Q1 2021 Biomarin Pharmaceutical Inc Earnings Call
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Operator: This is the operator. Today's conference is scheduled to begin momentarily. Until that time, your lines will again be placed on hold. Thank you for your patience.
Yeah.
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Yeah.
Welcome to the Biomarin first quarter 2021 financial results conference call hosting the conference call today from Biomarin is Traci Mccarty Vice President of Investor Relations. Please go ahead J C.
unknown: BF-WATCH TV 2021
unknown: Thank you, Greg. Thank you all for joining us today.
Great. Thank you all for joining us today to remind you this non confidential.
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, the actions of regulatory authorities, the 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 the 10Q, 10K, and 8K reports.
Presentation.
Looking statements about the business prospects of Biomarin for pharmacy.
Inc, including expectations regarding Biomarin finished.
Commercial products and potential future products on different areas of therapeutic research and development for adults.
May differ materially depending on the progress for Biomarin product programs actions of regulatory authority availability of capital future actions on the farm.
And development centers and those factors detailed on Biomarin filings with Securities and exchange professional on Q10-K, and 8-K report.
On the call remotely from Biomarin management day are J, J, <unk>, Chairman and Chief Executive Officer, Jeff <unk> Executive Vice President Chief Commercial Officer.
Traci McCarty: On the call remotely from Biomarin Management today are JJ Bien-Aimé, Chairman and Chief Executive Officer; Jeff Ajer, Executive Vice President, Chief Commercial Officer; Hank Fuchs, President, Worldwide Research and Development; Greg Geyer, Executive Vice President, Chief Technical Officer; and Brian Mueller, Executive Vice President, Chief Financial Officer. I will now turn the call over to Biomarin's Chairman and CEO, JJ Bien-Aimé.
President worldwide Research and development, Greg Guyer Executive Vice President Chief Technical Officer, and Brian Mueller Executive Vice President Chief Financial Officer.
I will now turn the call over to Biomarin, as chairman and CEO J J P enemy.
Thank you Traci and.
JJ Bien-Aime: Thank you, Traci, and good afternoon, everyone.
Good afternoon, everyone.
We hope Q on your families are well on enjoying the return to normal day to day activities as the access to COVID-19 vaccines increases in the U S continues to open up so we had a very strong start to 2021 regarding $486 million on total revenues on GAAP net income of 17.
unknown: We hope you and your families are well and enjoying the return of normal day-to-day activities.
unknown: Please subscribe to my channel. I post weekly. See you next time.
JJ Bien-Aime: and the U.S. continues to open up. So we had a very strong start to 2021, recording 486 million dollars of total revenues and a gap net income of 17 million dollars in the first quarter and 114 million dollars of cash flow from operations.
Millions of dollars in the first quarter and $114 million on cash flow from operations.
An important achievement.
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We have also reaffirmed previously released financial guidance for the full year.
unknown: We have also reaffirmed previously released financial guidance for the full year. This takes into consideration both the typical uneven ordering patterns in some of our ex-US regions, as well as continued uncertainty outside of the US due to
This takes into consideration voice.
For the typical uneven ordering patterns in some of our ex U S regions as well as continued for uncertainty outside of the U S. Due to COVID-19.
unknown: due to COVID-19. It is not by chance that Biomarin has successfully managed the challenges caused by the global pandemic.
It is not by chance that Biomarin has successfully managed through the challenges caused by the global pandemic. Our business is built to weather uncertainty given the essential nature of our products.
unknown: Our business is built to weather uncertainties given the essential nature of our products.
The underlying strength of our business is quantifiable across a number of metrics.
unknown: The underlying strength of our business...
unknown: Unquantifiable across a number of metrics, Biomarin's 5-Year Non-Gap Income Compounded Annual Growth Rate, or CAGR, of 62% far exceeds the 12% average of biotech companies with at least $1 billion in revenues in the last five years. Our five-year revenue CAGR of 16% is better than 10 of the 15 biotech companies with at least $1 billion in revenues over the last five years. With the approval of Rosario Tide in European sites and the EMA marketing representing an opportunity that's roughly three times the size of the U.S., we are poised to deliver meaningful growth beginning in 2022.
Bottomline is five year on non-GAAP income compounded annual growth rate or CAGR of 62%.
Far exceeds the 12% average of biotech companies with at least $1 billion.
