Welcome to the BioMarin Fourth Quarter and Full Year 2020 Financial Results Conference Call. Hosting the conference call today from BioMarin is Traci McCarty, Vice President of Investor Relations. Please go ahead, Traci..

Thank you, Nicola, and thank you everyone for joining us today.

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 progress of BioMarin's product programs, actions of regulatory authorities, availability of capital, future actions in the pharmaceutical markets and developments by competitors, and those factors detailed in BioMarin's filings with the Securities and Exchange Commission such as 10-Q, 10-K and 8-K reports.

On the call remotely from BioMarin management today are J.J. Bienaime, Chairman and Chief Executive Officer; Jeff Ajer, Executive Vice President and Chief Commercial Officer; Hank Fuchs, President, Worldwide Research and Development; and Brian Mueller, Executive Vice President and Chief Financial Officer.

We do hope to keep this call to one hour today, so we respectfully request that you limit yourself to one question during the Q&A portion of the call. Thank you for your understanding. I'll now turn the call over to our Chairman and CEO, J.J. Bienaime..

Thank you, Traci. Good afternoon and thank you for joining us on today's call. We delivered strong results in the fourth quarter and full year 2020 demonstrating our continued operational excellence despite challenges brought about by the global COVID-19 pandemic.

Excluding Kuvan contributions, BioMarin revenues grew 13% in 2020 as compared to the full year 2019 revenue. And the company generated $85 million of positive operating cash flows for the full year 2020, underscoring our resilience in a challenging environment and the significant unmet needs our medicines address.

Our 2021 guidance does assume that the business environment remains good due to the ongoing effect of the pandemic, but also reflects the underlying global demand for our commercial brands. Excluding Kuvan, again, we present contributions in 2021.

We expect 9% growth in BioMarin marketed product revenue based on the midpoint of today's full year 2021 revenue guidance. We also expect continued positive operating cash flows for the full year 2021 both important indicators of the strength of our global brand. And in a moment Jeff will provide more details on these market dynamics.

Turning to our late-stage R&D programs and upcoming milestones, we are planning for a number of key events that we expect will drive substantial value over the coming quarters.

Beginning with our European regulatory update, first with Vosoritide for the treatment of children with achondroplasia, we are targeting a CHMP opinion this June followed by the European Commission decision in late summer leading to a potential commercial launch in Europe this fall.

To highlight the significance of these key regulatory milestones, we anticipate that vosoritide revenues ex-U.S. over the next five years, represents close to 70% of our anticipated global revenues.

Vosoritide continues to advance as planned, and we are optimistic that investors will share the same degrees of enthusiasm, the first pharmacological treatment to address the underlying genetic cause of achondroplasia that we have experienced from the patient community.

In Europe, with ROCTAVIAN gene therapy for severe hemophilia, we are also tracking the plan as we prepare for the resubmission of our marketing application in the second quarter of this year, next quarter.

So assuming we remain on anticipated time lines in Europe, this could potentially lead to a ROCTAVIAN CHMP opinion in the first half of next year with potential European launch in the third quarter of 2022. As a reminder, we believe that there are three times as many severe hemophilia patients in Europe as compared to North America.

In the United States with both vosoritide and ROCTAVIAN, we are focused on providing additional Phase III data to inform FDA's reviews of these highly innovative products.

We look forward to providing the FDA with the recently available vosoritide Phase III results that demonstrated sustained growth effects for over two years in children with achondroplasia, further corroborating the vosoritide treatment effect and the long-term durability as will be required for the product total benefit to accrue.

In addition, a few patients from Phase I/II RNA or at near final adult height, so that is substantially in excess of that which their Asian gender match peers would have achieved. That is great news for these patients and the patient community. So this shows that vosoritide addresses the underlying cause of achondroplasia.

And that has always been our call, so that the patients may benefit in ways that go beyond statural gain. We believe that results to date across our Phase III and Phase II programs are supportive of vosoritide becoming the first pharmacological treatment for this condition.

With ROCTAVIAN in the United States, we are planning to dialogue with the FDA to explore the potential submission of the BLA based on available one-year data package as planned for submission to the EMA. With provision of two-year data during the review period.

We recently convened a meeting with an expert advisory council to seek community and expert advice into our overall strategy and regulatory considerations. The council provided us with positive feedback on the data based on the dramatic bleed control demonstrated with ROCTAVIAN treatment.

We were pleased with the feedback and insight into the regulatory strategy and the approvability of ROCTAVIAN, and we look forward to further engagement with both the FDA and the EMA. And Hank, in a few minutes, will provide more details on the feedback. Moving to our earlier stage pipeline. We have numerous programs advancing this year.

Starting with BMN 307 gene therapy for PKU, we are pleased to share that we are moving to the next higher dose in our Phase I/II studies, advancing the third potential treatment modality for our PKU franchise.

We are encouraged by the Phe lowering and safety results observed in the first 2e13 dose cohorts in our Phase I/II study, and we are now ready to move the next dose of 2e13, which is similar to the ROCTAVIAN dose.

Based on this early data from the 2e13 cohort and our prior steep dose response experience with ROCTAVIAN, we are optimistic that the 6e13 dose will be our optimal dose. We will share the next update on the BMN 307 from the dose confirmation phase of this study once we have selected the dose for registration-enabling study.

In addition to BMN 307, we have four other earlier stage programs advancing that span a variety of therapeutic modalities and indications including an oligonucleotide for Duchenne muscular dystrophy, gene therapy products for hereditary angioedema and also hypertrophic cardiomyopathies, respectively, and a small molecule for a subset of a chronic renal disease.

In conclusion, despite the challenges faced against the backdrop of the global pandemic, demand for BioMarin medicines drove strong results in 2020, and we are expected to grow 9% in 2021, again, excluding the contribution from Kuvan we see facing generic competition in the U.S.

So we look forward to this new year and the goals that lie ahead over the coming quarters.

With our foundation of brands that constitute a strong base business driving positive operating cash flow, enabling the advancement of our next significant product opportunities with vosoritide and ROCTAVIAN, we are well positioned for substantial growth over the coming quarters, and we anticipate significant revenue growth starting in 2022.

After vosoritide and ROCTAVIAN, we look forward towards our earlier-stage pipeline to ensure a steady flow of new product opportunities on the medium and long-term horizon. Hank will search on these programs in a moment.

And finally, I just want to add that we ended 2020 with over $1.3 billion in cash and investments, and we anticipate being operating cash flow positive this year. So thank you for your continued support. And I will now turn the call over to Jeff for a discussion on of our commercial business.

Jeff?.

Thank you, J.J. 2020 presented the world with extraordinary circumstances and challenges, so I am especially pleased with the performance and determination of our commercial teams through the year. Their efforts resulted in the mitigation of impact from both COVID-19 and the loss of exclusivity of Kuvan in the United States.

