Welcome to BioMarin Third Quarter 2021 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, Grey (ph). 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.

Research 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. On the call today from BioMarin management are J.J Berberine, Chairman and Chief Executive Officer. Jeff Ajer, Executive Vice President and Chief Commercial Officer. Hank Fuchs, President Worldwide Research and Development.

Greg Guyer, Executive Vice President Chief Financial Officer, and Brian Mueller, Executive Vice President, Chief Financial Officer. We hope to keep this call to an hour, so respectfully, request that you limit yourself to one question during the Q&A portion of the call. Thank you so much.

I will now turn the call over to BioMarin's Chairman and CEO, J.J. Bienaime..

Thank you, Traci and good afternoon, everyone. Thank you all for joining us today. BioMarin's commercial organization is excited to be launching our seventh commercial product, following the August approval in Europe, of VOXZOGO for the treatment of achondroplasia for children ages 2 years and up.

I would say that the level of initial prescription demand for patients seeking a VOXZOGO treatment in Europe has exceeded our expectations. VOXZOGO revenues this year will come from France and Germany, where there were a number of children already on therapy. As well as a number of selected early access countries in Europe, Middle East, and Africa.

And as you also Latin America. As the first and only approvement, it's seen that targets the underlying cause of achondroplasia and improves phone growth in children. We are very pleased with early indicators of product demand. In the US we are in late-stage labeling and post-marketing requirements discussions with the FDA.

So we remain encouraged about the potential positive FDA PDUFA action outcome in less than a month now. I think the US approval would pave the way for our largest -- largest global product launch to-date, and set the stage for significant revenue growth starting in 2022.

Turning to 2021 financials, it is important to understand the dynamics of our global business, to appreciate the underlying strength. Despite the impact from anticipated uneven ordering in the first half of the year as compared to what is expected in the second half of the year, we are pleased to be improving full-year top and bottom-line guidance.

And this is despite Kuvan having faced generic competition since the First Quarter of last year, we actually, despite this, we anticipate generating full-year '21 revenues, mostly in line with our 2020 revenues, which illustrates the strength of our base business.

This is the result of underlying growth in net product revenues from products marketed by BioMarin, excluding Kuvan and also continued expense management. The number of patients treated with [Indiscernible] in therapies, as it has increased this quarter for all our products, [Indiscernible] Kuvan of course, and as which record levels.

We expect revenues to rebound in the Fourth Quarter as compared to the Third Quarter, so as to end up with a strong finish in 2021. With the addition of VOXZOGO [Indiscernible].

And the anticipated US approval, we expect a significant step-up in revenues beginning next year in 2022, leading to anticipate that sustainable positive GAAP income for full-year starting next year. We will provide full-year 2020 guidance as usual, during our Fourth Quarter, quarterly calls on next February.

Suffice it to say that our strategy to layer on VOXZOGO, and potentially ROCTAVIAN to our strong base business, leveraging our global infrastructure and manufacturing capabilities to drive meaningful profitability is rolling out as planned.

In support of that plan, cash flows from operating activities, increased to nearly $300 million year-to-date and are driving the expansion of BioMarin earlier stage pipeline. With six early-stage products on the agenda for our upcoming R&D Day, we expect to initiate clinical trials for multiple new products over the coming years.

Harnessing genetic technologies to speed our discovery capabilities has resulted in an exponential growth in our pre-clinical assets. And we are very excited to share our progress with you on November 30th. The past 18 months have been challenging for many reasons. The global pandemic, regulatory setbacks, etc.

We have remained focused on our mission and goals. BioMarin has never been better positioned to achieve the next level of growth. And we plan to capitalize on the many opportunities that are before us. I want to thank our BioMarine colleagues and associates for their continued commitment to developing the essential medicines that helped so many.

So thank you all for your continued support that we'll now turn the call over to Jeff to discuss the commercial business update. Jeff..

Thank you, J.J. I'm very pleased with the team's performance across all brands and all regions during the quarter. Not only are we improving top-line guidance for the year, but we are at the start of launching what maybe our biggest brand to-date, VOXZOGO. As J.J.

already described, the impact of large, unevenly timed orders for our enzyme replacement therapy brands on the first half of the year, as well as the US loss of Kuvan market exclusivity a year ago was notable in the Third Quarter.

Despite those dynamics, we achieved $409 million in total revenues, reflecting solid demand in the Third Quarter and year-over-year growth in net product revenues marketed by BioMarin, excluding Kuvan.

Q3 revenues were consistent with our expectations around order timing and the balance between first half and second half revenues communicated previously.

Keep in mind, patient demand remains a key indicator to gauge product demand for both Naglazyme and Vimizim patient numbers increased by more than 10% respectively year-over-year Brineura in the Third Quarter where children on therapy increased by more than 20% year-over-year.

Moving to Palynziq, where 32% year-over-year growth translated to $61 million in net product revenues in the Third Quarter, reflecting a combination of revenues for more patients achieving maintenance dosing, as well as new patients initiating therapy.

This growth was achieved despite continued COVID impact resulting in many PKU clinics operating at partial capacity. Consistent with our commentary last quarter, it is important to note that PKU clinics in the US have not opened up to new patient starts at the rate we anticipated.