Revenues in the last five years, our five year revenue CAGR of 16%.
Better than 10 of the 15 biotech companies with at least $1 billion on revenues over the last for years.
With your pool up was already tied in Europe in sight.
And the EMEA market seeing representing on an opportunity.
On your EMEA market Sui, representing an opportunity that swap is three times the size of the U S. We are poised to deliver meaningful growth beginning in 2022 on.
On the heels of potential was already tight approvals this year in the U S on Europe and with the European filing of Octavian She's targeted for this year and we could potentially receive a second significant product approval in Europe in the second quarter of next year.
unknown: On the heels of potential Buzzori-tied approvals this year in the U.S. and Europe, and with the European filing for Roktavian, which is targeted for this June, we could potentially receive a second significant product approval in Europe in the second quarter of next year. Similar to the E. coli market opportunity in the EMA, we believe that there are three times as many severe hemophilia patients in that region as compared to North America, representing Transformational Growth Opportunities with the approval and commercialization of Zoetide and Roptagen. Assuming favorable results with Rottweiler.
Similar to the achondroplasia mark for the market opportunity.
And he says he or three times as many severe hemophilia a patients in that region as compared to North America.
Presenting transformational growth opportunities for us there's always thought on road division.
And commercialization.
Assuming favorable results with rotating at tier two we will target a biologics license application or BLA resubmission in the U S. In the second quarter of 2022, followed by an unexpected six months review procedure and then potential U S approval.
unknown: In year two, we will target a biologic license application or BLA resubmission in the U.S. in the second quarter of 2022, followed by an expected six-month review procedure and then potential U.S. approval at the end of 2022.
End of 'twenty 'twenty two next year.
Based on the cumulative data to date with World champion, we suppose the 62 of the 13 on there for each of the 13 doses. We believe it is reasonable to expect durable bleeding control at tier two in the phase III study.
unknown: Data to date with Roktavian at both the 60 to the 13 and the 40 to the 13 doses, we believe it is reasonably safe.
unknown: I believe it is reasonable to expect durable bleeding control at Tier 2 in the Phase 3 study.
And also that is based on the first 17 patients that year for us.
unknown: and also that's based on the first 17 patients that year that we communicated to have reached also the two years.
We communicated that reached also two year.
Goalposts.
unknown: So, if the data are supportive of your efficacy and safety data from our expansive program, which would represent significant cost savings to global healthcare providers, it should be a very momentous 2021 and 2022 with these exciting catalysts on the horizon.
So if the data are supportive to your efficacy on safety data from our expense program would represent a significant cost savings to global health care providers. It should be a very momentum 2021 and 'twenty two will be for.
Exhibit exciting catalysts on the horizon.
Thank you all for your continued support and I would like to turn the call over to Jeff to discuss the commercial business update Jeff.
JJ Bien-Aime: Thank you all for your continuous support, and I would like to turn the call over to Jeff to discuss the commercial business update. Thank you, JJ.
Thank you J J as.
As we begin 2021, I am very pleased with the team's performance across all brands and all regions during the quarter.
Jeffrey Robert Ajer: As we begin 2021, I am very pleased with the team's performance across all brands and all regions during the quarter. As JJ mentioned, we achieved total revenues of $486 million in the first quarter, excluding Kuvan contributions. Total revenues grew 9% in the first quarter 2021 compared to the first quarter 2020. Before discussing commercial results, I'd like to introduce the brand name for Visorotide. As we are currently in label negotiations in the EU and with ample product supply ready for launch, we are pleased to introduce VOXZOGO to the investment community.
As J J mentioned, we achieved total revenues of $486 million in the first quarter. Excluding Kuban contributions total revenues grew 9% in the first quarter 2021 compared to first quarter 2020.
Before discussing commercial results I'd like to introduce the brand name for the sore tied as we are currently on label negotiations on the EU and with ample product supply ready for launch we are pleased to introduce box zelle go to the investment community.
The name is as unique as our company and our product and we look forward to spreading the word once it's go time with box Sogo spelled V O ex Z O G O.