Despite these headwinds, our teams across the globe collectively contributed to 9% year-over-year growth in total revenues for the full year, delivering $1.86 billion. Excluding Kuvan contributions in 2020, our base business grew 13% year-over-year, an impressive result against the backdrop of the pandemic.

We saw healthy revenue growth from our smaller newer brands and maintained our mature enzyme replacement therapy business against threats from COVID-19.

A notable milestone in the year, Brineura crossed over the $100 million revenue mark, fueled by continued starts in high patient compliance as clinicians continue to recognize the importance of early diagnosis and treatment of CLN2.

In 2021, we expect Brineura to continue its growth trajectory and anticipate an approximate 18% increase as compared to 2020 at the midpoint of guidance. Looking more specifically at the quarterly results, BioMarin revenues in Q4 totaled $452 million or essentially flat to Q4 2019.

I'll take a few moments now to share individual product details specific to the fourth quarter. Focusing first on Palynziq, we're reporting $49.6 million in revenue for the fourth quarter, a 56% increase over the fourth quarter of 2019.

For the full year 2020, Palynziq sales totaled $171 million, representing a 97% increase as compared to the full year 2019 results. The majority of that growth came from the U.S., where new patient identification starts continued, albeit at an inconsistent pace due to clinic closures from COVID.

Throughout the year, we observed PKU clinics impacted, but adapting to dynamic COVID case surges and despite factors outside of our control, new patient growth continued. We exited the year with approximately 1,000 patients in the U.S.

on commercial therapy, an impressive milestone, but only a fraction of the amenable patient population, given the approximate 30,000 PKU adults in our global territories.

In Europe, COVID-19 proved particularly disruptive to Palynziq uptake due to clinic closures as well as pricing and reimbursement negotiations that were disrupted as health care systems focused on the COVID-19 pandemic.

As we begin 2021, we have an expectation of making progress on both price and reimbursement approvals and patient starts and that Europe will contribute more materially throughout the year.

In its third full calendar year on the market, and even considering the likely continuing impact from COVID, we are expecting a remarkable 35% increase in revenue growth based on the midpoint guidance for Palynziq in 2021, making it the largest expected growth driver in the portfolio. Kuvan, which experienced the loss of exclusivity in the U.S.

beginning in October 2020, had total revenues in the quarter of $89 million, an anticipated decrease of 27% compared to Q4 2020 and almost exclusively associated with the impact from the generic competition in the U.S.

We expect to continue to experience erosion of the revenues in the United States, although not a catastrophic loss of share, due in part to strategies we have taken to retaining market share. Our expectations for erosion of U.S. sales are captured in the full year revenue guidance provided for Kuvan.

Turning now to our lysosomal storage disease products, I've commented in prior calls on the successful mitigation tactics quickly employed in the first months of the pandemic to ensure continuity of infusions for enzyme replacement patients.

As a result, we exited the year close to baseline patient compliance for all three brands, Vimizim, Naglazyme and Brineura. During 2020, we experienced new patient identification and resulting new patient starts occurring at a slower-than-anticipated pace due to the impact from COVID-19.

In spite of that, commercial patient accounts for Naglazyme and Vimizim grew by 5% and 9%, respectively. As mature brands, we are highly penetrated of known MPS VI in more TOA patients and continued growth for these brands is highly dependent on newly identified patients.

The kind of patient growth experienced last year bodes well for continued future growth and demand for both brands. At the midpoint, we expect Naglazyme revenue to decrease by 3% in 2021. That is entirely a result of expected order timing for certain markets, primarily Brazil, relative to actual orders in 2020.

At the midpoint, we expect 8% growth in Vimizim revenue in 2021. In 2021, we will continue our launch readiness effort for vosoritide, which we expect to be our largest brand to date, if approved. We are busily preparing for our possible launches in our two largest regions, North America and EMEA, in the second half of the year.

With two applications moving forward in parallel, we have two complementary and attractive commercial opportunities ahead. Based on our experience, the U.S. typically presents a large market characterized with rapid payer approvals, rapid patient uptake and favorable pricing. In a scenario of parallel launches, we expect the U.S. to drive early revenue.

Collectively, Europe presents a larger market opportunity based on larger patient populations. As has typically been the case with our European product launches, the pace of revenue uptake is slower initially as individual markets take time to navigate price and reimbursement approvals.

Over several years, the larger EU market drives mid- to longer-term revenue growth and with other international markets, becomes the engine of revenue growth for the long-term.

To put this into perspective, the pool of patients in our EMEA operating regions, an important indicator of market potential is roughly 3 times the size of that of the United States. When considering estimates of achondroplasia patients with open growth plate and severe Hemophilia A patients. Pricing corridors are similar between U.S.

and early new markets in particular. These comments summarize our experience generally with our marketed brands and it can apply to both the vosoritide, ROCTAVIAN and future pipeline programs.

As we get closer to potential approvals for vosoritide, we will look forward to coming back to you with more details on our efforts to prepare for commercial launches, including our pricing strategy.

In summary and looking forward, we expect continued growth in our base business with the exception of Kuvan, where further erosion of the base is expected in 2021. Palynziq will be the largest growth driver as a single brand, with stronger sales in the U.S. and material growth from Europe.

Vimizim and Brineura will continue on their growth trajectory appropriate to each brand's stage of life cycle, and we will be prepared for a successful launch of vosoritide once approved. Thank you. And now I'd like to turn the call over to Hank.

Hank?.

Thanks, Jeff. Then I, too, would like to congratulate and thank the commercial team for delivering medicines around the world in spite of all this uncertainty and also congratulate and thank the R&D team for their resilience and commitment and efforts in a year of high uncertainty in 2020. As J.J.

conveyed, we look forward to a number of important regulatory events in 2021 based on strong Phase III results, both from our vosoritide and ROCTAVIAN programs that we experienced towards the end of last year and the beginning of this year.

Accumulating data on durability of our products suggests meaningful clinical benefits will be maintained and therefore, we remain optimistic about the potential of these two innovative therapies to be transformative to the people who need them. We were pleased to begin 2021 with positive Phase III ROCTAVIAN results.

To remind you, GENEr8-1 is the largest global Phase III study to date for any gene therapy in any indication, having enrolled 134 participants. Compared to before gene therapy, there was an 84% reduction in annualized bleeding rate from 4.8 while on standard of care prophylactic Factor VIII therapy replacement.

And before treatment with ROCTAVIAN, to 0.8 bleeds per year after receiving ROCTAVIAN. The treatment burden of this condition in terms of mean annualized Factor VIII infusion rate in the rollover population was also substantially reduced by 99% from 136 infusions to 2 infusions per year after treatment with ROCTAVIAN.

