BioMarin Pharmaceutical Inc.

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 programs, actions of regulatory authorities, availability of capital, future actions in the pharmaceutical market, and developments by competitors. And those factors detailed in Biomarin's filings with the Securities and Exchange Commission, such as 10Q, 10K, and 8K reports. In addition, we will use non-GAAP financial metrics 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 in the investor relations section of our website. Please note that our commentary on today's call will focus on non-GAAP financial measures unless otherwise indicated. Beginning on slide three and introducing Biomarin's management team joining today's call, Alexander Hardy, President and Chief Executive Officer, Brian Mueller, Chief Financial Officer, Kristen Hubbard, Chief Commercial Officer, and Greg Freiberg, Chief R&D Officer. I will now turn the call over to Biomarin's President and CEO, Alexander Hardy.

Thank you, Tracy. Good afternoon, everyone, and thank you for joining us on today's call. Starting on slide five, I am very pleased with the strong results across the business, leading us to raise full year total revenues guidance at the midpoint and reaffirm our Voxogo revenue outlook for 2025. In addition to top line performance, Biomarin has delivered expanding profitability and significant growth in operating cash flow, bringing our cash and investments balance to approximately $2 billion at the end of the third quarter. We are focused on finishing the year strong, positioning ourselves to achieve record commercial results for the full year. To date this year, we have delivered 11% increase in top-line growth year over year. These strong results are driven by the performance of our global enzyme therapies and skeletal conditions business units. as we deliver for patients around the world. We've built the enzyme therapies business unit into a $2 billion plus franchise over the last 12 months with continued growth anticipated. In the skeletal conditions business unit, our first indication with our first product, FOXOGO, the treatment of achondroplasia is expected to generate more than $900 million in revenues this year. leading us to reaffirm our full year 2025 FOXOGO outlook and representing 25% growth at the midpoint of our guidance range. As the established standard of care in achondroplasia, FOXOGO revenue has increased 24% year-to-date compared to 2024. Now in the fourth year of its global launch, FOXOGO has represented a breakthrough therapy for families seeking treatment for their children with achondroplasia. Building on this innovation, we're excited to bring VoxOgo's second indication forward for the treatment of children with hypochondroplasia. We have high confidence in the upcoming pivotal data readout for hypochondroplasia expected in the first half of next year, based on proof of concept data of more than 10,000 patient years of safety and efficacy data in achondroplasia. Building on the rapid and successful global commercialization of Oxogo in achondroplasia, now available in 55 countries, we are well positioned to execute a strong global launch in hypochondroplasia, targeting 2027 should the data be supported. Kristin and Greg will provide more details in a moment. Turning now to our broader strategic objectives. Over the past 18 months, we have undertaken a series of initiatives designed to prepare BioMarin for future growth and expansion. As part of this effort, we have made difficult decisions, including the discontinuation of multiple research programs that did not meet our criteria for advancement. Accordingly, today we are announcing the decision to pursue options to divest Roktavian and remove it from our portfolio as we focus on the business unit aligned with our strategic priorities. Roktavian is an innovative gene therapy that holds potential within the treatment landscape for severe haemophilia A. As a result, we are working to find an alternative that will allow for Roktavian to reach its full potential by ensuring access to those interested in gene therapy treatment. In the meantime, Roptavian will be commercially available in the United States, Italy, and Germany. Throughout this process, we will support and monitor patients who have received Roptavian as their well-being is our top priority. As we look to the future, we are pleased that our breakthrough medicines are in high demand and reaching thousands of patients around the world. Our financial performance so far this year reflects strategic investments in the enzyme therapies and skeletal conditions business units, both of which remain central to our growth strategy, along with increased business development opportunities and our own advancing internal pipeline. Building on this momentum, we look forward to the many data readouts and potential new approvals ahead, along with new business development opportunities as we focus on the next stage of biomass growth. With that, I will now turn it over to Brian.