Jeffrey Robert Ajer: The name is as unique as our company and our product, and we look forward to spreading the word about Z-O-G-O. Turning to results for the quarter, I begin with a reminder of the dynamics of large irregular order patterns specific to our enzyme replacement therapy brands. I want to emphasize that we received large orders during the first quarter from such markets as Turkey, Brazil, Egypt, Russia, and Saudi Arabia, which are gratifying and good for our business and which we expect will cause the first half of 2021 to have some concentration of our annual revenues for both naglozyme and bimazine relative to the second half of 2021.
Turning to results from the quarter I'll begin with a reminder of the dynamics of large irregular order patterns specific to our enzyme replacement therapy brands I want to emphasize that we received large orders during the first quarter from such market says, Turkey, Brazil, Egypt, Russia, and Saudi Arabia.
Yeah that are gratifying and good for our business and which we expect will cause the first half of 2021 to have some concentration of our annual revenues for both <unk> and vimizim relative to the second half of 2021.
We reaffirm our annual guidance for total revenues and for each of the commercial brands and ask that you consider that guidance when modeling your expectations for the balance of 2021.
Jeffrey Robert Ajer: We reaffirm our annual guidance for total revenues and for each of the commercial brands and ask that you consider that guidance when modeling your expectations for the balance of 2021. Relative to my comment about having inventory in these markets helping maintain continuity of supply, the lack of which can occasionally present a challenge in these and other markets and which can have a negative impact on compliance and demand generation. For Bernera, we experienced a different impact from order patterns.
Relative to my comment of gratifying and good for our business, having the inventory in these markets helps maintain continuity of supply the lack of which can occasionally present a challenge in these and other markets.
And which can have a negative impact on compliance and demand generation.
For burn era, we experienced a different impact from order patterns. In this case inventory purchases made in Q4 2020 were followed by drawing down of inventory in Q1, 2021 which contributed to a decrease in revenue quarter to quarter for Bernardo.
Jeffrey Robert Ajer: In this case, inventory purchases late in Q4 2020 were followed by a drawdown of inventory in Q1 2021, which contributed to a decrease in revenue quarter to quarter for Bernera. A few more details on our products for Lysosomal Storage Disorders, Naglozyme, Vimizem, and Bronura. All three products have maintained strong patient compliance despite the persistence of COVID-19 globally, and our mitigation tactics across the most pandemic-impacted markets continue to successfully support patient access and adherence to therapy.
A few more details on our products for license almost storage disorders and that goes on Vimizim and burner on all three products have maintained strong patient compliance. Despite the persistence of COVID-19 globally and our mitigation tactics across the most pandemic impacted markets continue to success.
Police support patient access and adherence to therapy of.
Of note patient demand for both Meg was on in Vimizim increased approximately 10% year over year underscoring the essential nature of these important therapies for the people who rely on them. We expect that <unk> in particular will resume a trend of modest quarterly growth following the normalization.
Jeffrey Robert Ajer: Of note, patient demand for both Naglozyme and Vimizem increased approximately 10% year-over-year, underscoring the essential nature of these important therapies for the people who rely on them. We expect that Bronura, in particular, will resume a trend of modest quarterly growth following the normalization of customer inventory levels in Q1, driven by roughly 30% increase year-over-year in patients on commercial therapies. Moving now to Palanzec, where year-over-year growth of 56% translated to $54 million in first quarter revenue. The U.S. continued to be the main contributor of growth in the quarter, driven by U.S. patient increases of more than 20% year-over-year.
On customer inventory levels in Q1, and driven by roughly 30% increase year over year in patients on commercial therapy.
Moving now to Pelon, Zeke, where year over year growth of 56% translated the $54 million in first quarter revenue. The use U S continued to be the main contributor of growth in the quarter driven by U S patient increases of more than 20% year over year.
While we are still experiencing net patient growth new patient starts in the U S have continued to be impacted by COVID-19 in the quarter. We are optimistic about the growth prospects for Pellens, Inc. For the balance of 2021 with an expectation that PKU clinics that have been on operating at partial capacity.
Jeffrey Robert Ajer: While we are still experiencing net patient growth, new patient starts in the U.S. have continued to be impacted by COVID-19 in the quarter. We are optimistic about the growth prospects for Palanzec for the balance of 2021, with an expectation that PKU clinics that have been operating at partial capacity are able to increase capacity over the coming quarters. The pandemic impact of Palanzec has been more severe in the EMEA region, where we continue to experience delays in price and reimbursement approvals and very little new patient activity.
For city are able to increase capacity over the coming quarters.
