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spk01: Welcome to the Biomarine Second Quarter 2021 Financial Results Conference Call. Hosting this conference call today from Biomarine is Tracy McCarthy, Vice President of Investor Relations. Please go ahead, Tracy.
spk02: Thank you, Grace. Thank you all for joining us today. To remind you, this non-confidential presentation contains forward-looking statements about the business prospects of Biomarine Pharmaceuticals, including expectations regarding Biomarine's financial performance, commercial products, and potential future products in different areas of therapeutic research and development. Results may differ materially depending on the progress of Biomarin's product program, actions of regulatory authority, 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 10Q, 10K, and 8K reports. On the call today from Biomarine Management are JJ Vianame, Chairman and Chief Executive Officer, Jeff Ager, Executive Vice President, Chief Commercial Officer, Hank Fuchs, President Worldwide Research and Development, Greg Geyer, Executive Vice President, Chief Technical Officer, and Brian Mueller, Executive Vice President and Chief Financial Officer. We hope to keep the call today to one hour and give everyone a chance to ask a question, 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 will now turn the call over to Biomart's Chairman and CEO, JJ Bien-Aimé.
spk17: Thank you, Tracy, and good afternoon, everyone. We hope your families are enjoying the summer. So we had very strong results in the first half of this year, recording $988 million in total revenues in the first six months of the year, and half a billion dollars in total revenues in the second quarter loan. representing a 17% top-line year-over-year growth, including Kuvant, and 38% year-over-year growth in Q2, excluding Kuvant, which, as you know, has been facing generic competition in the U.S. since October of last year. These results underscore our ability to execute despite the impact of a global pandemic, and more importantly, are a testament to the value our products represent to patients. Based on this strong performance, we are pleased to be raising our total revenue and bottom line guidance for the year, and Jeff and Brian will provide more details in a moment. With the commercial business increasing steadily, we look to the next generation of bio marine products to drive transformational growth in the coming years. With our late stage products, Voxogo and Roctavian, currently under review by health authorities, the R&D organization achieved a number of key goals in the first half of the year. In this quarter, Hank and his team advanced regulatory progress with both products, setting up for four potential US and European approvals, beginning with Vox Togo in Europe in the next few weeks, hopefully by the end of next month. And actually, we are going to start treating Our first commercial box local patients in France imminently based on early access program which was approved the so called ATU in France and Jeff will give some more details in a little while. So we expect EU approval to be followed by potential approval in the US based on the current action date of November 21 and discussions with the FDA are moving forward. With Rokavian, the recent validation of the MAA and potential CSMP opinion in the first half of 2022 paves the way for a third potential measure of market approval in the next 12 months upon completion of the three-year observation from all 134 patients in our pivotal GNRI-1 study With Roptavia, this will be the basis of a potential BLA submission next year in the U.S. Should the data be supportive, as we expect, and then anticipating a fourth major market approval, if possible, potentially in late 2022. The value proposition of Roptavia increases with each additional year of bleeding control as demonstrated. As we just shared at the recent ICH meeting, from our PIVOTL-GENERATE-1 study, over 90% of the 134 patients had an annualized beating rate of zero or lower than baseline after four weeks following treatment with Roktavian, and this is just with one intravenous infusion of Roktavian. Also, an ISDH from our Phase I-II study following a single infusion of Roktavian throughout these five years, we observed a 95% reduction in mean annualized bleeding rates to less than one bleed per year compared to the bleed rates from participants previously treated with standard of care factor V8 prophylaxis. Again, we're not comparing ourselves to placebo here. We're comparing ourselves to steel of care and standard of care. So we are recognizing that it has to be determined how long rhododendron will demonstrate hemostatic efficacy. But we have reason to believe, based on the current data, that bleeding control may be sustained for at least five years and beyond, based on the current data. And while gene therapy is not curative, and it's not as likely to be lifetime therapy at this time, the value proposition Roktavion represents to patients and payers only strengthens with each year of data we are accumulating. based on the five-year bid control from our Phase 1-2 study, at least $3.25 million per patient has been spared for each patient in the clinical trial in the U.S. This is based on the fact that in the U.S., recover and factorate prophylactic therapy costs about $650,000 per year. So as you can imagine, payers will understand this kind of math very easily. So when considering value, we recently learned from a review of some insurance claims of patients taking Imlibra in the U.S. that many of them are still using recalibrated factor VIII despite being treated with Imlibra. This is based on a review of insurance claims in the year 2020. This not only highlights the ongoing infusion burden with Imlibra, but the tremendous cost of potential duotherapy. Hemolibra, which is chronic therapy and can cost over $700,000 per year for your patients, in addition to whatever factor weight the patients are taking. The bottom line is that the sustained, durable hemostatic efficacy observed following treatment with roctavion in the longest and largest gene therapy trial ever done in hemophilia positions roctavion as a very attractive treatment option to both patients and payers pursuing approval in the U.S. and in Europe. As we shared with you previously from a paper published by Coteau in 2019, the lifetime cost of factor V prophylaxis alone, and not including other aspects of the disease management and surgeries that the patients have to undergo on a regular basis. So the lifetime cost of factor V prophylaxis alone is estimated in that paper to be, and other papers, to be between $28 million and $31 million. So obviously, if we price our product between $2.5 and $3 million, we're not pricing our product as a lifetime cure. But more relevant to the value proposition for Octavian, specifically as noted in an ICER report last year, ICER determined that the value proposition for Octavian was around $2.5 million, and that was a cost-effective threshold for treatment with Octavian, and that was based only on three years of efficacy data. Now we have five years. So we are thrilled with the dramatic B-control demonstrated with Roktavion, and more than ever we believe that it will be an important treatment choice based on efficacy for patients and cost savings for payers. As our next potential significant growth drivers, Roktavion and Voxoco have been a key focus and we expect will be transformational to BioNREN upon potential approvals. but it is our next generation of early-stage pipeline products that we look forward to unveiling in more details later this year. The bottom-end value proposition reaches far beyond our strong-based business and our near-term opportunities in hemophilia and achondroplasia, and we're excited to share more details with you at our upcoming R&D Day in November of this year. So thank you all for your continuous support, and I would like to turn the call over to Jeff discuss the commercial business update in more details.
