biomarin pharmaceutical (bmrn) earnings report: q3 2015 … · 2015. 10. 30. · biomarin...

CompanyName:BiomarinPharmaceuticalIncCompanyTicker:BMRNSector:HealthCareIndustry:Drugs

EventDescription:Q32015EarningsCallMarketCapasofEventDate:17.83BPriceasofEventDate:117.04

©2014TheStreet,Inc.Al l R ightsReserved Page1of21

BioMarinPharmaceutical(BMRN)EarningsReport:Q32015ConferenceCallTranscriptThefollowingBioMarinPharmaceuticalconferencecalltookplaceonOctober29,2015,04:30PMET.Thisisatranscriptofthatearningscall:

CompanyPart icipants

TraciMcCarty;BioMarinPharmaceutical;SeniorDirectorIRJean-JacquesBienaime;BioMarinPharmaceutical;Chairman&CEOJeffAjer;BioMarinPharmaceutical;COODanSpiegelman;BioMarinPharmaceutical;EVPandCFOHankFuchs;BioMarinPharmaceutical;ChiefMedicalOfficerRobertBaffi;BioMarinPharmaceutical;EVPofTechnicalOperations

OtherPart icipants

MarkSchoenebaum;EvercoreISI;AnalystJohnScotti;EvercoreISI;AnalystChrisRaymond;RaymondJames;AnalystGeoffMeacham;BarclaysCapital;AnalystTerenceFlynn;GoldmanSachs;AnalystJosephSchwartz;LeerinkPartners;AnalystPhilNadeau;CowenandCompany;AnalystAndrewPeters;UBS;AnalystMichaelYee;RBCCapitalMarkets;AnalystYingHuang;BofAMerrillLynch;Analyst

MANAGEMENTDISCUSSIONSECTION

Operator :

Goodafternoon,ladiesandgentlemen.WelcometotheBioMarinPharmaceuticalconferencecalltodiscussThirdQuarter2015FinancialResults.

(OperatorInstructions)

Asareminder,thisconferenceisbeingrecorded.

Iwouldnowliketointroduceyourhostfortoday'sconference,TraciMcCarty,SeniorDirectorofInvestorRelationsatBioMarin.Pleasegoahead.

T raciMcCarty(SeniorDirectorIR):

Thankyou,operator.WithmetodayfromBioMarinManagementareJean-JacquesBienaime,ChairmanandChiefExecutiveOfficer;DanSpiegelman,ChiefFinancialOfficer;HankFuchs,ChiefMedicalOfficer;JeffAjer,ChiefCommercialOfficer,andRobertBaffi,ExecutiveVicePresidentofTechnicalOperations.Toremindyou,thisnon-confidentialpresentationcontainsforward-lookingstatementsaboutthebusinessprospectsofBioMarin,includingexcitationsregardingBioMarin'sfinancialperformance,commercialproducts,andpotentialfutureproductsindifferentareasoftherapeuticresearchanddevelopment.




ResultsmaydiffermateriallydependingontheprogressofBioMarin'sproductsprograms,actionsofregulatoryauthorities,availabilityofcapital,futureactionsinthepharmaceuticalmarket,anddevelopmentsbycompetitorsandthosefactorsdetailedinBioMarin'sfilingswiththeSecuritiesandExchangeCommission,suchas10-Q,10-Kand8-Kreports.NowI'dliketoturnthecallovertoBioMarin'sCEOandchairmanJJBienaime.

Jean-JacquesBienaime (Chairman&CEO):

Thankyou,Traci.Goodafternoonandthankyouforjoiningusontoday'scall.Today,weannouncedthatBioMarin'scommercialorganizationdelivered$662millionintotalBioMarinrevenueyeartodate,resultingin28%growthcomparedtothesameperiodlastyear.TheprimarydriversoftheseresultswerethecontinuedrobustgloballaunchoftheVimizimandstronggrowthindemandforKuvan,whichmorethanoffsetthenegativeimpactofforeignexchangeheadwindsandunevenorderingpatternsfromNaglazyme.GlobalmarketpenetrationofVimizimhascontinuedandwehavebeenabletobringnewpatientsontotherapyatafasterpacethanwehadoriginallyanticipated.

Significantly,wehavealsobeenabletoachieveandmaintainourtargetrevenueperpatientsglobally.Asaresult,weareinapositiontoincreasefull-yearrevenueguidanceforVimizimandwenowexpect2015full-yearrevenuetobebetween$220millionand$235million.WhileweexpectQ42015salestoslowerQ3,duetosomeextralargegovernmentordersinthatquarter,consistentwithwhatweseewithNaglazymeisthattransientpatientgrowthandpenetrationcontinuestobeexcellent.Wefullyexpect2016Vimizimrevenuesintocontinuetogrowandtoexceed$300million.Inamoment,Jeff,willreviewsomeofthedynamicsdrivingupdatedguidanceacrossourcommercialportfolio.

InadditiontostrongcommercialresultsinQ3,duringthelastquarter,weenteredintotwoimportantstrategictransactionsthatwillincreasebothourleverageandprofitabilitybystreamliningourdevelopmentportfolio.First,weenteredintoanagreementwithMedivationforthesaleoftalazoparibfor$410millionupfrontanduptoanadditional$150millionupontheachievementofregulatoryandsalesmilestonesandalsomid-singledigitroyalties.Theninaseparate,butstrategicallymatchedtransaction,weacquiredalltheglobalrightstoKuvanandpegvaliasethatwedidnotalreadyown,withtheexceptionofKuvanrightsinJapan.

WhilewecontinuetobelievethattalazoparibmaybethebestPARPinhibitorunderdevelopment,asourcore[monogenetic]rarediseaseportfoliohascontinuedtodeveloptheexpectedfinancialreturnsforBioMarininthePARPorstartedtofallbelowourotheropportunities.Inparticular,theopportunitytoacquireglobalrightsforbothKuvan,withtheexceptionofKuvaninJapan,pegvaliaseandtechnologieswillallowustoleverageourexistingR&Dinvestmentinpegvaliaseandourglobalcommercialinfrastructure.DuetoexistingrestoftheworldKuvansalesandafive-yearpatentrunwayinEurope,thistransactionalsohaslimiteddownsideandsubstantialupside.

Webelievetherestructuringofourproductpipeline,asaresultofthesetwotransactions,willoptimizeourportfolioandfocusourresourcesonBioMarin-establishedareasofexpertise,developingandmarketingnovelproductstotreatrareandultra-raregeneticdiseases.Ontheportfoliodevelopmentfront,wearepleasedtohavebeeninvitedtothePeripheralandCentralNervousSystemDrugsAdvisoryCommitteeoftheUSFoodandDrugAdministrationtoreviewthenewdrugapplicationforKyndrisa.Wearehopefulthatanear-termacceleratedapprovalofKyndrisawillmakeavailableanimprovedtreatmentoptionforchildrenwithDuchennemusculardystrophyamenabletoExon51skippingtreatment,adevastatingmusclewastingdisease.

Inaddition,aspartofourlong-termcommitmenttoDuchennefamilies,inthequarterwelaunchedourkNOWyourDuchenneprogramtohelppatientsandphysiciansobtainandinterpretgenetictestingforpatientswithDuchennemusculardystrophy.ThistypesoftailoredserviceissomethingBioMarinhas




providedforpatientsreceivingourcurrentlycommercializedproductandwe'reveryproudtohavetheopportunitytoleverageourexperiencefortheDuchennecommunity.Lookingatourotherdevelopmentsandregulatorycatalystsoverthecomingmonths,wewillhighlighttheproductivityofBioMarin'sR&Dinvestments.

Overthenextfourquarters,wecouldpotentiallyhavethreenewmolecularentitiesinregistrationsforapproval:KyndrisaforDMD,cerliponasealfaforCLN2disorder,andpegvaliaseforPKU.Icannotthinkofanyotherbiotechnologycompanythathasachievedthislevelofproductivity.TheseopportunitiestrulyrepresentBioMarin'scoremission,growingthecompanythroughinnovationforthebenefitofourpatientswhohaverareorultra-rarediseases.

Irrespectiveofthepoliticalrhetoricofourdirectpricingwe'veheardaboutoverthelastfewweeks,itisimportanttoappreciatethedistinctionbetweentakingunreasonablepriceincreasesonalldrugsversusinvestingheavilyinresearchanddevelopmenttodiscoverbreakthroughtreatmentsforpeople,mostlychildreninBioMarin'scases,whohavenoalternative.WearetrulyproudofwhatwedoandwejustwanttothankyouforunderstandingtheuniquenessofBioMarin'smission.Thisuniquenessistobeinnovatorsforthemanypatientswithrarediseasesthatweservearoundtheworld.Withthat,I'dliketoturnthecallovertoJeffwhowilldiscussprogressofourcommercialproductsinthequarter.Jeff.