The pandemic impact on pounds Zeke has been more severe in the EMEA region, where we continue to experience delays in price and reimbursement approvals and very little new patient activity in.
In spite of that we are making incremental progress and I continue to expect that we will see more material pounds. Each revenue from this region when PKU clinics have more freedom to operate and start additional patients.
Jeffrey Robert Ajer: In spite of that, we are making incremental progress, and I continue to expect that we will see more material Palanzec revenue from this region when PKU clinics have more freedom to operate and start additional patients. Continuing with the PKU franchise, Kuvan contributed $71 million in revenues in the quarter.
Continuing with the PKU franchise Kuban contributed $71 million in revenues in the quarter Kuban net product revenues decreased by $51 million year over year, primarily due to the loss of market exclusivity in the United States in October 2020, resulting from generic.
Jeffrey Robert Ajer: Kuvan net product revenues decreased by $51 million year over year, primarily due to the loss of market exclusivity in the United States in October 2020, resulting from generic competition, and as anticipated. Circling back to our next potential commercial product, Boxogo, launch readiness in key EU markets and the U.S. are quite advanced. Sales, brand, and market access teams are in place and working on finalizing details of the launch. Released, labeled, finished goods are expected to be available in key markets, including Germany, France, Italy, and the U.S., and ready to ship to customers within four to eight weeks of approval.
Competition and as anticipated.
Circling back to our next potential commercial product, but sogo launch readiness in key EU markets in the U S are quite advanced sales brand and market access teams are in place and working on finalizing details of the launch.
Released labeled finished goods are expected to be available in key markets, including Germany, France, Italy, and the U S and are ready to ship to customers within four to eight weeks of an approval we have been able to leverage existing teams that are well experience from recent launches a balance he can burner.
Jeffrey Robert Ajer: We have been able to leverage existing teams that are well experienced from the recent launches of Palanzec and Branura and expect to be well prepared for what could be Biomarin's largest brand yet. In conclusion, it was a strong start to the year from a revenue perspective, and I'm very pleased with the continued commitment and resilience of our teams globally. Thank you for your attention, and I will now turn the call over to Hank to provide an R&D update.
And I expect to be well prepared for what could be biomarin largest brand yet.
In conclusion, it was a strong start to the year from a revenue perspective, and I'm very pleased with the continued commitment and resilience of our teams globally. Thank you for your attention and I will now turn the call over to Hank to provide an R&D update Inc.
Thank you Geoff this is Jay Jay conveyed we look forward to a number of important events on the horizon in 2020 one.
Henry J. Fuchs: Thank you, Jeff. As J.J. conveyed, we look forward to a number of important events on the horizon in 2021. Accumulating data on the durability of both FOXOGO and Roctavian suggests meaningful clinical benefits will be maintained, and therefore, we remain optimistic about the potential of these two innovative therapies to be transformative to the people who need them. In Europe, and beginning with VAXOGO in the quarter, our dialogue with European health authorities has been quite positive, and we look forward to a CHMP opinion in June, followed by a European Commission decision in late With labeling discussions well underway in Europe, we feel that the VoxOgo path forward is significantly de-risked.
Cumulated data on the durability of both Fox Sogo and rock TV suggests meaningful clinical benefits will be maintained and therefore, we remain optimistic.
About the potential of these two innovative therapies to be transformative to the people who need them.
In Europe, and beginning with box sogo in the quarter, our dialogue with European Health authorities has been quite positive and we look forward to a C. H M. P opinion in June followed by European Commission decision in late summer with labeling discussions well underway in Europe, we feel that the vocs other path for significantly derisked.
Yeah.
Turning to Octavian and the European Union in the quarter, we held a very productive pre submission discussion meetings with the European health authorities and remain on track to submit the marketing authorization application in June in.
Henry J. Fuchs: Turning to Roctavian in the European Union, in the quarter, we held very productive pre-submission discussions and meetings with the European health authorities and remain on track to submit the marketing authorization application in June. Of particular note, the rapporteur and Co-Rapporteur are fully aware of the coming five-year Phase II and two-year Phase III Roctavian data cuts and are not requiring those data to support the submission, giving us added confidence in our ability to meet the June deadline. Assuming we remain on the anticipated timelines in Europe, therefore, we could potentially receive a CHMP opinion under Octavian in the second quarter of 2022.