spk06: Thank you, JJ. I'm very pleased with the team's performance across all brands and all regions during the first half of the year. In the second quarter, we achieved $502 million in total revenues, representing 17% growth in the second quarter of 2021 compared to the same period 2020. Significant growth concentrated in markets where customers placed lowest orders specific to our enzyme replacement therapy brands, drove strong sales in the first half of the year. Specifically, in the first and second quarters of 2021, large orders for Maglazyme and Vimazine from such markets as Turkey, Brazil, Egypt, Russia, and Saudi Arabia is expected to partially satisfy demand for those products in those regions in the second half of 2021. As a result, we expect a step down in volume in the second half of 2021 in those markets. Based on the strength of demand in the first half of the year and expectations for the remainder of 2021, we are raising full-year guidance on total revenues, increasing VIMSIM, NAGLASIM, and PALENZIC guidance, raising the bottom end of the range for CUBAN and reaffirming previously provided brineuric guidance. The detailed guidance updates are available on page four of today's press release. Beyond ordering dynamics, patient demand is another key indicator to pay attention to. For both naglazime and bimazime, patient numbers increased more than 10% year over year, underscoring the essential nature of these important therapies. For Brunura in the second quarter, patients on therapy increased 33% year-over-year. Moving to Palantir, where year-over-year growth of 45% translated to $59 million in second quarter revenue, despite continued COVID impact and new patient starts, due to PKU clinics closed or not operating at full capacity. Building on that theme, it is important to note that PKU clinics in the U.S. have not opened up to new patient starts at the rate we anticipated. We are still experiencing net patient growth, noting that new patient starts in the U.S. in the second quarter were lower than we expected. Consistent with expectations, the U.S. was the main contributor of growth in the quarter, driven by U.S. patient increases of approximately 30% year over year, And while we remain optimistic about the growth prospects for Palantik for the balance of 2021, we expect USPKU clinics to increase new patient starts at a slower pace than originally anticipated. The pandemic impact on Palantik in the EMEA region remains in effect, where we have experienced delays in price, reimbursement approvals, and very little new patient activity. In spite of that, we are making incremental progress And I continue to expect that we will see more material balance revenue from this region when PKU clinics have more freedom to operate and start additional patients. Continuing with the PKU franchise, Kuban contributed $79 million in revenues in the second quarter, an increase compared to the first quarter of this year, and reflects two factors. First, slower than expected erosion to generics. And second, a rebound from the seasonal dip in demand for QBAN and Q1 that we typically experience. QBAN net product revenues decreased by 36% year-over-year, primarily due to the U.S. loss of market exclusivity in October 2020 as anticipated. Despite the impact of these challenges, as I mentioned, we are raising the bottom of the range of full-year revenue guidance for QBAN. And now, turning to Vox SoCo, our next potential commercial opportunity and potentially the largest launch to date. As JJ said, we are so pleased to have received the positive CHMP opinion for treatment of children two years old through final adult height, given the importance of starting treatment early in a counterplasia. Additionally, receipt of authorization for use for ATU early access program granted in France allows access to Voxogo for those seeking treatment in France. This will give us the ability to get patients started in France imminently. Consistent with our past practice, we will communicate the price for Voxogo once we have an approval. Assuming the upcoming EU decision aligns with the CHMP opinion, which is typically the case, we look forward to potential launch in the third quarter in Europe. Upon that approval, we expect to launch in Germany first, begin the reimbursement process in other large markets, and take advantage of named patient sales opportunities in markets where they exist. As we have shared previously when asked for help modeling VoxOgo revenue, we are targeting annual net per patient revenue that is more like Palenzec than enzyme replacement therapy like. Turning to commercial supply. We anticipate the released labeled finished goods will be ready to ship to customers in key markets such as Germany, France, Italy, and the United States within four to eight weeks of an approval. Teams are currently in place and well prepared for what could be Biomarin's largest brand yet. We look forward to sharing more detail on launch plans, pending potential approvals over the coming weeks in Europe and in November in the United States. In conclusion, Results in the first half of 2021 exceeded our expectations and reinforced the essential nature of our commercial brands to the people who rely on them. Despite typical uneven ordering patterns, demand for our products in the more than 75 countries where we do business is robust. Biomarin's commercial team continues to execute seamlessly and looks forward to new product launches around the world over the coming quarters. should timing of approvals align with our expectations. Thank you for your attention, and I will now turn the call over to Hank to provide an R&D update. Hank?