Thank you, Alexander. Please refer to today's press release for detailed third quarter 2025 results, including reconciliations of GAAP to non-GAAP financial measures. All 2025 results will be available in our upcoming Form 10-Q, which we expect to file in the coming days. Starting on slide seven, Strong global demand across our portfolio of innovative medicines drove a year-to-date total revenue increase of 11% compared to the same period in 2024. Revenues from Voxogo and Palantik each increased by more than 20% on a year-to-date basis. As we shared last quarter, we anticipate Voxogo revenue in Q4 to reach its highest level of the year due to the timing of contracted orders, as well as increasing numbers of patients on therapy. We expect full year 2025 Voxogo revenue of between $900 million and $935 million. We are pleased with 8% year-to-date growth of the enzyme therapies business unit led by Pal and Zeke. Due to large orders for Naglazyme and Vimizem in the second quarter, we note that enzyme therapies revenue was lower in Q3 quarter over quarter. And compared to Q3 2024, alzheimer's therapy revenue in the quarter was relatively flat, primarily due to a higher volume of Durazine quarter last year. Given the strong top-line performance so far this year and our expectations for the fourth quarter, we are raising the lower end of our full-year 2025 total revenue guidance to $3.15 billion, with the midpoint of the range representing double-digit year-over-year growth. Now moving to slide 8, Q3 2025 results include a charge of $221 million for acquired in-process research and development, or IPR&D, on a pre-tax basis related to the Innozyme Pharma acquisition completed on July 1st of this year. This acquisition-related expense represents an approximate impact of $1.10 on a per-share basis. the IPR&D charges significantly increased both GAAP and non-GAAP R&D expenses in the third quarter. And along with higher SG&A investments across our skeletal conditions and enzyme therapies business units resulted in lower year-over-year operating margin and diluted earnings per share, both on a GAAP and a non-GAAP basis. However, looking past the IPR&D charge, Biomarin's underlying strong revenue performance and operational efficiencies drove increased year-to-date GAAP and non-GAAP diluted earnings per share. Further, we recognized lower tax expense during the third quarter due to the timing impact of the Innozyme IPR&D charge on our quarterly estimated tax rate, as well as some tax benefits from the recently enacted tax law. Taking these dynamics into account, alongside our expectations for strong revenue growth and continued operational execution in Q4 2025. We are updating full-year 2025 non-GAAP operating margin guidance to between 26% and 27%, and non-GAAP diluted earnings per share guidance to between $3.50 and $3.60. Biomarin continues to generate robust operating cash flows. reaching $369 million in the third quarter, $728 million year-to-date, contributing to the company's total cash and investments balance of approximately $2 billion at the end of Q3. We expect this momentum to continue, both solidifying the sustainability of our profitability and cash flows and building incremental capital to invest in future growth through business development. Now moving to slide nine, and to summarize, we have updated our full year 2025 guidance across total revenues, non-GAAP operating margins, and non-GAAP diluted earnings per share, incorporating the impact of the Q3 IPR&D charges. This update reflects a net improvement in our expected financial performance, net of the IPR&D charge of about 15 cents per share for non-GAAP diluted earnings per share. We are executing on our business plan so far this year, and today's guidance updates reflect both our year-to-date performance and our confidence in strong top-line and profitability growth in the final quarter of 2025. Finally, we are sharing an update on our previously provided 2027 revenue outlook, given the high level of interest. Based on the many unknowns and variables impacting our revenue over the next two years, mostly the impact of VoxOgo potential competition. We recognize that there are a range of outcomes from which a single scenario cannot be predicted with enough certainty at this point in time. We have developed a number of scenarios and will share that the lower end of our range of estimates is in line with current 2027 top line consensus per fact set, excluding Roctavian. And on the higher end of the range of estimates, there are scenarios that reach $4 billion in total 2027 revenues, also excluding Roctavian. But again, given the many unknowns between now and then, we are not providing a specific estimate or more narrow range. Going forward, we will continue to execute on our strategy and monitor the most impactful variables. However, we do not plan to provide additional estimates of 2027 revenues and we plan to follow our usual process of providing full-year guidance at the beginning of each year with the usual quarterly updates. Thank you for your attention, and I will now turn the call over to Kristin for a commercial update. Kristin?