As expected, the US was the main contributor of growth in the quarter driven by US patient increases of approximately 20% year-over-year. While we remain optimistic about the growth prospects for Palynziq for the balance of the year, we expect US PKU clinics to increase new patient starts at a slower pace than originally anticipated.

The commercial launch of Palynziq in BioMarin's Europe, Middle East, and Africa region continues to progress through individual country level pricing and reimbursement negotiations. Continuing with the PKU franchise, Kuvan contributed $68 million in revenue in the Third Quarter, reflecting incremental erosion to generics in the US.

Revenues decreased by 45% year-over-year, primarily due to the US loss of market exclusivity in October 2020 as anticipated. Moving on VOXZOGO, our newest commercial opportunity and likely the largest launch to date.

We've been very pleased with the level of prescription demand for patients seeking VOXZOGO treatment since receiving European approval on August. A reminder that in Europe price and reimbursement processes are the primary gates to being able to treat patients and generate revenue, and these processes can be lengthy.

Therefore, for revenue purposes, we are focused on the set of markets where we can quickly begin treating patients and generating revenues. These markets include France, Germany, and a number of other markets in which we are pursuing named patient sales. Importantly, we're seeing robust prescription demand already.

And we're optimistic about the prospects of being able to convert that demand to patient treatment and revenue. The small revenue recorded from Q3 was from France and for the first patients, they're starting treatment.

Already in Q4 additional patients have started therapy in France and we have shipped VOXZOGO to Germany and Switzerland to begin treating patients in these markets.

Concurrent with the EMEA launch, our US commercial team is planning for the potential launch at the end of the year, assuming a positive PDUFA action outcome in November, as has been our experience with prior launches in the US, we do have the ability to quickly respond to prescription demand following approval.

While US payers are numerous and diverse, we have experienced navigating the medical exception process to facilitate early prescription demand while we work through the process, yielding payer coverage policies. As with the launch of previous BioMarin brands in the US, this experienced team is in place and prepared for a potential approval.

We look forward to providing full-year VOXZOGO guidance for 2022 when we report Fourth Quarter results next February. We would also like to set expectations for quarterly metrics that we will report on for the next six quarters.

For the quarter being reported, we will report net VOXZOGO product revenues, active markets with sales, the total number of commercial patients at the end of the quarter, and other color on the progress of the launch that will help you evaluate the commercial status of VOXZOGO and inform your expectations.

In conclusion, results in 2021 for our established brands are tracking to expectations for the improved top-line guidance provided today raising the low end of the total revenue guidance by $30 million, as well as the low end of the ranges for Vimizim, Kuvan, and Palynziq.

Demand for our essential medicines in the 75 countries where we do business is robust and growing. The commercial team is energized to be launching our newest, potentially largest product opportunity with VOXZOGO in the EMEA region, and we are eagerly preparing for the potential launch in the U.S. should we receive approval in November.

Thank you for your attention, and I will now turn the call over to Hank to provide an R&D update. Hank..

Thanks, Jeff. Similarly, the research and development organization echoes your enthusiasm for the European approval of VOXZOGO. Families have been waiting for a long time for a treatment option for their children.

And we believe the targeted mechanism of VOXZOGO, which promotes endochondral bone growth during the time period when growth plates are open and have a meaningful and potentially lifelong impact on children with achondroplasia.

We're so pleased that this important medicine is now available in Europe, and we look forward to hearing a real role treatment experience as families access VOXZOGO over the coming months and years.

European approval of VOXZOGO for children ages two and up further demonstrates the importance of beginning treatment as early as possible to provide maximum clinical benefit while growth plates are amenable to treatment.

We look forward to the readout of our 52-week placebo-controlled study in children newborn through five years of age around the middle of next year as the next potential step toward expanding access to VOXZOGO should those data be supportive. In the U.S., we look forward to the PDUFA target action date of next month.

We believe that robust dossier of data under review provides clear signals of clinical benefits from VOXZOGO treatment. I also want to take the opportunity for everyone -- to thank everyone who contributed to this important milestone on behalf of families seeking a treatment option for achondroplasia. Thank you very much.

Briefly on ROCTAVIAN, regulatory milestones are tracking the plan. At the end of November 2021, we'll reach the two-year mark for the Phase III study in the two-year follow-up observation period.

We continue to expect resubmission of the US biologic application for ROCTAVIAN in the Second Quarter of 2022 assuming supported two-year data, followed by an expected six months review procedure from U.S..

In Europe, with the marketing authorization application validated and under review, we continue to expect a CHMP opinion in the first half of next year, assuming supportive two-year data, which will be shared with the EMA when it is available.

We remain confident in ROCTAVIAN see potential to be an important treatment option for those with severe hemophilia A, based on the clinical evidence, observed today demonstrating dramatic reductions in bleeding rates. Factor VIII [Indiscernible] and Factor VIII infusions following treatment.

Turning to BMN 307 therapy, gene therapy for Phenylketonuria, following the clinical whole [Indiscernible] by the Food and Drug Administration, we've now received communication from the agency with guidance on next steps. We are in the process of addressing the agencies request for additional information.