Jef f Ajer (COO):

Thankyou,JJ.PersistentgrowthofpatientsonBioMarin'sbrandsdrovecontinuedincreaseintheunderlyingdemandacrossthecommercialportfolio,resultinginstrongrevenuegrowthinthequarterandyeartodate.Thisresultcameinspiteofforeignexchangeheadwindsandtheimpactofunevenorderingpatternsinsomeregionsthathavetheeffectofskewingquarter-to-quartercomparisons.StartingwithVimizim,thecommercialorganizationdelivered$65.1millioninVimizimrevenueinthethirdquarter.

Recall,wesetagoalforVimizimofbeing80%penetratedofknownpatientsingreaterthan50marketsinfouryears,halfofthetimerequiredtoachievethatlevelofpenetrationforNaglazyme.1.5yearsfromthefirstlaunch,weare33%penetratedofknownpatientsin32markets.Sowe'rewellontrackandmakinggreatprogressagainstthatgoal.Moreover,withmorethan2/3ofidentifiedpatientsstillpotentiallynewusersofthedrug,plusnewpotentialpatientsstillbeingidentified,thereissignificantfutureupsideaswemakeVimizimavailabletothepatientswhoarenotyetontherapy.Wenowexpectincreasedfull-yearrevenueforVimizimofbetween$220millionand$235million.

Thisisinthefaceofastrongerdollar,whichcreatedheadwindsforVimizimrevenuegrowth,andweestimatethatVimizimrevenueswouldhavebeenapproximately$20millionhigherin2015ifrateshadbeenthesameasin2014.Inaddition,itshouldbenotedthatthirdquarterVimizimrevenueincludedalargeorderfromLatinAmericathatisnotexpectedtoberepeatedinQ4.WehavehistoricallyexperiencedunevenorderpatternsforNaglazymefromLatinAmericaandoccasionallyotherregionsandwenowexpectthispatterntoapplytoVimizimaswell.

Therefore,itwillbeimportantgoingforwardtoconsiderfull-yearrevenuefiguresforVimizimandexpectoccasionalchoppinessinquarter-to-quarterresults.IncreasedpatientpenetrationwillcontinuetodriverevenueincreasesforVimizimandweexpect2016revenuesforVimizimcouldexceed$300million.Insummary,thecommerciallaunchofVimizimin2015hasbeenrobustandweexpectgrowthtocontinueonastrongtrajectory,drivenbyconsistentandsteadygrowthofnewpatientsinallourcommercialterritories.

NowturningtoourothercommercialproductsandstartingwithKuvan,asexpected,followingaseasonaldipinthefirstquarter,secondandnow,thirdquarterrevenuegrowthwasstrong,resultinginyear-to-




daterevenueof$174.5millionorgrowthof20%yearoveryear.Inthethirdquarter,Kuvanrevenuewas$64.2million,a20%increaseoverthesameperiodlastyear,duetopatientcountincreasesandhighratesofcompliance.Factorsdrivingsuccessinthequartercontinuetobethepositiveimpactoftherevisedlabelthatincludessafetyinzerotofour-year-oldandtheeducationandadoptionofACMGpracticeguidelinesthatareraisingawarenessofthebenefitsofKuvanandtheimportanceoflifelongtreatmentofPKU.

Weexpectthesetrendstocontinueandtodayincreased2015full-yearKuvanguidancetobetween$235millionand$245million.TurningnowtoNaglazyme,recallthatlastquarter,revenueincludedaverylargeorderfromLatinAmerica.Asexpected,therewasreducedorderinginLatinAmericainthethirdquarterandrevenuesdecreasedto$54.1million.Inaddition,thestrongdollar,particularlyversusemergingmarketeconomies,alsocontinuedtohaveanegativeimpactonourreportedNaglazymerevenues.Forthefullyear,weexpectforeignexchangeeffects,netofhedging,toreducerevenuesofNaglazymebyapproximately$20millionto$25million.

Asaresult,weareloweringNaglazymeguidanceforfullyear2015tobetween$300millionand$310million.Importantly,thebaseofpatientsonNaglazymeremainsimpressivelycompliantandpersistentsupportingtheunderlyingstrengthofthisbusiness.NewpatientsonNaglazymecontinuetodriveincreaseddemand.ThenumberofpatientsonNaglazymecommercialtherapyattheendofthethirdquarter2015wasapproximately9%greaterthanitwasayearearlierattheendofthethirdquarterin2014.Finally,turningtoDuchennemusculardystrophyandoureffortstohelpsupportfamiliesinneedofdiagnosisassistance.

Wehavelearnedthat,whilephysiciansreportthatamajorityoftheirpatientshavebeengenotypedtoconfirmthediagnosisofDMD,manyhavenothadtheirgenetictestresultsinterpreted,resultinginagapintheawarenessofamenabilityforgeneticallytargetedtreatmentsanddevelopments.Toaddressthatgap,inthethirdquarter,BioMarinintroducedthekNOWyourDuchenneprogramtohelpfamiliesandphysiciansobtainandinterpretgenetictestingforpatientswithDuchennemusculardystrophy.Thisnovelprogramwillprovideevaluationofapatient'sgenetictesttohelpcaregiversandclinicianslearniftheirsonorpatientisamenabletotreatmentwithanExonskippingtherapy.

ThiseffortissimilarinsomerespectstothemarketcharacterizationwedidaheadofourVimizimlaunchandisthenormalcourseofactionwhenpreparingforthesuccessfullaunchofatherapytotreatararedisease.Insummary,IamverypleasedwiththelevelofdemandweareseeingforVimizimacrossallofourcommercialregions.Goingforward,thecommercialteamswillfocusondrivingmarketpenetrationofVimiziminsubstantiallyallmarketedregionsandcontinuingtodeliverrevenuegrowthacrossourcommercialportfolio.

WewillfocusoncommercialpreparationinadvanceofapotentialapprovalandlaunchofKyndrisaintheUS,aswellasmarketcharacterizationactivitiesrelatedtotheCLN2patientpopulationinourglobalterritories.Finally,wearepreparingtoassumesalesofKuvaninallglobalterritories,withtheexceptionofJapan,beginninginJanuary.NowIwillturnthecallovertoDanwhowillreviewquarterlyresults.

DanSpiegelman (EVPandCFO):

Thankyou,Jeff.Earliertoday,weissuedapressreleasesummarizingourfinancialresultsfor2015thirdquarterandyeartodateandIreferyoutothatreleaseforfulldetails.Startingwithtoplineresults,totalBioMarinrevenueforthethirdquarterof2015was$208.9million,anincreaseof18%year-over-year,drivenbystrongsalesofVimizimandKuvan.Yeartodate,totalrevenuewas$662millionwhichis28%higherthaninthesameperiodlastyear.Asaresult,thestronggrowthofVimizimandKuvan,combinedwithasolidbaseofrevenuesfromAldurazymeandNaglazyme,weareraisingfull-year2015totalBioMarinrevenueguidancetobetween$880millionand$890million.




Whilereportedrevenuesgrew28%yeartodate,thestrongdollarandforeignexchangeheadwindscontinuetohaveanegativeeffectonourreportedrevenues.Thestrongerdollarreducedtotalrevenuesbyapproximately$10millionand$38millionforthethirdquarterandyeartodate.Moreover,ourfull-yeartotalrevenueguidancewouldhavebeen$40millionto$50millionhigherifrateshadbeenthesamein2015astheywerein2014.Theseproformaresultsarenetoftheforeignexchangehedgingprogramwehaveinplace.

Historically,wehavehedgedasignificantportionofoureuroexposure,butonlylimitedamountsofouremergingmarketexposures.Consequently,thoughtheeurohasastabilizedagainstthedollar,continuingweaknessinemergingmarketscurrenciescontinuestonegativelyimpactreportedresults.Movingtooperatingexpenses,GAAPR&Dexpensesincreasedto$158.7millioncomparedto$125.7millioninthethirdquarterof2014.Theyear-over-yearincrease,whichwasconsistentwithourexpectationsandwithourguidance,wasprimarilyduetoournewDMDprograms,drisapersen,andtoalesserextent,ourthreePhase2Exonskippers,BMN44,45,and53.Theprior-yearcomparisonperioddoesnotincludetheseexpenses.

Whilecontinuingtoadvanceourportfolio,wearemaintainingR&Dexpensecontrolsandwearemaintaining2015full-yearR&Dexpenseguidanceatthelevelssetatthebeginningoftheyear.GAAPSG&Aexpensehasincreasedto$94millioninthethirdquartercomparedto$74.6millioninthesamequarterlastyear.ThelargestdriverofthisincreaserelatestoDMDmarketingandcommercialplanning.WithcontinuedprogresstowardspotentiallaunchofKyndrisaintheUSandthroughoutourglobalterritoriesin2016,weareupdatingSG&Aguidancetobebetween$400millionand$410millionforfull-year2015.