Thank you, Brian. I want to begin by acknowledging the exceptional work from our teams across the world whose dedication has delivered strong year-to-date results for BioMarin's commercial portfolio. Now moving to slide 11. We are pleased that PALENZIC's strong performance resulted in another quarter of more than 20% growth, reflecting more patients reaching efficacy and adhering to therapy. PALENZIC's sustained growth demonstrates the PKU community's continued belief in its unparalleled efficacy profile and the importance of reaching normal fee levels for effective treatment. We are pursuing approval of PALENZIC for adolescents aged 12 to 17 in the United States and Europe in 2026, potentially enabling this younger group of people to have access to therapy during an important period of transition to adulthood. Beyond Palenzeke, year-to-date revenue growth across our enzyme therapies portfolio reflects increased new patient starts across all products and strong adherence to therapy, reinforcing the durability and high penetration of these treatments, despite quarter-to-quarter order timing dynamics. Now moving to slide 12. Voxogo for the treatment of achondroplasia was available in 55 countries as of the end of the third quarter with new launches across multiple geographies. Global expansion and demand drove year-over-year Voxogo revenue growth of 15% in the third quarter and 24% year-to-date with growth in patient numbers quarter-over-quarter. For the remainder of 2025, we expect large contracted OUS orders, deeper penetration across our growing Voxogo footprint, and quarter-to-quarter new patient starts to result in Q4 being the highest of Voxogo revenue for the year. Outside the U.S., with a large majority of children eligible for Voxogo are located, our global footprint remains a powerful growth engine, and we saw strong uptake across key large markets during the quarter. With approximately 75% of year-to-date Voxogo revenue generated outside the U.S., We expect significant opportunity ahead as we open new countries and more deeply penetrate countries that currently have access. Leveraging Voxogo's best-in-class evidence package of health benefits beyond height, international treatment guidelines recommending treatment as early as possible, and broad age label, we are focused on increasing access to Voxogo for more children around the world and keeping them on therapy to realize the greatest health benefits. In the United States, the team has been laser focused on initiatives to expand VoxOvo treatment. These efforts drove new patient starts across all age groups during the third quarter, but the majority of new starts from children under two years of age, and we expect that trend to continue. Due to the geographical dispersion and management across a range of specialties for older children in the U.S., we have implemented initiatives to address slowing uptake in that age group, noting that the initiatives will take time to show results. We have expanded death prescriber base across the country, and increased the number of children on therapy across all age groups in Q3 versus Q2. Importantly, the strong adherence rates observed among families with children receiving Voxogo remain a key indicator of the product's value proposition. Now moving to slide 13. We look forward to building on the momentum we have established with the breakthrough treatment of achondroplasia as we pursue the next five indications in our skeletal conditions business unit. Acondroplasia represents the first of six indications we are pursuing for treatment with Voxogo and or BMN333, our long-acting CNP. With the pivotal data readout just around the corner in hypochondroplasia, we are preparing for a strong global launch should those data be supportive, and I'll share more about that in a moment. We are also advancing our canopy clinical studies with Voxogo across four additional indications, including phase two studies in idiopathic short stature, Noonan syndrome, Turner syndrome, and shock deficiency. These skeletal conditions represent a total addressable population, or TAP, of approximately 420,000 patients. Acknowledging our focus will be on the most severely impacted subset of these children, representing a modest proportion of the total TAP. We are expanding our leadership position in skeletal conditions, building on Voxogo as the standard of care in achondroplasia, with future potential indications, the second in hypochondroplasia, and four follow-on indications across the Canopy trials. Our next-generation product, BMN333, offers the promise of even greater efficacy, not just the convenience of the extended dosing interval, and we look forward to starting our Phase 2-3 study in the first half of 2026. Now, moving to slide 14, our experience launching FOXOGO for the treatment of achondroplasia has given us a strong foundation to scale globally. We've built the infrastructure, the relationships, and the expertise to execute effectively as new indications come online. And VoxOva for the treatment of hypochondriplasia represents a potential significant breakthrough for patients. Hypochondriplasia is underdiagnosed because children with growth delays often do not receive a full diagnostic workup for various reasons, in part because hypochondriplasia presents with a wide range of symptoms and no single sign confirms the diagnosis. And families often face a complicated referral process and barriers to genetic testing, which slows down the path to diagnosis. These challenges mean many children go undiagnosed for too long, and that is why one of our priorities is improving early diagnosis for hypochondriplasia worldwide. We're driving initiatives like genetic reclassification, clinician education, and patient and caregiver awareness, all aimed at driving earlier diagnosis. We're also optimizing diagnostic pathways so that in the future, children can potentially access therapy as early as possible. Importantly, we're seeing robust engagement from healthcare providers across multiple specialties. That enthusiasm reflects growing recognition of the unmet need in hypochondriplasia. This positions us well for the next phase. Phase 3 program in hypochondriplasia is progressing with data expected in the first half of 2026 and a potential launch in 2027. I'll now turn the call to Greg to provide an R&D update. Greg?

Thank you, Kristen. Now moving to slide 16, and to provide a little more color, hypochondriplasia is a serious condition with a potentially broad impact on the health and daily life of those affected. Children and adults with hypochondriplasia can face significantly higher rates of comorbidities and procedures when compared to the general population, covering areas like respiratory, orthopedic, ear, nose, and throat, and mental health. As a result, they often undergo more surgeries, adding to the overall burden of the condition. Beyond the medical challenges, the condition can affect quality of life in very real ways, making everyday tasks harder and creating social and emotional strain. These insights reinforce why it's important to advance treatment options for hypochondriplasia, a condition for which no approved therapies are broadly available today. Now moving to slide 17. At ASBMR in September, we presented important spinal morphology data for children under five years old with achondroplasia. These children were treated on our phase two canopy study with either vasorotide or placebo. Spinal morphology is one of the factors that contributes to spinal stenosis, a leading cause of morbidity in achondroplasia. Spinal stenosis, particularly in the lumbar region, is a serious and all too common medical complication in achondroplasia, resulting in pain, muscle weakness, and reduced mobility in the most severe cases. Since measures of spinal canal reach near final size by age five, early intervention is essential to prevent complications. Radiographs of the spine in our canopy study demonstrated that children who received Voxogo experienced improved spinal measurements across all lumbar vertebrae and an overall improved curvature of the spine after just one year of treatment. As a reminder, These improvements were seen as compared to placebo rather than simply describing the natural history of growing children. As these anatomic measures are often predictors of complications later in life, we intend to follow these patients in our canopy extension study to confirm that they translate to reduced morbidity or need for surgical correction. Importantly with these results, Voxogo is the only approved therapy with data showing a positive impact on spinal morphology, and these findings add to the extensive body of evidence supporting Voxogo's health benefits beyond improving growth. Now moving to slide 18 and BMN 333, we will focus on our next generation therapy for achondroplasia. Last call, we shared that multiple cohorts from our phase one study had demonstrated superior pharmacokinetic measures of free CNP as compared to another long-acting CNP agent. We're advancing the program in our targeting initiation of Phase 2.3 in the first half of 2026. We have a strong conviction that the multifold increases in free CNP AUC that we observed with the BMN333 can translate into clinical benefit. That confidence comes from three pillars, free clinical data, showing roughly double the attributable growth versus Voxogo at high free CNP exposures. Human genetics, where natural CNP pathway overactivation leads to extreme height without unexpected safety issues. And clinical dose response data from other long-acting CNP agents suggesting that additional growth may be possible at higher exposures. BMN333 is the right agent to test this hypothesis. And in our Phase 1 study, we observed multiple cohorts, which met our modeled PK requirements to deliver superior growth. From a design standpoint, the upcoming study will include a dose-ranging Phase 2 portion, followed by a Phase 3 comparison against Voxogo, assessing safety, growth, and resulting functional outcomes. Our goal is clear. BMN 333 is designed to deliver superior efficacy versus Voxogo without additional safety We've engineered the molecule to safely achieve these higher free CNP levels, and our target product profile reflects that ambition. We've aligned with regulators on this approach, and our strategy is to establish a new standard of care for achondroplasia. BMN 333 represents a major opportunity to build on Voxogo's success and further strengthen our leadership in skeletal conditions. Finally, on slide 19, here's a snapshot of a few highlights expected across the pipeline through the coming quarters. As mentioned in our skeletal conditions portfolio in the first half of next year, we're excited for the Phase III data readout for Voxogo in hypochondriplasia, as well as the initiation of our Phase II-III registrational enabling study for BMN333 in achondroplasia. For enzyme therapies, we look forward to extending Palenzec access to younger populations with a potential approval in 2026 of the PAL and ZEAC label extension for adolescents aged 12 to 17. In the first half of 2026, we also expect Phase III data for BMN401 in children aged 1 to 12, providing a potential first in disease medicine for ENPP1 deficiency. Our earlier stage pipeline is also advancing, and we plan to share a clinical update by the end of the year for BMN351 for the treatment of Exxon 51 skip amenable Duchenne's muscular dystrophy. At this next update, we intend to share whether data from our six and nine milligram per kilogram cohort supports our stated ambition to reach mean muscle dystrophin increases of 10% at steady state. And a reminder, this is without additional adjustment for muscle content. Safely achieving this target defines our GO criteria for a potential registrational study. In summary, we have multiple data readouts and regulatory milestones ahead, and we look forward to keeping you updated as we execute on these opportunities to drive growth and deliver value for patients. Thank you for your attention today. We will now open the call to your questions. Operator?