So we do not have an update on when the hold might be lifted. The hold on our PKU gene therapy study was based on recently identified safety findings for a non-clinical non - GLP pharmacology study in immuno deficient mice. The scientists striving to serve patients needs, we're committed to understanding these findings.

As we've shared previously, and it was corroborated during the FDA panel discussion on AAV safety in September, it remains uncertain and in our view unlikely that these specific findings with BMN 307 will translate to a safety issue with this or other AAV gene therapy treatments.

We are working through the process with the FDA and we'll keep you posted as we have relevant updates. Turning to our R&D Day event now planned for November 30th, we look forward to sharing new data and new program updates with you.

The R&D organization has hit its stride, melding our own internal discovery capabilities with genetic tools to understand underlying mechanisms of disease in order to develop targeted medicines. We're excited to share these advance s with you in greater detail and describe the many assets under development in the earlier stage pipeline.

We hope you will all tune in. Thank you so much for your support and I'll now turn the call over to Brian to update financial results in the quarter.

Brian?.

Thank you, Hank, please refer to today's press release summarizing our financial results for full details on the Third Quarter of 2021. As usual, our comprehensive report on the quarter will be available on our upcoming Form 10-Q, which are on track to file over the next few days.

As J.J and Jeff mentioned, the previously anticipated order timing and 2021 has created a meaningfully uneven revenue flow between the first and second half of the year. To illustrate the impact of select individual country order timing on Q3 2021, last quarter Q2 2021, there was approximately $90 million more revenue, excluding Kuvan.

From Brazil, Russia, and the Middle East that did not recur in the Third Quarter, substantially accounting for the quarter over prior quarter, total revenue fluctuation. Importantly, however, as Jeff mentioned, the key underlying business driver of patient demand continues to increase for all of our products. Again, except Kuvan in the U.S..

Based on these timing dynamics, we anticipate to emphasize our full-year guidance as the best metrics to measure our top-line financial performance.

To that point, the strong start in the first half of the year drove a previous upward revision of full-year 2021 revenue guidance back in July, including Vimizim and Palynziq, as well as improved GAAP and non-GAAP bottom line guidance.

And we're pleased to announce today that we are again improving total revenue guidance, including both Vimizim in Palynziq by raising the lower end of our guidance for the full-year 2021. As noted by J.J. despite the impact of For full-year of Kuvan generic competition in the U.S.

and a continued COVID-19 impact on our growth, total revenue for 2021 is expected to be mostly in line with total revenues in 2020, which is better than our expectations at the beginning of this year.

Moving to operating expenses, R&D expense for the Third Quarter was $158 million, which was $11 million higher than R&D expense of a $147 million for the Third Quarter of 2020, which reflects increases in our early-stage research and development.

Based on our R&D expense trends through Q3 '21, and expectations for the Fourth Quarter, we are lowering the range for R&D expense guidance by $10 million for the full year. Next, with respect to SG&A expense, Q3 2021 SG&A totaled $183 million, which was essentially flat compared to the Third Quarter of 2020.

We are launching VOXZOGO in the EMEA region, and preparing for the launch in the U.S., SG&A expenses in 2021 are weighted towards the Fourth Quarter of the year. Turning to bottom line results, we reported a GAAP net loss of $37 million in the Third Quarter of 2021, compared to GAAP net income of $785 million in the Third Quarter of 2020.

Please recall that GAAP net income in the Third Quarter of last year included a large tax benefit totaling $835 million related to the transfer of certain intellectual property rights between BioMarin entities, which drove the significant level of GAAP Net Income last year.

Non-GAAP income of $34 million in the Third Quarter of 2021 was lower than non-GAAP income of $99 million in Q3 2020, primarily due to the lower revenues this quarter as a result of the previously discussed timing. We're very pleased with the Company's GAAP and non-GAAP bottom-line performance through the first three quarters of 2021.

And based on our expectations for the Fourth Quarter, we have improved full-year GAAP and non-GAAP bottom line guidance.

We've reduced the full year 2021 GAAP net loss guidance to between 85 million and $45 million dollars and an increased non-GAAP income guidance to between $215 million to $255 million, representing an increase of $20 million at the midpoint of the range.

That substantial level of non-GAAP income helped generate a continued increase in our total cash and investments as we ended the Third Quarter of 2021 with $1.55 billion compared to $1.35 billion at the end of 2020.

We set a goal of generating positive operating cash flow in 2021 and the business has delivered nearly $300 million of positive operating cash flows year-to-date. One brief comment is that the previously discussed timing of revenue and expenses in 2021 also impacts our cash flows. Which we observe are also weighted to the first half of the year.

This solid cash position coupled with our strong operating performance through the first three quarters of 2021 is a strong foundation from which to look forward to the continued European Launch of VOXZOGO to potential US launch at the end of the year, and potentially ROCTAVIAN next year.

And the progress of our early-stage pipeline that is leveraging the same R&D organization that developed our portfolio of now seven approved products and two large market late-stage programs is an exciting next chapter in BioMarin's potential future growth story. Thank you for your support and we will now open up the call to your questions.

