This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.
spk09: Welcome to the Biomarine second quarter 2022 financial results conference call. Hosting the conference call today from Biomarine is Tracy McCarty, Group Vice President of Investor Relations. Please go ahead, Tracy.
spk13: Thank you, Rob. Thank you, everyone, for joining us today. To remind you, this non-confidential presentation contains forward-looking statements about the business prospects of Biomarine Pharmaceutical Inc., 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 from Biomarin's management team today are JJ Bien-Aimé, 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. I will now turn the call over to Biomart's Chairman and CEO, JJ Bien-Aimé.
spk02: Thank you, Tracy, and good afternoon, everyone. Thank you for joining us today on the call. So the first half of 22 is our strongest six-month results to date with over a billion dollars in combined total revenues from our record-breaking first and second quarters. Vox Togo revenues of $54 million in the first half of the year contributed to these results, and they were driven by continued rapid expansion of global commercial access for children with incontrovertible Box logo growth led to today's increase in top and bottom line guidance for the full year, despite ongoing economic challenges, including considerable foreign currency exchange, rate fluctuations, and the strength of the dollar. Turning now to some of the key highlights in the second quarter, all of which were first in our industry. In late June, we were thrilled to have received a positive CHMP opinion for Europe for Roktavian. We continue to expect European Commission approval in the third quarter, which will be opening access to thousands of people with severe hemophilia who are interested in a one-time infusion of Roktavian gene therapy. This will be the first gene therapy to treat any hemophilia recommended for approval in Europe. Jeff and his team are ready to launch Roktavian Potential EC approval later this quarter. And in the U.S., we remain on track to resubmit the BLA by the end of September, the end of next month. Another first was the approval of Arsogo in Japan for children of all ages with achondroplasia and no age restriction. This approval represents our largest commercial opportunity to date in Japan, and we look forward to working closely with the achondroplasia community there. We also received approval in Australia for children ages two years and older. These important additions to the global access footprint are expected to be meaningful contributors with revenues from Japan beginning later this year. With Biomarines financial outlook and robust global launch of Oxogo tracking the plan and obtaining approval on the rise in Europe, we are on our way to achieving the goals set forth at the start of the year. Turning the corner to sustainable gap profitability ramping up our largest opportunity today with Voxogo and then progressing Roktavion to approval in Europe and pursuing approval in the US and also advancing the broadest early stage pipeline in our history. I would add that as compared to where we were a year ago, we have made major progress to substantially reduce regulatory risk for biomarines with the global approval of Voxogo and upcoming approval of Roktavion in Europe. And with our successful launch of Oxogo, the commercial risk is also significantly reduced. We will continue to build on this financial, commercial, and regulatory momentum in the second half of 2022 and beyond as we make the transition to an earnings cold start. Thank you for your continued support, and I will now turn the call over to Jeff to discuss the commercial business updates. Jeff?
spk08: Thank you, JJ. I'm very pleased. resulting in $534 million in total revenues, which represents 6% growth year-over-year, including Kuban, and 13% growth excluding Kuban, which continues to experience decreasing market shares and philosophy exclusivity in the United States. Year-to-date, all brands marketed by Biomarin, with the exception of Kuban, experience revenue growth year-over-year. Starting with Voxogo, We are pleased to share that as of June 30th, 2022, an estimated 446 children were being treated with commercial Boxogo. This includes 282 children in countries outside of the United States and 164 children within the United States. At the end of the second quarter, Boxogo sales were spread across 20 active markets, including sales in new markets not previously reported in Brazil, China, Hong Kong, Qatar, and Russia. Outside of the EU, we are thrilled to have received approvals in Japan and Australia during the second quarter, giving us a strong foothold in the Asia-Pacific region with revenue contributions expected to begin later this year from Japan. Turning to launch dynamics in the United States, we continue to see prescription demand ramp up We have been able to rapidly convert patient referrals to patient starts. In the quarter, we saw prescriptions mainly from geneticists and pediatric endocrinologists. As expected, we are making continued progress in creating the referral pathway to pediatric endocrinologists. We also see more payer coverage policies published, which are largely consistent with our label or our clinical trials criteria. and are aligned to our expectations. We also continue to experience patient growth in European markets, consistent with what we have seen in the previous quarter, including new patients from new markets as reported. As a result of the continued strong Voxogo ramp, we are increasing full-year guidance once again to between $130 million and $160 million for the full year 2022. In summary for Voxogo, We're very pleased with the pace of uptake during the first half of this year, and note that we are well into the global launch cascade of Voxogo. These results underscore the ability of our experienced commercial teams to tap into large market opportunities, regardless of location. Launching in the EMEA region ahead of the United States provides the team an important framework for a potential Octavian launch in the coming months, should the European decision be supportive. Turning now to our enzyme replacement therapy brands, collectively achieved record results in the first half of