80% of the participants were bleed-free starting at week 5 after treatment in the Phase III study, again, in spite of the withdrawal prophylactic Factor VIII therapy. The findings of the study were all statistically significant as prospectively specified.

Additionally, in 17 patients who had received ROCTAVIAN two or more years prior to the data cutoff, the decline in Factor VIII activity level was observed. However, Factor VIII levels remained in a range to produce meaningful hemostatic efficacy, and the annualized bleeding rate was also very low at less than one bleed per year.

In fact, Factor VIII levels at this time point were higher than those observed entering the third year of follow-up after the 4e13 dose was administered to an earlier cohort who also experienced an ABR of less than 1 in that third subsequent year.

Therefore, the growing body of evidence supporting the clinical benefit of ROCTAVIAN and its durability for people with severe hemophilia A has been very encouraging and a tremendous gain for the field and the scientific community. As J.J. mentioned, we recently held an expert advisory council meeting with former U.S.

and EU regulators from both the FDA and EMA.

Key statistical experts deeply experienced in both the advisory committee process in the United States and the scientific advice process in Europe, physicians and patients to gain insight into the best path forward, given the accumulating evidence, demonstrating dramatic bleed control in patients and people receiving ROCTAVIAN.

Additionally, feedback from patient advisory leaders provide helpful insights into the importance of patients to make informed choices and critical aspects to support the decision-making for patients and prescribers.

We are very encouraged with the feedback and the path forward for ROCTAVIAN approval based on results observed to date and assuming favorable outcomes continue.

We remain encouraged with the progress made to date and are continuing our dialogue with the Food and Drug Administration in the form of ongoing discussions, both with CBER, Center for Biologics Evaluation and Research leaders based on discussions with CBER leadership, and with the review division about potential path forward.

We have more to share with the agency over the coming months as the Phase III program continues to mature with the phase – with the two-year data for all subjects available in late November, which is important feedback from the expert advisory council based on the dramatic bleed control demonstrated across our ROCTAVIAN program.

We aspire to dialogue with the agency on potentially submitting a BLA with one-year results that could be supplemented with two-year results during review. This is our current thought process, and actual guidance on next steps will be forthcoming as we continue our dialogue with the FDA over the coming months.

We and the agency are intending to be deliberate in the review and take the time necessary to ensure careful examination of risks and benefits, but also ensure appropriate product label and risk management procedures in the marketplace.

In Europe, we're targeting 2Q 2021 for resubmission of the marketing application authorization, pending confirmation of upcoming presubmission meetings. Under this timing, we could potentially receive a CHMP opinion in the first half of 2022. We've been engaging with the European health authority since the one-year data became available.

And we are encouraged that the application review will be in progress as the two-year data become available and are prepared to share it should that be beneficial to supplement to the package. Given procedural considerations, it's likely that ROCTAVIAN will be approved after the second year of data in the Phase III are available.

And therefore, our hope and intention is to shorten the interval between data availability and regulatory actions as much as possible with a goal to enable physicians and patients to have an additional therapeutic choice in their armamentarium.

As for the ongoing Phase II study, we intend to share a five-year update with the 6e13 dose as well as a four-year update on the 4e13 dose in the middle of this year.

The importance of the ROCTAVIAN five-year update and continued durability of bleed control is a key focus, and we hope to see results consistent with what has been observed through year four.

Recall that almost all patients remain bleed-free in our prophylactic therapy for four and three years after gene therapy in spite of declining Factor VIII levels among participants.

Turning now to vosoritide for treatment of achondroplasia under review, both in the United States and Europe, we are very pleased to share positive two-year results from our Phase III program last December, demonstrating that children maintain an increase in annual growth velocity through the second year of continuous treatment.

A first analysis comparing all children randomized and treated with vosoritide for two years, 52 subjects, to all children from the run-in study who are randomized or placebo with an untreated observation period of two years in 38, showed improvement in one-year height change in the treated group relative to the untreated group that was similar in the second year of treatment, 1.79 and as in the first year of treatment, 1.73.

The cumulative increase in height gain over the two-year treatment period was 3.52 centimeters compared to untreated children, which is the sum of the first year, 1.73 and the second year at 1.79.

An important consideration in growth studies is the status of bone growth as measured radiographically and in comparison to the subjects' chronological age. Some agents promote rapid growth, but precipitate early closure of the growth rates, precluding gains from adding up over time.

In contrast, measures of bone maturation in patients treated with vosoritide confirm that vosoritide is promoting bone growth while maintaining and not accelerating bone maturity. This bodes well for accumulating treatment gains over time as growth plates are not expected to close prematurely.

Turning to vosoritide regulatory timing updates with the MAA under review in Europe, we look forward to a CHMP opinion in June followed by European Commission decision in late summer. If successful, this would enable Jeff's team to launch in Europe in the third quarter of this year.

In the United States, we've chosen to provide the two-year Phase III data to the FDA, given the opportunity to convey durability of treatment benefit in a larger number of patients.

While this may result in a major amendment pushing the current PDUFA action date out three months to November, we believe it is prudent to make these newly available and encouraging results available regardless of potential delay in approval timing.

Also new today, in January, FDA granted vosoritide priority review status based on the pediatric indication addresses and the lack of treatment options currently available. Vosoritide now qualifies for a priority review voucher upon approval, which would be the third PRV granted to BioMarin.

Consistent with the FDA's policies on changes to review classification for an ongoing application review, the PDUFA action date remains August 20, 2021. Turning to BMN 307, our investigational gene therapy for PKU, results from the starting dose in the PHEARLESS Phase II study demonstrating meaningful Phe lowering in the first two subjects.

The study will progress with a higher dose cohort, a three-fold higher dose 6e13 vested genomes per kilo. We're hopeful this test will be registration-enabling based on these early data from the 2e13 cohort in our prior steep first response experience with ROCTAVIAN.

We are conducting this study with material manufactured with a commercial-ready process to derisk the program and facilitate rapid clinical development. We are excited about the prospects of BMN 307 as it represents a potential third treatment option in our PKU franchise and our second gene therapy development program.

We look forward to sharing results from the dose confirmation phase of the study when we've selected dose registration-enabling studies. We doubled our early-stage pipeline in 2020 by internal growth and external partnerships, advancing several preclinical programs spanning multiple modalities.

With gene therapy beyond our ROCTAVIAN and PKU programs, we're conducting IND-enabling studies with BMN 331 gene therapy for hereditary angioedema. Our collaboration with DiNAQOR on hypertrophic cardiomyopathies, which we announced in May of last year is progressing well.

Together, we and DiNAQOR had achieved properly localized expression and function of myosin-binding protein C3 in culture human cardiomyocytes and cardiac stem cells derived organ – in cardiac stem cell-derived organoids and in vivo with several lead vectors. We plan to select our candidate vector in 2021 for this program.