ThissmallincreaseincludestheeffectofourrecentlyannouncedkNOWyourDuchennecampaign,whichwillhelpallDMDpatientsobtainagenetictestandaninterpretationofthattest.Turningtobottomlineoperatingresults,non-GAAPnetlossinthethirdquarterwas$41.3millioncomparedto$23.1millioninthethirdquarterof2014.Aspreviouslydiscussed,ournon-GAAPresultsarebasedonGAAPearningsbeforeinterest,taxes,depreciation,andamortizationandadjustedtoexcludecertainnon-cashstockcompensationexpense,non-cashcontingentconsiderationexpense,andcertainotherspecifiedmaterialitems.

Assuch,webelievethenon-GAAPresultstakeninconjunctionwithourGAAPinformationprovidesadditionalinformationregardingtheperformanceofBioMarin'scoreongoingbusiness.Moreover,itisnon-GAAPprofitabilityin2017thatwearetargetingifweareabletoobtainearlyapprovalofdrisapersen.Duetoincreasedrevenuesandconsistentwithourdrivetowardsnon-GAAPprofitability,wearepleasedtolowerournon-GAAPnetlossguidancefortheyeartoalossofbetween$115millionand$135million.Inaddition,wereporteda$90.9millionGAAPnetlossinthethirdquartercomparedtoGAAPnetincomeof$7.4millioninthethirdquarterlastyear.

ThedecreasedGAAPnetincomeinthethirdquarterof2015comparedtotheprior-yearwasprimarilyduetoproceedsfromtheone-timesaleoftheCompany'swerepediatricdiseasepriorityreviewvoucherof$67.5millionpretaxinthethirdquarterof2014.WithrespecttoguidanceforGAAPoperatingresults,weareprovidingthefollowingupdates.First,forthesaletoMedivationofourtalazoparibprogram,resultingina$410millionupfrontpaymenttoBioMarin.Netofapproximately$30millionbookvalue,thatupfrontpaymentwillbetreatedasagainonsaleofanassetinthefourthquarterof2015,similartothetreatmentofthePRVsaleinthethirdquarterlastyear.

BasedonthetransactionwithMedivation,aswellasincreasednon-cashstockcompexpensedrivenbyincreasesinoursharepricein2015,wearerevisingfull-year2015GAAPnetlossguidancetoalossofbetween$85millionand$105million.ThesecondtransactionthatwasannouncedonOctober1andexpectedtocloseduringJanuary1,2016isouracquisitionofthePKUfranchisefromMerckSeronofora




totalpurchaseconsideration,includinganupfrontpaymentofEUR340millionanduptoanadditionalEUR185millionifcertainfuturesalesandregulatorymilestonesareattained.Thiswillbetreatedasapurchaseofthebusiness.

Thereisnofinancialstatementimpactin2015,butstartingin2016,theupfrontportionoftheconsiderationallocatedtoKuvancommercialoutsetwilllikelybeamortizedovertheexclusivityperiodoffiveyearsandthebalancetopegvaliaserights,whichwillsitonthebalancesheetuntilapprovedinEuropeandthenamortizeovertime.Theexactsplitistobedetermined,butweestimateitwillberoughly50/50ofthetotalpurchasepricebetweenthosetwoassets.Inclosing,BioMarindeliveredaverystrongthirdquarter.OurlegacyproductscontinuetoperformevenwithexpectedseasonalityforKuvanandunevenorderingpatternsinLatinAmericaandotherregionsforNaglazymeandnowVimizim.

Ourcommercialteamhashititsstride,balancingthestronglaunchofVimizimwhilemaintainingmeaningfulsalesofourotherproducts.WithboththeUSandEUfilingsofKydrisaacceptedandunderreview,welookforwardtotheopportunitytomeetwiththeadvisorycommitteepanelonNovember24withthegoalofgettingdrisapersenapprovedandavailabletoboyswithDMD.WecontinuetobelieveanearlyapprovalintheUSwilltakeustoprofitabilityonanon-GAAPbasisin2017,withgrowingprofitsafterthat.Now,I'dliketoturnthecallovertoHanktoprovideanupdateonourpipelineproductsandexpectationsoverthecomingmonths.

HankFuchs (ChiefMedicalOfficer):

Thankyou,Dan.Thethirdquarterwasespeciallybusyfortheresearchanddevelopmentorganization.TheregulatoryteamfocusedonpreparationsforameetingwiththePeripheralandCentralNervousSystemDrugsAdvisoryCommitteeoftheFoodandDrugAdministrationtoreviewthenewdrugadministrativeforKyndrisaonNovember24.Duringthequarter,we'vebeenaskedbymanyofyouaboutourconfidenceaswegetclosertotheDecemberPDUFAdate,soI'dliketosharehowwe'rethinkingaboutthings.Overall,sinceacquiringProsensainJanuary,wemaintainaconfidenceinapotentialnear-termapprovalofKyndrisa.

Wehavehadveryproductivediscussionswiththeagencyandtherehavebeennosurprisesthroughoutthereviewprocess.Wecontinuetobelievethetotalityofthedatademonstratesafavorablebenefittoriskprofile.Alsoduringthefourthquarter,attheWorldMuscleSocietymeeting,investigatorssharedresultsoftheClinicalGlobalImpressionScaleAssessmentfromourPhase3patients.Toremindyou,theClinicalGrowthGlobalImpressionscaleisaresearchtoolusedtoquantifyandtrackclinicalstatusandtreatmentresponseovertime.

Thistoolwasusedbyourinvestigatorstodeterminethewell-beingofourKyndrisapatientsandwe'repleasedthat30%ofKyndrisapatientswereassessedasclinicallyimprovedcomparedtothebaselineoneyearearliercomparedwith5%ofplacebo-treatedpatients.Aswe'vetalkedaboutbefore,thereareseveralthingswebelievemayhaveinfluencedtheequivocalresultsofthePhase3studythatinourview,haveunderestimatedthemagnitudeoftreatmentbenefit,includingthelackofaloadingdose.Theinclusionofsickerpatients.Inuseofnon-Duchenneexperiencedclinicaltrialsites.

Additionally,wehavealsofoundthatrandomizationinstudy044,thePhase3trial,wasimbalanced.Correctingforthatimbalanceimprovestheresultsofthestudyto16years,nearlya60%increaseinthebenefitsoftreatment.IbelieveKyndrisacanprovideameaningfultreatmentbenefittoboyswhoareamenabletoanExon51skippingtherapeutic,basedonthetotalityofevidenceobtainedfrommultipleclinicaltrials.ThefileforKyndrisaisthelargesteverpresentedtotheFoodandDrugAdministrationforaDuchennemusculardystrophydrug.Toremindyou,theUSandEuropeanUnionfilingsarebasedonthreerandomizedplacebo-controlledtrialsandtwolong-termopenlabelstudiesofmorethan300patients,inwhichsomeboyshavebeentreatedformorethanthreeyears,accumulatingtonearly500




patientyearsofexposure.

Andsotorecapthebreadthofourdatapackage,thisincludestwotrialsdemonstratingimprovementinsixminutewalkdistanceinpatientswhosebaselinerisefromfloortimewaslessthan7seconds.Athirdtrialincludedpatientswhosebaselinerisefromfloorwasnotrestricted,resultinginamuchbroaderpatientpopulation.However,sixminutewalkdistanceimprovementswereevidentoneyearlaterinthegroupofboyswhohadreceivedcontinuousdrisapersenfortwoyearscomparedtothegroupofboyswhohadreceivedplaceboforoneyearandKyndrisaforoneyear.

Additionally,boyswhohavebeentreatedforoverthreeyearsinaseparateongoingextensionstudymaintainedtheirsixminutewalktestdistanceincontrasttopublishednaturalhistorycontrols.TreatmentwithKyndrisaseldomisaccompaniedbyadversedrugeventsrequiringdiscontinuationandthemostcommonadverseeventsconsistedofinjectionsitereactions.Othersideeffectsaremuchlessfrequentandcanbeappropriatelymonitored.We'recontinuingtopursuethedevelopmentofadditionalExonskippingproducts.WecurrentlyhavethreePhase2studiesunderwayforthetreatmentofotherExonskippers.

BMN44,45,and53andthesestudieswerelookingatvariousdosesanddeliverymethodsinanefforttoprovidethemostefficaciousandsafestdosingregimenstopatientswhomaybenefitfromournextExonskippingproducts.Weareevaluatingdatafromtheseongoingstudiestodeterminespecificnextsteps.Turningtoourotherpipelineprograms,wehaveanumberofexcitingcatalystsonthehorizon.AsJJsaid,wedon'tknowofanotherexampleofabiotechcompanythathashadregistrationsunderwayinthesameyearforthreedistinctnewmolecularentities.