Thank you. If you would like to ask a question, please press star 1 on your telephone keypad. If you would like to withdraw your question, simply press star 1 again. We ask that you please limit yourself to one question and one follow-up. Thank you. Your first question comes from Phil Nadeau with TD Cowan. Your line is open.

Hi. Thanks for taking our question. Our question is on the 2027 guidance. Can you talk a little bit more about the scenarios you see and maybe more specifically, why are you rescinding the guidance now? What has changed over the last year since it was initially issued? Thank you.

Hi, Phil. This is Brian. Thanks for the question. I'll take that one. Since we shared the original $4 billion 2027 outlook last year, we've had a year to assess the various factors that have arisen since then, including the impact of potential Voxogo competition.

There's other puts and takes.

We've got our acquisition of and the potential for BMN 401 to launch in the pediatric indication in 27. We've also incorporated today's announcement that we're pursuing options to divest Roctavian. We've developed a number of scenarios to capture what we believe are different outcomes across these key variables, across the entire portfolio. But given the many unknowns and their impact on predicting 2027 revenue, Instead of taking an official position on those key assumptions, what we've done is outline the range of our lowercase estimates and our highercase estimates. I'll share that in the lowercase estimate. That reflects the scenario with two competitors successfully launching and taking significant share by 2027. And I'll share on the high case. that reflects the scenario where there's a significant delay in the competition. For example, successful intellectual property grants for biometh. And again, in between there, there are a number of outcomes, highly uncertain at this time, and therefore narrowing the range or coming up with more specific point in time estimates at this time isn't appropriate. Again, I'll just finish by saying, reiterating my comments in the prepared remarks, that in that lowercase estimate for Biomarin, you're still at consensus for 2027.

And maybe just to follow up, I think when you issued the guidance a year ago, you suggested that competition was factored into the guidance. Do you now have a different appreciation or a different concern about how much share that competition can take, specifically against Foxago? Thank you.

Yeah, thanks, Phil. We did the initial work last year following Investor Day when the competitor data was released and at the time modeled some competitive impact. There was some ability to absorb that into our original forecast at the time, and we did have some other upsides last year. We have taken a different view. We've observed trends in the marketplace, both what we are experiencing in these markets as well as, again, different potential competitor scenarios. And this is not a single point in time estimate. It is not our forecast. We merely wanted to reflect what the range of outcomes could be from our view.

The next question comes from Selvine Richter with Goldman Sachs. Your line is open.

Good afternoon. Thanks for taking my questions. Could you speak to why Voxogo's sales were down quarter over quarter? And then also, just help us understand here the business development strategy, just given that there seems to be so much of a focus on Voxogo and how that plays out, but you're kind of stuck from just given all these various dynamics competitively. When can we start to see that business development lever or levers kind of emerge to really add to your portfolio? Thank you.

Hi, Salveen. This is Brian. I'll take the first part of the question on Q3 Vox Ogo. And yeah, slightly down quarter over quarter. Looking back to the remarks that we made back last quarter when we signaled that we were expecting Voxogo revenue for the second half of the year to be back-weighted to the fourth quarter. We noted a couple of specific larger orders where there were true timing shifts, but also just our market-by-market forecasts for Q3 and Q4. What ended up happening in Q3 is that that was just a bit more exacerbated, and the timing shifted a little more I'll point you to two things. One, reaffirming the total VoxOgo range today for the year of 900 to 935 million. Again, just timing between Q3 and Q4. And then secondly, and most importantly, steadily adding patients across all markets and all age groups in Q3, which again, just You know, that's the key indicator of long-term demand, and we're going to continue to experience some of these quarter-to-quarter order timing fluctuations.