And to commence non-clinical development studies to enable a subsequent IND filing. BMN 351 or DMD 2.0 or oligonucleotide therapy for the treatment Duchenne muscular dystrophy has demonstrated high level of protein expression in experimental animals possessing skippable dystrophic mutations and at doses that are promising in regard to safety.

BMN 255, our small molecule for chronic renal disease, for which we filed an IND in 2020, is also progressing well. And we hope to share more detail on these programs at our R&D date are tentatively planned for the second half of the year.

The R&D organization is very energized and very busy as we advance a wide range of early and late-stage programs to deliver on our goal of bringing transformative therapies to people with rare conditions. Thank you for your continued support. And now I'll turn the call over to Brian to review the financials for the quarter.

Brian?.

Thank you, Hank. Please refer to today's press release, summarizing our financial results for full details on the fourth quarter and full year of 2020. Since Jeff touched on many of the top line results from the commercial business, I will primarily focus on bottom line results, operating expenses and our 2021 guidance.

As usual, all results will be available in our upcoming Form 10-K, which we are on track to file over the next couple of days. In terms of the bottom line, for the full year 2020, we provided guidance for GAAP net income of between $760 million and $820 million, and have reported a better-than-guidance GAAP net income of $859 million for the year.

As a reminder, GAAP net income in 2020 includes the $835 million non-recurring tax benefit recorded in the third quarter of 2020 related to the transfer of certain intellectual property rights between BioMarin entities.

Importantly, we observed that BioMarin was able to generate positive GAAP net income for the first time in the company's history achieving our goal set at the beginning of the year, despite the strains on the business in 2020 and the handful of material non-recurring transactions recognized in 2020.

Turning to non-GAAP income where the company delivered $312 million for the full year 2020 within the higher range of our guidance and $40 million in the fourth quarter of 2020 driven by solid top-line results across the commercial portfolio and operating expense controls.

Non-GAAP income for the full year 2020 was 87% higher than non-GAAP income for the full year 2019, despite the impacts of COVID-19 and Kuvan loss of exclusivity in the U.S. since October of 2020. Moving to operating expenses, both R&D and SG&A expenses in the fourth quarter tracked with both recent trends and our 2020 guidance ranges.

R&D expenses were slightly lower year-over-year at $157 million and $628 million for the fourth quarter and full year 2020, respectively.

In the fourth quarter, R&D expenses primarily reflected our continued development of our late-stage programs, vosoritide and ROCTAVIAN as well as our early-stage programs in research, including BMN 307, our PKU gene therapy.

SG&A expenses for the quarter and full year 2020 were $196 million and $738 million, respectively, and were higher than 2019, reflecting the preparation for the potential commercial launches of vosoritide and ROCTAVIAN.

And lastly, for 2020, we finished the year with $1.35 billion of total cash and investments as compared to $1.17 billion at the end of 2019. December 2020 balances reflect both the $536 million of net convertible debt proceeds raised earlier in 2020 and the expected $375 million cash outflow upon the maturity of convertible notes in October of 2020.

The company generated $85 million of positive operating cash flows for the full year 2020, which is a great indicator for the health of BioMarin's base business, particularly considering the negative impacts of COVID-19 on our revenue. Now moving on to 2021 guidance.

Jeff touched on many of the brand dynamics and for total BioMarin top line, we expect 2021 total revenues to be in the range of $1.75 billion to $1.85 billion. Importantly, as discussed last quarter, 2021 total revenues reflect the impact of several headwinds, most notably are the impact of the Kuvan generic competition in the U.S.

since October of last year, and the continued impact of COVID-19 on our commercial business. Our guidance does not assume a rapid recovery and rebound from COVID-19 impact on our revenues, but our guidance does assume that the conditions and effects in our business will not worsen.

For example, our guidance assumes that we will be able to maintain similar levels of patient compliance with our therapy regimens and rates of new patient starts that we experienced during the pandemic in 2020.

While our total revenue expectations for 2021 are lower than 2020, we note that our core business, except for Kuvan, is still growing healthily with 9% growth at the midpoint of our guidance range.

And 1 comment on Aldurazyme, which is marketed by Sanofi Genzyme, and therefore, we do not provide specific guidance is that BioMarin Aldurazyme revenues in the fourth quarter of 2020 were low due to the timing of products applied to Sanofi Genzyme.

However, based on data provided to us by Sanofi Genzyme, Aldurazyme added 10% more commercial patients during 2020, the product's 17th year on the market, which is a solid indicator that the market demand is increasing despite BioMarin Aldurazyme revenue timing.

Lastly, on top line, while we remain optimistic that vosoritide and ROCTAVIAN will be approved and launched, we are not expecting significant revenues from either product in 2021. Shifting to bottom line expectations for 2021, we anticipate recognizing a GAAP net loss ranging from $80 million to $130 million.

And while our GAAP profitability goals are delayed, while we continue to develop vosoritide and ROCTAVIAN, we do expect to earn positive non-GAAP income in the range of $170 million to $220 million.

This significant amount of non-GAAP net income, plus our expectation to earn positive operating cash flows for the full year 2021, are again indicators of a healthy core business that is able to both generate approximately $1.8 billion of revenues and develop a high-value, late- and early-stage pipeline.

In closing, from a financial perspective, 2021 is a year where we plan to hold the line on both our revenues and bottom line due to the continued COVID-19 pandemic uncertainty and the pause in our substantial revenue and profitability growth aspiration.

As a reminder, if vosoritide and ROCTAVIAN are approved and launched, the commercial market opportunities for both of those potential products significantly exceed the market sizes of our current products.

Therefore, we believe the combination of the positive operating results expected from BioMarin's base business plus the growth potential from the company's large late-stage opportunities that will leverage the infrastructure of the base business, create a compelling value proposition that is further expanded by our commitment to early-stage innovative rare disease research.

Thank you for your support, and we will now open up the call to your questions.

Operator?.

Thank you. [Operator Instructions] Our first question comes from Robyn Karnauskas with Truist Securities. Your line is open..

Hi, guys. This is Kripa on for Robyn. Thank you so much for taking my questions. So it looks like you've been engaging with the FDA quite a bit in discussing the pivotal data from ROCTAVIAN.

Can you tell us how much of the data the agency has already seen? What additional data they need to see? And also, based on your commentary, during your engagement with the FDA, was there anything that gave you the indication that you will have to submit the two-year data for approval? Thank you so much..

Hi, there. The agency told us that they would expect to see the two-year data in the 134 patients before the product would be approved.

And they said that before the one year data were available and they repeated that after the one year data are available, in the short amount of time since the one year data is available, they've only been able to see the top line. But their stance really was predicted not to have changed given the one year data.

I think the one year data are strong and they anticipated that they'd be strong and they have reiterated their preference for making their approval data, their approval decision on the basis of having seen the two year data..