spk04: Thanks, Jeff. Beginning with OXOGA for the treatment of children with achondroplasia, we were thrilled to announce the positive CHMP opinion in the quarter, paving the way for potential European approval in this quarter. We were also pleased that the positive opinion recommended treatment with OXOGA for children ages 2 and above, broader group than we had anticipated given the importance of starting treatment as early as possible we appreciate the european medicines agency recognize how important early treatment is given the window of time when boxogo can provide a clinical benefit in the united states two results from the phase three extension study to supplement the new drug application are under review and we look forward to the padufa target action date of november 20 2021. Voxogo is the first medicine that addresses the root cause of achondroplasia and is potentially the first medicine to be approved for children with achondroplasia. I would like to convey our gratitude to the families, the advocacy groups, investigators, and colleagues that supported the development of Voxogo. We're in the cusp of the potential approval of another innovative product that addresses the root cause and tremendous unmet need of a significant pediatric condition. We want to thank everyone who contributed to this important moment. Briefly, on Roctavian, regulatory milestones are tracked into plan. We recently announced that the European Medicines Agency had validated our marketing authorization application, which could lead to a CHMP opinion in the first half of next year under the accelerated assessment timeline. We're very pleased to be tracking towards potential approval next year in Europe, given the breadth of clinical evidence demonstrating dramatic reductions in bleeding rates, factory utilization, factory infusion rates following with Roctavian. In the United States, we expect to resubmit the biologics license application for Roctavian in the second quarter of 22, assuming support of two-year data, followed by an expected six-month review procedure. Further supporting the role we believe Roctavian may play in the treatment of severe hemophilia A, last week we're very pleased to have shared 12 presentations at the International Society on Thrombosis and Hemostasis' 2021 Virtual Congress. The three oral presentations and nine posters spanned a variety of relevant gene therapy topics, as well as data updates from both our Pivotal Generate 1 and Phase 1-2 studies with Ractavian. As you may have seen in the updates, the largest and longest development program for any gene therapy in hemophilia A, Ractavian demonstrated continued durable clinical benefit through at least five years. Data from our Pivotal Generate 1 study demonstrated that over 90% of all 134 participants at an annualized bleed rate of either zero or lower than it was than their baseline, and a reminder that their baseline was collected while they were on best standard of care factory prophylactic therapy. At 5.1 years after receiving a single dose, the 6013 vector genome per kilo dose cohort of the Phase I-II study demonstrated that after week four, the mean annualized bleed rate was reduced by 95%. Also of importance to patients when considering the overall benefit from Roctavian in the pivotal Generate 1 study, all but two of the 134 participants remain off prophylactic factory treatment. And in the Phase 1-2 study for both the 6E and 4E 13-dose cohorts, all participants remain off prophylactic factory therapy through years 5 and 4, respectively. What our investigators are telling us is that this is no prophy, no bleeds. Status is hugely meaningful outcome for these participants. patients in those studies. We are very encouraged by these results and look forward to the full two-year readout with all 134 participants in early 22, the basis of our potential US VLA submission in the second quarter of next year. Lastly, we want to extend our thanks to the community, our investigators, and the people who participated in the clinical program. You're making history, and we thank you for your contributions to the body of knowledge in this important new therapy for hemophilia A. Turning now to earlier stage pipeline and beginning with 307 gene therapy for phenylketonuria, the dose escalation portion of the study continues with incoming subjects now receiving the 6E13 vector genome per kilogram dose. Based on encouraging signals from the 2E13 vector genome per kilo dose, we look forward to gathering a meaningful amount of data with the 6E dose before determining next steps. To remind you, we're targeting normal feed and normal diet, and we look forward to the readouts from additional subjects given the interest in gene therapy solutions for phenylketonuria. Behind BMN307, we've been concurrently moving a number of our next-generation products forward and are pleased to have two active INDs to highlight today. Last week, our IND for BMN331 gene therapy for the treatment of hereditary angioenema, or HAE, was activated in the United States. HAE is characterized by unpredictable, painful, recurring, and self-limiting effects acute edematous attacks, which may occur at multiple locations, such as the face, extremities, upper airways, and the GI tract. Laryngeal attacks are the most serious manifestation of HAE, and they can cause fatal asphyxiation due to obstruction of the upper airways. And while standard of care has improved over recent years, HAE patients still require chronic therapy, still experience debilitating, unpredictable breakthrough attacks that require rescue medications. BMN331 is an AAV5-based gene therapy intended to restore the deficiency and circulating levels of the missing or dysfunctional C1S3 inhibitor protein, causing HAE with one-time IV infusion, thereby providing a durable preventive effect against HE attacks without the need for regular prophylactic treatments. This will be the first gene therapy clinical trial for the treatment of HAE in the U.S. and Byron's third investigational gene therapy product to the clinic. We're finalizing study protocols and hope to begin dosing participants by the year's end. We're pleased to share that, in addition, BMN255, our small molecule for the treatment of a subset of chronic renal disease, is in the clinic, and we are dosing participants. We've been very productive and somewhat under the radar with these advances, as well as a number of other candidates over the last quarters, and we look forward to sharing a deeper dive on the burgeoning next-generation pipeline at our upcoming R&D D-Day in November. Thanks for all your support, and I'll now turn the call over to Brian to update financial results in the quarter. Brian? Thank you, Hank.