the year, with Q2 sales lower than Q1 due to the volume of large irregular orders placed in Q1 relative to Q2. This is consistent with our experience of uneven quarterly revenue patterns, particularly for Naglazyme and Bemisem. In 2022, for both brands, we expect a higher concentration of revenues in the first half of the year compared to the second half. Our expectations for the full year are reflected in today's updated guidance, where we have narrowed the range for both Benazim and Naglazime and increased the top of the range of Naglazime by $10 million for the full year. For Brunura, 24% growth year over year and revenue of $38 million in the second quarter was driven by 18% growth in commercial patients versus a year ago. for neuroguidance remains unchanged. Moving now to Palantzec, net product revenues grew 4% to $62 million in the second quarter as compared to the second quarter of 2021. While we expect meaningful year-over-year growth and saw continued net patient growth in the quarter, Palantzec's performance has trailed our expectations, resulting in an adjustment to full-year guidance downward to between $250 million to $275 million. We expect Palantique patient trends to continue to grow, albeit at a slower pace than initially expected. It is clear that the capacity of PKU clinics, particularly in the US, to treat adult PKU patients with Palantique has not recovered the capacity lost due to the pandemic. As a result, we have an active initiative to identify alternate prescribers in parts of the United States where clinic capacity is at a deficit compared to adult patients that could benefit from Pal and Z. We are targeting adult endocrinologists for this initiative, and our research indicates both an interest in treating PKU and the ability to manage treatment with Pal and Z. We are early on in this effort, We have REMS certified a number of new prescribers, and we will keep you informed of the impact this initiative has on our business going forward. Continuing with the PKU franchise, KUVAN contributed $58 million in revenue in the second quarter of 2022, down slightly from the first quarter of this year. As we have stated previously, As Kuven nears the end of its life cycle, since losing market exclusivity in the U.S. in October 2020, we are gratified to be able to retain meaningful market share and resulting revenues. However, based on current trends, we are lowering full-year 2022 Kuven revenues guidance to between $210 and $235 million. Lastly, With the potential positive EMA decision for Roctavian expected in the near future, we are ready for launch. Our team is prepared and encouraged that our longer-term data results offer a compelling value proposition and treatment option for adults with severe hemophilia A, and we look forward to providing you with more detailed updates upon approval. In conclusion, in 2022, We anticipate increased demand for all of our commercial brands, with the exception of Kuban, as just described. Our NPS products are expected to contribute significantly to revenue growth this year. We also expect Basogo to be a meaningful factor in this ramp year, as noted in today's increase in full-year revenue guidance. We believe that robust prescription demand represents a foundation for continued growth, including in new markets throughout 2022. Thank you for your attention, and I will now turn the call over to Hank to provide an R&D update. Hank?
spk11: Thanks, Jeff, and thank you all for joining us today. With the European decision for Octavian now on the horizon following the positive CHMP recommendation, we are working fastidiously on the BLA for resubmission by the end of September. Our belief in the potential for Octavian to be transformational for people with severe chemistry A only strengthens with each passing year. As we announced in May and also included in an oral presentation at ISDH in July, durable hemostatic efficacy was maintained over six years in our ongoing Phase 1-2 study of Roktavian in the 6013 cohort with a mean cumulative annualized bleeding rate of less than one, substantially below baseline levels on standard of care. The safety profile from this study remains consistent with previously reported data with no delayed onset treatment-related adverse events. Needless to say, we've been very pleased with the Roktavian results across the Phase 3 and Phase 1-2 programs and look forward to a potential marketing authorization in Europe in the third quarter. Turning to Voxogo in June, we were pleased to share favorable 52-week results from our global Phase 2 study in infants and young children with achondroplasia at the Endocrine Society's annual meeting. The improvement observed in Hype-C score and annualized growth velocity observed was consistent with what was observed in children over five years of age. We plan to meet with U.S. health authorities in the second half of the year to discuss expanding access to younger children. Finally, turning to the early stage pipeline, all of the candidates under development continue to advance. But with Biomarin 255, which adjusts as a subset of chronic renal disease, we've gotten the go-ahead from the Food and Drug Administration to move forward with the multiple ascending dose portion of our Phase 1-2 study. With BMN331 for hereditary angioedema, we have dosed patients in the Phase I-II Harmony Study to evaluate this investigational AAV5-mediated gene therapy for patients with hereditary angioedema. Concerning BMN351 for Duchenne muscular dystrophy, we expect to file an IND this winter. Our preclinical studies of Biomarin 349 continue to build our enthusiasm for its potential to dramatically improve liver health in people living with A1AT deficiency. For BMN293, formerly referred to as DINA001, we are on track to be the next gene therapy clinical candidate, in this case for the treatment of hypertrophic cardiomyopathy caused by mutations in the myosin-binding protein C3 gene. Lastly, we continue to advance BMN349 and 293 towards INDs in the second half of 2023. In the coming weeks, we look forward to the EC's decision for Roktavian to be followed by resubmission of the BLA in the United States. Thanks for your support, and I'll now turn the call over to Brian to update financial results in the quarter. Brian.
