BioMarin Pharmaceutical Inc.

Thank you for standing by and welcome to the Biomarin Pharmaceutical fourth quarter and full year 2023 conference call. I would now like to welcome Tracy McCarty, Head of Investor Relations, to begin the call. Tracy, over to you.

Thank you, Mandeep. Thank you everyone for joining us today. To remind you, this non-confidential presentation contains forward-looking statements about the business prospects of Biomarin Pharmaceutical Inc., including expectations regarding Biomarin's financial performance, commercial products, and potential future products in different areas of therapeutic research and development. Results may differ materially depending on the progress of Biomarin's product program, actions of regulatory authorities, availability of capital, future actions in the pharmaceutical market, and developments by competitors. And those factors detailed in Biomarin's filings with the SEC, such as 10Q, 10K, and 8K reports. In addition, we will use non-GAAP financial measures as defined in Regulation G during the call today. These non-GAAP measures should not be considered in isolation from, as substitutes for, or superior to financial measures prepared in accordance with U.S. GAAP. And you can find the related reconciliations to U.S. GAAP in the earnings release and earnings presentation, both of which are available on the investor relations section of our website. On the call from Biomarin Management today, are Alexander Hardy, President and Chief Executive Officer, Hank Fuchs, President of Worldwide R&D, and Brian Mueller, Executive Vice President, Chief Financial Officer. Jeff Ager, Executive Vice President, Chief Commercial Officer, and Greg Geyer, Executive Vice President, Chief Technical Officer, are here with us to answer questions during the Q&A portion of the call. I will now turn the call over to Biomart's President and CEO, Alexander Hardy.

Thank you, Tracy, and good afternoon, everyone. Thank you all for joining us today. As I said in January and reiterate today, the opportunity at Biomarin to positively impact patients' lives through transformative therapies while delivering value-creating revenue growth and profitability to shareholders has never been more evident. Touching on today's financial results, total revenue grew 20% in the fourth quarter of 2023 compared to the fourth quarter of 2022. total revenue grew 15% for the full year of 2023 compared to the prior year. This is a very strong performance. On a constant currency basis, total revenue growth was 25% in the fourth quarter and 20% for the full year. Equally as important to Biomarin's growth story are bottom line results. Non-GAAP earnings per share increased 48% in the fourth quarter versus the fourth quarter of 2022, percent year over year. These 2023 results, along with our growth expectations as implied by our full 2024 financial guidance provided today, solidifies our position as a financially self-sustaining business that can grow revenue, expand operating margins, and accelerate earnings per share. Brian will provide more details on the financials in a moment, so I will now turn to update you on our progress on the priorities I outlined in January. The first, to accelerate and maximize the Voxergo opportunity, remains front and center. As demonstrated by the Voxergo financial results today, 178% growth year over year, with close to 300 new patients added in Q4. The launch in achondroplasia is on a path to blockbuster status. We were pleased that 70% of new U.S. prescriptions in Q4 were for children under the age of five following FDA's age expansion approval last October. The U.S. and EU approvals last quarter allowing treatment from infancy sets Voxergo up to be a major multi-year growth driver. Beyond having an expanded age label, Voxergo's profile benefits from more than 1,000 patient years of long-term safety and efficacy data beyond just height. We believe this substantial clinical track record will encourage families to pursue VoxOgo treatment as early and for as long as possible to enable maximum essential therapeutic benefit. As a result of the growing global demand for VoxOgo treatment and the scope of our extensive long-term clinical data, We're seeing an increase in the breadth of our prescriber base. Our work to build prescribing confidence and relationships with pediatric endocrinologists in the United States has been extremely well received. With recent Voxergo uptake for children with achondroplasia under five being twice as fast as launch uptake for children over five, our plan to drive earlier and longer intervention with a goal of greater therapeutic outcomes is on track. We plan to build on our established leadership in achondroplasia treatment to expand into multiple other statural conditions. In the fourth quarter, Biomarin began the enrollment in the six-month observational run-in portion of the pivotal program with Voxergo for the treatment of children with hypochondroplasia. And we are actively engaging global health authorities regarding development programs in idiopathic short stature, and multiple genetic short stature pathway conditions with plans to begin pivotal studies later this year. As Hank will discuss later, we believe that there is strong proof of concept and indications beyond achondroplasia. As we expand into these indications, we hope VoxOgo treatment will empower patients and families across a spectrum of structural conditions to live their lives to the fullest. For this reason, VoxOgo acceleration, achondroplasia and expansion other indications remains the top priority of Biomarin. The second priority is establishing the Roctavian opportunity. As I said in January, we believe 2024 and 2025 will inform Roctavian's uptake curve and long-term potential. We have been very pleased with the strong and positive payer response to the value proposition associated with Roctavian and how this is translated into published payer policies and lives covered. Furthermore, we continue to be confident with the clinical profile of the product, which is evidenced by the warranty agreement, which has been equally well received in the marketplace. We have also continued to make good progress in activating the global marketplace, including the recent publishing of the Italian Octavian price. We want to reiterate, however, that the complexity of aligning the required pre-infusion checklist will take time. As I outlined last month, for successful Octavian treatment, we need a motivated patient, a supportive payer, and a treatment site with a physician who's willing and able to use the product. For a pioneering new therapy, this isn't a surprise and is the reason why we intend to let the results do the talking for Octavian uptake. We do expect patients to be treated with Octavian in 2024, as implied by its inclusion in our 2024 total revenue guidance. In the meantime, we will continue our work to activate the global marketplace and look forward to reporting Roptavian revenues on a quarterly basis. The third priority is our focus on the most productive R&D assets, those with transformational benefits for patients and high commercial potential. I've been spending a lot of time with the R&D team to understand the unique profile of each pipeline asset currently under development. I've been impressed by the level of innovation and expertise in developing transformational therapies. Keeping with our ambitious financial goals, we intend to hold a very high bar in terms of discipline spend and prioritization of the most impactful medicines. To that end, we're undertaking a strategic portfolio review to determine which pipeline assets will advance and which will not. A complete update on prioritized R&D assets, those with the highest potential patient impact and highest potential value creation for shareholders, will be communicated at our investor day later in 2024. In the meantime, we have a number of promising candidates advancing, and Hank will provide an update on those in a moment. And lastly, our fourth priority is increasing profitability faster than originally planned. Our 2023 results and our four-year guidance for 2024 both demonstrate our transition to growing profitability and significant operating leverage. Our four-year 2024 guidance reflects double-digit revenue growth, regardless of Roptavian contributions, and non-GAAP earnings per share growing faster than revenues. Otsogo is expected to be a major driver of year-over-year growth, and is reflected in our streamlined guidance, total revenues guidance item, which includes all Biomarin commercial products. Non-GAAP operating margin is a new line item added to Biomarin's 2024 four-year guidance, primarily because it reflects our focus on leverage across the P&L and anticipated margin expansion this year, as well as providing you with a clear line of sight into our business performance. We believe these streamlined, full-year guidance items will allow you to track our financial progress as we strive to achieve the four strategic priorities I just described. So in summary, it's truly an exciting time at Biomarin, and I see tremendous opportunity to create value for patients and for shareholders. The entire leadership team is hard at work on shaping the future corporate strategy, which will include views on R&D and capital allocation, as well as setting and taking steps to achieve ambitious long-term financial targets. The entire organization is mobilized and approaching this work with a sense of urgency. We will be making significant progress that we will want to share externally on a timely basis. That could be incrementally and at the investor day for which we are evaluating the specific timing. Please stay tuned for additional updates. Thank you for your attention and I will now turn over the call to Hank provide an update on key R&D highlights.