spk18: Please refer to today's press release summarizing our financial results for full details on the second quarter of 2021. As usual, our comprehensive report on the quarter will be available in our upcoming Form 10-Q, which we are on track to file over the next few days. As JJ mentioned, the anticipated timing of revenue and expenses over the course of 2021 resulted in a strong start to the year and the upward revision of full-year 2021 total revenue guidance, including VIVAZM, NAGLAZINE, and PALENZ, as well as improved GAAP and non-GAAP guidance. With respect to revenues, Jeff mentioned some of the specific markets that placed large orders during the first half of the year in both the first and second quarters. They were concentrated in markets where countries typically place bolus orders, causing unevenness in revenues on a quarterly basis and in 2021 on a first-half as compared to a second-half basis. Based on these quarterly timing dynamics, we continue to emphasize our full-year guidance as the best metrics to measure our performance. While we continue to steadily identify and add new patients to each of our commercial products over time, we anticipate that demand for Biomarin products will continue to increase in the future, notwithstanding global ordering patterns. Moving to operating expenses, R&D expense for the second quarter was $161 million, which was lower compared to R&D expense of $182 million for the second quarter of 2020, which included an upfront payment related to our Dynacor collaboration last year. Based on our R&D expense trends through the first half of the year and expectations for the second half of 2021, we have lowered the top end of full-year R&D expense guidance by $10 million. Next, with respect to SG&A expense, Q2 2021 SG&A totaled $184 million, which was slightly higher than SG&A expense of $175 million for the second quarter of 2020. We hope to be launching Boxogo globally in the second half of this year, which is driving our SG&A expenses to be weighted to the back half of the year. Of note for 2021 is that our SG&A line this year includes some charges for idle plant time of approximately $25 million. mostly related to maintaining our Roctavian manufacturing capability during its continued development cycle. Based on these SG&A drivers in 2021, we are narrowing our full year SG&A guidance by $10 million and further note that we're trending towards the higher end of the range for SG&A expense. Turning to bottom line results, we reported gap net income of $13 million in the second quarter of 2021. compared to a GAAP net loss of $29 million in the second quarter of 2020. Non-GAAP income of $98 million in the second quarter of 2021 also grew as compared to non-GAAP income of $57 million in Q2 2020. These bottom line results follow the same circumstances noted earlier. Higher first half 2021 revenues and higher second half 2021 expenses resulted in a strong profit result through the second quarter. If the second half of the year trends that we're expecting hold true, we predict recognizing a gap net loss and lower non-gap income in the second half of the year. However, back to the full year 2021, we're very pleased to announce the improvements of full year gap and non-gap guidance. We've reduced full year gap net loss by $20 million to between $110 million and $60 million for 2021. Non-GAAP income full-year guidance is now increased to between $190 million and $240 million, representing an increase of $20 million on each side of the range. That substantial level of non-GAAP income helped generate a continued increase in our total cash and investment as we ended the second quarter of 2021 with $1.47 billion compared to $1.35 billion at the end of 2020. We set a goal of earning positive operating cash flow in 2021. And while the aforementioned timing dynamics also impact cash flows, the business delivered $83 million of positive cash flows from operations in the second quarter and $196 million on a year-to-date basis in 2021. This solid cash position, coupled with our strong operating performance through the first half of the year, is a strong foundation from which to look forward to the potential launch of Boxogo over the next few months and Rockavian next year. And the progress of our early-stage pipeline that is leveraging the same R&D organization that developed our portfolio of six 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'll now turn the call over to your questions. Thank you. Operator?
spk11: As a reminder, to ask a question, you'll need to press star 1 on your telephone. To answer a question, press the pound key. Please stand by while we compile the Q&A roster. Your first question is from Corey Casimov from J.P. Morgan. Your line is open.
spk05: Great. Good afternoon, guys. Thanks for taking my question. I wanted to ask you about Roctavian. I'm curious if you've been able to get much physician and also payer feedback coming out of IFTH. I just given the virtual nature of it and the five-year update, particularly in the context of factor VIII levels demonstrating a continued decline despite a still very favorable ABR. So, basically wondering if this update impacts how they're thinking about the product and the treatment paradigm in any meaningful way. Thank you.
spk04: Maybe I'll start, and Jeff will tag team a little bit on the physicians to the payers. You know, as a virtual congress, that's not quite the same thing. You're right, Corey. But, you know, one of the things I was struck by, you know, just sort of at a very high level talking to clinicians and their experience with Ractavian and the patients, they're not very focused on the surrogate markers. They're more focused on the patient right in front of them. And one of the things that struck me was now five years later, what's top of mind for this physician is, was the liberty that roctavian afforded their patients that we think of this as okay you just you know like just take a few less doses of this other thing it's life transformation freedom that these people are experiencing now it's five years since they have some vague recollection of having this condition called hemophilia uh and so i think that's pretty profound i think that's what's more on people's mind necessarily than you know tomorrow's another day so Jeff, I don't know if you want to add anything from your perspective.
spk06: Thanks, Hank. In fact, we haven't had a chance to specifically get out and check in with payers and physicians in any kind of a formal way since ISTH. There just hasn't been enough time. But a couple of observations I would make from some recent prescriber research that we've done in the United States and Germany. that follows the availability of a full 301 data set through one year, generate one data set through one year, is a lot of stability in the interest of Rocktabian relative to the last time we went out to do this market research two years prior. a significant interest increase in the confidence in the product. And that's probably due to a combination of the longer data set from the Phase I-II study and the full data set from the GENERATE-1 study being available. So, I find that really encouraging. And as you know, Corey, our U.S. team has been out talking to payers for a year and a half now. And the payers appreciate what Hank just mentioned. I think a lot pivots on the final durability of this drug with patients. The five-year data that we've recently released is certainly supportive of continued durability. And the payers, we continue to work with on mechanisms in the U.S. and in Europe of being able to address risk of durability in managed access agreements or pay for performance agreements of one type or another, depending on the market. So I'm really confident as we head into this next round. It's very helpful.
spk17: Thank you. Jeff and Hank say, I mean, the peers, I mean, they don't measure factory levels. They cannot track them. They're not organized for that. What they look at is how much the species are costing them every year. And they're costing them north of $800,000 a year. So right now, we have five years of efficacy. So it's close to $4 million of savings potential for the spares. That's what they look at.
spk05: Great. Thank you very much.
spk11: Your next question is from Robin Carnicus from Truist Securities. Your line is open.
spk19: Hi, team. Thank you for taking the question. Just a question on Voxogo. Now that you have the European opinion, you're about to get the U.S. opinion. Can you talk a little bit about your latest thoughts on the dynamics amongst the patients and the doctors? Are you seeing patients or children reaching out for interest in getting the drug and trying to see whether appointments are being available and how are you going to manage that And then what are you seeing on the awareness side, especially in Europe and the United States, now that you're so close to approval? Where are you at there? I have a similar question about VoxDogo that you answered for Octavian. Thanks.
