well, I think all I can do is repeat what basically FDA says, which is this is a tentative date. They haven't linked it to any specific proceeding. And the only way anybody knows what is an official date is when it gets noticed to the Federal Register. And like you, we have not noticed anything in the Federal Register.

And I suppose it will be a short time interval, in which you notice it before we notice it, but that's the process and it hasn't happened yet..

Okay, great. Thanks for taking my questions..

Yes..

Yeah..

Yeah, I answered it..

And our next question is from Terence Flynn from Goldman Sachs. Please go ahead..

Hi, thanks for taking the questions. Maybe just two on the pipeline for me as well. So on BMN 701 for Pompe, can you just remind us how much of the data we can anticipate later this year and expectations for what you guys are focused on regarding a decision to drive the next trial? And then, the second question was just on BMN 250.

I know you've guided to file in the IND in the middle of this year. Just remind us again of the design there and then what you want to see beyond safety. Thanks..

I always get my codes mixed. So while they're reminding me of which BMN 250 is....

NAGLU..

Thanks. So many children, I can't remember all their names. BMN 701 data that's coming, the study was designed as a single-arm, open-label study in patients who have been previously treated with the commercially available product, who will then be switched without a washout period to BMN 701.

Primary efficacy outcome variable is improvement in maximum inspiratory pressure, a measure of respiratory muscle strength.

And then the secondary endpoints include measurement of other respiratory parameters like maximum expiratory pressure, spirometry, FEV1, FEC, six-minute walk distance amongst other secondary outcome variables, obviously, safety is an important outcome variable for the clinical trial. Our expectation, we try to not report bits and pieces.

We try to get enough of the data together when we report the data to give you the sort of the big picture, and in a way that it doesn't change a lot over the ensuing weeks after our initial announcement. Exactly what we'll report, we'll have to wait and see the data to figure out exactly what we're going to report when we report it.

As far as NAGLU goes, I think we've been guiding that we're going to file the CTA or the IND in the second half of this year. I don't know that we've given precise guidance about when to expect a first patient to be enrolled. But typically it's relatively soon after we file our health authority notifications.

So if it's not in the second half of the year, it'll be shortly thereafter..

Okay. Thanks..

And our next question is from Michael Yee from RBC Capital Markets. Please go ahead..

Hi. Thanks for the question. Two quick ones on IP with DMD.

Obviously, there's an interference going on in the U.S., I think you made some comments, but if there is a situation where obviously you win and both drugs are approved, how should we expect you to proceed? You've mentioned the word blocking and that kind of stuff, but what would be the scenarios that you would take in that situation if both were approved? And then my second question for Hank was, in gene therapy, can you just reiterate, again, how you picked the dose and whether you're confirming that there would be disclosure on data, yes or no, whatever it shows by the end of the year? Thanks..

Well, let me – I think J.J. wants me to start first. So, we picked the dose based on an extensive study in mice and then in non-human primates evaluating different capsid types, different codon optimization schemes, different vector constructions.

And then, we looked at the relative efficacy achieved as a function of dose across the spectrum of mice and monkeys for factor IX to get a sense of base – I'm sorry for, yeah, for factor IX.

So, based on sort of the three dots of mice, monkey, man in factor IX, we're estimating for factor VIII for the capsid type, the gene construct, the codon optimization, and the promoter, we're estimating what the target efficacy would be for a given dose level administered to humans.

That's – and as I said previously, the goal would be that the first dose would actually be an efficacious dose. But, of course, that's an extrapolation based on factor IX and that extrapolation may or may not hold up for factor VIII.

I think we'll announce first patient in when that happens and I think during my prepared comments I said that we expect that to be imminently. So, I think if you hear an efficacy statement from us by the end of the year, you can conclude what you can conclude from that efficacy statement.

I think if you're not hearing anything about conclusions to the experiment, we're still at work, would be the conclusion to draw..

Okay. And then IP..

Now, on the IP – yeah, I mean, I think as you know, we – drisapersen is protected in the U.S. and Europe with the patents that have issued on both sides of the Atlantic. We are very confident that we have freedom to operate basically all around the world, and it is our intent to vigorously defend our IP position..

That means being litigious or blocking or royalties, what does that mean?.

I don't think we need to answer that question at this time..

Okay. Okay. Thank you..

Thank you..

And our next question is from Ying Huang from Bank of America Merrill Lynch. Please go ahead..

Hey, good afternoon, guys. Thanks for taking the question. First one is maybe, can you remind us if there's any significant new territory signed in the second half where you want to launch Vimizim? T Then the question on drisapersen, so you have a patient still on the extension phase from Phase 2.

Hank, have you noticed any difference in safety findings at all in particular, I guess, kidney metrics here for renal function?.

So nothing new in terms of kidney function in extension patients. And just to remind everybody, there is an observation of a very small amount of protein coming into the urine that's of a transient nature. It doesn't require discontinuation.

And with drisapersen, out of over 300 patients treated with 450 patient years of experience, there were two episodes of glomerulonephritis, which resulted in study drug discontinuation. In both of those cases, kidney function returned to normal on study medication discontinuation.