Operator?.

Thank you, sir. At this time, we will begin our question-and-answer session. [Operator instructions] Please stand by while we compile the Q&A roster. And speakers, our first question from Cory Kasimov of JP Morgan. You may now ask your question..

Great. Thanks. Good afternoon, guys. Thanks for taking the question. The VOXZOGO label in Europe is obviously pretty broad covering patients as young as two years old.

I'm wondering if there's any pushback from either in early access point of view or physician comfort in potentially treating patients under five, and do you have expectations for the FDA label to be equally broad, if approved of course? Thank you..

Jeff you want to answer the first part of the question and Hank, the second part?.

Yes, happy to. So what -- one we're really happy with the open-label as you described it, including for patients 2 years and up in Europe. And we believe that in Europe, the endorsement of the CHMP on safe and effective use for ages 2 years and up is a powerful statement to both payers and prescribers.

It's too early for us to provide specific color in Europe, but we're not anticipating pushback from payers or prescribers on 2 to 5-year old patients. And maybe I'll turn it over to Hank for the second part of the question..

Yes. Of course, as you know, there's no direct connection between the FDA and the EMEA and they tend to operate independently. And we're really encouraged that the EMEA understood the context of the condition, and we're scientifically vigorous in consideration of the label.

And I'd encourage you to come to R&D Day where we're going to share some of that information. Obviously, we're hopeful that the FDA will be similarly influenced, but as you know, the FDA is a little bit more conservative. And so we'll just have to muscle through the next month to see where it lands..

Okay. Great, thanks, guys..

Speakers, our next question's from Phil Nadeau of Cowen and Company. You may ask your question..

Thanks for taking our question. Another one on a VOXZOGO, perhaps one of the more controversial aspects of VOXZOGO is the language that was in the FDA acceptance letter discussing the need for two-year placebo-controlled data.

Now, that you are in late-stage [Indiscernible] negotiations, could you give us some information or some idea of how the FDA reviewers have dealt with the Advisory Committee's commentary around two-year placebo-controlled data and whether it's safe for us to assume that since we're [Indiscernible] discussions, that won't be necessary for approval of VOXZOGO at this time around..

Yeah. Thanks Phill for the question. We're really in the throws of it so I can't really give you too much of the exact socks edge making of discussion. But what I would say is that we've been fairly transparent from the get-go as you just reminded about where the FDA was.

And at the time and I continue to say that the agencies or the US agencies focuses on or interest, I should say, is on durability and we've provided them what amounts to a two-year placebo controlled study, it's a little bit unorthodox in its design, but it's essentially two years worth of data and we supplemented that with five years of open-label treatment data in comparison to some pretty good natural history sources of data.

We feel pretty good about the durability of the effect on linear growth. I think a related question is going to be, is in sort of a one or two-year growth.

Does that constitute substantial evidence of clinical benefit or is that a benefit that's reasonably likely to predict clinical benefit? And there I would just say that you should be aware that in that growth field, that in the case of growth hormone administration to non-growth hormone deficient disorders a lot of the language has been around [Indiscernible] and this suggests to us that the FDA is also very concerned about [Indiscernible].

So I think their decision-making about durability is going to be related to ultimately not the two-year sort of story. But what does this say about what can be expected from [Indiscernible] ? All of this I think will come to some form of resolution in the next few weeks. So stay tuned..

Perfect. That's very helpful. Thanks again for taking our question..

And our next question speakers is from Chris Raymond of Piper Sandler. You may ask your question..

Thanks. One, if I could ask maybe a pipeline question on, specifically 307.

So Hank I'm wondering if you can comment on what kind -- I know you said like you've met with FDA and you don't have a sense as to when the clinical hold will be lifted, but can you comment on what additional experiments or analyses maybe the agencies requested? And is this something that could be addressed in the near term or is this maybe longer-term experiments? And maybe can you share what you did provide to the FDA when you met with them? I think you were going to meet with them this month to get -- you felt might give comfort on that.

This was an issue related only to mice. And then if I could just like maybe a quick VOXZOGO question. I'm not sure if you're willing to answer this but. Of patients that have started in Europe, what's the average age? Thanks..

I will take the first part of your question, Chris while Jeff plots the second part of your question. You know, Chris, we had meeting with the FDA, we've had correspondence with them. They're busy, it's hard to get meetings with the agency nowadays.

And it was a pretty sort of tactical correspondence because what happened was, you know, we observed the finding and you felt duty-bound to report. It turned out that we were in a dose evaluation period from the second cohort of patients, we've discussed that. And so we were not enrolling patients at that moment anyway.

We were transparent with the agency about this pre-clinical finding as soon as we found it, and as consequence, they've not really seen all that much yet.

But what they asked for of us is relatively straightforward and can be wrapped up in a package and they were pretty comprehensive in the kinds of things that they asked for including, how is this going to reflect an informed consent and protocol minutes and things like that.

So they -- it's obvious that they've seen these things before and they have a pretty prescribed list of the types of questions and considerations. I think to put this in a bigger perspective and it goes back to your I think it's your question about the FDA 's Advisory Committee meeting.