spk06: Hi, Robin. This is Jeff. Maybe I'll take a shot at answering this first and ask Hank and JJ to round out anything I'm missing. So the first thing I would say is, It's really not possible for us in advance of an approval to be engaging with patients and prescribers, so we're very much looking forward to getting to the point where we can do that. As JJ noted in his remarks, we now have an approved early access program in France. We just got that, and that'll allow us to start treating patients in Germany. we'll be poised to launch right after an approval should we be so fortunate to get one. Our market research that we have done to map out kind of the prescriber networks, I would start in Europe as saying there are expert centers in most markets in Europe, and we're going to be relying on those expert centers as a first wave of prescribing for achondroplasia patients, we would anticipate that patients would migrate from getting started in expert centers to being treated in more local areas and eventually having those more local physicians initiate treatment. In the United States, we have a team in place today that's been establishing an initial profiling relationship with pediatric endocrinologists, which we expect to be largely the base of prescribers in the U.S. So these would be physicians that are quite accustomed to dealing with and prescribing drugs for growth disorders. We also know that some patients are in genetics clinics, and we have well-established relationships. and those genetic clinics in the United States that we can and will leverage. Our market research indicates a high degree of interest in VoxAgo on the part of caregivers. So we're looking forward to getting to that next phase where we can begin actually selling and promoting.
spk04: Maybe the only thing I would add is, you know, 80% of the patients are born to parents normal in stature, and this is not a impacting condition, and they're looking forward very much to improved health. And I would say the evidence that interest and awareness is rising, cresting, as Jeff was just describing, just from the EMA's actions in terms of their recommendation, they were willing to extrapolate safety and efficacy data from the pivotal trial in patients older than five to making the product available in children other than five. We saw this with Granura with the EMA as well, the sort of their thinking is no child should be left behind. So I think they recognize the urgency of the condition and the importance of giving Jeff's team the tools they need to get this medicine to patients early.
spk19: Just to clarify, you said 48 weeks of a delay between an approval time and time you could get drug to a center. Just want to be clear that that's true both for the U.S. and Europe. How do you think about modeling it?
spk06: That's right. So that's getting Greg's operations team getting final label product release, quality release, and into a distribution center where we can ship to customers.
spk02: So between, Robin, between four weeks and eight weeks, not 48 weeks.
spk19: Sorry. Not a year. That's tragic.
spk17: Thank you. Although, again, we are going to treat our first patients in France in the next few days.
spk11: Your next question is from Salvin Richter from Goldman Sachs. Your line is open.
spk14: Good afternoon. Thanks for taking my question. For Vox Zogo, do you feel that the FDA views the overall clinical package for approval similarly to the EMA just given the two-year data comment and also with regard to the EMA's recommendation for a broader age group of two years of age and older?
spk04: Well, as we've talked about it, every health authority has their own sort of unique gloss on it. In the case of the U.S. FDA, we've been transparent all along talking about the fact that their original recommendation was a two-year trial. And of course, we provided them two years worth of control data on improvement and height velocity. We think we have a really strong package. You know, we're getting really close to the finish line. And as typical for bottom line, we're going to, you know, not get into the sausage making of the later stage discussions with the health authorities. But we We remain very confident in the package that we submitted, and I think that European action speaks, you know, good volumes to the results of diligent peer review. The perspective might be ever so slightly different, but I think, you know, the main question remains on balance of the benefits exceed the risks here. We're pretty confident, you know, of the coming actions.
spk11: Thank you. Your next question is from Josh Micken from Bank of America. Your line is open.
spk03: Hey, guys. Thanks so much for the question. I had one on Ractavian, and it sort of parallels another question. So as you guys continue to accumulate long-term data, just a bigger end and longer follow-up, are there any themes that you can identify for maybe what characteristics could predict stable factor eight and longer durability? Or in contrast, you know, what could predict maybe a breakthrough bleed or shorter durability? I'm just trying to get a sense for maybe, you know, how you could maybe optimize that looking to the commercial launch. Thank you.
spk04: You know, the subject of predictability and variability comes up a fair amount. Actually, The fact that only two out of 134 patients that were dosed in the GENERATE-1 trial required relatively quick return to prophylactic therapy, where 132 out of 134 did not require return to prophylactic therapy and maintained adequate hemostatic efficacy, I think goes really well for the predictability of response. Now, not everybody's going to respond in the exact same way, and of course, that's a regular routine issue in medicine. It's relatively easy to manage and monitor in this case in the sense that We don't remove any options for patients. They can always go back to Heimlieber or factory prophylaxis. There's not any, the side effect profile as we understand it today seems fairly favorable for that to be a choice that patients could make. Of course, all of this is going to be subject to the review of the health authorities for their final decision making at the end of the review cycles that we've talked about for the EMA and for the U.S. respectively. All that said, you know, the durability data that we have give us confidence that although we don't know exactly where things are going to settle out and when they're going to settle out, it does appear to be a large number of years after initial transduction, which I think gives you the platform of belief around what JJ was talking about, which is the commercial value of the product, the platform of what Jeff was talking about, which is confidence in a product that can, you know, transform the lives of people. And what my doctorate colleagues are telling us are sort of a mind-blowing level of difference in the outcome for patients at a clinical level.
spk17: Yeah, and again, as Hank said, you know, we have very few patients that don't respond at all, less than 2% based on our current data. So obviously, although obviously it's not very useful to patients, I don't know of any therapy that works in 100% of the patients. Even the fantastic COVID vaccine on the market, they have about 90% response rate. And hundreds of millions of patients have been taking them, although 10% of them don't respond. Okay.
spk03: Thank you, guys.
spk11: Your next question is from Dajit Chattopadhyay from Guggenheim Securities. Your line is open.
spk16: Hey, good afternoon. Thank you for taking the question. So on Roktavian, post-approval, how do you think physicians are going to decide on steroids? So would it be prophy or on demand with closed monitoring for the first 12 to 16 weeks? And secondly, assuming a seven to eight year durability, how are you thinking about retreatment, especially on the back of the benign immunogenicity profile of AAV5 vectors? Thank you.