Hank? Thank you, Alexander, and good afternoon, everyone. The R&D organization is gratified by the productivity achieved on behalf of those who benefit from our innovative therapies. As we take Biomarin into the future and align our drug development capabilities with our ambitious financial goals, we will continue to prioritize the most high-impact medicines for patients. What will change is the level of spend and the rigor of the criteria that used to determine which assets advance. As Alexander mentioned, we are undertaking a strategic assessment of our portfolio with the goal of ranking, prioritizing, and then advancing only those assets that represent the highest value to patients. The assessment will evaluate the amount of time and investment required to determine proof of concept through global approvals, as well as the market opportunity and competitive landscape for each asset. The higher bar is designed to expedite development, increase the probability of success, and improve cost effectiveness. We look forward to sharing the results of the strategic assessment at our Investor Day later in 2024. Touching briefly on a few clinical updates, we intend to open the treatment study of the pivotal trial with Oxego for hypochondriplasia in the middle of this year. Results from Dr. Gauber's 52-week Phase II study with Oxego and hypochondriplasia were recently posted to the ACMG website ahead of his oral presentation at the meeting in Toronto next month. We are encouraged to see an increase in the 12-month annualized growth velocity of 1.81 centimeters in Voxogo-treated children treated with hypochondriplasia and a safety and sustained durability profile observed in achondroplasia at six months and 12 months. These data provide further support for our imminent plans to initiate the treatment phase of our pivotal program in hypochondriplasia expected to begin in mid-24. Regarding our development programs in idiopathic short stature and multiple genetic short stature pathway conditions, we are in discussions with global health authorities with plans to begin pivotal studies later this year. We look forward to Dr. Dauber's ISS update at the Pediatric Endocrine Society meeting in May. Biomarin is securing our leadership position for treating multiple genetic central conditions, and we look forward to updating you on our progress across the three pivotal programs just described. Turning briefly to other assets in the early stage pipeline, we're pleased to share that the Phase II proof-of-concept study of BMN351 for the treatment of Duchenne muscular dystrophy is open for enrollment. The 52-week study will enroll 18 boys with Duchenne muscular dystrophy with the potential to expand enrollment as needed and is designed to assess both dystrophin levels and functional measures. BMN349 is an early bioavailable small molecule designed for the treatment of alpha-1 antitrypsin deficiency liver disease. Our non-clinical studies indicate 349 enables secretion of the mutant protein and prevents its polymerization in liver cells, which if unchecked, drives the progression of liver disease. The single ascending dose study in healthy human volunteers is progressing with no safety signals observed thus far. We look forward to providing an update on our other pipeline assets following the strategic assessment described by Alexander. Thanks for your attention. Thanks for your support. And I will now turn the call over to Brian for financial updates. Brian?