The thing that struck a lot of us about that was when the presentation came to integration and orthogenesis, the presentation was divided into what did we know up to 2016 and what do we know from 2017 and beyond.

And I think the relevance of that is that the agency subsequently approved to subsequent to 2016, they approved [Indiscernible] and they approved Zolgensma (ph). Zolgensma is importantly for IV administration and importantly, a lot of the vector goes to the liver.

And in spite of the fact that insertional oncogenesis was -- or insertions were described in mice. The agencies has approved Zolgensma. And in fact, over 3,000 patients have been treated with gene therapy in clinical trials where 200 patients have been treated with Zolgensma.

And so the agencies -- I think what that says is the agencies on the one hand, aware of the pre-clinical experiments and on the other hand, is thinking about that as a sort of not as a risk benefit issue because there's not a -- risk has not appear yet, but it's a risk information for patients kind of an issue.

In that discussion, I don't think that there was any real breakthrough in terms of what additional information to be providing.

I think rather there was maybe a little more of a challenge in the scientific community that aspire to understand what's going on mice and to ask the question, is there any vulnerability for that to go on in humans, given that we haven't seen insertional oncogenesis in humans to-date.

We fully expect to see assertions of AAV [Indiscernible] cancers that is a speculation at this point.

So I think that the field has been dealing with this issue for quite a while or you think that there are more experiments to do, That won't directly answer to the question of how does this translate to humans in terms of predicting a risk of oncogenicity in humans, but rather, I would see more delineating technical details about how these experiments should be done and interpret and give us comfort and to that point, I just want to highlight one specific aspect of findings and you're probably all aware of a study that found clonal abundance of a specific set of mutations.

And they postulated that there was a cause and effect relationship between the fact that a lot of cells had indicated insertion. And the versus insertion had a lot of cell had the syndicated uncertain. However, the thing I think to keep in mind and we see this on our 307 study is not every cell in the sample has that characteristic.

And so it raises the question of whether these findings are in fact causal in mice or Passengers in mice. And I think do we have a better idea about the answer to that question. We're not even going to get on first base in terms of understanding the relevance to humans.

So we are in the front row of all of this because we have a lot going on in gene therapy and our scientists are awesome at season in a part of problems and we look forward to providing the agency the info it needs to get after we start it on the 307 trial shortly.

And now let me pass it to Jeff, who -- to see if Jeff can handle your question a lot better..

Thanks Hank. I'm still digesting all that you had to say, but with respect to VOXZOGO and Chris with the implementation of GDPR privacy regulations in the EU, we don't have the same very specific data about our individual patients that we might historically have had. So I'm kind of rounding around your question.

As we get some data about product usage by bile strength. Will be able to make estimates, the size and thus the age of the mix of patients that we've got on treatment. We don't have enough data yet to work through that. What I might say is the early patient -- early ESP patients treated are coming from France under an ATU early access program there.

That ATU was approved separately or in parallel with EMA negotiations that led to the label of two years and up. So interesting enough, the ATU label indication is for patients five-years and up. And so in France, the early experiences with patients in the range of, let's say 5-9 or 10 years old.

And we'll keep you posted with that kind of color going forward as we get more data to evaluate..

Thanks guys..

Speakers our next question from Salveen Richter of Goldman Sachs. You may ask your question..

Good afternoon. Thanks for taking my question on VOXZOGO again, you talked about the strong demand.

Can you just give us some color there of how we should think about not just France, but Germany in the select early access countries in 4Q and how the launch so far has exceeded expectations?.

Hi Salveen. Thanks for question. It's really a pleasure to answer this one and some of the color that I would add here, it's specifically from brands in Germany. I would characterize as this, in previous launches, we've had patients come in generally one patient at a time, one patient from clinic A, one patient from clinic B.

A little while later, another patient from clinics C maybe sometime later a second patient from clinic A. What we're seeing this time around is -- we're still seeing some prescriptions emerge from individual clinics with a patient end of one, but we're also seeing ends of 4, ends of 5 coming straight through at once.

We've never really experienced that and that gives us -- that drives our comment about the strength of prescription demand in part, so there's patients coming through in clusters. In addition, there's been a lot of prescription demand that is emerged from named patient sales markets.

I mentioned that we have sales to Switzerland, which by the way is not an EMA market. So if Switzerland is not covered by an EMA approval, and in it is thus a named patient outside of registration market. We -- we've seen initial prescription demand from markets in Middle East as J.J. mentioned, and also in Latin America.

And we've seen ends larger than one in that experience, so that -- the combination of quick named patient sales, prescription demand for markets, and the cluster of groups of patients, not one or two. That's really driving our comment about prescription demand..

However, Salveen, obviously the dollar sales in Q4 are going to be limited compared to the demand that's [Indiscernible] because the patient's treated, we only have been treated for like [Indiscernible]. But it boards well for 2022 and the significant growth in revenues in 2022, there is definitely a lot of interest.

Interesting anecdote is that we got noise from the Russian Federation government that we got on there. Other federal reimbursement for VOXZOGO in Russia, when we have not even filed. It's kind of an interesting anecdote. Okay. Next question..

And speakers, our next question from Akash Tewari of Jefferies. You may now ask your question..