spk05: Thank you, Hank. Please refer to today's press release summarizing our financial results for full details on the second quarter of 2022. Since Jeff touched on many of the top-line results from the commercial business, I will primarily focus on operating expenses, bottom-line results, and other key financial updates this quarter. As usual, all results will be available in our upcoming Form 10-Q, which we are on track to file over the next couple of days. As we have been highlighting over the course of this year, we believe that 2022 is an exciting and transformational year for BioMarin. Resuming a cycle of substantial revenue growth and expectations to transition to sustainable gap profitability are aspirational milestones that we have been working toward for years. We are pleased to be tracking the plan based on the company's second quarter and first half results provided today. Total revenue growth of 13% in the second quarter of 2022, as compared to the second quarter of 2021, excluding KUVAN, has put us on a path to achieve our 2022 GAAP and non-GAAP income goals. One comment on how our planned 2022 revenues are split between the first half and second half of the year. is that while Naglazyme and Vimazim order timing were weighted to the first half of the year, as Jeff noted, second half revenues are expected to benefit from growing Voxogo and Palindique revenues compared to the first half of the year, plus the potential for a modest amount of Roctavian revenue. As a result, total revenues in the second half of the year are expected to be roughly even with the first half of the year. The strong Voxogo launch in consideration of the trends observed across our other brands drove the increase to our full year 2022 total revenue guidance to between $2.06 billion to $2.16 billion. Also, to comment on the impact of foreign currency exchange rate volatility on revenues, the strong U.S. dollar has impacted many companies' foreign currency-denominated revenue in 2022. While Biomarin is not immune from the resulting decreases in mostly Euro-based revenue, We are pleased to observe that our foreign currency hedging program is providing the intended protection. Based on current exchange rates, we project that the net impact on our full year 2022 revenues after hedges will be a relatively modest negative effect of approximately $15 million versus our original 2022 guidance expectations, which did incorporate some of the exchange rate volatility observed early in the year. Moving to operating expenses for the second quarter of 2022, both R&D and SG&A expense fell in line with our expectations. R&D expenses for the second quarter were $158 million, a slight decrease as compared to the second quarter of 2021, reflecting decreased Voxogo development efforts after the marketing approvals in the second half of last year, which was mostly offset by increased R&D on our early stage programs. SG&A expenses for the second quarter of 2022 were approximately $197 million as compared to $184 million in the same period last year, with the largest components of the increase being the Voxogo global commercial launch effort and Roktavian commercial launch preparation cost. Moving to bottom line results for the second quarter and first half 2022, just a reminder that during the first quarter of 2022, The company sold the priority review voucher received with the approval of Vox Ogo in the United States. While the gain on the sale, the PRV, remains the largest single contributor to first half Gap Net income, we are pleased to report Gap Net income during the second quarter of 2022 totaling $28 million and $149 million for the first half of the year. Based on this strong first half 2022 performance, we have slightly improved our full year 2022 GAAP net income guidance range by $10 million to $105 to $145 million. While we have improved the full year guidance, we recognize that the full year math in light of $149 million of first half GAAP net income suggests that we may recognize a net loss for parts of the second half of the year. This is due to some of the aforementioned revenue timing and some possible larger expense items in the second half of the year. We remain confident in our core business generating GAAP net income this year and beyond. With respect to non-GAAP income, Q2 2022 non-GAAP income of $109 million was slightly higher than 2021 second quarter non-GAAP income of $98 million, and full year 2022 non-GAAP income guidance remains unchanged at between $350 million to $390 million. Turning to total cash investments, We ended the second quarter of 2022 with $1.5 billion, flat compared to year-end 2021. The company continues to incur quarterly timing differences in several cash flow categories, mainly working capital timing. However, the business did earn approximately $56 million of operating cash flow during the second quarter of 2022. In closing, the BioMaroon team is pleased to use this midway point of 2022 to both acknowledge the strong business performance through the first half of the year and the promising expectations for the rest of 2022. We continue to believe that our strategy of substantially growing revenues that drive increasing profitability and positive operating cash flow, while also investing in developing an innovative pipeline, are the best financial levers to fuel growth further into this decade. Thank you for your attention, and we will now open up the call to your questions. Operator?
spk09: If you would like to ask a question, please press star one on your telephone keypad now and you will be placed in the queue in the order received. Please be prepared to ask your question when prompted. Once again, if you would like to ask a question, please press star one on your phone now. And our first question comes from Salveen Richter from Goldman Sachs. Please go ahead.
spk14: Good afternoon. Thank you for taking my questions. Two questions here. One is with regard to your outlook for Octavian. Are you ready to launch here? And, you know, once you have revenue from this product, how are margins and profitability expected to be impacted longer term? And then the second question is just about drug pricing reforms. As we're looking at the proposed bill here, how will Biomarin be impacted and just orphan drugs in general? Just wondering if they get carved out to a good degree here.
spk08: Thank you, Salvin, for the question, and in particular, the outlook for Rocktabian launch in EMEA. Super excited about that. Also have a team in place that's most recently been busy successfully with the Voxogo launch. It is largely that team that will be tasked with the Rocktabian launch, so good track record there. You know, I would say what's the reason to believe prospectively in Roctavian success in Europe if we get the positive approval from the EC? And I'd go back quickly to what we believe are the five criteria that should be met to set up a successful commercial gene therapy program of which Roctavian satisfies all five criteria And those include, one, a disease with a significant remaining unmet need, as we've described in hemophilia. Two, a material treatment effect size, which would include all of a clinical effect, quality of life effect, and a convenience benefit. Three would be a pharmacoeconomic benefit, which Rockadian, is clearly set up to deliver. And as we've described over and over previously, four would be a material population to treat. So we believe that a lot of gene therapies that are being developed to treat esoterically small patient populations have limited commercial potential. But certainly severe hemophilia A adults is a significant large population. And five would be a prepared team on the ground that is experienced and ready to launch. So as I said, Roktavion meets all of those criteria. That's the reason to believe in our view.
spk05: Yeah, thanks, Delvin. This is Brian. I'll comment on margin. Thanks for the question. I mean, in short, we believe the Roktavion EU launch is going to be a significant contributor to what was already planned, you know, margin improvement into our future, you know, Already today, we're observing that the Voxogo launch is a contributor. When we look at our SG&A as an example, as a percentage of revenue today at about 40%, that's, you know, the global infrastructure we've built to support our seven approved products today, which we sell in over 70 countries. The Voxogo contribution alone is getting leveraged out of the commercial organizations. And while a Roctavian severe hemophilia A market launch is going to take incremental investment, it's mostly a leverage story from that commercial infrastructure that Jeff mentioned. So while it will take some time for Roctavian revenues to ramp, we expect that the investments and operating expenses along the way to be significantly less, which over time is going to contribute to the bottom line and margin improvement. So we'll look forward to observing that.