ForBioMarinin2016,thesecouldpotentiallyincludeKyndrisaforDuchennemusculardystrophyinEurope,cerlioponasealfaforCNL2andpegvaliaseforphenylketonuria.Tosaymyteamisverybusywouldbeanunderstatement.Inthethirdquarter,wearepleasedtohaveenrolledthefirstpatientinthePhase2studywithBMN270,ourgenetherapyproductforhemophiliaAandwelookforwardtoprovidingyouwithanupdateonthisprogramandpreliminarydataatresearchanddevelopmentdaynextAprilinNewYorkCity.Fortheremainderof2015,beyondouradvisorycommitteeandPDUFAdateswithKyndrisa,weexpecttoshareresultsfromourstudywithreveglucosidasealfaforPompediseaselaterinthequarter.

ForourongoingPhase1/2studyofcerliponasealfaforthetreatmentofCLN2disorder,weexpecttoconcludethestudybyyear-end,shareresultsinthefirstquarter,andifthedataaresupportive,topursueregistration.Wecontinuetobeveryencouragedthatthisstudycouldsupportregistration.InMarch/April2016,we'llsharePhase3pivotalstudyresultsfromourstudywithpegvaliaseforthetreatmentofphenylketonuria.WehopetofilethebiologicslicenseapplicationintheUnitedStatesinthesecondhalfof2016.OncewehavepivotaldatainMarchorApril,wewilldeterminethepathforwardforpursuingapprovalintheEuropeanUnion.

WewouldhopetousethedatafromourUnitedStatesstudytosupportaregulatorypathwayintheEuropeanUnion,butwewillnothaveclarityonthatuntilwemeetwithhealthauthoritiesinEuropeoncewehavePhase3results.AlsoexpectedatourR&DdayinNewYorkinApril,datafromongoingphase2studywithvosoritideforachondroplasia,aswellasplansandtimelinesforourpivotalstudy.We'vefullyenrolledthefourtharmofthePhase2studywiththe30microgramperkilogramdose.WhilethefirstthreecohortsinthePhase2studymoveforwardintheextensionarmofthePhase2studywiththe15microgramperkilogramdose.

That'sabriefrateupdateonthestatusofourclinicalprograms.We'reobviouslyverybusyintheresearchanddevelopmentorganizationandlookforwardtosharingwithyoutheimpendingmilestonesjustreviewedoverthenextfewquarters.Sowiththat,operator,we'dliketoopenthecallforquestions.




QUESTIONS&ANSWERS

Operator :

(OperatorInstructions)OurfirstquestioncomesfromMarkSchoenebaumwithEvercoreISI.

MarkSchoenebaum(Analyst-EvercoreISI):

It'sMarkSchoenebaum,I'vegotJohnScottionwithmeaswell,whomightaskaquestion.TheWallStreetconcernrightnowI'djustlikeyouguystoaddressthisheadon,andthatisthisconfirmatorytrial.There'sobviouslytheletterinthepublicdomainthatProsensareceivedfromFDAin2014andIthink,stronglyencouragedProsensaatthetimetobeginaconfirmatorytrialandyet,wesithereinlate2015,youguyshavenotyetstartedaconfirmatorytrial.

Thatbearssay,uh-oh,thebullssayBioMarinknowswhatthey'redoingwhenitcomestonegotiatingwiththeFDAaroundorphandiseases.ButcanyoujustgiveusanyassurancesthatthefactthattrialhasnotstartedbythetimeofPDUFAorisnotwellongoingshouldnotbeanimpedimenttoapproval?AndJohnmayhaveonefollow-up.


Hi,Mark,thisisHankandI'mstronglywiththebulls,here.BioMarinknowswhatit'sdoing.Theissueofaconfirmatorytrial,asI'vesaidnumeroustimesbefore,isthatitmustaddresstheissuesthatareidentifiedduringthereview.AndIthinkthoseissuesget,tosomedegreeortoalargedegree,peer-reviewedbyadvisorycommittee.We'vemadealotofpreparationsforwhatthatconfirmatoryprogramcouldbe,butwedon'twanttoinitiateenrollmentintoaconfirmatorystudyuntilwe'resurethatwehavetheissuesthatareinconsiderationaddressedintheconfirmatorystudy.

Ishouldalsoremindyouthatwehaveongoingaverylargenaturalhistorystudy.WereportedsomepreliminaryresultsofthatinAprilattheAmericanAssociationofNeurology.Sowe'realreadyaccumulatingprospectivenaturalhistorydataonpatientsandweclearlyhavebeenindiscussionoftheFoodandDrugAdministrationaboutthenatureofnextstepsofstudies.Wedon'thaveanxietyaboutwherewestandinregardtopullingthetrigger,ifyouwill,onaconfirmatorystudy.


Okay.CorrectmeifI'mwrong,Hank,sofarwe'veneverheardfromtheFDAthatinitiationofaconfirmatorytrialwasaprerequisiteforapprovalofthedrug.


That'scorrect.

JohnScott i(Analyst-EvercoreISI):

Hey,guys,thisisJohn,ifIcouldjustfollowup.WeallthoughtSarepta'sdatareleasedamonthago,theirnewdata.Iwasjustwonderingtotheextent--I'msureyoucan'tcommenttoomuchonSarepta'sdata,buttotheextentthatwe'llseemaybesomenewdatacutsfromyouguysfromDEMAND3maybeinlightof--besidesjustgreaterthansevenyearsoldandlessorwhatyousaidbeforetheclinicaltrialsites,butmaybewithregardtosixminutewalktestsasaprognosticfactorforbenefit.

Isthereanythingnewthatwe'llseeonDEMAND3duringtheAdcomorsomethingthatcould,inthatvein,withregardtowhatwesawwithsomeSareptadataearlier?Letmeaskyoumoresuccinctly,doyoubelieveSareptaputanythinginthepublicdomainthatmateriallychangesthedebate?





I'mgoingtoanswerthelesssuccinctquestionandI'llleavethemoresuccinctquestiontoJJ.We'vementionedthattheDEMAND3studyincludedsickerpatients.WearesharinganalysiswiththeFoodandDrugAdministrationandIwouldexpectthatwewill,attheadvisorycommittee,haveanopportunitytodiscusstheimpactoftheinclusionofthosesickerpatientsinthestudy.Texturally,there'snothingsubstantiallydifferentaboutthattodaythanwhenBioMarintookovertheprogram.Tosaybeyondthat,webelievethatittakeslongerforsickerpatientstohavethebenefittheyhave.LessremainingmuscletissuefortargetingofanExonskipperandtherefore,toachievebenefittakeslonger.

IdidmentionanewpieceofinformationthatIdidwanttohighlightforyouortwonewpiecesofinformationthatIwanttohighlightforyou.OneiswefoundthatrandomizationwasprettymeaningfullyimbalancedinDEMAND3.We'llsharethatinformationwiththeadvisorycommitteeandyou'llhaveachancetoseethatinabitmoredetail.Andwesharewithyoualsothattheclinicians'globalimpressionofimprovementismeaningfullybenefitedbyKyndrisacomparedtoplacebo.IthinkthattheseareallthingswhichgivemegrowingconfidenceinthemedicalvalueforpatientsofreceivingKyndrisa.


Whatwasthesecondquestion,again?


JJ,Iwasjustwondering,allofthispaperintroducedinthemarketplacefromSareptaoverthelastcoupleweeks,didyouseeanythinginthosedatasetsthatmateriallychangedthedebatearound--


IpresumeyouarereferringtodataanalysisthatwaspresentedattheWMSmeeting?


Yes,sir.


Thenewpopoutcomparatorygroupof13patients?


Yes,thenewnationalhistorycomparativegroup.


Iunderstandthat13patientscamefromtwocentersinEurope,oneitaliancenter,oneBelgiancenter.Thegroupwasmadeoverthreeyearsafterthecompletionofthetrial.Iwouldsaywedon'tbelieveitchangesthelandscapeinanyway,shape,orformbasedonourintroductionwiththeFDA.Butalsothereisanotherissuewhichiswedon't--itstillunclearwhatisthedataintermsofwalkdistance.Whetherit'stheoriginalanalysisorthenewanalysiswhatisthedatafor30mg?

Becauseweunderstandthedatawaspresentedlumping30milligramsand50milligramsanditappears,althoughwedon'tknow,itappearsSareptahadbeenfilingfor30mg,not50.IthinkweunderstandtherewerequestionsaboutitattheWMSmeetingandIthinktheanswerIheardfrommanagementwasthatthedystrophinproductionwasaboutthesamefor30and50milligram,butatthesametime,itlookslikewecouldn'treallyshowrelationshipbetweendystrophinandwalk.Wedon'tbelieveithassubstantial




impactonthelandscape.


TheonlyotherthingI'daddis,ifI'mglad--it'simpossibletocomparestudiesapplestoapples,nothead-to-headtrialsetcetera,somakingnocommentaboutthequantumofevidencethatcamefromourtrialversusthequantumofevidencethat'scomefromanybodyelse.ButtosaythatI'mgladthatBioMarinhas,inadditionto3.5yearsoflong-termsafetyandefficacydatafrom12boystreatedinwhichwedemonstratedmaintainedmaintenanceoftheambulation,I'mgladwehavethreeotherrandomizedplacebo-controlledtrialstoindependentlybringtoadvisorycommitteeconsiderationwithanadditionalgroupofpatientsthathavebeenfiledinopenlabelextensionstudies.