Great. And then you talked about the feedback you received from the external counsel. In addition to the feedback being generally positive, was there anything new you learned that you think it could help strengthen your case to get approval on the one year data..

No they – yes, well, we convene the ad council as a kind of our version of an advisory committee reasoning that we wanted to hear the worst possible version of our story as told to us by highly critical people.

And I would say that what we learned is, is that we have a pretty good program; one of our colleagues, who is incredibly disciplined reviewers characterized the results as impressively strong.

And I think the thing that we learned is that this is – it is really more like it was confirmed that the agency's decisions are more of a qualitative nature and that they're just going to feel more confident about the application when they see the two year data with the full 134 patients.

So we're working very closely with our colleagues to try to discern the most facile regulatory pathway. And at this point, these are, to some extent, largely procedural discussions..

Our next question is from Cory Kasimov with JP Morgan. You line is open..

Hey, good afternoon guys. Thanks for taking the question. Hank, you were hard to understand on some of your scripts. So, I just want to make sure I got this correct.

It sounds like based on that independent expert counsel and preliminary discussions with the agency, that you may resubmit the ROCTAVIAN BLA on one-year of data and supplement that mid- review with the two-year.

So, assuming I did hear that correct, I guess, when do you expect to finalize this? And is this latest thinking, which sounds like a pseudo acceleration from what we were talking about earlier this year? Is this being driven more by the feedback you got from this outside counsel or more by the conversations with the FDA today?.

Cory, you heard correctly in a little bit of both. I think on the one hand, the data package is impressive. On the other hand, people sort of novel therapy and hemophilia patients are deserving of a very careful examination of the data. And the part that is a little bit is out of our control.

It's just sort of, like I said, a procedural part, which is when do agencies have bandwidth and capacity to take on an additional chunk of data for review.

Would they prefer to get started before the two-year data are available, knowing that the two-year data are going to be available for them when they finish? Or do they want to get started after that? And those are discussions that we're having.

There are a lot of examples where agencies accept data during review, and there are a lot of examples where the agency just doesn't want to get themselves in a position of accepting the data. And oftentimes, that hasn't had anything to do with necessarily what the data are. It has to do sometimes with other circumstances that the reviewers have.

As I mentioned, for example, at the end of last year, with the EMA, their preference for reviewing the additional data was entirely procedural related to staffing levels within the EMA and the rapporteurs. So, these are discussions that ordinarily don't get a lot of attention in terms of synchronizing things.

I know there's a lot of interest in regulatory actions on ROCTAVIAN. I think that we're encouraged with really good data, turned out the way we expected it to turn out at the one-year mark.

And given what we've seen in our earlier trials, we have a reason to believe that things will turn out positively with the two-year data, and it's a matter of being patient and collaborating with them to assure that the review has given the full attention of reserves..

Okay.

And did you say there were ex-regulatory officials on this committee?.

Oh yes, very senior, very seasoned, top-of-the-shelf..

Okay, perfect. Thank you very much..

Our next question is from Salveen Richter with Goldman Sachs. Your line is open..

Good afternoon. Thanks for taking my questions.

Could you just talk about the commercial dynamics playing out with your PKU franchise and how you made the assumption of erosion to Kuvan in your guidance? And what's playing out to offset that with Palynziq?.

Jeff, do you want to cover that question?.

one, we don't have any enterprise experience with loss of exclusivity of a product in a major market; and two, there's very few analogs to look to, to guide expectations.

And so, we've guided that we think we would experience material, but not catastrophic, loss of share, like you might see in a detail prescription driven product that goes generic, for example.

And indeed, if you look at the drop of revenue in the fourth quarter of last year, for Kuvan relative to the fourth quarter of 2019, we were really right on top of our internal expectations.

If you then look further at the 2020 revenue, the midpoint of the guidance, that captures our expectations for the further erosion of that Kuvan business in the United States. Now let's turn to our expectations for Palynziq.

Both products are part of the same PKU franchise, that their paths are now relatively disconnected, so our expectations for what happens with Palynziq is not highly tied to what happens with Kuvan now in the marketplace.

It is true that we have a great base of business of Kuvan and a great deal of patient-level knowledge, particularly in the United States. And it is true that about 30% of our Palynziq patients have transitioned from PKU.

So, these would-be patients that are not achieving a desired strength of clinical benefit from Kuvan and that are thus appropriate for a more powerful agent in Palynziq.

And so, we continue to expect that we would be tapping into adults that have not received an adequate benefit from Kuvan, but those two products are essentially on different paths at this point..

Thank you..

Our next question is from Phil Nadeau with Cowen & Company. Your line is open..

Good afternoon. Thanks for taking my question. Hank, your comments on procedural benefits on the ROCTAVIAN refiling was intriguing for me. And I guess I'm trying to work through in my head what would be more advantageous for BioMarin for the FDA filing early versus following after you have the Phase 2 data.

I guess what strikes me is from a BioMarin perspective, if they're going to give you a three-month PDUFA extension, when you follow the two-year data anyway, it doesn't really buy you that much time to file early.

But conversely, I guess, for the FDA, maybe it gives them more time to contemplate the full range of the data, both the one year and two years.

So, I guess, how are you thinking what would be most advantageous to you based on what you think the FDA's needs, questions and maybe concerns are about the data package?.

The thing I focus on is when do we think we're going to finish. Because that's obviously the point in time in which patients have a different choice available for them. And you could do the gain theory in both directions, like you just said.

The part that we don't know about is what's the workload and what are the considerations on their side? And how much time – where do they leave the complete response letter off in the U.S.

We still have inspection to do, how do they – how do they see the management of their workload? And so, I think we just need a little bit more information from them about what their preferences are. But our focus is going to be on getting their decision on the one hand and in the most expeditious way possible.

And on the other hand, to ensure that their review is thorough and the considerations for product labeling are appropriate and under – well understood and that our post-approval commitments and risk management plans are the right ones.

I think there's a lot of work that we could be done – that can be done before the two-year data, but they may choose to decide to wait for the two-year data before they get started. So, it's a bit of a wait and see in how everybody's looking for certainty about this, and we're working hard to deliver it.

And our focus is on trying to enable a choice for patients with Hemophilia A..

And just a brief follow-up, will they be definitive on what they prefer when you have your meeting with them? Or when you conclude your conversations, that it sounds like they're ongoing now?.

I think that we will be in a much better position to provide information after we've had a couple more dialogues with them. As to definitive, that's always a hard thing with the FDA, not so sure with respect to the time. You submit, they file. So, a bit of a stay tuned on the U.S. regulatory status..

Perfect. Thanks for taking my questions..

Our next question is from Chris Raymond with Piper Sandler. Your line is open..