Hey, Salvin. Thanks very much. Your question is, Alexander. I'll answer the part of your question around business development. First off, I would say, you know, we've got strong underlying business performance in both enzyme therapies and in skeletal conditions. I mean, 11% year-to-date growth across both business units. but we are also producing significant cashflow. Our balance sheet is very strong and we have conviction that assets are worth more in our hands than they are right now. So business development is a very important part of our strategy right now. We have a number of deals that we're in pursuit of. We've always been a company focused on early stage collaborations, but what is different or how has our strategy has evolved is we're also looking at phase three pre-commercial and commercial assets. Because again, we think we can add value to all stakeholders with those in our hands. So we have a number of deals in the works and in sight. And obviously business development's never completely within your control, but it remains a very high priority for us. And we're looking forward to sharing more information when we have that.

The next question comes from Corey Kasimov.

with evercore your line is open hey good good afternoon guys thanks for taking my question um i guess i have a follow-up on uh on two questions that were asked first of all brian i appreciate the commentary you made on the previously issued 27 guidance i think the way you framed it is helpful however i'm curious if you have any qualitative commentary you could also share in your prior long-term mid-2030s guidance with regard both to the opportunity for voxogo as well as the anticipated CAGR for the enzyme therapies business. And then to follow up for Alexander's capital deployment commentary, given the pretty big cash balance and good operating cash flow generation you alluded to, have you given much consideration to share buybacks, or are you really just holding that capital for other uses like BDs you were talking about? Thank you.

Thanks, Corey. This is Brian. Appreciate the question. And it's a similar question. Similar analysis as I shared with the 27 range of estimates there. We are absolutely planning on continued sustainable growth across the business. I'll share that we are still targeting high single-digit sustainable growth rate for the enzyme therapies over time. Voxogo, we do plan to continue to grow the brand by deepening penetration across all markets, plus the indication expansion opportunities where we will always have a lead. However, the offsets to that, most notably being potential competition, are still very uncertain at this time. So we and the investor community will watch all of these variables very closely. and we'll keep you updated in terms of what we're seeing along the way. But again, we feel it's prudent to avoid taking an official position on a forecast with so many uncertainties. So not quoting a long-term growth rate at this time for that reason.

Hey, Corey, this is Alexander. I'll answer the second part of your question with regard to capital allocation. You know, it's obviously something we discuss with our board frequently. It's very, very important, obviously, that we're – really effective stewards of the significant capital we've generated through the success of our business. We actually think that business development is the greatest opportunity for us to drive significant incremental growth rate on the top line. And that's the most highly correlated stock appreciation. You know, we have this strong financial profile. We have this capability. in rare diseases, whether it's in research, development, manufacturing, commercialization. And we're convicted that assets are worth more in our hands than where they are right now. In an environment that we have right now in the US with biotech stocks, there are many rare disease companies that are undercapitalized and under-resourced, and those assets are worth more in our hands. So we are, as you can tell, we're very convicted that business development is the best use of our capital. That remains our priority, but it's something that as a board we constantly look at.

The next question comes from Joe Schwartz with Lering Partners. Your line is open.

Great. Thanks very much. For the upcoming BMN 333 PK data, what specific exposure levels would give you confidence that you can achieve clinical superiority over VoxOgo? And as you move into a head-to-head superiority trial against VoxOvo, what is the minimum annualized growth velocity delta over VoxOvo that you believe could be required to demonstrate clear clinical superiority, drive patient switching, and reestablish standard of care in the face of potential competition?

Thanks, Joe. This is Greg. I'll take a stab at both of those. With regard to the exposure levels, the stated level that we were looking for from our Phase 1 PK study was while we were looking at the free CNP levels. So in the case of Voxogo, of course, that's the drug itself. In the case of other molecules, it would be the released active quantity. We were looking for increases of at least 3X on the AUC. And as I mentioned in our prepared remarks, we actually saw three different dose levels where we achieved that in that ongoing phase one study. So, in our dose ranging, again, we'll have an opportunity to test a variety of levels that met that criteria. With regard to the change in AGV over Voxogo, not ready to comment today on an actual number. Sorry to disappoint you there. I will add, though, that we have looked at this very closely, spoken with both clinicians as well as patients, and we've determined a level of differentiation that we think will be not only clinically meaningful, but also has the potential to pull through to the endpoints that really count, which are not just linear growth, but are all of those measures of health and wellness and function that we think, again, these patients deserve from a next-generation therapy.

The next question comes from Jessica of JPMorgan. Your line is open.