Wejusthave,beyondourownlong-termopenlabelextensions,wejusthavealotmoretrialsandIthinkthat'sgoingtobeaveryimportantconsiderationastheadvisorycommitteeworksitswaythroughunderstandingthetotalbodyofevidence.

MarkSchoenebaum(Analyst-EvercoreISI):

Allright.Great.Thanksfortakingmyquestion.NicetoseeyoulastweekattheEvercoremixer,JJ,goodbye.

Operator :

OurnextquestioncomesfromChrisRaymondwithRaymondJames.

ChrisRaymond (Analyst-RaymondJames):

Anotherdrisapersenquestionifyouwill,there'sbeenadecentamountoftalkonthisconfirmatorytrial.IthinkI'veheardsomespeculationfromyouguysthatitmightbeinnon-ambulatorypatients.I'mjustkindofcurious.YoumentionedsickerpatientsbeingaconfoundingfactorintheProsensatrial.Canyoumaybetalkaboutthatandmaybereconcilethat?


Ithinktherearetwodifferentissues.Oneistheinclusionofpatientswhoaremoreadvancedinthecourseoftheirillnesshasthepotentialtodilutethetreatmentsignal.Theplacebosstudies876and117hadessentiallynegligibledeclineintheplacebogroupandyet,theDEMAND3044studyhadabout50orsometerormaybeindeclineintheplacebogroup.TheplacebogroupwassickerinDEMAND3thanitwasintheother1178and1176studies.

Theinclusionofthosearesickerpatients,becausetheyhaveadvancedfatandfiberstissueinfiltrationintotheirmuscles,diminisheslowerextremitymusclethatisthetargetforExonskipping.Sotherefore,it'snotsurprisingthatsixminutewalkdistanceimprovementsinthatgroupofpatientsareofasmallermagnitudeandtakealongertimetoachieve.Ikeepmentioningthelackofaloadingdose.Welearned,subsequenttothecompletionofallofthesetrialsthatittakesaboutsixtoeightmonthstogettosteadystatetissueconcentrationsofKyndrisa.

It'sactuallyprettyamazingthatwewereabletoobserveimprovementsinthe044DEMAND3trialat48weektimepoint,consideringthepatientsareonlyatsteadystatetissueconcentrationsforarelativelyshortperiodoftime.Thatdilutionoftreatmentbenefit,ifyouwill,isoneimportantconsideration.AndI'dputthat,bytheway,inacontext.PTCrecentlyreportedwithatalurenaresolutionofaquestionthathadbeenoutstandingforawhileandthatisitlookedliketheirdatasaidworksbetterinsickerandtheirconfirmatorytrialresolvesthatdilemmabysayingthere'sasweetspotforeffectivenessthat'sprobablynorthoforhealthierthanthelowerlimitofinclusionintheBioMarin044trial.




Ithinkbiologicaldata,externaldatapointusinthedirectionthatsaysifyouhavelostalotoflowerextremityfunction,thebenefitisgoingtobetherebutit'sgoingtotakelongertoseeandit'sgoingtobeoflowermagnitudeinregardtohimambulatoryfunctionendpoints.TheotherthingImentionedwasthatbecausetheinclusionofsickerpatients,thatmeantthatthetrialwasvulnerabletoimbalancesinrandomizationandI'llgothroughthatattheadvisorycommittee.Buttheshortversionofthatis,wealwaysassumerandomizationworksperfectly,exceptthatitdoesn'twhenyoudon'tstratifyrandomizationforkeyprognosticfactors.

Becausethesefindings--theknowledgeofthenaturalhistoryofDuchennehasonlyreallyemergedinthelastfiveyears.Unfortunately,thestudywasn'tdesignedwiththoseelementsinmindandtherefore,thestudy's,tosomeextent,partiallycompromisedbythataswell.TwofactorsinfluencedtheinterpretationoftheequivocalresultsofthePhase3trialamongstothers,dilutionoftreatmentbenefitandbalanceofrandomization.


Thanks,Hank.AndifIcouldasksortofafollow-upquestiononthecommercialside,IwaskindofstruckbyyourcommentsonNaglazyme.Iknoworderpatterns,especiallyinLatinAmerica,arechoppy,butanothercompanywithararediseaseportfoliohighlightedmacroissuesinLatinAmericaassortofalonger-lastingheadwind.Conspicuously,Idon'tthinkIheardthatfromyouguys.Canyousortoftalkaboutwhatyou'reseeingthere?


IthinkthemainelementsforusinLatinAmericaarethechangeintheforeignexchangeratesthat'stheBrazilianrealveryhard.It'salsohittheColombianpesothisyear.Thatisthemainone.AndthenwehavetheseverylargeunevenorderpatternsthatarecomingfromLatinAmericathatare--they'remakingthequartertoquartercomparisonsverydifficulttokeeptrackof.

Theycouldalsospillintoyear-over-yearcomparisonsbasedonthetimingofthesebigorders.Finally,likethisothercompanythatyoureferredto,we'rewatchingmacroeconomicconditionsinLatinAmericaandotherregionsandIwouldsaywearewatching,we'reconcerned,wehavenotseenitbeanegativeinfluenceonourbusiness.Itcouldhappeninthefuture.Ihaven'tseenityet.


Okay.Thankyouverymuch.


Chris,iinspiteoftheissues--againthenumberofNaglazymepatientsaroundtheworldhasincreasedinQ3overQ2.DefinitelythecollapseorthedramaticreductionofthevalueofsomeLatinAmericancurrencyasitscomparedtothedollarobviouslyhasn'thelpedus.

Operator :

OurnextquestioncomesfromGeoffMeachamwithBarclays.

Geof f Meacham(Analyst-BarclaysCapital):

Thanksfortakingthequestion.IhaveafewforHank.One,vosoritide,Iguesswhenyouthinkaboutthenextsteps,howmuchexposuretothehighdosedoyoureallyneedtoseebeforestartingaPhase3andthenwhat'sthegainingfactorbeyondthat?Ihaveafollowupjusttocontinuetobethedeadhorseondrisapersen.





That'sathoroughbredstallion.Thenextstepsonhowmuchexposure,webelievethatwereportedthesix-monthfindingsandwebelievethatnormalizationofgrowthatsixmonthsportendsverywell.Obviously,youcanfollowpatientslonger,youcanalwaysaskthequestionabouthowwellthatefficacyissustained.Webelievethatvosoritide'sefficacywillbesustainedbecausewesawasustainingofthebiologicalmarkeroftheCNPsactivityurinaryexcretioncyclicGMPfrombeginningtoendofthestudy.Andsowethinkthedatawillholdupandobviously,we'recontinuetofollowthosepatients.

WebelievewehaveenoughevidencetodatetopivottoPhase3andthenthenextgatingitemsarereallyliningupthehealthauthoritiesonthedesignofaglobalregistrationprogram.It'sveryimportantintherarediseasespacebecauseoftherarenessofthepatientpopulationandthedesiretogetmeaningfulclinicaloutcomesinclinicaltrialsmeansthatyoursamplesizestendtobeonthelargersizeandtheavailabilityofpatientstendtobeonthesmallersidebecauseoftherarenessofthepopulation.SothatpushesustowanttomakesurethatwedotourI'sandcrossourT'swithhealthauthoritiesaroundtheworld.

We'veinitiatedthatprocess.We'refeelinggoodaboutthisprocessandI'dsaystaytuned,asImentionedinmypreparedremarks,foranupdateatR&DdayinApril.Exactlywhatwe'llbeabletotellyouatthatpointintimewilldependontheamountofprogresswe'vemade,butwe'llprovidewhatupdatewecan.Andthenyouhadanotherquestionaboutthestallion.


Yes.Sojustonsubsequentstudies,clearly,you'llgetinputfromthepanelandobviously,aheadofthePDUFAdateonwhatthedesignofthosestudiesandtofinalizethat.ButIwantedtokindofaskyouwhatthevenueormechanismwastogetEuropeaninput?Clearlyyouwanttohaveatrialthatworksforbothgeographiesorifthere'sanyotherinputfromhealthauthoritiesgloballytowhattheymayaskforwhenyouthinkaboutwhataconfirmatorystudymaylooklike.


Yes.That'sreallytheoutstandingquestionaswell.We'reinregistrationinEUandtheUnitedStatessimultaneously.TheprocessintheEUisstructuredalittlebitdifferentlythantheprocessintheUnitedStates.Butwe'reabletohavedialoguewitheachoftheagenciesindependently.They'rewellawareoftherarenessofthepatientpopulation.They'rewellawareoftheneedforconsiderateuseofpatientresourcesinthepost-approvalsetting.