Thanks. So, I wanted to just probe maybe a little bit more on the PKU commercial dynamic. I heard your comments, Jeff, around how Kuvan and Palynziq are somewhat disconnected. But I guess it sounds to me like you – as you described the Kuvan erosion dynamic, it might be more price-driven than share driven.

So, you guys would seem to maybe have a little bit more control over that conversion dynamic than otherwise. But maybe more importantly, I guess, as I see it, it seems like you'd have a pretty decent sense of any kind of patient warehousing effect that might happen as the effects of the pandemic wane in sort of that timing.

Can you maybe give a little bit more color around that, Jeff, and in terms of what you're seeing, in terms of warehousing? Is this even something we should be asking about, I guess, as we think about the infection rate and all the other measures and metrics of the pandemic change over time?.

Thanks, Chris. So good observations on your part. Maybe I'd start with saying that without disclosing details that would constitute competitive intelligence for one of our competitors, it is true that our revenue from Kuvan loss of exclusivity is both a price and a volume mix. So you're right on that point.

In terms of patient warehousing, it's a great question. The rate-limiting step for growth of Palynziq in the United States has always been clinic capacity, and that condition existed before the pandemic hit.

And when I say clinic capacity, I mean the ability and willingness of clinics to be prescribing Palynziq and inducting patients and titrating them up on dose, either one patient at a time or maybe small multiples of patients at a time.

And so as clinics were closed down last year and as clinics continue to be operating under reduced capacity this year, it's really that clinic – PKU clinic capacity for dealing with new patients that's the rate-limiting step to growth of our business.

It – so how does that point to a warehousing effect? Certainly, there will be patients that are wanting access to Palynziq and waiting for their clinics to either have the capacity or to be back in operation to be able to help them on Palynziq, get a prescription, induct, titrate and get to a maintenance phase. Certainly, that will be the case.

We'll still be dealing with overall clinic capacity during this year. Hopefully, the pandemic will let up. But one way or another, we're back to the issue of PKU clinic capacity as the rate-limiting step.

I'm looking forward to working with clinics in the U.S., in particular, and meeting the demand from patients that maybe in that kind of warehouse category..

Okay, thank you..

Our next question is from Geoff Meacham with Bank of America. Your line is open..

Hi, guys. Thanks for the question. I also wanted to focus a bit on guidance. When I look at other commercial biotechs or pharmas, I didn't hear a lot about the continued COVID impact or headwind for this year. So I want to dig in to the guidance, not for the whole portfolio, not just PKU.

Is it more the geographic mix? Is it the orphan nature of your business that you're still seeing a COVID impact? I didn't hear from you that there are headwinds on new starts or compliance. And so, I'm just trying to figure out the delta here. Thank you..

Jeff?.

Yes. Thanks, Geoff, for the question. So we did try to address some of the dynamics of how the pandemic is affecting our business in the guidance. And so one of the things that we said was we're exiting 2020, having at least for now, pretty much solved the patient compliance problems that we experienced early last year.

So things could turn around on that front. But right now, we think that we've got patient compliance under control. The bigger issue that we pointed to in the script is the rate of new patient identification and new patient starts.

So last year, we did, in fact, have material new patients for Naglazyme, 5% patient growth; Vimizim, 9% patient growth; and Palynziq, you can read that from the revenue growth.

But as I described just a moment ago, the rate of new patient starts for Palynziq was severely impacted by COVID-19 last year, and will continue to be impacted this year until PKU clinics kind of get back to operating as normally pre-pandemic. And even then, we've got the clinic capacity issue as an overall gating factor.

For the enzymes, we're expecting that the new patient starts will continue to be slower than we would have expected had there not been the COVID-19 pandemic. So it's kind of that new business, the results from patient identification and patient starts for our LSD brands that are affected there.

And you're right, it may be – these dynamics may be unique to BioMarin's enzyme replacement therapy and PKU business globally relative to some of the other companies you're covering..

And if I may add, Geoff, regarding specifically Palynziq, the issue here is that, as you might remember, Palynziq revenues really start kicking in four months or so after initiation of treatment because of the titration period. And in the first three to fourth months or so, the revenues generated per patients are pretty limited.

And consequently here, since we had the PKU clinics were closed for most of 2020, and then we're starting to reopen. And then when the second wave hit in the winter starting in November, they closed again and until January, they're starting to reopen now.

So in a sense, we've missed a lot of new patient starts, even in Q4 of last year, which are impacting the revenue this year. But again, the good news is that with the vaccinations and the pandemic hopefully going away, those clinics are going to reopen. And that's going to allow us to accelerate the growth of Palynziq again..

Got you. Okay..

Geoff? Geoff, sorry, this is Brian Mueller. I thought I'd just chime in. Yes, clarify. So we're trying to clarify that the headwind, the COVID headwind is still there, but the assumption in our guidance is that it won't worsen. So even during 2020, we were able to add new patients, albeit at a slower rate due to the pandemic.

We had some disruption in weekly infusion, which we were largely able to recover. So we're assuming we're going to be able to maintain the current level in 2021..

Okay. Thanks for the clarification guys..

Our next question is from Paul Matteis with Stifel. Your line is open..

This is Thor on for Paul.

Quick question on HAE, given kind of like the evolving competitive landscape, what are you kind of assuming? And what are you expecting to need to hit with the gene therapy to be competitive in that space?.

I think one think one simple way of looking at therapies for which they're conditions for which there are therapies is the extent to which the available therapies carry their own burden in the condition. And clearly, that's the case in hemophilia A. Clearly, that's the case in PKU.

And similarly, in HAE, you can get reasonably low attack rates, but it requires a high degree of compliance, which is not easily maintained and patients are looking for the opportunity essentially to be attack-free and prophylaxis-free.

And as we've shown with ROCTAVIAN, I think with ROCTAVIAN, we've had – of the 134 patients, I think, two have returned to prophylactic Factor VIII replacement therapy and our long-term studies three and four years. Nobody's returned to prophylactic factor therapy and bleed rates are very low.

So an HAE population, I think, we'd want the same sort of thing, which is a meaningful proportion of patients experiencing no attacks and no need for prophylaxis. And I think that would be an important therapeutic advance for some of these patients..

Great, thanks..

Our next question is from Akash Tewari with Wolfe Research. Your line is open..

Thanks a lot. So it looks like consensus models have operating margins approaching 25% by next year and 42% by 2024.

Given the delays in the vosoritide and Valrox, do you feel like those figures are hittable organically? And has there been any discussions internally about how to improve the cost structure beyond just COGS, but maybe to R&D and SG&A? And do we know broad strokes what's baked in for 2021 R&D spend for vosoritide and Valrox? Thanks..

Brian, do you want to take this one?.

Yes. I can take that, J.J. Thanks, yes. Thanks for the question. And you touched on one of the key elements we view in our value proposition, which is both margin growth and profitability growth with the potential of vosoritide and ROCTAVIAN.