Hey, guys. Good afternoon. Thanks for taking the question. I had a couple on the guidance and a couple on the pipeline. On the guidance, I don't have FACSAT. What is the 2027 FACSAT consensus, excluding Octavian, just so we know what that lower bound is? And then the second one on the guidance, Maybe just asking about the other two elements of the longer-term targets that I don't think Corey mentioned. Should we still expect 40% non-GAAP operating margins starting in 26 that could expand to the low to mid-40s and the greater than 1.25 billion of CFOs starting in 2027, or were those sort of top-line dependent and more in question now? And then the two on the pipeline, for 351, My understanding is we'll get six-month biopsy data for the six-milligram cohort. What should we expect for the nine-milligram cohort? And second one of the pipeline is for hypochondriplasia, can you remind us of the powering for that trial, and is that SIG sufficient in your mind, or is there some minimum delta on efficacy you want to see to meet your target product profile? Thank you.

Thanks, Jess. This is Brian. I'll speak to those first couple questions. So first, just to clarify that fact-set math for you, we are showing fact-set total revenue consensus for 2027 of $3.725 billion. And that includes $75 million of Roctavian. So that without Roctavian consensus would be 3.65 billion in 2027. And then with respect to the 40% operating margin target next year, that does remain our target. Just a reminder that we've grown profitability and operating margin significantly over the last two years due to our strong underlying execution and the focused cost transformation. We do expect that to continue heading into next year and hold that 40% target. I will say that our operating margin objective is rooted in driving efficiency in the business through cost and process transformation, but without compromising value-creating activities. So, in the event, in the lower-end scenario, over time, if we do face a trade-off, and this is, you know, less next year and more beyond, if we face a trade-off between preserving those value-creating activities and hitting the 40% margin, we will prioritize value creation to maximize long-term shareholder value. But right now, cost transformation and the target for next year is on track. We'll be prepared to update that again when we issue 26 guidance early next year.

Thanks, Jessica, and this is Greg. Let me take your two pipeline questions. With regard to 351, just as a reminder, what you can anticipate is a top-line result. That will be a combination of all the safety data that we have. That will be the 6 milligram and the 9 milligram per kilogram cohorts, as well as the early data that we have. We'll be looking at the 12 milligram per kilogram, which is currently enrolling. What we will be also looking at is biopsy results. and dystrophin levels from muscle biopsies in both the six and the nine milligram per kilogram cohort. Our goal, again, is to have a level that predicts its steady state that we would be hitting this 10% level, which is a quite ambitious target that's not correcting for fat and muscle content. That is a level that has yet to be seen in programs targeting exon 51. With regard to hypochondriplasia, we powered the study to measure for an HEV delta similar to what's been seen with Voxogo with achondroplasia, though as a quick reminder, the Dr. Dauber data would suggest that growth in hypochondroplasia may be on the order of 1.8 centimeters per year, a little bit more, which gives us confidence, again, that this is a well-powered study for hypochondroplasia.

I'm sorry, Jess. This is Brian. I'll come back again because I realized you had another part to your question about that 27 cash flow and that greater than $1.25 billion. So I'll use your words there. That was top-line dependent and therefore in the lowercase scenarios would be somewhat proportional to the overall revenue scenario. But I will say, again, we're generating significant operating cash flow today, almost $370 million this quarter, over $700 million year to date. We've got a number of working capital optimization initiatives that we're introducing across the enterprise over the next two years. As Alexander touched on with respect to our capital allocation strategy and business development, these cash balances and the sustaining cash flow that we're building have the opportunity to be opportunity to be deployed as growth capital going forward. So it's a top priority for the company. But in short, that $1.25 billion was tied to the $4 billion.

Thanks. The next question comes from Paul Matias with Stifel. Your line is open.

Hey there. This is Julian on for Paul. Thanks so much for taking our questions. You talked about how your views have changed on the market. as well as in thinking about some of these best case scenarios and some of these more bearish scenarios. Can you talk about the contributions of potential commercial competition versus the risk to some of these competitors entering the market? And how much do you think could be attributed to your overall view on you know, being able to have a positive outcome in litigation. I'm just curious on what you think about that. And then further, on the DMD program, could you just talk a little bit more about, you know, the 10% bar that you're sort of setting for yourselves there? You know, obviously, I think a lot of investors believe that, you know, the bar for, you know, regulatory approval is meaningfully lower. you know, when thinking about exon skippers that are currently approved. So, you know, just thinking about, you know, what sort of, you know, informs that view, and if there's any sort of outside case that you could push a program forward that doesn't meet that bar. Thank you.

Hi, thanks for the question. This is Brian. I'll start with just outlining those bookends of the lowercase estimates and the highercase estimates again, I'll hand it over to Kristen to make a couple of remarks on the specific market trends we're observing. So for the sake of making these assumptions and developing the lower end of these estimate scenarios, again, we took the assumption that two competitors come to market and that by the end of 27, they've been successful with their launch and take significant share. And then in the higher case estimates, and there's a range in between outcomes, of course, that includes either less competition or success with our intellectual property defense. And again, neither of those are our official forecast. We are illustrating what the revenue impacts of those potential outcomes could be over time. And again, at the lower end, comfortable with consensus today. In the higher end, we can still get back to $4 billion. And again, this is excluding Ractavia. Kristin, do you want to comment on this?