Of particular note the rapid turn co rapid tour are fully aware of the coming five year phase two and two year phase three rock PV and data cuts and are not requiring those data to support submission, giving us added confidence in our ability to meet the June submission goal.
Assuming we remain on the anticipated timelines in Europe, Therefore, we could potentially receive a C. H M. P opinion on rock TV in the second quarter of 2022.
Turning to the United States Inbox Sogo in the quarter, we provided the food and drug administration with the two year results from the Phase III extension study to supplement the new drug application already under review.
As anticipated they designated this submission a major amendment to the application to provide the time for a full review of the submission thus extending the produce a target action date by three months to November 20th 'twenty.
Henry J. Fuchs: Turning to the United States and VOXOGO, in the quarter, we provided the Food and Drug Administration with the two-year results from the Phase III Extension Study to supplement the new drug application already under review. As anticipated, they designated this submission a major amendment to the application to provide the time for a full review of the submission, thus extending the PDUSA target action date by three months to November 20, 2021. We are pleased that the pre-approval inspection of our Novato facility for the manufacture of VoxZogo was completed.
2021 where.
We are pleased that the preapproval inspection of our Nevada facility for the manufacturer of box Yoga was completing checking off another milestone for regulatory review.
Special congratulations to our technical operations team and our compliance teams for that accomplishment.
We're also happy to report the Phase II study with zero to five year olds completed enrollment in the quarter.
The importance of starting treatment with OXXO go as earliest possible cannot be overstated and we are hopeful that the output of our zero to five year study will provide support to regulators to enable the youngest children to benefit from the first potential therapeutic option to treat the underlying cause of achondroplasia.
Developing boxes on it's been a 15 year journey and I want to extend my deep appreciation for the team at Biomarin, our investigators and the generous families who have dedicated themselves to advancing the standard of care in achondroplasia.
Henry J. Fuchs: Checking off another milestone for regulatory review. Special congratulations to our technical operations team and our compliance teams for that accomplishment. We are also happy to report that the Phase 2 study with 0-5-year-olds completed enrollment. The importance of starting treatment with Oxogo as early as possible cannot be overstated, and we are hopeful that the output of our 0-5-year-old study will provide support to regulators to enable the youngest children to benefit from the first potential therapeutic option to treat the underlying cause of achondroplasia.
Yeah.
Moving to rocked Haven in the U S. Following discussions with the FDA. This quarter, we have aligned on the previously communicated base case scenario of Resubmission with two year follow up safety and efficacy data on all phase III subjects in the second quarter of 2022.
F D. A remains committed to this path forward to Robert with Rock gave you to support their final benefit risk assessment.
Based on the consistent and dramatic we control observed to date across our phase two program.
Not just with the 60 dose, but also with the for each dose through three years in the 60 day through for years as well as the phase III data to date now out to two years. We are encouraged that the combined dossier will provide ample evidence of clinical benefit was rocked JV.
Henry J. Fuchs: Developing VoxOvo has been a 15-year journey, and I want to express my deep appreciation for the team at Biomarin, our investigators, and the generous families who have dedicated themselves to advancing the standard of care in achondroplasia. Thank you.
We remain on track to share the phase two five year update with the 60 13 dose as well as the for your update on the for each dose later this year and plan to also include those data in the U S. BLA resubmission in two Q 'twenty two assuming favorable results.
Henry J. Fuchs: Moving to Roktavian in the U.S., following discussions with the FDA this quarter, we have aligned on the previously communicated base case scenario of resubmission with two-year follow-up safety and efficacy data on all Phase III subjects in the second quarter of 2022. FDA remains committed to this path forward with Roktavian to support its final benefit-risk assessment. Based on the consistent and dramatic bleed control observed to date across our Phase 2 program, not just with the 6E dose, but also with the 4E dose through 3 years and the 6E dose through 4 years, as well as the Phase 3 data to date, now out to 2 years, we are encouraged that the combined dossier will provide ample evidence of clinical benefit with Roctavia.
Followed by an expected six months review procedure by the FDA upon Resubmission.
Briefly on the earlier stage pipeline dose escalation has commenced with the M. N. Three O seven our investigational gene therapy for phenylketonuria.
And in and the program continues based on the encouraging fee lowering observed with the lower dose that's been tested so far.