So while we haven't given long-term guidance, we talked about the larger market potential for both of those potential products and the leverage to your question that we hope to get out of our existing infrastructure.

So the infrastructure we built, whether it be sales and marketing or R&D support or G&A support that we got in place today to support the $2 billion of revenue and non-GAAP income at a positive level, which you can approximate to operating profits. It's that same infrastructure that we plan to use to launch vosoritide and ROCTAVIAN.

So while there's going to be some incremental investments for both of those products, we expect a lot of those revenues to drop to our profit margin. And beside those, we also expect lower cost of goods sold from those two products. So while we're not giving specific numbers for the future, that's how you can think about the trajectory, the P&L.

And on R&D, we do want to increase the investment in R&D. We've got an exciting early-stage pipeline and research engine that we want to continue to fund, but we believe we can do that and increase R&D on an absolute dollar basis. But reduce it as a percentage of revenue, thereby increasing profits.

And I think you asked about vosoritide and ROCTAVIAN R&D specifically, we don't give specific product-level R&D guidance, but with both of those products still being in registration and requiring a lot of our internal efforts. And you'll see this – we do disclose historical R&D by program in our 10-K. So you'll see that when we file the K.

You can expect similar levels of ROCTAVIAN and vosoritide R&D this year.

Did that help?.

Yes. Thanks so much..

Thanks..

Your next question comes from the line of Kennen MacKay of RBC Capital Markets. Your line is open..

Hi, thanks for taking the question, and congrats on wrapping up 2020 on a strong note. Maybe just another question on Kuvan.

I would love to understand a little bit more just what the assumptions are around – built into the guidance around additional generics entering the market, if that's something, again, after that six-month exclusivity period you sort of built into guidance? Or again, just sort of what is built into guidance there? Thank you, again..

I'll start, and then maybe Jeff or Brian, you can comment. But at this time, we don't anticipate any – we only anticipate one additional generic this year because I think there is no other – there is no pure generic so far that has filed for an IND application in the U.S. So we do assume that the second generic will be launching this year.

Jeff or Brian, do you want to add something to this?.

Yes. It is our assumption, J.J. .

Jeff? Maybe on the impact of the second generic. .

Yes. Maybe just – yes, just very briefly. So we were aware and expecting two generic entries. We haven't seen, as J.J.

said, a third generic entry and relative to our expectation that we can retain some meaningful share of Kuvan business in 2021, our modeling suggests that it's exactly when you see a third, fourth, fifth generic enter the market that it becomes difficult to retain that share.

So our assumption right now is two generics, we can retain meaningful share in the U.S..

Next question, please operator..

Yes, ma'am. Your next question is from Gena Wang of Barclays. Your line is open. .

Thank for taking my questions. Just two very quick regarding the gene therapy. First is ROCTAVIAN.

Hank, did I hear you correctly for EMA approval, they actually, given the time line, they likely also will see the two-year data? If that's the case, would there be any requirement for approval regarding the two-year data for EMA? And the second question is regarding the PKU gene therapy.

So if I recall correctly, the first dose of the 2e13, and what kind of factor or data type from the initial dose make you decided to choose 6e13 as a second dose?.

Yes. Hi Gena, I'll do the second one first. We used the 2e13 dose as a starting dose that was based on preclinical studies where we thought there was a decent chance to see some efficacy. And indeed, we did see some evidence of effectiveness.

And we had preplanned that dose intervals would proceed in half log, meaning we would go from 2 to 6e13 and we're not anywhere close to as concerned about the potential for overexpression with phenylalanine hydroxylase as we were in consideration of it for ROCTAVIAN.

Because we've shown that you can't really get a Phe – you can't get really sick from a low Phe. And the enzyme is such that it shouldn't cause low Phe. So we were – we skipped the 4e step, if you will, and went to the 6e step as originally planned.

And given the steep dose response curve that we observed with ROCTAVIAN and the initial signs of efficacy that we've seen both in terms of Phe lowering, but also relatively low, no evidence of liver dysfunction from the transgene, we're encouraged to take the next step at 6e13.

Then As far as your question about the EMA, I think it's important to understand that these procedures with the health authorities takes some time and that when you talk about, well, we have the one-year data and then the two-year data are available one-year later. For the EMA, that's almost the length of a review cycle.

So you have to imagine that they're going to have to go through the intellectual process of thinking through where do they want that data, at what time point and what role will it play in the decision. And as I've said before, the Europeans were less focused on the two-year data than the FDA were.

So again, these are discussions with the health authorities that we have to have about their procedures, their timing, their considerations, what they think they need in terms of ensuring effective, adequate time for review. So we'll be in discussion about that.

We have not received anything from the EMA that says anything different than we've represented to you before, that is – we believe that the one-year data are very important to them, and we're just acknowledging that reviews will not conclude until the two-year data are available. .

Did you get any feedback regarding minimum to ABR rate they will be looking for just directionally, for two years?.

No. But I'll – but what is clear is, like I said, the – even the hard – even hard-edge reviewers view our reduction in the annualized bleeding rate from 4.8 to less than 1. And it's been less than 1 more or less everywhere we looked.

The second year after gene transfer with the Phase III material, the third year after gene transfer of 4e13, the fourth year after gene transfer with 6e13, by and large, these are very low annualized bleeding rates. And so I don't think there's any real quarrel with the magnitude as the activity on the clinical endpoint.

The issue of the CRL, as we've talked about, is the ability to project the future trajectories of Factor VIII expression. And with two years of data on animal [indiscernible] lay the issue to – maybe not rest, but at least know how to characterize it in the product label and a benefit risk decision. .

Great. Thank you. .

Your next question is from Matthew Harrison of Morgan Stanley. Your line is open..

Hello everyone, this is Kostas on for Matthew. One quick question on vosoritide.

Can you provide some color around the launch preparation in Europe? And how are you thinking about pricing?.

Jeff, you want to cover that?.

Yes, happy to. So I'll go back to some of the things we said in the prepared remarks. One is Europe represents a very, very large patient opportunity for us over time. And in Europe, it takes a little time to go market-by-market, navigate pricing reimbursement approvals, get patients started and generating revenues.

But we really expect Europe to be the long-term driver of revenue for vosoritide. In terms of pricing, we've done a fair amount of pricing research in the U.S. and in Europe. And we – as is typical for our practice, we won't set a price until we've gotten approval, we've got a label, that sort of thing.

But we think that pricing corridors between our initial European markets, call that, France, Germany, Italy, for example, and the United States, will be relatively similar for list pricing in particular.

And as we've guided to previously, based on the size of the patient population, we're probably not thinking about ERP types of pricing, maybe something more similar to Palynziq type of pricing for vosoritide.