Thanks, Brian. And so, yeah, so looking at the overall trends, I just want to note what, Brian, you said earlier, and we said in the prepared remarks, and that is that we have continued to add patients on treatment with Luxogo quarter over quarter, and that is worldwide. Now, if we dig a little bit into the U.S. market in particular, we do see that the majority of those new patient ads is for children under two years old. And we want to see that, right? This is patients getting on treatment early. The international guidelines also reiterate the importance of this. And what we see is our adherence rates are remaining strong. And importantly, we are expanding the prescriber base primarily or mostly in the pediatric endocrinology specialty. But what we've also seen in the U.S., and this is not unexpected for something its fourth year into launch, we are seeing a slower rate of growth in the older patients. Now, we expected this to some extent. One, many of these patients are geographically dispersed and in different parts of the country and therefore harder to find. Not to mention, they're being managed by different specialties. But I will say that the team has been very focused on drawing out initiatives that will target these patients, and we expect that those initiatives will take a little bit of time to play out. But it's really important that we note that the U.S. is 25% of our overall revenues, and really looking to the ex-U.S., which comprises 75% of the revenues, we do reiterate our guidance of $900 to $935 million this year alone. And if we look into the future, we continue to see VoxOvo as a strong growth engine for us. This is a product that, as Brian had said, has been first to market in achondroplasia. We expect the same in hypochondroplasia, and we have a robust lifecycle management plan behind it. launching in new indications over time, not to mention our asset BMN 333. So an important growth engine for us, but it's important to note the trends and the dynamics that we're seeing in the markets today.

Thanks, Julian. This is Greg. Just if I could tackle the DMD question, if that's okay. Yes, we have set a pretty ambitious bar with the 10% level. Just to back up a little bit, of course, Duchenne's muscular dystrophy, the name of the game is opening a therapeutic window in these patients and delivering meaningful results. We've made some choices with the way we've engineered this molecule. We've chosen to use so-called phosphorothioate chemistry instead of what most exon skippers use, the Morfolino approaches. That opens this opportunity, again, to open a large therapeutic window for what we think will be a potentially dramatic effect. There are some challenges associated with that as well, though. Weekly administration is required. And the reality is that steady state, because of the very long tissue half-life, will be out at a year or more. And so what we've done is we've set an ambitious target. We know that we're looking at biopsies at the six-month time frame. Now, as a quick reminder, if we see something between about 3% and 5% at six months, that will translate in our model to 10% at steady state. We chose that number because of the human genetic data that suggests dramatically improved functional outcomes in patients that reach those sorts of levels, similar more to a Becker's muscular dystrophy. And we think in the face of some of the characteristics of this molecule, we think that that sort of doubling of dystrophin as compared to some of the data that's been produced the other Exxon 51 skippers, would be an undeniable advance in the field. And so while we also will be looking, of course, at functional data, we'll look at the totality of the data, that 10% bar is our true north right now to deliver something meaningful for patients.

The next question comes from Chris Raymond of Raymond James. Your line is open.

Hey, thanks for taking the question. Just two, actually, for me. And, you know, Brian, I heard what you said about 27 not being guidance, just a sort of range of outcomes. But I won't say it's this way. But is it safe to say you're more concerned about transcon C&P than inficratinib? And, you know, I guess it is when you talk about that fact set number being, you know, sort of the low end. Is it your assumption that Ascendus gets first cycle approval? with just one year's worth of data, uh, when their PDUFA date comes, uh, you know, next month, or does that even, does that factor into your thinking? Uh, I know it's, you know, a little bit removed from 2027, but just kind of, uh, are you getting that granular in your thinking? And then maybe an MNA question, Alexander, you know, you guys talk about wanting assets that are under-resourced and could be better served by the biomarine infrastructure. Um, For the Inozyme Asset 401, can you maybe talk about how you have leveraged and improved upon Inozyme's efforts in terms of patient identification, outreach, other things that you've done to make that asset better? Thanks.

Thanks, Chris. This is Brian. I'll start. I appreciate the question. With respect to the two potential competitors, first, I'll say I don't think we're going to comment on them versus each other, one versus another. But I will say, this is, I think, at the heart of your question, what we've assumed in those lowercase estimates that I referred to in that lower end of the range, we have assumed middle-of-the-road assumptions with respect to that those companies communicated timelines for their approval, one of which has of PDUFA next month, as you noted. And then following those action dates and communicated approval and launch timelines by those other companies, we then modeled what a successful launch for those competitors could look like. And that's where we get to this point of the lower end estimate where, you know, VoxOvo remains a growth product for us over these next two years. But I think that's all that we'd have to say at this time.

Chris, I'll take the first part of the question and hand it over to Greg, because obviously, 401 is very much in the development stage right now. But overall, what Biomarin is now is we're executing rare diseases scale. I mean, we're in 80 countries with an incredible muscle. you know, we're confident that's going to, that's going to magnify the, uh, the potential impact, uh, and ability to reach patients with these genetic conditions all around the world. Um, our capabilities, the ability to find patients to start, to start them on therapy and then keep them on therapy. These are capabilities we built over, over 20 years. So, uh, very confident that, uh, should this product be approved, we'll be able to leverage that and achieve significant things for 401. Right now, our focus is on the execution of the clinical program, and I'll hand it over to Greg.