Hey, thanks so much. So one of the Vosoritide, can you talk a bit about the use of Sentinels for Vosoritide in the 206 study. How are they being used to kind of adjust the dosing for these younger patients? And what did you see from a safety perspective so far in that population. And this one's a bit more high level.

The stocks been range-bound for the last two years, despite the fact that you guys are approaching your two largest, most important commercial launches. Is there a point in time where you would more seriously explore strategic venues to unlock value, particularly, it's either rock cape end, or Vosoritide, don't get FDA approval as planned.

Thanks so much..

I'll start with the first part of your question. The study was put in the field before the phase of trial read out. So the comprehensive evidence in safety and efficacy in older children wasn't available to time of the study.

So in consultation with health authorities, the study was designed to enroll patients in three core upwards ages two to five or three cohorts by age, I think I've talked maybe I'm having up bringing knelt in terms of the ages six to two months from zero, six months.

And the underlying reason for that was that there were hypotheses about differences in the dose exposure and exposure response relationships. And so the concept was to enroll Sentinels to evaluate.

PK, PD and their safety response to that 50 microgram per kilo dose that we've been using on older children before then opening the rest of that cohort up to randomization to active medication or placebo.

And in the 2 to 5-year old cohort, we found that 15 microgram dose was an appropriate dose that gave an appropriate exposure on appropriate PD response and will actually review those data in R&D Day because that was the information that informs the European health authorities to move forward with the application.

We only had a limited amount of efficacy data in those small number of patients because there was no contemporaneous control. And I think that what that tells us is that 2 to 5-year old can be safely dosed with the same dose as children who are older than five.

Then turning to the children are under two, we did find a dose exposure relationships such that we had to increase the dose. And off the top of my head, I think that we had to do that also for the infants that were enrolled in the study from zero to six months of age.

And I think what that means is that we're actually benefited by having relatively short acting drug in the sense that short acting drugs are easier to adjust and accommodate dosing exposure on the basis of response than very long acting drugs, especially since although we did the trial from 5-2 to 6 months, humans age and the other informal direction from 6 months to 2 years to 5 years.

And so it's going to be important to have all this dose exposure, safety information. From a safety perspective, with the relatively now well-described safety profile of VOXZOGO, we haven't really seen much additionally, in terms of significant clinical adverse responses.

And so I feel like we're in pretty good shape understanding the relationship of dose and therapeutic and safety response. And you'll get your own dose of that just under a month or just over a month I should say. Let me pause there..

I think your second part of your question, [Indiscernible] different. It looks like you forgot about it. Obviously, I think there was a recent survey. [Indiscernible] in the past few weeks this past week or so that 50% of investors apparently don't believe that VOXZOGO will be approved in the US so I think that's good news.

I think it's approved that should be resulted in significant moving the stock. And that's advantage on the -- about three weeks away. So let's start the conversation again after the PDUFA date on VOXZOGO and then also potentially the European CHMP opinion in Q2 of next year..

Thank you so much..

Our next question from Gena Wang from Barclays. You may ask your question..

Thank you for taking my questions. So the first is regarding ROCTAVIAN. Just wondering what is the latest FDA interaction regarding ROCTAVIAN filing specifically on durability.

And then related question is for the type of anymore data pre-clinical data that FDA is asking for the PKU program or do you expect FDA also ask for similar type of data for ROCTAVIAN?.

Well, it's a little bit complicated, but let's see if I can [Indiscernible] cut to the chase of it. In terms of FDA interaction there really is no news there in terms of resetting or deferring expectations.

We said at [Indiscernible] , they want two years worth of data and [Indiscernible] in spite of our trying really hard, they want two years worth of data. We've had some lower level communications in correspondence about things like statistical analysis, which reveal really nothing new other than that they want the two-year data.

So we are interacting with the division and the review division [Indiscernible] and very much to the process of discussion.

Based on what we've seen so far, we believe and we've had experts in to tell us what they think the FDA may not be telling us, but might be conveying and the experts have device that this reads like a situation in which they asked for the two year data. They're going to make the decision on the basis of two-year data.

And that's good for us and for patients because we're optimistic that hemostatic efficacy will be maintained out through two years as was demonstrated in the first 17 patients that were treated in the Phase III clinical trial and now have been followed for an additional second year, as we reported earlier this year.

So we are confident that the remaining 100 or so patients will be adequately controlled from Factor VIII expression through the second year.

The issue of durability in PKU is a little bit more difficult for the simple reason that in Factor VIII expression, you measure the actual transferring credits itself, whereas with PKU, you measure indirectly the gene therapy product.

And we will want to see what the pattern of the control looks like before committing to a specific answer to that question. But based on pre-clinical data, where we have seen maintenance of gene expression, we believe that there is a stronger argument to be made around PKU and durability, and one year supporting that than there was for ROCTAVIAN.

Just to recall for ROCTAVIAN, because of the nature of the immune response and non-human primates, people don't typically do long-term studies in one week. [Indiscernible] on long-term studies that we did do and others have done and not a lot of them. You can see the effect of the immune response in lower species to the human protein.

