BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) Q1 2024 Earnings Call Transcript

BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) Q1 2024 Earnings Call Transcript April 24, 2024

BioMarin Pharmaceutical Inc. beats earnings expectations. Reported EPS is $0.71, expectations were $0.6. BioMarin Pharmaceutical Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good afternoon. My name is Audra, and I will be your conference operator today. At this time, I would like to welcome everyone to the BioMarin Pharmaceutical First Quarter 2024 Conference Call. Today’s conference is being recorded. All lines have been on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] At this time, I’d like to turn the conference over to Traci McCarty, Group Vice President, Investor Relations. Please go ahead.

Traci McCarty: 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 programs, actions of regulatory authorities, availability of capital, future actions in the pharmaceutical market and developments by competitors and those factors detailed in BioMarin’s filings with the Securities and Exchange Commission, such as 10-Q, 10-K and 8-K reports. 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 in 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 Bert Brian Mueller, Executive Vice President, Chief Financial Officer. Jeff Ajer, Executive Vice President, Chief Commercial Officer; and Greg Guyer, 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 BioMarin’s President and CEO, Alexander Hardy.

Alexander Hardy: Thank you, Traci, and good afternoon, everyone. Thank you all for joining us today. In addition to strong financial results, we made significant progress in the quarter developing the components of BioMarin’s new corporate vision and strategy, all in the interest of positively impacting patients’ lives while creating value for shareholders. And with a number of strategic initiatives ongoing to finalize these components to be communicated at Investor Day, which we have now set for September 4. We are pleased to share the first chapter update today, the results from our strategic assessment by Marin’s R&D portfolio. As innovation is fueled BioMarin’s success to date, we undertook a prioritization of our overall portfolio from early to life cycle stage assets.

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Q&A Session

The goal of this assessment was to accelerate the delivery of those assets, which add the greatest value to all of our stakeholders and align with the time lines for our strategic growth plans. We added a commercial lens early in the portfolio review process to ensure that return on investment, resource allocation, patient impact were all thoroughly considered. As a result, we chose to accelerate three assets that we believe offer the most transformative potential for patients and value creation for shareholders. We are also discontinuing four programs that did not meet our new higher bar for continued development. Moving briefly to progress made in the quarter on our four strategic priorities outlined in January. Beginning with our opportunity to accelerate and maximize our VOXZOGO, we made significant progress during the quarter with 74% revenue growth year-over-year and more than 500 additional children receiving therapy in the first quarter.

VOXZOGO in achondroplasia continues towards blockbuster status. The majority of new U.S. prescriptions in the quarter were for children under the age of 5, an important trend since FDA’s age expansion approval last quarter, albeit we continue to see expansion in the over five population as well. Global access to VOXZOGO from infancy is having a significant impact on rapid uptake as families pursue maximum therapeutic benefit by starting treatment early. In the United States, we continue to observe an increase in the breadth and depth of our prescriber base as real world experience drives confidence in VOXZOGO’s extensive safety and efficacy profile. Leveraging our established leadership in achondroplasia, we also made important strides in our plans to expand the multiple other growth-related conditions.

Our pivotal program with VOXZOGO for the treatment of children with hypochondroplasia will begin the treatment study mid-year with a target of completing enrollment by the first half of 2025. Based on ongoing discussions with global health authorities on study protocols with VOXZOGO, idiopathic short stature and multiple genetic short stature pathway conditions. We expect to begin enrollment in these programs later this year. The momentum we are seeing with VOXZOGO in achondroplasia supports our belief that CNP can potentially unlock clinical benefit for children across a number of growth-related conditions for many years to come. Hank will share a perspective on the opportunities ahead with VOXZOGO based on strong proof of concept indications beyond achondroplasia, as well as the potential for longer-acting formulations.

The second priority, establishing the ROCTAVIAN opportunity continues to be complex. With pricing and reimbursement established in the United States, Germany and Italy, aligning the required steps leading to patient treatment continues to pose different challenges. For example, while the ROCTAVIAN National German price was established and published in December, the sub-insurers have inserted new barriers to reimbursement. In the U.S., the complexity of local site reimbursement contracting continues to be an obstacle. We remain confident in the clinical profile of ROCTAVIAN and we’re pleased with the ROCTAVIAN update at the TH SNA meeting, showing durable hemostatic efficacy improved quality of life and no safety signals at four years. With respect to the additional ROCTAVIAN development programs, we are proceeding with ROCTAVIAN development in Japan and in the prior inhibitor population and of course, other programs until we observe more meaningful ROCTAVIAN commercial uptake.

We recognize the importance of allocating our resources to the highest value-creating opportunities. And with the current levels of ROCTAVIAN investments and continued challenges with commercial uptake, we plan to communicate our evaluation criteria for ROCTAVIAN in terms of its place in our portfolio and related timing for potential next steps at the Investor Day in September. The third priority is our focus on the most productive R&D assets. And as already mentioned, I’m pleased we have completed the initial chapter of that work. Beyond our refresh pipeline, centered around three key assets to be accelerated. We’re in a strong position to leverage external innovation in conjunction with our internal capabilities to fortify our mid and longer-term pipeline.

At Investor Day, we will also share more about our innovation strategy and plans and how they fit into our capital allocation and internal external portfolio innovation strategies. Lastly, our fourth priority to increase profitability faster than originally planned. As demonstrated by our first quarter results, we’re tracking well towards achieving this priority. As I complete my first quarter as CEO, I hope it’s evident that we’re taking decisive and thoughtful action to realize our priorities, all designed to align with our broader operational and cost transformation strategies to be shared at Investor Day. Our full year 2024 guidance reflects double-digit revenue growth non-GAAP operating margin expansion and non-GAAP earnings per share growing faster than revenues.