spk08: Yeah, so the drug pricing reform, should that get through and be legislation, I think it will be impactful to companies that have large Medicare drugs in particular and companies that have a history and a practice of greater price increases that exceed inflation rates in the United States, CPIU in particular. Biomarin, our portfolio has very limited exposure in Medicare, and it's not our practice to raise prices ahead of CPIU. So while we see that this is unfortunate if it moves forward in the general sense, we don't see a material impact to our business.
spk09: And our next question comes from Joseph Schwartz from SVB Securities. Please go ahead.
spk10: Hi, thanks very much. Congrats on the great quarter. I have a question on Voxogo and then Ractavian. So I was curious if you could talk about whether you're working on any lifecycle management strategies to fortify your Condor Plasia franchise ahead of potential competition. Are you still working on long-acting formulations? And can you give us an update on that status? And are you doing anything to improve the administration device or procedure or generate more data to show the real-world value of VoxOvo so your brand could have more staying power if competition arrives?
spk02: Thank you. Just to say a few words about the device I let Hank answer the rest of the question. Yeah, so we do have an answer here. We do have a pen device in late-stage development which we hope could hit the market in around 2024. It would make the administration of the drug even easier. Actually, maybe Greg Geyer is in charge of this device. Maybe he can say a few words, and then we'll have Hank answer your question on the long-acting formulation other life cycle activities, if you will.
spk07: Yeah, thanks, JJ. So, yeah, so the PIN device is well underway. We do believe it will be a step change in terms of convenience for patients and a lot simpler to administer. So that's well underway. We've got some studies we need to do with the PIN and then obviously go through approval process. So hopefully that will hit the market in the U.S. and then Europe in 2024. Maybe the thing I did
spk10: Go ahead, Hank. Sorry.
spk11: Oh, sorry, Joe. I was going to say the thing I would add about your question about the lifecycle, and there's very robust plans. You know, immediately next up is interactions with the Food and Drug Administration around broadening the label in the United States as it is more appropriately represented on a global basis. As you recall, Japan just approved the product unrestricted in regard to the younger limit of age. So that's a key piece of fortifying the franchise. The pen you've heard a lot about, The conversion to full approval on the basis of final adult height, very much in motion, very important from a regulatory perspective to fortify the brand. Lots of emerging information about potential for activity and additional indication work beyond achondroplasia. And maybe the final thing to say is, in taking a really long view, um the you know sort of the pen is step one in delighting the population with an easier and simpler approach to administration uh we do have a long acting program and we're thinking about as we get more experience in this population what what might be even better than that and so we have a lot of activity going on that will play itself out over a number of years to make voxel go into an even bigger brand than you can see just based on this launch
spk09: And our next question comes from Jeff Beecham from Bank of America. Please go ahead.
spk06: Hey, guys. Congrats on the quarter, and thanks for the question. I had a couple on Roktavion. So the first one is, as you approach the European approval, maybe what have you done or can you do to inform the cost-benefit analysis? I wasn't sure if there's any extra work that you guys had done as you approached the the approval just to talk to some of the payers about, you know, obviously the price tag. And I know, JJ, you did talk about, you know, the model shifting away from, you know, kind of an annualized kind of model into a single, you know, single payment. And then the second question also on Roktavian is just, Hank, when you look at the potential for retreatment using a different, you know, expression vector or vital vector, maybe just give us a status update on anything you're doing there. Thank you.
spk02: uh thank you so i'll just start and i'll have uh jeff and then brian will be on the revenue recognition plans for european revenues and then hank uh on on your your last question so uh indeed we are as compared to where we were like two three years ago uh where where we thought that peers whether it's in europe or the us would be interested in pay over time, they actually are not interested. They're not organized for that because most of them work on an annual budget, so there are difficulties committing to paying over three, four, five years. We thought, you know, before that it would be interesting for them, but it's not something that can work. However, they're extremely interesting in outcome-based agreements. And Jeff and Brian can explain the mechanics of that. And also, just the only thing I would add here is I would say Based on the very strong Phase II data that we have that now shows durability of bleeding protection for basically six years, we believe we are in a strong position to put these agreements in place with very little risk to biomarine and, in a sense, eliminate the cost risk for the payers And even if this whole question of durability is basically evacuated without outcome-based agreements, because there is no risk for the payers in case the durability is not as low as they anticipated. So that preamble, Jeff, maybe you can expand exactly what we're thinking about, and Brian talk about recognition, and then Hank can answer the last question. Yeah, thanks, JJ.
spk08: So we've got the outcome-based agreements that we are working towards. and that we've discussed in many instances with European payers, notably Germany, which will be our first launch. And as JJ said, we're taking with those agreements the risk of non-response and the risk of durability over time off the table for the payers. So that addresses their uncertainty. And based on the clinical trial data that we've got, both the the phase three full data set at two years, early cohort at three years, and the phase one to 6013 dose data at six years, we judge that the risk of nonresponse is very, very low, and the risk of going back to prophylaxis, which is essentially what we would be guaranteeing for a period of time in these agreements, is also similarly low. A relevant public analysis I would refer you back to is the ICER analysis from two years ago, which concluded that at the time that Roctavian was a superior choice to Hume-Libre standard of care at a presumed price of $2.5 million. The data behind Roctavian has materially filled in. in the ensuing two years, so we expect that that type of incremental cost effectiveness analysis will still hold. And as you know, every payer system in Europe has slightly different unique requirements, and so we prepare such incremental cost effectiveness analyses and cost benefit analyses bespoke for all of those payer systems. We're getting ready to file in the major EU markets shortly after an anticipated approval. So I think we're ready to go here.