Thank you, Hank. Please refer to today's press release summarizing our financial results for full details on the fourth quarter and full year 2023, including reconciliations of GAAP to non-GAAP financial measures. I will provide my comments on a GAAP basis for 2023 results, and will comment on key financial updates and guidance for 2024. All 2023 financial results will be available in our upcoming Form 10-K, which we expect to file within the next few days. In the fourth quarter of 2023, BioMarin generated strong total revenue of $646 million, representing 20% year-over-year growth, including KuVan, and 26% growth, excluding KuVan. As expected, the strength of our enzyme products generated more than $1.7 billion of net product revenues for the full year 2023, an increase of 4% year over year. Looking more closely at performance in the fourth quarter, Voxogo revenues of $146 million represented 118% quarter over quarter growth. We've previously discussed the supply constraint on Voxogo revenue in 2023. Our plans for supply to satisfy forecasted commercial demand around the middle of this year remain intact, and our fourth quarter revenue result being higher than guidance was driven by some incremental supply that became available late in the quarter. Double-digit revenue growth of both Vimism and Palantzeek in the fourth quarter was partially offset by anticipated lower KUVAN revenues, and we're also an important contributor to total revenues exceeding $2.4 billion for the full year 2023 and in line with our expectations. R&D expenses in the fourth quarter were $206 million, up $34 million year-over-year, primarily due to increased early-stage research activities as well as increased activity in our clinical programs. SG&A expense in the fourth quarter was $275 million, up $29 million from last year. Please note, we had a number of unique expenses during the fourth quarter of 2023, including impairment charges related to the discontinuation of our first-generation Vox Ogo pen, the devaluation of the Argentinian peso, along with incremental G&A expense related to corporate governance matters and leadership transitions. Together, these items combined a total over $40 million in Q4 2023. Moving to the bottom line, GAAP net income for the fourth quarter was $20.4 million, contributing to $168 million of GAAP net income for the full year, representing GAAP diluted earnings per share of 87 cents per share. GAAP net income for the fourth quarter was also impacted by the recognition of a loss on an impairment recorded in the other income and expense line. I will note that on taxes, similar to the third quarter, we recognized some incremental discrete tax benefits in the fourth quarter that lowered our effective tax rate for the full year. We continue to project on a consolidated global level an effective tax rate in the low 20s for 2024 and beyond. Non-GAAP income for the fourth quarter was $95 million and $405 million for the full year, representing full-year non-GAAP diluted EPS of $2.08 per share and growth over 36% over 2022. As we move into 2024, please note that there are select changes in Biomarin's P&L geography becoming effective in 2024. We are expecting to classify foreign currency revaluation in other income and expense going forward instead of its prior classification within SG&A expense. And idle plant time-related costs will be classified in cost of sales going forward instead of their prior classification within SG&A expense. These changes, which again are classification only and do not impact the bottom line, are being made to provide greater clarity on our core operating results, as well as to better align with industry peers. Details of the revised presentation of idle plant costs and foreign exchange gains and losses for previously reported 2023 and 2022 periods to conform with the presentation that we'll use going forward are available on our website. As Alexander mentioned, for 2024, we are guiding to total revenues, non-GAAP operating margin, and non-GAAP diluted earnings per share. For the full year, 2024, total revenues, we expect between $2.7 billion and $2.8 billion. which at its midpoint represents approximately 14% growth compared to 2023. To provide some additional context, since this is the first time that we are not guiding to specific brand revenues, our 2024 revenue guidance is driven by continued strong growth in Voxogo, expansion into younger age groups being a key driver of anticipated 2024 new patient starts, mid to high single digit growth across the five brands in our ERT portfolio, and offset by the continued decline of KUVAN due to the loss of market exclusivity. While Roctavian is definitively included in our total revenue forecast, the revenue contribution from Roctavian is relatively modest and risk-adjusted based on our recent experience. Going forward, we will let the actual Roctavian results speak to the performance. Also, one comment specific to the first quarter of 2024. that we are expecting a Q4 to Q1 dynamic with respect to order, timing, and volumes, whereby Q4 included some modest incremental revenue that will impact Q1 growth. We stand behind full year 2024 total revenue guidance provided today, and we expect most of the 2024 total revenue growth to be weighted to the second half of the year. With respect to non-GAAP operating margin for the full year 2024, we are guiding to between 23% and 24%, which represents four percentage points of expansion versus the 2023 non-GAAP operating margin of 19.4%. This is inclusive of our G&A reclassifications that I just mentioned. Over the last three years, including through our 2024 guidance, Our non-GAAP operating margin is projected to increase by approximately 13 percentage points from approximately 10 percent in 2021 to the 23.5 midpoint of our 2024 guidance. This demonstrates our commitment to growing profitability. However, it is not the end of the story as we are working through our cost efficiency and resource allocation priorities to help set ambitious long-term financial targets to be communicated this year. And for non-GAAP diluted earnings per share, we expect between $2.60 and $2.80 per share for the full year 2024, which at the midpoint represents 30% growth over last year. As we move into the next chapter of Biomarin, we are executing on our growth strategy with impressive performance driven by Voxelgo and Echondroplasia in pursuit of new indication of durable and growing enzyme products business and the potential to realize the value of our people. Thank you for your continued support, and we'll now open up the call to your questions.