In PKU we've been able to demonstrate sustained durability in pre-clinical species. So we hope that argument prevails upon the agency, but that, that discussion is yet to be had in sufficient detail with actual data from patients to inform.

The good news of all of this is that unlike with ROCTAVIAN where we changed the material from Phase I to Phase III and we made a tweak to the trial in the steroid regimen, none of those things are happening in the 307 trial. So these earliest patients will provide relevant information for long-term exposure..

Sorry, Hank, I wasn't clear.

I was referring for the PKU program was more the safety data the FDA was asking for additional pre-clinical data anymore, like whatever data FDA is asking, do you expect they also will ask a similar type of data sets to support safety for the ROCTAVIAN program?.

So far they have not been requiring pre-clinical carcinogenicity studies. I mean, if you look at the Zolgensma label, there are no oncogenicity studies either in the prior to submission studies or post-approval studies.

So don't expect additional studies to be required from a safety perspective prior to submissions and approvals, but again, those are discussions to be held as well..

Thank you very much..

Our next question from the line of Paul Matteis of Stifel. You may ask your question..

Thanks for taking the questions. Hank, if I heard you correctly when you talked about the issue of two-year placebo-controlled study earlier.

It sounded as though you feel like at this point in the review, this is a matter of either full approval or potentially accelerated approval, I guess did I understand that right, and if it is ultimately deemed that business an accelerated approval, how do you think benefit will be confirmed? Do you think you'd need to do a two-year placebo-controlled study as opposed marketing requirement, thanks so much..

The approval pathway is specifically the agencies decision, is specifically a -- is a tailwind of the consideration decisions.

So I don't want to read too much into anything other than just what I was characterizing with the landscape issue was that, in the landscape of growth promoting products from an FDA perspective, final, it all have this more of a question then interval growth velocities have been a question.

If it were to come to pass that a confirmatory study would be required, we would hope that longer-term follow-up of the patients that we have studied already could constitute Nexus or that main -- I should say the main group for evaluation.

We have provided the agency, as you know, we had I think 5-plus years of treatment data on the first patients treated in open-label. Several of them were close to final at all height. And the agency seemed interested in those patterns, but four patients is not a lot of patients for them.

So we're hopeful that whether it's a post-approval commitments to a conditional to an accelerated approval or whether it's a post-marketing requirement for even a full approval that finally it all tight characterizations will come in, when they come in, and will be powerful to document the accumulated benefit of VOXZOGO.

On some level, [Indiscernible] different..

Got it. Thank you..

And speakers, our next question from the line of Geoff Meacham of Bank of America. You may ask your question..

Hey guys. Thanks for the question. I just had a couple, the main one, you guys have talked in the past about prefer PKU clinics still not fully reopened just on the commercial business, just wanted to maybe get an update on that. Have you started to see a recovery in Palynziq [Indiscernible].

That'd be kind of helpful and maybe how do you think that's going to play out in 2022? And then a bigger picture for J.J.

I mean, on the BD side of things, how are you thinking about new opportunities in light of what could potentially be a little bit more scrutiny on AAV technology is it, is there something that you're looking for in terms of asset diversity by indication or technology diversity, or how are you thinking about that going forward? Thank you..

Jeff, you want to go over the PKU PD and the [Indiscernible].

Sure. I'd be happy to. So as noted in our remarks, both this quarter and the previous quarter, what we're seeing is in Europe, but more importantly in the US PKU clinics are continuing to operate at less than full capacity.

Of course, in the US there's a 125 PKU clinics, so there is some variability across there, but there's a lot of clinics are operating virtually not live. There are staffing issues in PKU clinics as certain supporting staff in particular have been reassigned during the pandemic.

Frankly, for the genetics clinics while PKU usually is the largest group of patients that they are treating, there are acute needs for patients in those genetics clinics and we've seen that those acute needs for really terrible conditions for children are first-in-line for priority for their capacity.

Having said that, we are getting new patient referrals on a steady basis. I would say steady through the pandemic.

And we're drawing the conclusion that if we've been, optimistic about PKU clinics getting back to their previous pre-pandemic capacity, it hasn't happened and we've been working on other tactical solutions to facilitate PKU patients that continue access to therapy and for new patients to start.

I think what we're trying to do is reset a little bit of expectations here that while we were optimistic at the beginning of the year, we're less optimistic about that capacity for the balance of the year now, but we're continuing to see overall growth. I might just comment as kind of a read through to, what do we think about that for VOXZOGO.

In fact other health care providers that we call on such as pediatric, orthopedists and pediatric endocrinologists, both of which are really relevant to VOXZOGO. For the most part and with restrictions and protocols in place, those specialties are -- they're back in business.

So the kind of capacity constraints we're seeing in the PKU clinics, I would say don't let that read through to your expectations about VOXZOGO..

So --.

[Indiscernible].

Sorry. Regarding your BD question. So I mean, that's a good question. Just want a few comments. As you know, we have several local modalities with in BioMarin. We started as a Company mainly based on protein therapeutics, Kuvan being a small [Indiscernible] was an exception. If you look at our pipeline today, we have additional protein therapeutics.