And our IND, enabling studies for B M N $3 51 for the treatment of Duchenne muscular dystrophy. This antisense oligonucleotide therapy demonstrated dystrophin protein expression levels are between 30 and 50%.
On normal levels of normal levels in the quadriceps N. A DMD mouse model treated for at least 13 weeks and who possess the human Skippable mutation.
The familiar chemistry and novel Biology of B M N $3 51 position us uniquely in this context levels of of antisense oligonucleotide that are known to be achievable and muscles with this class of molecule are expected to produce enough protein in human to transform lives.
Henry J. Fuchs: We remain on track to share the Phase 2 5-year update with the 6013 dose, as well as the 4-year update on the 4E dose later this year and plan to also include those data in the USBLA resubmission in 2Q22, assuming favorable results, followed by an expected six-month review procedure by the FDA upon receipt. On the earlier stage pipeline, dose escalation has commenced with BMN-307, our investigational gene therapy for phenylketonuria, and the program continues based on the encouraging phe-lowering observed with the lower dose that's been tested so far.
And while it is early days, we were very encouraged by these data as we shared at the world muscle meeting last fall because this may represent the potential of another important new therapeutic to address the unmet need in this population.
The P M on $3 31 gene therapy for the treatment of for editorial N. GT email, we're conducting IND, enabling studies and expect to file an I N V in the middle of the year.
Our collaboration with diet and Cora on hypertrophic cardiomyopathy, which we announced for May live last year is progressing well.
Preclinical studies are underway and we plan to select a candidate vector in 2021 for this program. We look forward to sharing a deep dive on all of these next generation products at our upcoming R&D day tentatively planned for this coming November.
Henry J. Fuchs: In our IND-enabling studies for BMN-351 for the treatment of Duchenne muscular dystrophy, this antisense oligonucleotide therapy demonstrated dystrophin protein expression levels of between 30 and 50 percent and normal levels of normal levels in the quadriceps in a DMD mouse model treated for at least 13 weeks and who possessed the human skippable mutation. The familiar chemistry and novel biology of BMN-351 Levels of antisense oligonucleotide that are known to be achievable in muscles with this class of molecule are expected to produce enough protein in humans to transform lives.
The R&D organization is energized and very busy as we advance multiple early late multiple early to late stage programs. This year to deliver on our goal of bringing transformative therapies to patients with rare genetic diseases. Thanks for your support and a special thanks to the Ww R&D team and the organization for driving as hard as they can.
On behalf of our patients I'll now turn the call over to Brian to update the financial results for the quarter Brian.
Thank you Henk. Please refer to today's press release summarizing our financial results for full details on the first quarter of 2021.
As usual our comprehensive report on the quarter will be available on our upcoming form 10-Q, which were on track to file tomorrow.
As JJ mentioned, the anticipated timing of revenue and expenses over the course of 2021 resulted in a strong start to the year with our financial performance in the first quarter.
Henry J. Fuchs: And while it is early days, we are very encouraged by these data, as we shared at the World Muscle Meeting last fall, because this may represent the potential of another important new therapeutic to address the unmet need in this population. With BMN-331 gene therapy for the treatment of hereditary angioedema, we're conducting IND-enabling studies and expect to file an IND in the middle of the year. Our collaboration with Diana Kaur on hypertrophic cardiomyopathy, which we announced in May last year, is progressing well.
With respect to revenues, Jeff mentioned some of the specific market debt placed large orders in the first quarter, while we don't expect that pattern to repeat this year and future quarterly revenues in 2021 may be lower we are pleased to be able to supply the market earlier, rather than later and we continue to emphasize our full year guidance and.
Our annual business cycle as the best metrics to measure our performance.
Moving to operating expenses, while R&D expense in the first quarter of 2021 was largely flat compared to the first quarter of 2020. The program mix of our R&D spend is starting to shift to our earlier stage pipeline.
As we advance these early stage assets, we expect R&D to increase over the course of the year, which is a key timing element driving the quarterly financials. This year.
Henry J. Fuchs: Preclinical studies are underway, and we plan to select our candidate vector in 2021 for this program. We look forward to sharing a deep dive on all of these next-generation products at our upcoming R&D day, tentatively planned for this coming November. The R&D organization is energized and very busy as we advance multiple early to late stage programs this year to deliver on our goal of bringing transformative therapies to patients with rare genetic diseases.