Operator? The floor is now open for your questions. To ask a question at this time, simply press the star followed by the number one on your telephone keypad. We ask that you please limit yourself to one question.

We'll now take a moment to compile our roster. Our first question comes from the line of Salveen Richter with Goldman Sachs.

Please go ahead.

Good afternoon. Thanks for taking my question. I just wanted to better understand your EPS guidance for 2024 and what that assumes. Are there some OPEX and, you know, overall R&D cuts that are possible? that are basically baked into the assumptions there, and help us also understand, as you do your strategic portfolio review of the R&D program, what the criteria is for further investment and advancement. Thank you.

Yes. Thanks, Helene. This is Brian. Appreciate the question. So, first of all, you know, we're pleased that the non-GAAP EPS guidance midpoint implies 30% growth over this year. And this year, as noted, was over 30% growth over 2022. There are a few items that impact the year-over-year non-GAAP analysis. One is those, some of those tax benefits that I mentioned in 2023. So now that tax since the beginning of 23 is in our non-GAAP income, To the extent those benefits don't recur, that would be a headwind, if you will, to 2024 non-GAAP. There's also some unique – I mentioned the unique SG&A charges in 23. We've got some incremental SG&A in 24. We're implementing a new ERP system, which is commanding some G&A resources in 24. So those are some of the dynamics. And to the part of your question about how much of our strategic savings or cost efficiency opportunities are included, just a modest amount of the known items at this point that we were already working on. We are embarking on the cost efficiency and operating model efficiency exploration as we speak. This is going to be part of the more ambitious financial target setting for the future to be communicated later this year. So I want you to stay tuned on that part. But I will say that there's not a substantial amount of savings related to that in this guide.

Thanks, Alvin. In response to the second question about prioritization of the R&D portfolio, we are undertaking a strategic assessment of our portfolio with the goal of ranking, prioritizing, and then advancing only those assets that represent the highest value to patients and shareholders. The assessment will include considerations of time and money involved to prove concept or to advance to global approvals, as the case may be, as well as consideration of market opportunity and competitive landscape. And the concept of having a very high bar for going forward is to foster expedited development. When things happen early, that are impressive and important, subsequent development and registration and market access happens much more quickly. And so with those higher bars, we can also see that subsequent events have higher probability of success and also contribute to improving the cost effectiveness of programs. We look forward to sharing the results of the strategic investments later in 2024.

Our next question comes from the line of Akash Tiwari with Jefferies. Please go ahead.

Hey, thanks so much. Alexander, in the past, Byron spent a lot of time and resources building up its gene therapy capabilities, but we haven't really seen that translate to shareholder value. For example, it looks like you're spending almost identical amounts on VoxOga and Roctavian, but with different results. What are your thoughts on potentially divesting your gene therapy platform or even Roctavian in order to cut costs and focus the story? Is that option out of the question in your mind?

Thanks very much for the question.

You know, as I mentioned in terms of our priorities, we're still very much at the early stage with Roptavian. We really want to establish the opportunity there. We are seeing progress in terms of market access, market activation. So we want to see that run through 2024. We also think probably into 2025 is when we'll be able to really determine. In the meantime, we're spending wisely and cautiously supporting the launch, but we're very mindful of the return on investment that we're currently seeing from Octavia. At the same time, we referenced in this conversation today a strategic review. So we're also thinking about the future strategy of Biomarin. We're looking at the R&D portfolio. We're looking at our own experience with gene therapy, the scientific challenges, regulatory market access, market uptake, and also taking note of what's happening in the world outside Biomarin's walls. And as part of that, we'll assess, do we have the right exposure to gene therapies in our pipeline? Is it something we want to double down on, stay the course? take a lower exposure to gene therapies. So we'll continue to keep you updated.

We'll provide more information at our investor day later this year.

Our next question comes from the line of Jessica Phi with JP Morgan. Please go ahead.

