Release Date: October 29, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Biomarin Pharmaceutical Inc (BMRN, Financial) reported record financial results with revenues reaching $746 million, marking a robust 28% increase compared to the same period in 2023.
- Voxzogo for the treatment of achondroplasia saw a 50% revenue growth, driven by increased penetration in the U.S. and new geographies.
- The enzyme therapies portfolio continued to perform well with 27% revenue growth in Q3 and 13% year-to-date growth.
- Biomarin Pharmaceutical Inc (BMRN) raised full-year guidance at the midpoint for all items, driven by strong ongoing execution and focus on performance.
- The company is targeting a mid-teen compound annual growth rate for total revenues through 2034, with a potential $5 billion revenue opportunity in skeletal conditions over time.
Negative Points
- The timing of order fulfillment, particularly for Aldurazyme, impacted revenue recognition and contributed to fluctuations in quarterly results.
- Operating expenses are expected to increase going forward as the company accelerates commercial growth strategies and advances the R&D pipeline.
- The company faces potential midterm competitive threats in the U.S. and EU markets, which comprise approximately 32% of the global total addressable patient population.
- Biomarin Pharmaceutical Inc (BMRN) is in a transition phase with operating expenses trending lower in Q3, but this is expected to change as new initiatives are deployed.
- The company is experiencing quarter-to-quarter fluctuations due to its dynamic global business, which can impact financial performance and growth metrics.
Q & A Highlights
Q: On Voxzogo, you noted that patient starts were primarily among patients under the age of 5 in the U.S. What does that say about the maturity of the launch in the U.S.? Are we approaching a period where new patients start to largely be an incident population?
A: Cristin Hubbard, Executive Vice President, Chief Commercial Officer, explained that the majority of new patient starts are in the 0-5 age group due to the recent label expansion in the U.S. In markets with high penetration, new starts are often in the 0-2 age group, indicating the creation of an incident market where penetration is higher.
Q: Could you walk through the development strategy for BMN 333 and how quickly you can move into other indications beyond achondroplasia with the long-acting CNP?
A: C. Greg Guyer, Executive Vice President, Chief Technical Officer, stated that BMN 333 aims to elongate the half-life of CNP, potentially increasing pharmacodynamic effects. The first set of data will provide insights into the PK profile, and depending on results, the program could accelerate into other genetic skeletal disorders.
Q: On the P&L, COGS looks elevated this quarter. How big was the impact of Roctavian inventory reserves?
A: Brian Mueller, Chief Financial Officer, explained that the cost of goods sold was impacted by a high rate of Aldurazyme revenue, which is their lowest margin product, and inventory reserves related to gene therapy raw materials. These factors accounted for a roughly 5% decrease in gross margin.
Q: Can you give more color on what's driving the increase in the ERT business growth and your confidence in continued growth?
A: Cristin Hubbard highlighted that growth is driven by Palynziq, especially in the U.S., and new initiatives like high-yield diagnostic efforts, adherence programs, and geographic expansion. The business unit model is expected to drive further growth.
Q: What is your base case assumption around the length of trial for BMN 333? Is it a 2-year or 1-year controlled trial?
A: C. Greg Guyer noted that the trial length depends on patient recruitment and effect size. The development plan is flexible, and if the profile plays out as anticipated, there may be opportunities to accelerate the timeline.
Q: Can you talk about the dynamics between total patient adds and incremental revenues for Voxzogo?
A: Cristin Hubbard stated that they are tracking to plan with 3,800 patients as of Q3, representing 54% revenue growth. The projected CAGR of 25% through 2027 is supported by broad age labels, geographic reach, and commercialization capabilities.
Q: What is the status of the transition to full approval from accelerated approval for Voxzogo?
A: C. Greg Guyer mentioned that they are committed to measuring final adult height for regulatory authorities and are focused on converting to full approval. The regulatory pathway for competitors will depend on their data and regulatory decisions.
Q: Can you comment on the clinical premise behind BMN 333 and why it might show better growth metrics than TransCon CNP?
A: C. Greg Guyer explained that BMN 333 targets higher free CNP levels, which preclinical models suggest could lead to better growth metrics. The PK profile aims to increase AUC and time above threshold, potentially translating into improved efficacy.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