And then in terms of launch preparations, achondroplasia patients are – they – we don't need to go through the disease awareness and screening and patient identification. All of the achondroplasia patients are essentially known as having achondroplasia from her shortly after birth.

So that's an important step that we can skip, and it's a powerful step to skip. What we do have to do is we have to, upon launch, kind of track down and corral those achondroplasia patients and get them to an appropriate treatment home.

That treatment home, in some cases, might be geneticists and genetic clinics that we're already connected with or it might be a new specialty and a new call point for us like pediatric endocrinologists who are very accustomed to treating growth disorders, but who don't know achondroplasia because there's not been a treatment for achondroplasia, pharmacologic treatment to date.

So those are the kind of things, big things that we're focused on finding achondroplasia patients, where they exist today, lining up an appropriate treatment home from that – for them, and homing in on our final pricing strategy..

Very helpful. Thank you..

Your next question is from Mohit Bansal of Citigroup. Your line is open..

This is James on for Mohit. Just had a question. Since presenting the one year data in early January for ROCTAVIAN, were you able to engage in any discussions with the physicians or payers? I would love to get any feedback on – or color on feedback there..

Maybe I can start with the physicians. As I said, we had a number of different kinds of physicians on our external advisory council that was intended to be convened kind of like an FDA Adcom.

So it included those skilled in the practice of hemophilia A treatment, who gave voice to the importance of having a treatment option and the importance of both ABR and Factor VIII in considerations for choosing ROCTAVIAN or an alternative therapy.

But also the group was augmented by physicians who are primarily, let's call them regulatory physicians who have really seen everything under the sun internationally for the past couple of decades.

So we had a – and I – as I said, it was – one of my colleagues came away with making – one of our colleagues came away making a comment, and this person has an extremely high bar of saying, this is an impressive data package. So on the basis of all that, we look forward to the two-year evidence package holding up.

And if that's the case, then we should be able to make available a choice for patients.

And Jeff, do you want to speak anything about payers in response to one year data?.

Yes, happy to. Great question, James. So we're really happy with the way the one year ROCTAVIAN data came out. We have not had a chance to go back explicitly with payers and refresh our payer research with them and we will, during the course of this year.

What I would say is the one year data was highly consistent with the product profile that we were putting in front of payers, both in the United States and in Europe last year.

So I concluded upon seeing the one year data, but the kind of – the feedback that we've gotten from payers to date is probably going to be consistent with the feedback we'll get from payers after we've explicitly stepped through that one year data..

Appreciate it guys. Thank you so much..

Your next question is from Liana Moussatos of Wedbush Securities. Your line is open..

Thank you.

If 30% of Palynziq patients came from Kuvan, what percent of Kuvan patients are going to Palynziq versus the generic?.

Okay. So let me see if I understand the question. You said what percent of Kuvan patients are moving over to the generic product. And I think that's independent of your observation that 30% of Palynziq patients are transitioning from Kuvan. So we're – we have that data.

That's important and valuable data that we consider competitive intelligence that we don't want to give to the generic competitors. And so I would guide to saying if you follow the revenue erosion for the quarter and the revenue erosion that we've projected for 2021, I've already commented that the revenue is a mix of volume and price erosion.

And I'm afraid you'll have to produce those percentages at your end..

I mean if I may add, Liana, also the other dynamic is that Kuvan is only approved in the U.S. – sorry, Palynziq is only approved in the U.S. for adults. And there are a lot of kids – there were a lot of kids on Kuvan. And obviously, they cannot be switched to Palynziq at this time or until they reach age 18..

Okay. Thank you..

Your next question is from Michelle Gilson of Canaccord Genuity. Your line is open..

Hi, thank you for taking my question. I'm just wondering on PKU gene therapy, you mentioned you're escalating the dose to 6e13. I guess, compared to what you saw in 2e13, what are you looking for to see in that next dose set? And what gives you confidence that 6e is going to be the dose? And then just kind of, if I can have also a side question here.

Is there any indication that you're seeing in the data so far that the modified steroid regimen is, I guess, better than what was used when we generate studies?.

Yes. It's too early to comment on steroids just yet. And what gives us confidence the 6e dose group is going to do it. The preclinical data that we have reasonably predicted, actually what we would see in the starting dose level.

And as I mentioned, both on preclinical data for ROCTAVIAN – clinical data on ROCTAVIAN and preclinical data on 307, we do observe there to be a steep dose response curve. So that's – it's the amalgam of that, that gives us confidence that the 6e13 dose will do it.

And when I say it, we asked what are we looking for? I think the dream of everybody with phenylketonuria is normal peeing, normal diet, and I don't have to take anything for it. And I do think that, again, when you go back to what ROCTAVIAN offers, we reduced Factor VIII infusions from 136 per patient per year to two per patient per year.

That would represent a very substantial reduction in the burden of care for patients with phenylketonuria. And those patients also experienced fewer than one bleeding event in a year, which would kind of lay that over to PKU arena. That would be like no fog events, no confusion events, no mental cloudiness events.

So the – if they we're looking for PKU gene therapy, it's normal peeing, normal diet..

Okay, thank you. .

Your next question is from Tim Lugo of William Blair. Your line is open..

Hi guys. This is John on for Tim. Thanks so much for taking my question. I was just wondering if there's anything the team has been seeing or any comments that you've been hearing from physicians about the entrance of generic Kuvan and how that might be influencing your expectations for erosion over the near and medium term. Thanks..

Let me – you can cover that Jeff, but I think we've covered that intensively to the call, but probably, Jeff, do you have anything to add here?.

Well, the only thing I'd add here is we think that the generics are essentially a specialty pharmacy substitution type of activity. We don't think that the generics are promoting like in a branded generic fashion to our physicians.

And one thing that we have going in our favor is I think physicians and patients have been and are continuing to be sensitive to the ranges of services that BioMarin provides around our drugs, including Kuvan and the value of those services. And so that's a good thing for us..

All right. Thanks so much..

And there's no further questions. I would like to turn it back to you J.J. Bienaime for closing remarks..

Thank you, operator. So I would say that, again, despite the business challenges that were caused by the COVID-19 epidemic last year. The demand for BioMarin's medicine drove some strong results in 2020, and they are expected to grow 9% in 2021, excluding contributions from Kuvan.

So with our strong revenues base driving positive operating cash flows, enabling the advancement of our next significant product opportunities, we are well positioned for substantial growth over the coming quarters.

Importantly, if vosoritide and ROCTAVIAN [ph] are approved and launched as we expect, the commercial market opportunities for both of these products – potential products significantly exceed the market sizes of our current products.

These large-stage opportunities, combined with our established base business create a compelling value proposition that will enable the continued growth and expansion of our innovative research programs. I want to thank you for your continued support, and stay safe..

Thank you. You may now disconnect..