Great. Good afternoon. Thanks for taking my questions. A couple on Voxogo. First, on the financial side, you mentioned 4Q revenue, I think you're seeing sort of broadly, 4Q revenue reflected modest incremental revenue that would impact 1Q growth. Can you talk to whether the 4Q Voxogo number specifically benefited from any channel inventory changes or lumpy international orders? And if so, just quantify, you know, what was out of the ordinary. And then on the pipeline side, can you do basket trials with multiple indications for some of these additional potential Vox Ogo development areas? How likely is the, you know, FDA or other regulators to sign off on something like that, that type of approach? Thank you.

Hey, Jess. It's Brian. Thanks. I'll take the first part of your question. Good question, and the way I'd respond is, Nothing excessive with respect to the channel and nothing broad across the marketplaces. I made that comment because when we gave our full year guide, essentially Q4 guide, you know, back on the 1st of November, the high end was $455 million. And we talked about how that high end was supply constrained. And so here we are, you know, reporting close to $470 million for the quarter. So I wanted to explain that the circumstances there were some additional commercial supply that became available. So we used it to meet demand that was out there. And the point is that with respect to Q1, we don't necessarily expect or guarantee that that same dynamic can recur. So that's the Q4, Q1 dynamic. You know, that plus decreasing QVAN in Q1 is just an overall comment that Q1 is not going to be our strongest quarter, and we're going to see most of the growth in the second half of the year.

Thanks, Jessica. As regards to the concept of basket, you know, one of the great benefits of having Dr. Dauber do his study is we actually have really good regulatory feedback on that question already. And in fact, you could see that his study is itself a basket of things that might be formally known as subsets of idiopathic short stature or hypochondriplasia. So the concept of basketing has already been in front of the FDA and has already gained a little bit of acceptance. And having said that, though, As reflected in our prepared comments, we are in the stages of finalizing our game plan after a last interaction with health authorities around the world, and we'll communicate final design decisions when those studies come online. All that said, we're not waiting for any of that because we're also implementing our theater studies, the baseline run-in studies that are essential for enrolling these baskets of studies so that we can expedite the start and completion of these additional registration activities. So in sum, I think we're trying to be as clever as we can be about getting these studies underway and working with health authorities around the world to ensure that they meet the demands of regulators.

Thank you.

Our next question comes from the line of Phil Nadeau with TD Cowan. Please go ahead.

Thanks for taking our question. A follow-up question on Voxogo. In the past, Byron had talked about converting Voxogo's approval form accelerated to full and that potentially changing what would be necessary for the competition to be approved. Is there any update on the process of converting Voxogo's approval to full? And at this point, would it have any impact on the regulatory requirements for the potential competition that's in pivotal studies already?

Hi, Phil. No particular update on the regulatory status or strategy or read-through on competitors, but one of the things that's really exciting about the update that we can report is that every so often we look at ongoing studies to assess durability of Voxogo's effect, and we continue to be reassured that Voxogo, unlike other growth-promoting types of drugs, has this remarkable benefit of sustaining its effect. And that's really one of the key features of benefit of VoxOgo for patients and I think is going to be an important bar for any future innovation in this space to ensure that patients can resume a physiologically normal growth rate safely and through the entire period of their growth, starting from earliest diagnosis all the way through the closure of the growth plate. So good on VoxOgo so far.

Perfect. Thank you.

Our next question comes from Jeff Meacham with the Bank of America. Please go ahead.

Hey, guys. Afternoon. Thanks for the question. Another one on Voxogo. I know it's a centerpiece of growth and the major pipeline investment for the year and beyond, but I wanted to ask you, what's been the impact of your commercial investments so far in terms of the pace of new starts or broaden the prescriber base, looking into the second half of last year, and then what do you think about what does success look like for 2025? I'm just trying to figure out a couple metrics that we can kind of evaluate over the course of this year for Vox Ogo.

Thank you. Hey, Jeff. It's Jeff here. Let me take a shot of that.

So I think we've had some good returns on our commercial investments today. You mentioned new starts. New starts were accelerated starting late last year following the label expansion, as noted in the prepared remarks. Expanding the prescriber base, particularly in the United States, to P to M Pediatric endocrinologist is a particular area of focus. Both last year and into this year, we're making good progress. And in terms of metrics, I would say we're dialing back from specific quantitative metrics on these launches and turning more towards revenue. I might suggest that with a With a post-launch revenue base for VoxOgo in particular, the best metric I would recommend now and going forward is the revenue line.

Great. Thank you.

Our next question comes from the line of Ellie Murley with UBS Financial. Please go ahead.

Hey, guys. Thanks for taking the question. At the ISS VoxOgo data update you mentioned will be coming in May, What should we expect from that in terms of the patient numbers and what you're looking to see? And then just as you look across the many different short stature conditions, how are you thinking about prioritization across the indications in which you'd move forward versus not and any threshold in terms of efficacy?