They'rebothwellawarethatthequestionsthatgetposedthatarepartof--whetherthey'repost-marketingcommitments,post-marketingrequirementsorconfirmatorystudies,theyneedtobeimportant,becauseitisalotofeffort.Itisaburdenonpatients.Itisaveryrarepatientpopulation.It'sreallythroughourdialogueindependentlywiththeagenciesthatwe'reabletotrytolineupandcomeupwithaglobalpost-approvalprogram.It'skindofanotherfactorofwhywedon'twanttorushintoonethinguntilwe'resureweknowwhattheissuesareglobally.


Great.Okay.Thanksalot.

Operator :

OurnextquestioncomesfromCoryKasimovwithJPMorgan.

Unidentif iedPart icipant :




Hithisis[Whitney]onforCory.Firstquestion,I'mgoingtostickwithdrisapersenhere,justontheISR's.We'vehadacoupleconversationswithdoctorsrecentlywherethey'vesortofindependentlybroughtuptheISRs,boththerateandseverityandkindoftalkedaboutthemaspotentiallybeingdurationoftherapylimiting.Justwonderingifyoucankindofreminduswhatyouwereseeingwiththeinjectionsitereactionsandwhetherornotyouthinkthat'sgoingtobeaparticularissuelookingtowardsthe[outcome].


Intwoyearsofstudyofcloseto200patients,callit,we'veseenonediscontinuationduetocutaneoustoxicityofdrisapersen.Asyoufollowpatientsforlonger,thereisevidencethatthefrequencyandtheseverityoftheskinreactionscanevolvetotheworst.Thatleadingedge,ifyouwillofpatientswerepatientswhowereonthestudythatwecall673,wherewenowhave3.5yearsofdataonthoseboysandthoseboyswerestartedontherapybeforearigorousprogramofinjectionsiterotationwasundertaken.Weknowthatinjectionsiterotationisanimportantelementtomanagetheoccurrenceofinjectionsitereactions.

It'simaginablethattherewillbeaneedfor,let'scallit,analternativerouteofdeliveryforsomeboysifthecutaneoustoxicityinyearthree,yearfour,yearfive,yearsixgetstothepointwhereit'sunmanageable.Therefore,we'llbeworkingonanIVformulation.ButSubQformulationreallyprovidesalotofconvenienceforpatients.Itcanbehandledsafelybypatientsandtheirfamiliesandhasnotrisentothelevelofanoverttoxicityrequiringdiscontinuation,exceptforinveryrarecircumstancesinthefirsttwoyearsoftherapy.


Also,theSubQroutesreducesthecostofadministeringthetherapiessubstantially.Weunderstandourcompetitionrequiresaboutaonehourinfusion,whichisabouttwotothreehoursandthephysician'sofficewiththeaddedrequirementsforinfusioninthephysiciansofficeorD&Dcentersandweunderstandthey'renotincludedforthat.ButasHankstates,fortheveryfewpatientsthatmightwanttoevolvefromSubQtherapyoverthelong-term,wehaveanactiveplantoworkonthat,includingtheabilitytogivethedrugintravenouslyandwehaveafewpatientsalreadyanIVtherapyinEurope.


Thanks.That'shelpful.Thenjustaquickone,canyouremindushowmuchyou'vebeendoingsortofatriskaheadofthePDUFAandhowquicklyyoucouldbereadytolaunchifapprovedonDecember27.


Yes.Justtoclarify,whenyousayhowmuchwearedoingatrisk,areyoutalkingaboutmarketpreparationorhowfastwecanhavefinishedgoodsontheshelfreadytoship?


Iguessboth.


WellintermsofmarketpreparationthisisnotBioMarin'sfirstlaunchofadrugtotreatanultra-raredisorder.We'vebeenworkingonthisoneallyearlong.We'reconductingthenormalandappropriatemarketcharacterizationandalsomarketconditioning.We'repreparingourteamandtheUnitedStatesandoursupportsystem.SoifwegetanapprovalonoraroundourPDUFAdate,fromacommercialperspective,we'rebasicallyreadytogo,subjecttotheinterruptionoftheholidayseason.MaybeIwould




askRoberttocommentonproduct.

RobertBaf f i(EVPofTechnicalOperations):

ThisisRobertBaffi,headoftechnicaloperations.Wehavebeen,overthecourseoftheyearsinceweacquiredtheproduct,buildingupinventory,bothfromanAPIperspectiveanddrugproductperspectiveandwewouldbeavailabletolaunchdrugsshortlyafterapproval.


Also,onarelatedtopic,we'dliketoemphasizethat,asfaraswe'reconcerned,wehavenolong-termmanufacturingcapacityconstraintsandwebelievethatweshouldbeabletosupplymarketdemandwithourproduct.


Thanks.

Operator :

OurnextquestioncomesfromTerenceFlynnwithGoldmanSachs.Yourlineisopen.

T erenceFlynn (Analyst-GoldmanSachs):

Thanksfortakingthequestion.Justafewonthehemophiliaprogram.Iwaswondering,youmentionedanupdateatyourAprilR&Dday,doyouexpectthatincludeonlyasignaldosecohortorcanweexpectmorethanone?Andanymoredetailsyoucansharearoundyourvectorandanythingintheprotocolaroundtheuseofsteroids?Thankyou.


Vectorwe'regoingtotalkaboutattheAmericanSocietyofHematologyattheendoftheyear.Ikindofwanttoansweryourquestionaboutwhetherwewillgiveyoumorethanjustthesingledosecohortbysayingweonlyeverplantotreatpatientswithasingledose,butIthinkyoumeant--Ithinkyou'reaskingaboutadditionaldoselevels.We'rejuststartingintheprogram.Ithinkit'sprematuretotalkaboutwhatthedoserangesorwhatdatamightbeavailableinApril.Staytuned.

Andastothesteroidregimen,we'rehighlysensitizedtothe--highlyawareoftheissuethatbrieftransaminitiscanmarkedlyattenuatethetransgeneexpressionandwebelievethatwehaveaprogramplacethatadequatelyprotectspatientsduringthatperiodandwe'lljusthavetogetmorepatientdata.I'llhavemorepatientdatatosharewithyou,hopefullyatanalystdaythatcanspeaktohowthatprogramworkedorwhatmodificationsmightbeneeded.

T erenceFlynn (Analyst-GoldmanSachs):

Thankyou.

Operator :

OurnextquestioncomesfromJosephSchwartzwithLeerinkPartners.

JosephSchwartz (Analyst-LeerinkPartners):

Great.Thanksverymuch.IwaswonderingifyouthinkthatREMSwillberequiredforKyndrisaandhowthatmightlook?





It'sprematuretotalkaboutwhatthepost-approvalrequirementsaregoingtobe,especiallyaheadoftheadvisorycommitteebecausethere'sstillfairamountofreviewstilltogo.OnethingIwouldsayisgenerally,we'velookedat--ourregulatorygrouphasdonesomeresearchonutilizationofREMSandacoupleofthingshavecomeoutofthatreview.Oneistheyseemtobedeclininginnumberandalso,theagencyisreluctanttointroducethoselateinthecourseofprogramsbecausethere'salotofinternalliningupthathastogoonattheagencytoimplementtheREMS.

Sonotwithstandingthosetrendpatterns,wedostillthinkit'sprematuretotalkaboutwhetherandwhattypeofREMScouldberequired.Ithinkit'simportanttosaythatwe'regoingtodowhatwillbenecessarytoassuresafeandappropriateuseofKyndrisatheinthecommercialarena.We'lldowhatittakestomakesurethatthepatientsgetabenefitandaresafe.


Okay.Thatmakessense.AndarethereanymetricsthatyoucansharefromthekNOWyourDuchenneinitiativesinceitwaslaunchedandhowdoyouanticipatethisprogrammightevolveuponpotentialapprovalofKyndrisa?

Jef f Ajer (COO):

WhatIcansayqualitatively--Idon'thavemetricstoshareonthephonetoday,butwhatIcansayqualitativelyisthattheprogramhasbeenwell-received.We'vegotteninquiriesfrompatients,caregivers,andalsophysiciansacrosstheUnitedStates.Manyofthoseinquirieshavetranslatedintothosepatientsenrollingintheprogramtoeithergetadditionaltestingresultsortohavetheirtestingresultsinterpretedbyanindependentanalystandsowe'reprettyhappywithhowthatprogramisgoing.

AsIstatedinthepreparedremarks,oneofthethingsthatIlearnedveryquicklyherethatistruethatpatientsandphysiciansforthemajorityofpatientswithDMDhavehadamoleculartestthat'sgenerallybeentoconfirmthediagnosisofDuchennemusculardystrophy.Itisnotthecasethatthemajorityofthosepatients,caregivers,orphysicianshavedonetheinterpretationrecentlyandareawareofthestatusofthosetestresultsandwhetherornotthatpatientwouldbeamenabletotreatmentwithanExon51skippingtherapy,anyotherExonskippingtherapy,oranyothergeneticallytargetedtherapythatmightbecomeavailable.