spk04: Yeah, it's a little early to talk about the steroid use in the context of post-approval because we don't have a label yet. And so we're just in the early stages of prosecuting that with Europe, and we'll begin that process next year with the FDA, as we talked about. What I can say about steroids in the post-approval setting is that we have data on both on-demand use of steroids and prophylactic use of steroids in our program. We have data on fairly light touch on-demand steroids and fairly heavy touch on-demand steroids. What we've learned out of all of that is that You probably don't need to treat people as hard with corticosteroids in the context of gene transfer. And it might be the case that there are simpler regimens, for example, just a prophylactic regimen from the get-go. And, in fact, we have an ongoing study that's enrolling quite nicely. Congratulations to the clinical team for that. And we're going to be learning more between now and the eventual product availability that I think will inform, in addition, as I started, the product labels on steroid use. The other part of your question has now escaped my... So in the get out my binoculars and think about what's going to happen in the many years from now, future, when potentially hundreds of patients, we don't know when. You know, we're doing a lot of work on the molecular basis of vector loss. And, you know, you've heard us talk about in the past, some of this could be liver cell turnover, but some of this could be intra-hepatocyte mechanisms that are pretty complicated and tricky. So the good news is that we're trying to learn, and we are learning quite a bit about that. So that would inform the design of a next-generation vector. And I think it's pretty premature to be thinking about that as a development candidate. I think about this in a more science context, learning and being prepared in the event that there's meaningful loss of vector expression out in the outer years. That's still a long ways away from the vast majority of patients.
spk16: Got it. Thank you.
spk11: Your next question is from Phil Nadeau from Cohen Company. Your line is open.
spk08: Good afternoon. Thanks for taking my question. The FDA's Cellular Tissue and Gene Therapies Advisory Committee recently announced a meeting for early September to discuss the safety of AAV vectors. Hank, I'm curious to get your thoughts on that meeting, and then maybe specifically, has Barmerin been asked to present at the meeting, or do you have any plans to make a presentation even during the public comments period? Thanks.
spk04: Yeah, I think it's terrific that the FDA is reaching out to their experts early in the time course of the development of these therapies. You know, these therapies have obvious transformative potential, but as the community likes to refer to, there are still unknown unknowns and some of the known unknowns that are the subject of this panel are important therapeutically. Now, you know, and they've named some of those, you know, integration considerations, thrombotic microangiopathy, for example, ALT or infusion or pretty severe hepatic reactions. We've not been asked to present anything. We're going to be watching the discussion just like everybody else as far as we know as of right now. I mean, the thing, the way I think about that is We don't really have a lot to say on that subject because we haven't experienced the kinds of things that the rest of the field has experienced with different capsids. I think a common thing for us to be thinking about could be, is there any read-through on product or class-specific labeling? I think that's really premature at this point to talk about. The thing that I think we have done that makes our program unique, important, and distinct, or unique and important, is that we have a fairly large data set. I think a lot of these things are arising in the context of one and two and three patients' worth of events. And I think, you know, the accumulation of a large amount of data is really the only formula for advancing knowledge as regards to safety of the AV gene therapy platform. So we're very pleased to have already those 134 patients that are faced through trial and following now past one year of follow-up represents a pretty exuberant body of accumulating knowledge. So we'll watch as interested spectators.
spk08: Perfect. Thanks for taking the question. Yep.
spk11: Your next question is from Paul Matys from Stiefel. Your line is open.
spk07: Hey, thanks so much. I had a couple of questions on Vasorotide. I was wondering if you've had any engagement with the FDA on the two-year data and how important you think that is for the FDA in determining durability of effect. And then second, I don't know if it's premature, but I guess there's a couple ways you can think about pricing for this drug in the U.S. One is based on prevalence, and the other is kind of looking at growth hormone, which really isn't kind of in the normal orphan ballpark, and those span a wide range. So I'd be kind of curious, at least in your philosophy, if those two are the kind of right brackets to be thinking about. Thanks.
spk04: I'll start on the two-year data, Paul. I mean, there's not a lot more to say about that other than that they flagged this as a consideration for discussion at their advisory committee. And we believe that we addressed the issue of durability, not in the exact way that the FDA wanted, but in a way that is robust scientifically for them to come to their conclusions. But as you know, they've reiterated their request. We have provided the data. We are interacting with them about the data, as I mentioned. You know, we're getting close enough to the finish line now that we won't go into the sausage making of the back and forth, but suffice it to say with a fiducia date of November 20, I think we'll all know the answer to the FDA fairly shortly. And we remain confident that that data package addresses the issues of their consideration. That is to say that Voxogo's effect will accumulate over time, that that benefit of the natural regulator bone growth will facilitate well-being in all the endochondral bones of the body, resulting in both stature gain, but ultimately, over time, improvement in their health.
spk17: I'll start with the pricing, and then Jeff can tell you about some bigger research we've done. Again, I think we've stated before, and we're reiterating it, that we anticipate a pricing here that would be similar to Palindex, which is around $200,000 a year for patients in the U.S., And that is based on previous research and the value proposition that we have here. I would say growth hormone is not a good comparator. Growth hormone insufficiency or deficiencies are much, much less severe disorder. You're talking about, you know, around two standard deviations from normal in terms of final delta high that no associated comorbidities. We're talking about five to six standard deviations from normal in terms of delta high here. so much more severe disorder, which, you know, puts it in the, you know, in the orphan category. And this is supported by peer research that Jeff can talk about.