spk05: And then, Jeff, thanks. This is Brian. Briefly on the financials, and we'll elaborate more on the details of this at our anticipated launch. But as JJ noted, we would expect upfront, not just payment, but revenue recognition for Ractavian as we deliver to customers. And on these outcomes-based agreements, we'll need to recognize the financial exposure from these commitments to customers. Although, as Jeff noted, because of the real strong response rates and durability in Ractavian, I believe it was only six out of 134 patients in the phase three study that have resumed prophylaxis. That's going to mean that when we estimate what will be balance sheet reserves or liabilities to capture these commitments, we believe they'll be modest and we'll recognize them in our gross-to-net revenue adjustment. And the way we model it thus far, it should fit within what you've observed as sort of normal bio-marine gross-to-net revenue. So stay tuned for more, but that's how we're thinking about it.
spk02: And Hank, do you want to answer the question on retreatment strategy? Sure.
spk11: Sure. You know, acknowledging the outcome on the 634 patients is suboptimal. We do have research programs underway that are intending to address this. You know, we have the largest collection of liver biopsy data and it's actually growing and we're learning a lot about mechanisms of attrition of expression, which could include both vector loss as well as the DNA being there, but RNA expression is diminished. And so that could encompass, and we have research programs that are looking at things like non-viral vector delivery or alternative serotypes or other strategies to, if you will, wake up expression. But, you know, having said that it's six out of 134, we should also take a look at Johnny Malongo's presentation at ISTH. And it goes back to something that Jeff said about how, you know, the heretofore we had tied the resumption of prophylaxis to being at a sort of 1% factor VIII level. But what Johnny showed was that what was, you know, where there were inflections at 5 and 1% in natural history studies of mutated factor VIII proteins, these appear to be left shifted to lower factor levels with the transgene protein, which is more native in its configuration. So, uh, for all those reasons, uh, I can't say that we, uh, view this as a major opportunity right now. Um, so that's why we're in sort of the research phase of exploring the opportunities to either redose or reawaken expression.
spk04: Okay, great. Thanks guys.
spk09: Our next question comes from Phil Nadeau from Cowan & Company. Please go ahead.
spk18: Good afternoon. Thanks for taking our questions. Two from us, also one on Roctavian and one on VoxOgo. On Roctavian, the press release mentions a likely nine-month review for the refiling, whereas the standard PDUFA is six months. So we're curious as to why you believe nine months is likely. Is that something that's been communicated to you by the FDA, or is that your own assessment? And then how would that work? Would you initially get a six-month PDUFA, and then it would be extended when you submit the data that you know in the press release, or is there some other mechanism?
spk11: Yeah, I'm trying to think where likely review came along. I think we're really simply just reiterating something that we said back in May, which is that we have an awareness of the fact that with the delay as a result of the FDA asking for us for additional information at the time of submission, that the review could overlap with the availability of both the three-year data as well as the corticosteroid data. We actually do not want to guide you one way or the other to whether it is likely or it is unlikely. At the time that we were informed by the agency of these additional requests, none of those requests were about those additional studies. So, as I say, we don't wish to guide you one way or the other to the likely or unlikely. However, the purpose of the communication today is to just remind you that the agency can request additional time for reviews. Based on either major amendment major submissions or any other reasons that they feel like they need more time and so The way it would work bill is is that we would get a new PDUFA date on acceptance of our Response to the complete response letter and at some time during the review if they wanted more time They would inform us that they want more time and they would extend the PDUFA clock as we sit here today, like I said, we're anticipating the initial submission in September and and a six-month PDUFA designation. But we are aware that these studies are emerging, and we wanted you to be aware, both to reassure you that, first of all, that there will be no surprises if it is to happen, and to make that very clear, and second, to reassure you that we're prepared in either direction. So we'll be ready for launch if launch happens at the six-month time clock, and we'll be ready to respond quickly to the FDA if they ask for additional data.
spk18: That's very helpful. And then on Voxogo, the press release notes that there's 164 patients on commercial therapy in the U.S., which implies about 164 patients were added over the first six months of the year. Is that a pace that we should expect to continue in the second half of the year? Were there any reasons for a bolus in that number, or do you think it's possible that it could accelerate in the second half as expert centers get their referral networks up and running?
spk08: Thanks. Great question, Phil. Thank you for paying attention. I would guide towards relative continuity of patient growth. It probably is true that there were patients located in kind of expert clinic centers, those that participated in the clinical trial, other genetic and skeletal dysplasia clinics that have a particular interest in achondroplasia and are treating kids with achondroplasia. and probably you know we got a fast run on kids from those sources more recently and as we've guided to and expected to all along we've been getting more kids referral referred in from let's call it their uh community uh position and you know as we've guided We're trying to build that referral network to mainly pediatric endocrinologists that can treat these kids with Voxogo on an ongoing basis. So those things are kind of happening at the same time. Early on, more patients referred from those expert clinics. Now, referrals coming in from the community, picking up. Net-net, you know, my expectation is relative continuity of patient growth in the United States.
spk18: That's very helpful. Thanks again for taking our questions.
spk09: Our next question comes from Paul Matisse from FIFO. Please go ahead.
spk04: Great. Thanks so much for taking my questions.
spk03: I wanted to ask a couple things about roctavian uptake in Europe. Maybe, Jeff, could you frame for us just how attitudes towards prophylaxis therapy and heme vary across European countries, how that might impact the target population for roctavian across different countries? And I guess when we talk to clinicians, just the feedback is really variable on the target population in their mind in terms of early adopters. How are you thinking about the first wave of patients that are most likely to get this drug and what proportion of the overall population does that demographic make up? Thanks so much.