Okay. As regards Dr. Dauber's ISS anticipated update, you know this is his study and so it's very much under his determination as to what he's going to update. My understanding is that he's enrolled more hypochondriplasia patients than other indications, but I think he wouldn't be reporting unless he felt that there was useful information to be reported. I think the things to be looking for really are corroboration of what I think most scientists fundamentally believe, which is that CMP as a master regulator of bone growth is going to work across a wide variety of indications. And so as we had seen with the hypochondriplasia program. So it's actually sort of the first half of the cohort at the six-month mark that enabled FDA to gain confidence that we could go directly into phase three. And that's predicated on a lot of this biology. And therefore, I think the important outcome of the ISS presentation at PES is going to be, are we seeing basically the same effects that we expect to see, you know, in the different types of statual disorders. And as regards your second question, I think the prioritization process has been described, you know, really boils down to fairly conventional metrics around time and cost to proof of concept or to global registration, value that gets created for patients and for shareholders, with the idea of by setting a high bar for something like proof of concept, then you really only advance your winners. And by focusing on those, we hope that will expedite development and bring faster and higher value to patients and shareholders of the undertaking.

Thanks. Our next question comes from the line of Joseph Schwartz with LeeRink Partners. Please go ahead.

Great, thank you very much, and welcome, Alexander. I think I heard you say that the outcomes of the Strategic and Operating Review Committee could be communicated incrementally as well as at the investor day in the third quarter. So, I was wondering if you have a sense of which updates might emerge sooner and which updates could require more time to formulate.

Thanks, Joseph. Thanks very much for the question.

You know, the SORC is proceeding extremely well. We've met frequently. We're making progress on the financial guidance, long-term financial guidance, and the capital allocation strategy. We also have a lot of other work underway, as you get a sense, from cost optimization to acceleration of VoxOgo, even faster, R&D prioritization, et cetera, et cetera. And right now, we're figuring out what is the best timing to update the external world on our progress on these points. Obviously, the benefit of the investor day just allows us to put this all together with a strategic context of where we're going to take Biomarin into the future. At the same time, we're keen to share the information we can as soon as we can on the progress we're making. So as I said in my prepared remarks, please stand by for more information. The latest possible day will be investor day for all of that information.

If it makes sense, we'll communicate other information sooner.

Our next question comes from the line of Robin Karnoskis with Tourist Securities. Please go ahead.

Hi, this is Nishant. I'm one for Robin. So I know you have spoken on competitor oral treatment for achondroplasia. Can you give us any color anecdotally about how patients or prescribers think about the orals? Is there room for both if it gets approved, can't you?

Yeah, we've shared, you know, robust and highly significant growth data. from Vox Ogo in our clinical trials. And as I just referenced, you know, the accumulating data on height gain is really quite positive and informative. And you'll see more of that at ACMG demonstrating these long-term positive effects on growth. Importantly, also on improvements beyond height. For example, improvements in the physical domains of quality of life types of scores. And so, what we're really focused on is building our leadership position in the genetic statural conditions where we see an incredible potential for VoxAgo, again, to normalize growth, to sustain that normalization of growth through the entire growing period and having the greatest possible impact in patients' lives.

Thank you.

Our next question comes from a line of Mohi Bonzel with Wells Fargo. Please go ahead.

Great. Thank you very much for taking my question, and congrats, Alexandra, and welcome. Maybe one question for you. In general, what is your general thought on gene therapy as a therapeutic modality? I'm asking because a significant portion of your pipeline is investing in gene therapy, and we'd love to understand how you think about gene therapy in general for rare diseases, and what are the puts and takes there? Thank you.

Thank you very much for your question.

Yes, as I referenced a little bit, but let me go in a little bit more detail. We've got a very broad and exciting pipeline. We've got multiple modalities, including gene therapies. Gene therapies offer obviously significant potential benefits for patients, transformative benefits. We have an expertise and ability to develop, manufacture, and now commercialize gene therapies in multiple geographies. That is a unique set of capabilities that BioMarin has. As we look at our pipeline, as Hank was talking about, we're going to be assessing at a program-by-program basis what is the transformative potential of the program together with the commercial potential. At the same time, we're also looking at the overall strategy by Marin. What are we really, really good at? And where are we confident we're going to have a sustainable competitive advantage going forward? And that will include asking and answering the question about our exposure to gene therapy, which will then inform also the prioritization of our portfolio. So more to come on this. Please, you know, hold your question. We'll have a clearer idea of this and we'll share it at our investor day later in 2024.

Thank you.

Our next question comes from , Gina Wang with Barclays. Please go ahead.

Thank you. I have two very quick questions. The first one is regarding Vox Ogle. I think in your press release, you say you already treated 2,613 achondroplasia patients across 41 active markets. What is the total market opportunity in terms of achondroplasia patient numbers for these 41 active markets? And also, what is the pricing dynamics there? And the second, very quickly, regarding Roctavian, I think the last earnings was mentioned that six patients were ready to be dosed in for Q23. Should we expect the remaining five patients to be dosed in first quarter 24?

Hi, Gina. It's Jeff here.

I'm going to take that first question on Boxago patient numbers. Essentially, those 41 markets represent the core of the commercial footprint that we usually use to quote eligible patient numbers and market potential. And for that group of patients, that would now total about 20,000 patients eligible. And that's essentially matching the lower age limit in the different labels, which are zero, four months, or six months, depending on where you are in the world. And in terms of the Raktavian question, back to Alexander.