spk06: Yeah, thanks, JJ. I think you largely cover it. But thinking about Voxelgo in the context of the prevalent treatment population, which is relatively small compared be eligible for growth hormone. But more importantly, thinking about the unmet medical need in achondroplasia and the potential long-term and lifetime benefits of Voxogo for those patients. We've done a lot of work with payers in both Europe and in the United States to characterize the unmet needs in achondroplasia. and to model out what could be benefits from VoxOgo beyond what we will be the significant improvements in and durable improvements in growth velocity that are the primary things that we're studying in the phase two and the phase three study. I think we've made a lot of progress with payers in that regard. And so as JJ notes, much more bullish about the prospects for pricing than in the context of growth hormone pricing.
spk17: And also, on top of it, here we're going to have no competition for many years to come. At least five or six years, if not more. Growth hormone is a very competitive market, including virus simulators. We're not quite in the same situation here. Another dynamic.
spk07: Thanks very much.
spk11: Your next question is from Gina Wang from Barclays. Your line is open.
spk10: I have one question regarding Octavian. Any thoughts on possibility that FDA could ask for longer than two-year follow-up for submission? And if so, when would you expect to hear back from the FDA?
spk04: Well, Gina, you know, the FDA can ask for anything they want, anytime they want. And as you've seen before, they can ask for much longer data even after they've communicated the complete response letter as the first communication execution. I know that's really frustrating for everybody. They have a lot of excuses about that. I think our side, we can't control what the FDA does and we can't control COVID and things like that. What we can do is we can generate a lot of data and try to develop the best possible drugs we can with the strongest evidence packages. And I think that, you know, judging by the fact that the European agency is willing to get their application review started with the one-year data, knowing full well that the two-year data is around the corner again also, I think bodes well for how a health authority can look at the accumulating package of information, even with uncertainties remaining about longer-term durability and I think the agency has been fairly clear about the time – the U.S. FDA has been fairly clear about wanting the two-year date. It's not driven so much by any worries they have about the date or what they've seen so far because they've seen the same things you've seen. Well, actually, they haven't gone in probably in as much depth on the one-year date as you have. They just made up their mind they want the two-year date. So I'm optimistic that that will get them there in terms of a positive benefit-risk. I think if you step back and say – Two years ago, I got a single infusion of something, and two years later, I'm still not suffering the underlying condition that I was, you know, originally diagnosed with. I think, you know, it's reasonably profound, but let's, you know, let's just keep our fingers crossed that that's the way it holds all the way through the next review cycles.
spk17: And also, we haven't had any communications so far with the FDA that would lead us to believe that they already require more than two years. But thanks, Annika, which is amazing.
spk10: Okay. I think the reason I'm asking, because we saw the recent, you know, Unicure can be updated, you know, shortly before submission. So just want to make sure. But I said Unicure was only working on one year. Similar things were not happening.
spk17: I said Unicure was just planning on submitting one year, and understand they asked for 18 months. So we're still below 24 months for Unicure.
spk11: Okay. Great. Thank you. Your next question is from Joseph Swartz from SVB Lyrinc. Your line is open.
spk12: Hi, I'm Drury Dalyan for Joe. Thanks for taking our question. So our question is on Vox Zogo. How confident are you that you understand all the influencers and influences in the achondroplasia market? So, for example, the adoption of Kuvan was influenced by dieticians that needed to be convinced of the merits of the drug. So ahead of Voxogo's launch, our question is, how confident are you that you have a handle and buy-in from all the stakeholders that matter that will be important for widespread adoption of the product?
spk06: Well, thank you for that question. That's a good one. In fact, we have a commercial model that includes paying attention to the different stakeholders that are likely to influence the entire range of commercial decisions. We call it our five P's model. And those include patients and advocates, politicians, physicians, and payers. And so we pay attention to all of those influencers. In terms of a degree of confidence each of those groups is not a monolithic thing. There are different individuals. Some are more bullish. Some are more skeptical. Some are early adapters. Some are later adapters. So there's a variability inside of there as it relates, for example, to patient advocacy organizations. Depending on where you're standing in the world, some are really excited about um, having a treatment option, others less so same thing with, uh, same thing with payers. So I think that we're reasonably confident, uh, in our ability to pull off a strong commercial launch starting in Europe. And hopefully later this year in the United States, um, you know, a hundred percent assurance is probably not something that I could promise you.
spk17: Yeah. I mean, although, although again, I think, um, You know, there is a lot of excitement about the drug in many parts of the world here, based on the feedback we're getting from our virtual organization. And, you know, in some countries like Italy and Spain, I think around 80% of patients undergo limb extension surgery, which is dangerous, painful, and expensive. But it gives you an idea as to whether they really want to, you know, grow faster than they're growing right now, if they're willing to do these things. And here we are offering something that's way more elegant than the anaemia extension surgery, which only impacts one or two bones of their body. So we are not too concerned here. I think the patient demand is going to be there. And also, as Hank said earlier, I think 80% of mycoplasia patients are born from patients that are from parents that are unaffected by the disorder, and the vast majority of them are interested in course velocity and final adult size for their kids. And indeed, there are a few patients, but it's a minority. I mean, a few patients, a few econdroplastic people that, you know, might be less interested in the product, but they are not eligible for the product because all of them are adults. So we're not counting them on our forecast anyway.
spk11: Next question is from Michelle Gilson from Canaccord Genuity. Your line is open.
spk13: Hi, thank you so much for taking my question. I have one quick one and one more robust question. I guess the first being, have you seen the five-year data on factor VIII activity for VALROC to Roctavian and reiterated their guidance to you for two years of data from the GENERATE study to file? And then the second also on Roctavian, you know, it seems like the first market you'll be launching into is Europe. And, you know, based on some European KOL feedback we've gotten, it really seems like KOLs overseas are expecting maybe one or two gene therapies at most for hemophilia A to be reimbursed and for the government to really be the deciding factor in determining which gene therapy is going to be available. I guess with respect to this dynamic and your experience marketing in Europe, how important is it to be the first mover there? And maybe if you could comment a bit on your expectations around both the near and long-term expectations for Roctavian uptake in the region.