spk08: Okay, a lot in there. Yes, there is variability in Europe It is a particular fact that we are focusing on the major markets in Europe early on. So what we would now call the EU4, Germany, France, that I've talked about a lot, Italy and Spain. So I would say the main impact on variable adoption in Europe in the first couple of years is going to be our ability to unlock reimbursement in different markets across Europe. So I would say that piece will trump kind of local treatment practices and preferences. And remember, in Germany, particularly with our ability to get outcomes based agreements in early in the one year free pricing period, Germany is the largest market. We think we'll go first there. and have been preparing for that eventuality. France being, let's call it, the second largest market in Europe and where we've guided that we are applying for an early access program that will give us limited but material access if approved during the approximately one year that it'll take to gain reimbursement approval fully in France. Spain and Italy with different dynamics. So I think it's the geographic piece that introduces most relevant variability in the first couple of years. In terms of target population, we can't specify for competitive reasons exactly, you know, our target early adopters. But as noted on the CHMP opinion call, there's a couple of factors at work here. First is, you know, we've seen a lot of adoption of Hemlibra. Hemlibra looks like it's working well for patients. That's also given the lie to the previous conventional wisdom that hemophilia patients won't switch their treatment. So we'll be looking at Hemlibra patients that are looking for superior outcomes, and we'll be looking at factor patients that are not adequately controlled on their factor VIII regimen as early adapters. And in terms of what percent, we've got lots and lots of market research, but most recently we went out and tested European and U.S. physicians and patients and advocacy organizations after the the phase three two-year data results were released. And what we heard was prescribers think that at peak, about 35% of their eligible patients would be on Roscadian, and that 80% of prescribers indicated that they were interested in prescribing for at least one patient in the first year following approval. Those are pretty positive signals to go on.
spk02: James, I mean, just a comment. There are lots of numbers floating around. You know, docs are being asked off the cuff, you know, percentage of patients they're going to treat with gene therapy. You have to be careful as to how the questions are phrased and the context of the question because if a doctor says, well, I'm going to put 10% of my patients on gene therapy, is that doctor talking about all his or her or just a severe one, or a severe over 18? So, I mean, so those questions and answers are pretty vague. That's why some numbers are all over the place. And so, because 10% of all hemophilia patients is a large number. So, I just want to point that out in terms of being able to understand some types of discrepancies between the different marketing research.
spk03: Great.
spk09: Thanks very much. Our next question comes from Gina Wang from Barclays. Please go ahead.
spk12: Thank you for taking my questions. Also, two questions. The first one is with Voxogo. What is the practice like in Japan and Australia? Are patients also concentrating in the big centers? And also, are the prices for Japan and Australia in the range of $250,000? And the second question is regarding Voxovian. After your BLA resubmission, when will you know if you will have adcom? Do you think FDA decision on whether Unicure will have an adcom for their hemophilia B program will have a direct read-through for you?
spk02: So lots of Japan. Yeah.
spk08: So thank you, Gina. Let's start with Japan. So Japan is a large market. And Japan is unique for achondroplasia in that it is the only market in the world where growth hormone is approved to treat achondroplasia. Now, I have personally been to Japan and talked to investigators in achondroplasia treating pediatric endocrinologists. And what they've told me is they know that growth hormone doesn't work. But anyway, parents are dedicated to getting their kids on treatment. And that's an available option. That's actually a really favorable environment then to be bringing VoxHugo into because there is an established treatment network. AECOM kids are actively under treatment in a way that they aren't really in the United States or most other markets. And so it's kind of an active market for us to jump into instead of having to build. like we're doing and as I've described for the United States. It is true then that we have a switch component and a competition component to deal with, but we think that net-net, that's pretty favorable. And the way that the Japanese pricing system works with our approval timing there, we've really got a couple of published references One is the United States and the other is Germany. So that bodes very well for pricing at a competitive level with Germany and United States when we get that far, which will be just another month or so. Turning to Australia, Australia is also another unique place because we have a really active investigation or investigator in Australia, so there's a really active treatment community for achondroplasia and a big appetite for wanting to treat these kids and help them, including throughout the whole Box Ogo clinical development program. So we're starting out there with a really enthusiastic and experienced investigator. Australia is a market of 27 million sold compared to about 125 million in Japan. And with the epidemiology of a chondroplasia, you would expect that the available market in Australia would be about 20% the size of Japan. It also takes longer to get reimbursement approval in Australia, I think a year or even longer. So why is Australia important? Australia is important because by the time we're two to three years into the global launch cascade, when it comes on, it is going to be illustrative of the additional markets in our 78 market footprint that we bring on board over a period of several years or more to keep the growth of the brand being driven. So think of Australia as being one of those mid to late growth drivers, and just illustrative of one market of many that will be doing that. Thanks for the question.
spk02: So, Hank, do you want to answer the question? Yeah, sure.
spk11: You know, Gina, it's a little hard to answer with deliberate specificity, and that's to some extent because a resubmission process is not as structured by the fda as a original submission you know with a resubmission they tell you with it with an original submission they tell you with the day 14 filing letter then you have an early you have a mid-cycle meeting and a late cycle meeting all of which are formal contact points all of which is there going to be an ad commas formally on the agenda so you kind of know to expect to hear from those and the resubmissions don't have those same uh milestone dates so i think the short answer to your question about whether we'll When would we know when they tell us? And that's not going to be tied necessarily. You know, as far as reading off of Unicure and what that means in general for our application or for whether to have an adcom, I'd point out that to the best of our understanding, the Unicure PDUFA date is going to be sometime in November, which means if there was going to be an adcom, it would likely be before we submitted. That's assuming they stay on track for that November PDUFA action date. Now, it's hard to handicap that as well for a variety of different reasons, not least of which is just the public comments that are being made by either Unicure, CSL, or both around working on companion diagnostic. And that's the kind of thing that could conceivably slow somebody down. So if that were to happen, then intersections of the applications might be more apparent, and then the question will get re-asked about adcoms. But back to your original question, when will we know? We'll know only when they tell us and not at prescribed milestones.