So I'm not even sure if there's a linkage between the subclinical proteinuria in these two cases, and I'm also not very clear – It's not very clear whether those two cases are sporadic cases of glomerulonephritis in children with Duchenne or whether they're drug related.

Obviously, we treat them as potentially drug related for the purpose of labeling and communication, but meaningful proteinuria is negligible in drisapersen-treated patients and there has been no real change in that pattern over the course of the extension studies.

Jeff?.

Thanks for the color..

Yeah. So just circling back to your question on significant new territories, reminding you we're in now commercially 30 countries of our 57 countries that comprise BioMarin commercial territory. So, we're in most of the primary markets. Many of the secondary markets and some of the tertiary markets already.

So going forward I'd say not a lot of progress to make in the second half on primary markets, expect more penetration a new – sorry, more new commercial markets principally in secondary and tertiary markets, which collectively will be good and significant contributors of growth going forward..

Thanks.

And, Jeff, can you provide also update on the UK reimbursements for Vimizim after the NICE draft decision?.

Yeah. So UK would be – probably the best example of a primary market that we haven't succeeded in getting price and reimbursement just yet. We are in the middle of proceedings with NICE. There's a certain amount of noise in the marketplace in the UK, but the real thing to note here is the nice process hasn't concluded. There's been preliminary report.

Of course, we have the opportunity and we've taken advantage of the opportunity to respond to that preliminary report and that's how the NICE process works over there. So we're not done yet, but we're continuing to work on it, and we'll let you know when we get across the bar..

Great. Thanks..

And our next question is from Ian Somaiya from Nomura Securities. Please go ahead..

Thank you. Just wanted maybe ask the big picture question.

Just wanted to get a sense for how we should think about the size of the organization, any other build-outs that may be needed, whether it's on the marketing side or on the R&D side, and how we should think about spending moving forward?.

Jeff, you want to start on the marketing and the...?.

Sure, I think – well the commercial organization is one of the large parts of BioMarin, certainly, not the largest part and as we go forward for the balance of this year getting into 2016 anticipating commercializing drisapersen in different markets, I would guide to incremental build-out of our rare disease commercial capability.

If you take a longer view, we have a number of products coming. All of which fit into the rare disease portfolio or essentially all of them do. And probably, we would expect significant commercial leverage out of our existing organization and continue to build out incremental capacity to handle new launches. And maybe I'd turn it over to Dan or J.J.

for the broader part of the organization..

Yeah, I'd say our spending is really activity driven. As Jeff mentioned with future products, we would expect to get leverage out of the infrastructure that we have. However, that doesn't mean that there is an incremental spend when we launched products and expand into different call points and frankly just handling the additional patients.

R&D spend is strictly driven by activities and as products advance there tends to be spending associated with that, all against the backdrop of a couple of profitability targets we've set for ourselves.

R&D as a percent of revenues to be peaking and coming down, and the first benchmark which is to be non-GAAP profitable in 2017, assuming drisapersen gets approved..

Just given some of the, I guess, positive data you generated recently, I'm just wondering if there is a period of time maybe some point later this year where you think it would make sense to revisit sort of longer term guidance?.

Well, we think about that question all the time and we'll continue to think about it..

All right. Thank you..

And our next question is from the line of Tim Lugo from William Blair. Please go ahead..

Thanks for taking the question.

Hank, can you review the carcinogenicity data you submitted to the FDA for drisapersen? I believe mipo (01:06:31) had some preclinical signals, which made it on to their label, I know, was discussed pretty significantly during that AdComm, maybe if you could just review the current data for drisa (1:06:42) to-date?.

Wow, I am going to have to get back to you on that one, Tim. I am pretty sure that we haven't even launched the carcinogenicity study for drisapersen, but I got to get back to you on that..

Okay. That's fine. And....

(01:06:59) – whatever we did or didn't do....

Right..

...we are – our submission has been accepted for filing..

Good to hear. Thanks for the question..

And that concludes our Q&A session. I would like to turn the call back to our CEO, J.J. Bienaimé. Please go ahead with your final remarks..

Thank you. So in summary, the commercial side of the business continues to deliver strong results moving us closer to anticipated non-GAAP operating profitability in 2017.

In the second half of the year, we are poised to achieve a number of value-creating events including the potential near term approval of drisapersen and further expansion of our broad DMD franchise with the progression of our additional excess keepers in our pipeline, continued market penetration across all our commercial territories with our newest product Vimizim, clinical advancement of vosoritide for the treatment of achondroplasia to include pivotal study planning using the 15 microgram per kilogram daily dose, and continued enrollment of the fourth cohort using 30 microgram per kilogram daily, and also we're planning an infant study to explore treatment in the under five year of age population.

The combination of the Phase 1/2 study with cerliponase alfa for the treatment CLN2 disorders and the planning of – for our new study in patients who have been diagnosed, but have not yet displayed symptoms of the disease in order to see if treatment can prevent neurological and motor skills declining in these patients, and also the continued cultivation of our legacy products including Naglazyme and Kuvan, which will help drive our path to profitability.

So we thank you for your continued support and for joining us on today's call..

Thank you for participating in today's conference. This concludes the program, and you may all disconnect. Have a wonderful day, everyone..