Thanks, Gina. Yeah, let me take your second question. We're going to provide details on Q1, including product revenues, at our conference call in April. You know, we're tracking progress on site readiness at hemophilia treatment centers with payers, completed CDX tests, positive CDX tests. But, you know, clearly these metrics so far have not yet correlated directly to patient update. So we're no longer going to be providing specific updates on these metrics. Once again, just to reiterate it, we're going to let the actual experience with actual commercial patient infusions inform our future expectations, and we'll report at the end of the quarter about our progress this year with infusions and revenue.

Our next question comes from a line of Paul Matisse with Stiefel. Please go ahead.

Hi, this is Julian on for Paul. Thanks so much for I guess just in terms of thinking about capital allocation moving forward, obviously you're reviewing the pipeline, but could you just provide a little bit of color on, you know, do you anticipate reinvesting in the pipeline perhaps after coding programs that don't meet that high bar that you speak of for advancement? Or are you sort of more focusing on, you know, growing the commercial business for Vox Sogo? I guess just any color you can provide on future capital allocation for 2024 and beyond would be super helpful. Thank you.

Yeah, thanks for the question. This is Brian.

We'll ask you to wait a bit longer for the outcomes of our strategic review to give you details on our capital allocation strategy. I mean, we can say that, you know, internal innovation, given our track record and value created in the current business, is going to continue to be a priority. But we also recognize that Biomarin not only carries a substantial amount of total cash and investments today, but we are now cash flow positive. So we are committed to developing a capital allocation strategy that's in the interest of maximizing shareholder value. That work is in process. and we will look forward very much to sharing it with you, but we'll just ask you to stay tuned until we finish the work.

Thanks. Our next question comes from the line of Vikram Perhot with Morgan Stanley. Please go ahead.

Hi. Good afternoon. Thanks for taking our question. We had a follow-up question on Roctavian, a bit of a broader one. So your release mentions, and you also just mentioned, a couple of different areas of work that you're going through to help progress commercialization here from patient education to site readiness, but I was wondering, now that you've had a few months of experience with the process for Octavian, what do you see as the one or two specific factors or drivers of uptake that you think you have the most near-term leverage with and control over that could support the trajectory here in 2024?

Hi, Vikram. This is Jeff here. I'll talk a little bit about that.

What we've said is that we've seen very nice signals of patient demand for example in the united states much of last year we talked about the build-up of a patient funnel in in the strategic market and priority market of germany where we had gotten good uptake of cdx testing we've also talked about the importance of site readiness and having reimbursement approvals that kind of clear that important reimbursement gate. As Alexander noted, we haven't seen a direct correlation, so we haven't been able to say, hey, this or that or these leading indicators are good predictive indicators of patient infusion and revenue uptakes. And so I think the idea from here is instead of trying to better tune that model, we're going to let the revenue, the actual revenue do the speaking for Rodkavian.

Our next question comes from the line of Tim Lugo with William Blair. Please go ahead.

Thanks for the question. You introduced operating margin in your guidance and you have a nice step up year over year. What are the initial impressions on whether BioMoraine will be able to continue to expand operating margins and eventually reach north of 40% like some of the other rare disease-focused companies?

Yeah, thanks a lot, Tim. Appreciate the question. It's a great one. So, again, we are pleased to be able to report and deliver over the last few years, kind of year-on-year operating margin improvement. We've been talking about it for a while, and it is – we're pleased to be able to actually deliver upon that. I'll give a two-part answer to your question. You know, on one hand, we know there's a lot of opportunity with the type of revenue growth that BioMarin has, not to mention the outcomes of the strategic work that we've talked about a lot today. potential impact on revenue into the future. We also recognize that we've got operating model and cost efficiency opportunities. We built this global infrastructure that now we're leveraging to support the strong launch of Voxogo, for example, in a very deliberate and organic way over the years. We've reached a lot of scale. We've got world-class capabilities across manufacturing, R&D, commercial, business support. But we've been focused on growing and scaling for years. And what that means is now we have a real opportunity to optimize the business model and make the cost structure more efficient. That's the work we're doing. together with the SORC and, by the way, the entire leadership team in enterprise. These are enterprise-wide initiatives that the company is really rallying behind. And the second part of my question is, for that reason, we'll have to ask you to stay tuned, but by all means, you can picture the work that we're doing to design what the appropriate and deliverable financial targets are. for long-term guidance purposes will be for the company. And we'll be sure to not just share those numerically, but the rationale, the strategy, and our plans to deliver upon them. So that's just going to take a bit more time. Thank you, though, for the question.

Understood. Thank you.

Our next question comes from the line of Olivia Breyer with Cantor Fitzgerald. Please go ahead.