spk09: Our next question comes from Robin Karnoskis from Truett Securities. Please go ahead.
spk16: Hey, guys. This is for Robin. Thank you so much for taking our question. On Roctavian, Hank, can you comment on your confidence in U.S. filing for Roctavian that the U.S. filing for September is on track? Have you submitted any more data since you last updated, and have there been any more communications with FDA that give you confidence that this is going to be the timeline? And then a question on Waxogo growth, you know, really impressive bump in patients quarter over quarter. Was this in line with your expectations and also maybe still early, especially in the U.S., but any early compliance data points? Thank you.
spk11: Thank you. Yeah, the confidence comes from, you know, we are confident that we will be submitting in the September timeframe, and the confidence comes from a combination of both informal communications we've had with the FDA, to just clarify, around some specific points about what they're looking for and how they want it presented, which all seem straightforward for us. And as well, just making progress on doing the work and having good line of sight. So we're reiterating today our confidence that we can get the application on into the FDA by September.
spk02: Jeff can elaborate, but regarding your question on VoxOgo, Yeah, I mean, actually, VoxOgo's launch is doing better than we anticipated. This is what was behind your question here. And regarding compliance, compliance is very, very good. As far as we can tell, we have only heard of about two or three patients, commercial patients that have discontinued to date, and that's worldwide. And actually, this is kind of different I know there is one of your competitors that did some QL call with our U.S. orthopedic surgeon who claimed to have by himself two or three patients that discontinued voxel. We have no evidence that it happened with that doctor, but Jeff, do you want to?
spk08: Yeah, and just to clarify, the compliance and persistence drop-off, we only have that in the United States, so those figures are relative to our U.S. experience, but anecdotally, we haven't heard anything outside of the united states that would be would indicate some other um uh experience um relative to expectations you know uh we've not been shy however about the the market opportunity for botsogo in achondroplasia and so relative to expectations i would say that the adoption curve is just happening faster than we had built into our original guidance. But we've thought for years that this is likely to be our biggest pediatric opportunity in the portfolio, and the early returns are supportive of that kind of thinking.
spk16: Great. Thank you so much.
spk09: Our next question comes from Matthew Harrison from Morgan Stanley. Please go ahead.
spk15: Great. I appreciate you guys fitting me in. I guess two small ones for me. So first on Palanzeke, outside the treatment center issue, anything else you can do to try and re-accelerate the trajectory there? And then second, just on Dynacor and that asset, what's happened? Because I believe, I don't know, maybe it was two years ago, I think you were close to filing an IND. So can you tell us what changes you've had to make in that program and why you feel confident you'll be able to get towards an IND next year? Thanks.
spk02: I'll start on Pallantyck and have Jeff continue with his perspective and then actually answer the Dynacor question. On Pallantyck, I think, you know, Pallantyck is an enzyme and like all enzymes, it grows slowly but surely. We can take the examples of Maglazam and Dezim that are very substantial drugs that actually didn't even start as fast as Palindex. So Palindex is going to continue to grow, and I think we anticipate double digit growth this year. There's been a challenge with the PQ centers, which are basically an office in large genetic centers. And because of COVID, indeed, they had a tendency as they reopened to prioritize patients with severe disorders instead of, you know, patients with PKU. But we do have a plan that is being implemented to actually now start the patients not only outside of the hospital and the PKU centers, but also use other prescribers that beyond geneticists that Jeff can talk about. Jeff?
spk08: Yeah, thank you, JJ. Exactly correct. the situation for adult PKUs patients is a little unique because historically all of their care has come from these PKU clinics that are either part of a larger genetics clinic or mixed in with a larger genetics clinic at mainly large academic institutions. And that fact has really had a huge impact on their their ability to access live care, which is necessary for Pal and Zeke. In contrast, for example, to what we've been experiencing with community-based pediatric endocrinologists, for example, for VoxOga, where access is not nearly as impacted. So we mentioned the alternate prescriber initiative, and the idea there is is to tap into adult endocrinologists that are accustomed to dealing with complex therapy. And it's the fact that they haven't historically seen PKU patients doesn't mean that there's not an interest and a natural link there and an ability to deal with Pal and Zeke. We're just in the early stages of trying to make that one go. In addition, One thing that we did implement over the last year is a begin-at-home program. So recall under the REMS, Palantir patients have to take their first injection in the presence of a healthcare professional. Historically, that would have meant a trip to the PKU clinic for that first injection. So we were able to remove that barrier for new patients that are starting. That's just an example of some of the things that we're doing to try to get around the impact that the pandemic has had on PKU clinics and we'll keep you posted. Yeah, yeah.
spk11: So I don't know where, Matt, you got the original impression about the filing timeline because we're actually pretty optimistic about our current filing timeline and feel like it's at or ahead of schedule slightly. Greg's Guyers, our chief technical officer's team has done a lot of work on manufacturing the vector and our preclinical groups have done a lot of work with Dynacor on human cardiomyocytes as well as doing a lot of work in vivo in animal models of myosin binding protein C3 deficiency. So we're feeling pretty good that a 23 IND is a possibility. along with 349, of course. But no, we're pretty pleased with the progress we've made with Dynas so far.