These full year guidance items allow you to track our financial progress as we transform BioMarin’s operating model to produce the best outcomes for the patients we serve, our employees and our shareholders. So in summary, we are making tangible progress across the enterprise to reshape BioMarin’s corporate vision and strategy. This is an enormous body of work that remains in process. But as you can see from our first quarter updates, we’re working with a sense of urgency, purpose and we are making definitive progress. We’re excited to continue this work over the coming months with the goal of sharing our vision for a successful future with you at Investor Day on September 4, in New York. Thank you for your attention. I will now turn the call over to Hank to provide an update on key R&D highlights.

Henry Fuchs: Thank you, Alexander, and good afternoon, everyone. The R&D team is energized by the more focused approach, decisions and clarity on the path forward to advancing the highest potential programs following our portfolio review. As a leading innovative and scaled biopharma company is more important than ever that we invest R&D resources in medicines that benefit the greatest number of patients. We move forward with an evaluation framework that will provide a high bar for consistent assessment of programs to determine if they fit in our burgeoning portfolio strategy. Briefly on the three programs that we chose to accelerate and starting with BMN 351 for the treatment of Duchenne muscular dystrophy. BMN 351 is the potential best-in-class antisense oligonucleotide designed to restore full-length dystrophin expression to more than 10% of normal at steady state.

The next-generation skipping oligo, this next-generation skipping oligo (ph) has the potential to convert patients phenotypes from progressive functional loss to durably preserve strength and function if data are supportive. BMN 351 is differentiated from other antisense oligos based on optimized chemistry and a unique slice enhancer target site, which together result in significantly improved potency for restoring dystrophin expression. It is also differentiated from gene therapy as BMN 351 produces near full length dystrophin rather than the truncated micro dystrophins produced via gene therapy. And BMN 351 can be administered chronically. For this reason, we believe the potential clinical benefit of BMN 351 over currently approved gene therapies and other treatments represents high value to patients and families living with this debilitating condition.

The 52 week clinical proof-of-concept study with BMN 351 is actively recruiting patients and will include 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. Also accelerating BMN 349 is a potential first oral therapeutic for the treatment of alpha-1 antitrypsin deficiency liver disease with the ability to address genotypes beyond PiZZ based on preferential binding to the Z protein with potential transformative effects on reversing fibrosis and preventing end-stage liver disease. There is a large addressable market, and we aim to differentiate ourselves from the competition based on specificity for the Z AAT allele and the ability to titrate to effect.

This first-in-human study in healthy volunteers remains ongoing. BMN 333, our long-acting formulation of CNP is designed to optimize and expand the reach of treatment for our portfolio of growth disorders by providing treatment optionality by a less frequent dosing and potentially improving the patient and caregiver experience, leveraging our current leadership in treating achondroplasia and anticipated expansion into other growth-related conditions, including hypochondroplasia, idiopathic short stature and multiple genetic short stature pathway conditions, we believe offering multiple treatment options will help families interested in safe and effective medicines to treat rare skeletal disorders. BMN 333 is completing IND-enabling studies and is slated to enter the clinic in early 2025.

Finally, for BMN 293 or gene therapy for hypertrophic cardiomyopathy, we are completing activities to advance it towards the clinic, while we wait additional supportive information, and we’ll share our next update with you at Investor Day. We look forward to accelerating our prioritized programs as they hold the highest promise for patients and align with the timing of our strategic growth plans. The programs that did not meet the criteria for advancement, mostly earlier stage are listed in our press release and will wind down over the coming quarters. There were no safety signals observed across the discontinued programs. We are working with sites now where applicable to continue monitoring patient safety per protocol as a top priority and we would like to thank all the patients who participated in these studies, the investigators sites and other health care providers.

Having the inability to focus on our prioritized programs in terms of resources and strategy that will enable us to — that will enable the highest probability and most rapid outcome for patients who may benefit. We will share more on time lines for each at Investor Day. Touching briefly on other encouraging clinical updates validating our plans to expand VOXZOGO’s reach to address a variety of growth related conditions, we were pleased to see Dr. Dauber’s one year update from his hypochondroplasia study demonstrating a 1.8 centimeter improvement in annualized growth velocity at the American College of Medical Genetics. Our registration study in hypochondroplasia is progressing well with the treatment study enrollment planned for mid-year. We are targeting approval in 2027, subject to enrollment and data results.

I was also pleased to preview Dr. Dauber’s abstract to be shared at the Pediatric Endocrine Society’s website including very encouraging data from his study addressing both ISS and pathway conditions. This first presentation of data at 12 months treatment with VOXZOGO and [indiscernible] and ISS conditions showed positive efficacy results in all subgroups. It was well tolerated with a similar safety profile to previous reports in patients with achondroplasia. These data are supportive of our thinking around the role CNP may play in benefiting patients across a variety of growth-related conditions. We are still in discussions on study design for multiple genetic short stature pathway conditions and expect to have a more detailed update on the second quarter call and are still expecting to begin that study in the second half of the year.

On BioMarin’s clinical program in idiopathic short stature, we held productive discussions with the U.S. FDA on this program and have aligned on plans to support approval in this new condition — new indication. Based on this feedback, we plan to start the clinical development program in ISS in the second half of this year. We expect our first study protocol in ISS to be posted to clinicaltrials.gov in the next few weeks, and will include the following agreed-upon elements. The study will be a placebo-controlled Phase II study and patients who will be naive to human growth hormone treatment, and we use the primary endpoint of annualized growth velocity determined at six months to determine the therapeutic dose levels. Patients will be randomized to one of five study cohorts, one of three different doses of VOXZOGO, including doses that are both higher and lower than the commercial dose in achondroplasia, placebo or human growth hormone.