Asaresult,weseethatthereisabigneed,andBioMarinhasjumpedintoaddressthatneed,thereareotherprogramsouttherethatareavailablealsotoaddresstheneedofgettingappropriatetestingandinterpretation.Honestly,Iseethatassomethingthat'sgoingtobeimportant,notonlythisyear,butcertainlyin2016,probably2017.


AreyouabletodothesamethingoutsidetheUSwheretheprivacylawsmightbealittlebitmorestrict?

Jef f Ajer (COO):

ThespecificprogramthatwehaveintheUnitedStatesreallyappliesjusttotheUnitedStates.Buttheoverallconceptcanbetailoredtocertainothercountries.Andbasedontheresponsethatwe'vegottenandinquiriescominginfromoutsideoftheUnitedStates,webelieveit'sappropriatetoputtogetherprogramsthatarecompliantwiththoselocallaws,butthatwouldalsoprovidesomeassistancetopatientswhodon'thappentobeintheUnitedStates.Sowe'reworkingonthat.





Great.Thanksfortakingmyquestions.

Operator :

OurnextquestioncomesfromPhilNadeauwithCowen&Company.

PhilNadeau (Analyst-CowenandCompany):

Thanksfortakingmyquestions.First,justacoupleofcommercialhousekeepingitems.Jeff,youmentionedthatthere'salargeLatinAmericanorderforVimizimduringQ3.Canyougiveussomeideaofhowlargethenon-recurringpartofthatorderwas,sohowmuchweshouldanticipatetakingoutoffuturequarters.

Jef f Ajer (COO):

Intherangeof$5millionto$10million.


Okay,great.AndontheimpactoftheFX,youmentionedwiththeimpactofFXwasonthetopline,obviouslyyouhadsomeoperationsoverseas.HowmuchmorewouldexpenseshavebeenifFXhadbeenconstant?

Jef f Ajer (COO):

Expensesintotalwould'vebeenaround$20millionto$25millionmoreoverthecourseofthefullyear.


Okay.Great.Acoupleonthepipeline,firstwiththereveglucoside,we'regoingtogetinterimresultslaterthisquarter.Hank,whattypeofdatawillbeinthoseinterimresults?Inparticular,myguessispeoplearegoingtointerpretthoseasaproxyforwhatthefinalresultsaregoingtoshow.Isthereanyreasonwhyweshouldn'tdothat?


It'salittleprematuretotalkaboutthatjustbecausewehaven'tfinalizedthatdatapackage.Butthetypeofresultswillbethesafetyparameters,whichwillbasicallybethingslikeinfusion-associatedreactionsourpotentialforhypoglycemiaoranythingunexpected.Andthenontheefficacyside,wefocusedontherespiratorymusclestrengthparameters.Maximuminspiratorypressure,maximumexpiratorypressure,we'vealsomeasuredsixminutewalkdistance.SoIthinkwe'lltrytogiveyouenoughofaninterimofalookatthedatainterimtosixmonthdatapointtobeabletoinformaviewastotheroadahead.


Anddoyouknowapproximatelyhowmanypatientswillbeintheinterim?


Notoffthetopofmyhead.


Okay.Andthenjustonelastquestion,backondrisapersen,youcanseeaskepticintheFDApanelsayingthatthecollectionofdatathatyouhavethatshowsefficacyisinteresting,butit'satheorybasedonpost-hocanalysesandyoushouldgoanddoanotherstudytoproveyourtheory.Ifthat'sasked,howwouldyouansweritinparticular?Wereanyoftheseanalysespredefined?Howdoyouanswerthepost-




hocquestion.

Jef f Ajer (COO):

Thereisn'tanyrealgreatanswertothepost-hocaquestionasitpertainstotheconductofthe044study.I'mgoingtopivottogoodthingwehadtwootherrandomizedtrialsthatwe'rerunessentiallyconcurrently.Thisisn'toneoftheseprogramswheretherewasabunchofstudiesdoneandthenabunchmorestudiesdoneandthentheydidonebigphase3trialandrolledthediceonthePhase3trialandthentheyhadtomakechickensaladoutofallofthat.

ThisisaprogramwhereGSK,forbetterorforworse,rancontemporaneouslythreerandomizedplacebo-controlledtrialsandunfortunately,becauseofthewell-motivateddesiretomakethelargestofthetrialshavethebroadesteligibility,thebroadestnumberofcentersincluded,thatallwaswellmotivated,butentirelybackfired.WhenItalkaboutthetotalityofevidence,it'sinformedbyguidedanalysesofthePhase3program,butstronglysupported,ifnotpivotallydependenton,theothertworandomizedtrialsintheportfolio.


That'sveryhelpful.Thanksfortakingmyquestion.


Theremaybeanotherillustrationofthis,anaspectthatcannotbemanagedbysomegroupanalysisofthePhase3dataarethingslikethefactlikethecentermostofthecentersinthePhase3hadnoexperiencewithsixminutewalktestorDuchennemusculardystrophyingeneralandthefacttherewasnoloadingdoseinthephase3trialwhenHanktellsyouthatittakessixmonthstogetthemaximumtissuepenetrationoverthedrug,theabsenceofloadingdoseprobablyaprettysignificantimpactontheresultsofthephase3trial.Andthat'sthe--youcannotanalyzethiswithsubgroupanalysis.


Thanksforallthedetail.That'shelpful.

Operator :

OurnextquestioncomesfromAndrewPeterswithUBS.

AndrewPeters (Analyst-UBS):

Thanks,guys,fortakingmyquestionandIappreciatethecommentsfromJJarounddrugpricing.Ithinkit'shelpfultoframethediscussionaroundyouguys.Asdrugpricingcontinuestocomeunderscrutinyingeneral,doesthataffecthowyouthinkaboutpricingbothfordrisapersenandforcerliponasealfa,especiallyinthecontextofCLN2beingkindofabitofasmallerindicationwhereahigherpricepointcouldbeexpected?Howdoyouthinkaboutkindoftheincreasedfocusonpricingintheindustryingeneralasyougoaboutmakingthosepricingdecisions?Thanks.


I'llstart,maybeJeffcangiveyouhisperspective.Iwouldsaythescrutinysofarhasbeenmainlyonlargepriceincreases,ratherthanlargepricesingeneral,highprices.Ithinkthescrutinyonthelargepriceincreasesisdifficultnottoagreewiththatandspecifically,whenacompanybuysandallmolecule,doesn'tdoanyresearchandjackupthepricehundredsofpercentovernight.Thisisnotourbusinessmodelandthiswillneverbeourbusinessmodel.IthinkI'vesaidonCNBCthatwehaveneverinthepastincreasedthepriceofourproductsbeyondinflationintheUSandwehavenointentiontodothatinthe




future.

Westillbelievethat,forthevalue-addedtherapieswhenthereisaverylargeunmetneedandlimitedcompetition,thereisstillthereisstillpricingpowerhere.ObviouslyweareintheprocessofdoingpricingresearchforKyndrisaandtheenvironmentwillbetakenintoaccount,butIwouldsaythepastfewweeks,theenvironmentofthepricingismoreofapoliticalenvironmentthanarealenvironment.Also,Ijustwanttohighlightthatmostofoursales,exceptforKuvan,butthevastmajorityofoursalesareex-USwherewe'vebeendealingforyearswithsinglepayers,governmentpayerswherethereispricecontrolthepriceofourproductsoutsideoftheUSisnotsignificantlylowerintheUS,actuallyinsomecountriesitishigher.

AndIwouldsaythelastpointisthattheVimizimlaunch,whichishappeninginthecontextofthispricingheadlineisgoingverywell.Obviously,therearetheusualpushbacksinsomecountriesandeverycountryistryingtogetthebestpossiblepricethattheycan.That'snotunusual.Iwouldsayforusintheshortterm,whenwetalkedearlieraboutthefullexchangeheadwindsarethebiggerimpactonusthanwhenthepricingenvironment,nottosaythereisnopricingissuewhatsoever.Jeff,youwanttoaddanything?

Jef f Ajer (COO):

Thatwasgreat,JJ.IguessIwouldjustaddthatbynow,itisawell-establishedandawell-acceptedfactthattheeconomicsofdrugdevelopmentmanufacturingfordrugsthattreatultra-raredisordersresultinhighprices.Thatmuchisnolongerdisputed.Thatonewassettledalongtimeago.Discriminatingcarefulbuyersofthosedrugs,singlenationalpayersystemsandgovernmentandprivateinsurersintheUnitedStates,theycarealotaboutthestrengthoftheclinicalvaluepropositionandthedegreeofsupportthatthesedrugsbringtothemarketandagainstthepricethatthey'reclaiming.

BioMarinknowsthat,we'rewellawareofthat.WetakeallofthoseconsiderationsseriouslyandintoaccountwhenwepriceourdrugsandtheevidencesofarhasbeenprettypositiveforourcommercialportfolioandIexpectthatwewillcontinuetodotherightgoodjobpricingourdrugsgoingforward.