spk15: Great. Thank you. Thank you, Hank.
spk09: Our next question comes from Tim Lugo from William Blair. Please go ahead, Tim.
spk17: Thanks for squeezing in as well, and congratulations on the strong launch. Can you give us an update on about DOGO for infants? I know you have the investigators study which should have 52-week data next year. You also have the phase two patients at risk of surgery study ongoing. What's just the regulatory strategy for these patients?
spk11: Well, so you mentioned a bunch of different things. So we're talking about children with no other recognized morbidities. You know, we completed this so-called 206 phase two study. trends in the right direction. I think reasons to believe that that could lead to a label amendment are, to some extent, based globally on other health authorities' acceptance of the data that we've provided so far, but also that the biology and the unmet need here are very strongly favorable, and the results trending in the right direction could be viewed as meeting the bar. The reasons not to believe are FDA can get hung up on things like devalues and that sort of thing. And then we do have a study in children who have potential risk for frame and magnet compression. I believe that is completely enrolled or nearly completely enrolled at this point with a data readout to come. And then finally, we have some work going on with an IST with Dr. Dauber at Children's in D.C. that's exploring the activity of Oxego in children with mutations other than the one that causes achondroplasia. which is also very encouraging in that we do see signs, preliminary signs of enhanced growth after a run-in period. So, again, this goes back to a much earlier question about the things that we're doing to build out the Voxogo brand in its lifecycle to demonstrate the value across a spectrum of ages, a spectrum of delivery, kinds of considerations, a spectrum of, potentially a spectrum of indications.
spk17: All right. Thank you.
spk09: Our next question comes from Akash Tiwari from Jefferies. Please go ahead.
spk01: Hi, this is Ivy for Akash. Thanks for taking our question. We have one quick question on VoxLogo. I knew you already touched on this topic during the call, but regarding the Phase 2 data in the three new indications you presented at PEF earlier this year, can you comment on the development timeline and also how will you further advance these indications? Is there a potential to pursue accelerated approval for these indications, and when can we expect to hear updates on those? Thank you.
spk11: Yes, as I just mentioned, that study by Dr. Dauber is still very much in flight, and there does need to be a lot of regulatory interaction around the design of clinical trials for Voxego outside of the achondroplasia indication. Don't want to set a specific timeline of expectation at this point, as we're still in the process of strategizing and engaging health authorities. We'll provide updates when we have specific updates to provide. But we are very encouraged by the activity that Dr. Dauber is demonstrating, improving height. This is very much what was predicted biologically well before we completed the phase three trial of voxelgoidic contrabalasia. So we do have a great deal of passion to try to find pathways to make this novel, you know, natural regulator of bone growth available to patients with other statual deficiencies besides achondroplasia.
spk01: Thank you.
spk09: Our next question comes from Debjit Chattopadhyay from Guggenheim Partners.
spk19: Please go ahead. Hey, thanks for taking my questions. So I've got a couple. On VoxerGo, what's the net price in ex-U.S. territories right now? And then on Roktavion, how should we think about the number of hub centers in Germany initially, and then the three major markets over the remainder of, say, 23? Thanks so much.
spk08: Scott Rice, XUS. Yeah, so, so far in Loxugo, you know, the listed prices are in Germany and the United States. We've previously disclosed that. We are close to getting a finalized price on reimbursement post the one-year repricing period in Germany, and that will involve a confidential discount. So we won't be disclosing those confidential discounted prices. So far, what we've been able to achieve in other name-patient sales markets around the world is a price that's, you know, reasonably close to what we see in the United States and Germany so far. Over time, those prices are going to go down as we complete reimbursement deals and as we have guided since, you know, prior to the launch of VoxGo, but nothing more particular to report there. And sorry, your question about Ractavian in Europe in 2022. Sorry, I missed that one.
spk19: So I was wondering how should we think about the number of hub centers? Because I believe it's a hub-and-spoke model that's being talked about in terms of screening patients and identifying patients from the neutralizing antibody perspective. So from a number of hub centers that you would likely need in Germany and in France,
spk08: france italy and spain between now and end of the end of 2023 um great question so just uh to put out on the table that haven spoke model was uh was published on by the european hemophilia community so you can find more in the may 2020 and i believe september 2021 uh publication of hemophilia that describes that initiative more completely. That's not a BioMoran initiative. That is a European hemophilia community initiative. So back to Germany and France, think low double digits of hub centers in each country, which is really nice because it'll allow us to focus on relatively small number of centers, get them trained and in service and ready to treat patients. And then we'll have a relatively small number of centers that are gaining critical experience actually treating those patients. And the hub and spoke model would involve essentially, you know, the workup of the patient at the spoke hemophilia treatment center, referral in for treatment, referral back out to the spokes for post-treatment follow-up. Thank you.
spk09: appreciate it thank you so much our next our next question comes from it looks like that person went out of key okay it looks like the call uh we run out of time so we're going to turn the call back to our ceo bio marine ceo jj bnm closing remarks thank you operator and thank you all for joining us today so our results in the first half of the year underscore the
spk02: strength of our brands and our execution across the organization. As reported, the addition of Oxogo to our commercial portfolio is an important component of our growth story, and it does pave the way for GAAP profitability this year and beyond. So we look forward to the potential launch of our next significant opportunity with Octavian in Europe later this year. I would say combined with VoxOgo, we believe that both of these drugs will drive substantial value for our patients, our employees, and our shareholders over the next few years. So thank you all for your continued support, and we look forward to seeing you soon.
spk09: This concludes today's conference call. Thank you for attending.
Disclaimer