spk04: Oh, sorry. While Josh warming up, it's local courts. The five-year data press release, the FDA is aware of it. I have no idea whether they went to the presentations, actually. But they had reiterated their demand for the two-year data before the one-year data was seen, and there was no point in them reiterating their demand after the five-year. We knew what their request was going to be, even if we had asked them. So the availability of the five-year data did not change the dialogue that we had.
spk06: And maybe circling back then to your question about, uh, Europe and payers and preferences for one or, or more gene therapies. Um, it were Octavian is substantially ahead of, uh, competitive potential, competitive programs. So, um, I, you're exactly right. Having first mover advantage in, in Europe and in the United States comes with many, many, many advantages. Um, First, when, you know, assuming an approval on the kind of timelines that we've been planning, there is no second approved program. There is no viable in the wings second program. And if there was, that program would have less durability data. We know they're going to have less robust data sets in terms of numbers of patients. By the time that happens, BioMoran will be well into life cycle management initiatives, exploring other aspects of the treatment of Roctavian for hemophilia A. So I think you're exactly on the money thinking that a first mover advantage is so valuable in so many different ways for Roctavian. And we're really bullish about the kind of uptake prospects in terms of treating patients that come along with that, and noting that once those patients are treated with roctavian, they're off the table for potential later entrance to the market. So thanks for shining a light on that. Yeah.
spk17: Once they've been treated with roctavian, they cannot be treated with another gene therapy, at least with an AAV vector, which is basically all the ones that are in development right now. So that's obviously a major first-mover advantage. that we will have as compared to our competitors. So we are, again, pretty excited by it. And also one other aspect which is important is that our vector, AAD5, has the lowest, basically the lowest prevalence of any other AAD vectors in terms of pre-existing antibodies, which is also an advantage we have against our competitors.
spk11: Your next question is from Kenan McKay from RBC Cattle Markets. Your line is open.
spk09: Hi. Thanks for squeezing us in. Just a quick pipeline question. For BMN 307, wondering if you could sort of give us an update on additional patients that have been dosed here, if you've dosed beyond sort of that lowest dose and within that program and that fearless study program. Just what you're looking for during dose escalation, essentially with a vector like this, how, and a disease like this, how do you decide on a go-forward dose when, you know, more reduction is better in being lower? Thank you.
spk04: You know, we are, in fact, at a second dose level. So we've dosed patients at the first entry dose level, the study which was 2E13 vector genome for TLO, we saw some signs of fee-lowering efficacy. So it says to us that we're probably on the dose-response curve. On the basis of that, we elevated the dose in the next group of patients. We haven't communicated the data from that next group of patients, but what we have communicated is that based on what we've seen in the 2E group and based on what we've seen with Ractavian, we're encouraged to think that it's possible that the 6E group would be the group that we choose to dose-expand As regards how do you pick a dose, I mean, the target of therapeutic effectiveness effectively is normal feed, normal diet. So the dose that gives that result in the largest fraction of the population tested is going to be the dose. And as soon as we meet the criteria for dose cohort expansion and move into the registration phase, we'll take you through the data in particular and illustrate why we chose that dose to believe that that was a dose that was going to give us the right target product profile. So that's very much right in front of us, and we look forward to sharing those data when they're available.
spk09: All right. Thank you.
spk11: Your next question is from Matthew Harrison from Morgan Stanley. Your line is open.
spk15: Great. Good afternoon. Thanks for taking the question. I was just hoping, Jeff, that maybe you could comment a little bit on, in more detail, some of the PKU center dynamics you were talking about and how much visibility you have into the flow of patients coming back or the flow of patients coming into those centers and sort of how confident you are in a second half recovery there.
spk06: Thanks, Matt. In fact, particularly in the United States where our biggest business is the biggest We have a lot of visibility into how the different centers are operating to the extent that they're open or not, if they are open, to what percent of their previous capacity, whether or not they're doing work through telemedicine or not, and what kind of wait times for patients that are looking to get started on Palantir therapy. So we've got a lot of intelligence. What I would say is the, by and large, the PKU clinics are operating to some level and they are starting new patients. They're just not starting them at the pace that would look like the pace that they were starting new patients prior to the pandemic. So that's our issue. As we noted, we have really nice year-over-year growth of Palantique patients on therapy by the end of the second quarter. Had it not been for the pandemic, that rate of growth, I can confidently say, would have been substantially higher. And we know that there is a patient population out there that's interested in getting onto Palantique. And so we've been, you know, we've been optimistic as the pandemic has kind of slowed in the United States in particular that these centers would be able to get back up and running. Degree of confidence in the second half, well-given developments with the Delta variant and, you know, the CDC announcement yesterday, I would say, you know, I'm still optimistic, but not really highly confident. In Europe, it's more of a mixed bag, depending on the market that we're talking about. You know, Europe has been on a different path. I'm optimistic, but not 100% confident that we'll be able to get more patients started in our key markets in Europe in the second half.
spk17: So that being said, we are raising the guidance of KUVA and challenging by $10 million each
spk11: We have reached the end of the Q&A session, and we will now turn the call back to Biomarine CEO and Chairman, JJ Vianney-May.
spk17: Thank you all for joining us today. As we described, Biomarine is on the cusp of our next significant stage of revenue growth, our solid cash position, foundational-based business, two significant market opportunities, and with four potential approvals on the horizon. starting with the potential approval of Voxogo or likely approval of Voxogo in Europe next month and a robust early stage pipeline that we've been advancing steadily over the last few quarters. This sets up for a transformational growth beginning in 2022. So thank you for your attention today and we look forward to speaking with you again soon.
spk01: Thank you for joining today's conference. You may now disconnect. Have a great day.
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