We have small molecules, we are moving into oligo or we about to get back in with second-generation, oligonucleotide, and we have some options there beyond DMD. And so we are always going to go beyond one modality.

So I would say, gene therapy is very important for us and will continue to be in the future, but we have no intents on the pure gene therapy Company. If you will see at our R&D Day when we got to disclose some new programs and talk about all the programs we have in development.

Besides ROCTAVIAN [Indiscernible] in therapy and [Indiscernible] therapy, which is about to start. The only new program in terms of gene therapy is potentially indicating pre-clinical right now. But to be in the clinic in about a year-and-a-half, two years is hypertrophic cardiomyopathy.

So but we have many, many other programs that are not gene therapy programs. And that will continue to be the case at the same time, we are far from giving up on gene therapy, and I guess we're not the only Company doing so. We still believe it's got major potential.

I mean, it remind me, I don't know, I'm loosing track of timing, we were 2005 or 30 years ago when some of the first patients treated with monoclonal antibodies died. Then I would say somewhat based on that with the oh, that's the end of monoclonal antibodies, we shouldn't go forward with those.

That would have been a huge mistake considering that I don't know the aggregate sales of monoclonal antibodies today's over a $100 billion a year. So, here we are at the beginning of the adventure with gene therapy. We're learning a lot. I think as Hank was illustrating, we continue to learn a lot.

We believe we are ahead of most other gene therapy companies in this respect in our understanding of what happens in the sales after the gene insertion and what leads to expression, durability, [Indiscernible] response or immune response so we believe we can design better and better gene constructs. We also got to look at re-treatments.

You'll hear about a little bit that R&D Day, we're going to look at non-viral gene therapy opportunities. So this is basically the framework of what drives our internal research and what drives that kind of stuff we're looking at outside in terms of BD.

I hope that answers your question and maybe Hank can give his perspective here too in the middle of this..

Well, I just think that the genetic and genomic revolution is unearthing so many opportunities. And it just really creates target rich environment. I'm always [Indiscernible] -- we have this behind the seizures program for screening children who have essentially unexplained epilepsy.

So we find CLN2 patients who are indicated for Brineura treatment but we also find increasingly numbers of mutations that then get associated with pedigrees because we're starting -- because in details starting to accumulate large enough family trees that they can start to identify things that have genetic etiologies.

We're used to be like sort of runs in families, but now there's actually concrete evidence and it's actually concretely linked to specific genes with specific limitation of medical history.

So it's really an amazing time to be where we are and to be able to leverage diverse technology-base that we've invested in and we can do small molecules, proteins, peptides, nucleic acids, complex nucleic acid mixtures.

So it's really a nice coming together of the fundamental thing about BioMarin in terms of our orientation to research and science and therapeutic opportunities that are presenting itself. So that all is a way of saying that we've been successful in academic and early partnerships. And for the time being, I think that that's where we are..

Great..

One more comment indirectly related to this. As you know -- and I'm not going to disclose any data here, but we got some, but on our R&D Day, we're going to give you our first update on a clinical trial going on with VOXZOGO [Indiscernible] type in indications beyond achondroplasia.

We could open up a major additional opportunity for VOXZOGO, so I would highly recommend you, you attend that part of the R&D Day presentations..

Thanks..

And our next question from Kennen Mackay from RC -- RBC Capital Markets. You may ask your question..

Squeezing me in. Hank, maybe going back to some of the prior questions with concern that the safety concerns on BMN 307 might breakthrough to ROCTAVIAN. Maybe can you address the levels of adenoviral or adeno - associated viral integration that's seen in the vector used to knock in ROCTAVIAN versus that of we're seeing in BMN 307? Thank you..

It's not really facile to do head-to-head kinds of things but, in general the levels of integration that can be found across species are relatively low.

So I don't think that there's a meaningful likelihood that ROCTAVIAN is necessarily any more or any less integrating than anything else you know, that agency in their early 2020 guidance on gene therapy referred to AAV vectors that have a lower propensity to integration unless they are designed to otherwise to integrate and quite to the contrary, we designed we do not and designed to integrate and in fact, we move things that could be suspected of facilitating integration.

So we've been fairly delivered to stay on the low propensity integration side and believe that that's likely to be true for all. Now, we've done longer-term studies for both the HAE vector already, and for a vector that is otherwise identical to ROCTAVIAN other than it's coding sequence.

We felt pretty good about the lack of read through from one vector to another. In fact, we feel pretty good about the lack of read through from mice to other species..

Thank you..

Speakers there are no further questions at these -- this time. You may now continue J.J Bienaime for the closing comments..

So thank you again for joining us today. So we are -- I hope we convinced you we are poised for significant growths on next year as just described. That's based on our foundational base business on VOXZOGO launch in the EMEA region and anticipated in US next month.

Also, the ROCTAVIAN gene therapy potentially later on top of that in mid to late 2022, as well as a deep early-stage pipeline that we look forward to sharing with you on November 30th during our virtual R&D Day.

So we are focused on continuing the strong momentum as we achieve our next important catalysts including the potential approval of VOXZOGO in the US by the end of next month. So thank you for your attention today and we look forward to speaking with you again soon..