Hey, good afternoon, guys. Thank you for the question. Wanted to ask about lifecycle management for your Voxogo franchise. Obviously, you have a lot of expansion opportunities within that product, but could we see any efforts to maybe better optimize the dosing schedule or maybe any other avenues to keep that product as competitive as possible? Thank you.

Yeah, thanks. That's a good question, and yes, in fact, we do plan to undertake some further dose optimization Right now, our thinking is to try to do that in parallel with registration-enabling trials, but again, details to be communicated when study designs are final after regulatory authority alignment.

Our next question comes from the line of Costas Ballouris with BMO Capital Markets. Please go ahead.

Hello, everyone. Congrats on the progress. Thanks for taking our question. Given that your R&D day is planned for the third quarter of 2024, which is about a year after Alex took over, and likely this is when you will potentially share pipeline prioritization details, I'm wondering whether you will continue to progress all pipeline programs full steam until this third quarter, or you are going to pause the progression of some of the programs until you decide on their fate. Thank you.

Thanks, Costas. You know, I think a big part of the purpose in the early part of the year of prioritizing the R&D portfolio ties to the conversations that Brian was just having around capital allocation, that Alexander was having around longer-term financial outlook. The way I think about that is that And it's a great thing that our company can generate cash that can be reinvested in our R&D portfolio. And we have to earn that through developing assets that have value to then reapply to generate new medicines. But we have to do that in a business context. And so as soon as we can make decisions about what's going to go forward, we want to invest in expediting that and also things that are not going to go forward. We want to make sure that we don't spend money on things that are not going to go forward. So that's very much the intention. And it's, I think, ties to Alexander's statement of how the progress of our process through to Investor Day could be potentially incrementally informed over the course of the year.

Our next question comes from the line of Jack Allen with Baird. Please go ahead.

All right. Thanks for taking our question, and congratulations on all the progress made over the course of the quarter. I wanted to ask one on Voxogo. You mentioned that about 70% of the new U.S. starts in the fourth quarter were from the younger patients in the label expansion. I guess, could you provide some more context around how penetrated the older patients are, and how should we think about growth of Voxogo moving forward? Is it mainly expected that it will come from younger patients, or is there still opportunity to expand uptake in the older patients in the US as well.

Thanks for the question, Jack. In the United States, we haven't disclosed penetration rates, and we're not going to introduce that metric. Overall, with reported numbers of about 2,600 patients, and you heard me quote the question to Gina earlier of an eligible patient population, of 20,000, you can do the quick arithmetic on that yourself. Specifically from the United States, which is one of our largest and highest value markets, we're really encouraged by both the continued uptake in the older children, those ages five and up from the original approval, and also the new demand from the younger patients. So I think we're pretty confident that we've got an opportunity for

for increased uptake there going forward. Great, thanks so much.

Our next question comes from the line of David Leibowitz with Citigroup. Please go ahead.

Thank you very much for taking my question. Just following up on that, with 70% of patients on Voxogo from new scripts being young patients, is it... to assume that that number would be maintained next year, or should that dial back as the year goes on?

Hi, David. Let me take that one on.

I don't think we have enough data to specifically say that we're going to maintain that mix, but that's a one-time metric intended to give you a little bit of color on how things are going in that key market since we got the younger age label expansion. But it's an important signal, and I think it's a good one, good and encouraging moving forward.

Thanks for taking my question.

Our final question comes from a line of Luca EC with RBC Capital Markets. Please go ahead. Oh, great. Thanks so much.

Thanks for squeezing in. Maybe, Alexander, at the R&D day last year, which I appreciate was before your time, we talked quite extensively about lifecycle management for VALROX, including testing any patients with neutralizing antibodies to AAV5, patients with factor VIII inhibitors, younger patients, and so on. Given the relatively slow launch, is that still a plan, or is there a scenario where you just don't invest that capital, just you prioritize the operational efficiency to really make the story here driven primarily by Avogadro, rather than Balbrox? Any call there, much appreciated. Thanks so much.

We do intend to include a review of those studies in our portfolio assessment and prioritization, and so we'll communicate the plans for each of the additional potential Roctavian indications that we did outline at R&D Day that you did just list. And, you know, as we complete our portfolio prioritization process as well as our overall corporate strategy. And so we'll follow up then.

And I would just add to that that, you know, as we've said, that R&D prioritization is looking at the potential benefit in terms of the medical impact together with the commercial potential. So we'll be taking into mind our experience with the commercial uptake of Roktavian to inform the business case around those lifecycle developments.

Thank you very much. I would now like to turn the call over to Alexander Hardy, President and CEO of BioMarin for closing remarks.

Thank you very much for joining us today. As you've heard, we are really hard at work here on shaping the future corporate and R&D strategy, as well as setting ambitious long-term financial goals. As you've heard, these are on about accelerating revenue and also profitability. We're approaching this work with a sense of urgency, and we're making significant progress. We're looking forward to sharing that with you on a timely basis. So, as you heard, please stay tuned for additional updates. Thank you very much for your attention and your questions, and goodbye.

This concludes today's call. You may now disconnect.