Operator :

OurnextquestioncomesfromMichaelYeewithRBCCapitalMarkets.

MichaelYee (Analyst-RBCCapitalMarkets):

Hello,thanksforthequestions.Acouple,I'mstilltryingtobeatthedeadhorse.Ihopeit'snotdeadyet.ButHank,ondrisapersen,canyoujustremindussortofwhereyoustandonthedystrophindebate,whetheryoucancommentonwhetheryourdatais--whateverdatayouhaveiscorrelativedirectionallyrelatedorwhetherthat'sevenbeeninanydiscussionsatallwiththeagency.Thensecondofall,canyoujustcommentaboutwhetherornotyouactuallyfiledforacceleratedapprovalornotandwhetherthere'sanydistinctdifferenceastohowshouldinterpretaquote-unquoteconfirmatorystudyversusjustpost-marketingandmaybethat'sdifferentiationthatIshouldconsidertowhetherornotaconfirmatorystudyisevenneeded.


SotwoeasythingsfirstandjustsayIwon'tcommentonongoingdiscussionswiththeagencyaboutaparticularfacetofdatarevieworaparticularconsiderationaboutwhethersuchthingisapost-marketingcommitmentrequirementorconfirmatorystudy.I'vetriedtolaythelandscapeoftalkingaboutthepotentialthatanyorallofthosemightapplypost-approval,butthatwe'renotatapointintimewherewecanbespecificenoughaboutthenatureoftheapprovalorthetypesofrequirementsthatwillensue.




Butturningtotheveryfirstquestionthatyouaskedaboutwhereareweinthediscussionofdystrophin.

I'dsaythatweareadequatelyconvincedthatwecandocumentinpatientstreatedwithKyndrisathatthereisExonskippingandthatanoveldystrophinthatismadethatisaresultofExonskippingasaresultofthetruncationofthepre-MRNAandtherestorationofthereadingframe.Weareveryclearthatwecannot--wehavenotidentifiedaparameterorameasurementofdystrophinthatisapredictivebiomarkerofchangeinclinicaloutcome.Thatisaveryimportant--thosetwothingseveryimportanttodistinguish.

Wemakedystrophin.Secondquestion,howmuchdystrophindohavetomaketobeclinicallyrelevant?Nooneknowstheanswertothatquestionyetandourdatadoesn'tchangethatandwe'renotawareofanytrialthat'sunderwaythatcouldevenpossiblyaddressthat.Itwilltakeawhiletovalidatethemeasureofdystrophinasasurrogatebiomarkerofclinicaloutcome.


Butthedata'scertainlydistinctfromtheplaceboandthat'syourpointintermsofdystrophindataregardlessofquantitation?


Webelieve,inaggregate,that'sthecase.Someofthethingsthatwe'velearnedareonehastocomparepre-treatmenttopost-treatmentinthesamepatientinthesamemusclegrouptoproperlyinterpretthedrug-inducedchangeindystrophin.Onemustmeasureareasonablesizedsampleofmuscleandtherearealotofchallengestechnicallyinhandlingconditions.Butwhenyoucanmeasurepre-andpost,doitindependently,objectively,andquantitativelythanourbeliefisthatyoucanadequatelydemonstratethattheintendedeffectofdrisapersenisoccurringinpatientstreatedwithKyndrisa.


Thankyou.

Operator :

OurfinalquestioncomesfromYingHuangwithBankofAmerica.

YingHuang (Analyst-BofAMerrillLynch):

Thanksfortakingmyquestion.Justone,Hank,youmentionedthoseimbalancesasabaselineforthePhase3.Couldyoujustshedmorelightaboutexactlywhatimbalancewasthereoracrossdifferentmetrics?ThenIknowyouguyshavebeensayingthatyouhaveverystrongIPpositionfordrisapersenagainstSarepta'sproducts.Hypothetically,ifbothareapprovedintheUS,wouldyoureallygototheextremeandpotentiallyblockthemintheUSorEuropebecausethatcouldcreatesomebadwillforthepatientsintheorganization.Sojustcuriousyourthoughtaboutthat.Thankyou.


Sothefirstpart,age,baselinewalk,andsixminutedifference--age,baselinewalk,andrisefromfloortimeareallimportantprognosticindicatorsofthechangeinwalkandtheyareallimbalanced,thatisagainstdrisapersen,inthe044placebo-controlledstudy.Interestingly,notintheothersmallerstudies.ProbablyduetothewidthoftheeligibilitycriteriainthePhase3trialandcorrectingforthatconfoundingimprovesthetreatmentbenefit.Soaswesitheretoday,it'sage,baselinewalk,andrisefromthefloor.

Jef f Ajer (COO):




AndJJwantsto--


OntheIP,Ithinkwe'vebeenaskedthisquestionseveraltimes.AndwhatIneedtokindofgobacktothefactsthatinEurope,wehaveanimmediatelyenforceablepatentbecausetheregulationsofdifferentfromtheUSandwewant--theUSpresentsthatbackin2011,wewontheproceedingsthere.Sareptahasappeals,butintheEurope,theEuropeanregulationsyourpatentisissuedandimmediatelyenforceable,evenduringtheappeal.IntheUS,wejustwonthepatentcasewiththepatenttrialappealboardrelatedtoourmethodofusepatents.Thereareotherpatentsthatarebeingevaluated.

ButIjustwantto--justsomepointofclarificationthatintheUS,whateverhappenstotheotherpatentsthatarebeingsecuredandbytheway,weareprettyconfidentofthecompositionofourpatentintheUSsimilartotheEuropeanone,wherewewonthecase.Butevenifwelostthereeverythingelse,ithaszeroimpactonourfreedomtooperateintheUSorinEuropeandhaszeroimpactonthevalidityofthecurrentpatentintheUS.Assumingthatthepatentismaintainedonappeal,ourabilitytoprotectourintellectualproperty.

Thatbeingsaid,soIdon'tthinkweneedtomakeanydecisionsastowhatwewilldotodefendourintellectualproperty.Itisourintenttodefendourrightshere,butlet'swaitandseewhathappensastowhogetsapprovalwhenandthenwe'lldeterminewhatisthebeststrategymovingforward.

YingHuang (Analyst-BofAMerrillLynch):

Okay.Thanks.

Operator :

ThatconcludestheQ&AsessionIwillnowturnthecallbackovertoJJBienaimeforclosingremarks.


Thankyou,operator.Thankyouforbeingonthecalltoday.Weare,insummary,verypleasedwithourresultsforthequarterandfortheyeartodate.Soweincreasedourtoplinerevenueguidanceforthesecondtimethisyeartobetween$880millionand$900millionforthefullyear,intermsoftotalBioMarinrevenuesandhavedrivenprimarilydrivenbythecontinuedsuccessfulgloballaunchofVimizimandthestronggrowthofKuvan.SocommercialteamwillcontinuetofocusondrivingfurthermarketpenetrationwithVimizimworldwideaswellastakingovertheglobalKuvanfranchisebeginningJanuary1,2016.

Sooverthenextsixmonths,wehavenumerousdevelopmentandregulatoryopportunitiestolookforwardto,includingouradvisorycommitteemeetingonNovember24forKyndrisaandourPDUFAdateofDecember27,followedbyananticipatedCHNPappealinthefirsthalfof2016inEuropeonourmarketingauthorizationapplicationwithEMAandthepotentialapprovaldecisiononthesecondhalfofnextyear.Also,inthefourthquarter,wewillcommunicatethetoplineresultsforoursinglearmPhase2/3withreveglucosideforPompedisease.ThenthecompletionofandtheresultsofourPhase1/2studywithcerliponasealfaforCLN2disorderandifthedatasupportive,anticipatedfilingforapprovalinthefirsthalfof2016.

Ifwedoaccomplishthat,wewillhavegonefromfirstinhumantofilinginbasically2.5years,whichisarecord,Ithink,intheindustry.TheninMarch/Aprilnextyear,weanticipatecommunicatingresultsofourpivotalstudywithpegvaliaseforthetreatmentofPKUandthesubmissionofaBLAforpegvaliaseinthesecondhalfofnextyear.Finally,weanticipate--we'replanninganR&DdayonApril20inNewYorkandwewillupdateyouonallourprogramsandmorespecifically,BMN270forgenetherapyinhemophiliaAandthevosoritideforachondroplasia,includingthePhase3plansandthefinalPhase2




updates.Soimportantly,wealsomaintainourgoalofbecomingprofitableonanon-GAAPbasisin2017,assumingtheapprovalofKyndrisa.Wethankyouforyourcontinuedsupportandthankyouforjoiningusontoday'scall.

Operator :

Thankyou,ladiesandgentlemen.Thatdoesconcludetoday'sconference.Youmayalldisconnect,andeveryone,haveagreatday.

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