Thanks, Alexander. Yeah, Brian, just as a quick reminder, again, the deal closed on July 1st, so we're not quite four months into the integration at this point. It's premature to cite, I think, too many examples of the impact that that scale of our capabilities and resources can have on the totality of the program. It is very early days. But I will reassure you again that we're leveraging all of our capabilities, whether it's interacting with regulators around the world, whether it's looking for additional indications. And that first sign, I think, that we'll be able to talk about in future calls will be our preparation that's ongoing for an adult indication in this ENPP1 deficiency area. We're very much looking forward to taking this asset that the Innozyme team, quite frankly, did a remarkable job, being able to recruit these very difficult to find patients, difficult to reach patients, onto a pivotal study. And we're looking forward to turning the card over for the NRG3 study in the first half of next year.

The next. question comes from Sean Lehman with Morgan Stanley. Your line is open.

Hi Alex and team, hope everyone's well and thanks for taking my questions. Just get your latest thoughts on orphan drug exclusivity, you know kids under five and what you think about the potential switching to a competitor as the first one. And the second one, if I'm getting the narrative right, without business development, Biomarin's a capital accumulator. Just to get your thoughts on what you think your balance sheet capacity is and what you see as an efficient balance sheet structure. Thanks.

Hi, Sean. This is Kristen. I'll take the first question. And I think it really comes down to that element of a patient switching. assuming we're, you know, as we're looking at there being a potential for more therapies on the market for the treatment of achondroplasia, we do think that there's a distinct difference between patients that are new to therapy that are naive and the choices that they will make, and importantly, those that are already on therapy and seeing great efficacy. So what we hear in both our market research and in our conversations with physicians and families alike, we hear that The majority of patients, when they are looking at the opportunity to switch, if they are satisfied with their treatment, they will more likely than not remain on therapy. Now, of course, some will choose not to, but that is irrespective of orphan drug exclusivity. That is just a decision that a physician, caregiver, and patient are likely to make in that moment. We do think that the adherence rates that we see on Voxogo, which remain really high, are a testament to the product's efficacy and safety, for that matter, and the impact that patients and families are seeing. And so it really does come down to that element of a decision made between the physician and the family at that time as to whether or not a switch is appropriate. But we think that that's going to be a different decision than for those that are naive to treatment.

And I'll answer the firepower part of your question there, Sean. This is Brian. We estimate that our total firepower is between $4 to $5 billion. We're just reporting $2 billion of cash investment on hand, a significant portion of which is available to invest in future growth. And then with our current and growing EBITDA profile, we do have a chance to leverage our earnings and assuming a reasonable We believe that in total, we've got $4 to $5 billion to deploy as growth capital.

Sean, I just want to jump in. Was your question around orphan drug exclusivity as well? Sure. It was. Okay. I apologize about that. Yes. I mean, we've submitted a petition to the FDA concerning the orphan drug exclusivity for VoxOgo to assert that. The timing of that is we'll find that out at the time of PDUFA. So we feel evicted of the status and the importance of the incentive with regard to innovation in these orphan diseases, and that's very much in process right now.

The next question comes from Akash Tiwari with Jefferies. Your line is open.

Hi, this is Zaki, on for Akash. Thanks so much for taking the question. So you talked about how the lower end of your 2027 scenarios is basically in line with the top line registry consensus, in part due to the changing competitive environment, which includes Ascendus, which had positive data shortly after your initial guide. And now it sounds like we're kind of revising the case estimate ahead of pending phase three data from Bridge. So number one, why not just wait until the bridge bio data comes out first half of next year. I mean, should we assume that the lower end of your 27 case is the most conservative case that assumes superior efficacy versus for bridge? And then in the most bullish scenario, it sounds like you are either modeling, you know, at most 4 billion or lower in rev. Just wanted to confirm that I have that correct. Thank you so much.

Hi, thanks for the question. And yeah, you know, I tried to capture the primary takeaway from this exercise, which is that we've modeled a significant level of scenarios across all of our portfolio, across all markets, and given the various key assumptions. We did that given the significant level of investor interest on the topic. We appreciate that. When we gave the original $4 billion guidance at Investor Day last year, that was before seeing the first competitor data here and have made some updates along the way, but really outlining the full range of outcomes and including a lower case that has two competitors launching successfully, but yet our revenue is still landing at current consensus for 27, we thought would be useful. I am not characterizing that as a worst case scenario, nor am I characterizing the 4 billion as a best case scenario. We just decided to share with you a range of our lower case estimates and our higher case estimates. And on the upside, that would include I mentioned as an example, intellectual property defense success, but it could also include success across the entire portfolio or competing successfully.

Thanks. That concludes the Q&A portion of the call. I will now turn it back to BioMarin's President and CEO, Alexander Hardy.

Thank you, Operator. We are pleased with the third quarter results across the business, leading us to raise four-year total revenues guidance at the midpoint, reaffirm our Vox Ogo revenue outlook for 2025. We have delivered expanding profitability and significant growth in operating cash flow, bringing our cash and investments balance to approximately $2 billion as of the end of the third quarter. Our financial performance so far this year reflects strategic investments in the enzyme therapies, skeletal conditions business units, both of which remain central to our growth strategy. Building on this momentum, Look forward to the many data readouts, potential new approvals ahead, along with new potential business development opportunities as we focus on the next stage of BioMarines growth. Thank you for joining us today. Look forward to speaking with you all soon.

This concludes today's conference call. Thank you for joining. You may now disconnect.