Likewise, as we hope to be launching box will go in the second half of the year SG&A expenses are also weighted towards the back half of the year timing aside SG&A expense for the first quarter of 2021 slightly lower than Q1 last year, primarily due to lower foreign currency exchange losses, and slightly reduced operating activity in Q.
One 2021 due to the pandemic.
Turning to bottom line results, we reported GAAP net income of $17 million in the first quarter of 2021.
Compared to GAAP net income of $81 million in the first quarter of 2020.
Henry J. Fuchs: Thanks for your support and a special thanks to the WWR&D team and the organization for driving as hard as they can on behalf of our patients. I'll now turn the call over to Brian to update the financial results for the quarter. Thank you, Hank.
The decrease in income was primarily due to absence of for $60 million gain.
Gain on the sale of deferred as commercial assets in the first quarter of 2020 and the impact of the U S.
Kuban generic competition in 2021.
Non-GAAP income decreased to $104 million for the first quarter of 2021 compared to Q1 2020 non-GAAP income of $117 million also primarily due to the two van U S generic entry late last year.
Brian R. Mueller: Please refer to today's press release summarizing our financial results for full details on the first quarter of 2021. As usual, our comprehensive report on the quarter will be available in our upcoming Form 10-Q, which we're on track to file tomorrow. As JJ mentioned, the anticipated timing of revenue and expenses over the course of 2021 resulted in a strong start to the year with our financial performance in the first quarter. With respect to revenues, Jeff mentioned some of the specific markets that placed large orders in the first quarter.
Based on the expected timing dynamics for both revenue and expenses from quarter to quarter in 2021, and our business plans for the remainder of the year, we reaffirmed full year 2021, R&D expense SG&A expense and bottom line guidance.
Lastly, with respect to total cash and investments we ended the first quarter of 2021 with one $4 billion compared to $1.35 billion at the end of 2020.
We set a goal of earning positive operating cash flow in 2021, and while the aforementioned Havent dynamics also impact cash flow. The business is off to a strong start in 2021 with $114 million of positive cash flow from operations in the first quarter.
Brian R. Mueller: While we don't expect that pattern to repeat this year, and future quarterly revenues in 2021 may be lower, we are pleased to be able to supply the market earlier rather than later, and we continue to emphasize our full-year guidance and our annual business cycle as the best metrics to measure our performance. Moving to Operating Expenses, while R&D expense in the first quarter of 2021 was largely flat compared to the first quarter of 2020, the program mix of our R&D spend is starting to shift to our earlier stage pipeline. As we advance these early stage assets, we expect R&D expense to increase over the course of the year, which is a key timing element driving the quarterly financials.
The solid cash position, coupled with Biomarin business fundamental as shown with our stable operating financial performance put us in good standing to manage through this year when our rapid growth is on pause in anticipation of the potential launches of box that will go in rock Paypal, Inc.
Beyond our late stage pipeline, our increasing investment in the early stage pipeline sets up the advancement of the next generation of transformative Biomarin products.
Thank you for your support and we'll now open up the call to your questions operator.
Alright, so as a reminder.
Ask a question you will need to press star one on your telephone tours. All your question grass, Japan key again that is star one on your telephone.
We do have a question from Joseph Schwartz from SBB Leerink.
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Hi, I'm Jerry dialing in for Joe Thanks for taking our question.
I was curious about your rocked AVN program first.
Brian R. Mueller: Likewise, as we hope to be launching VoxOgo in the second half of the year, SG&A expenses are also weighted towards the back half of the year. Timing aside, SG&A expense for the first quarter of 2021 was slightly lower than Q1 last year, primarily due to lower foreign currency exchange losses and slightly reduced operating activity in Q1 2021 due to the pandemic. Turning to bottom-line results, we reported a gap net income of $17 million in the first quarter of 2021 compared to a gap net income of $81 million in the first quarter of 2020.
Satisfied are you with your pricing discussions on the EU authority given that another gene therapy manufacturer recently decided to forgo offering Angela on therapy product in Germany. After a day you don't get a lot of traction for their premium price.
Yes, if you want to answer that I might add some comments.
Sure. Thank you.
I think the first thing to recognize is rough baby N is a very different situation.
With respect to value proposition compared to <unk> of the product on the situation that you reference.
I'll remind you that I served in the United States recently.
Reviewed rock Baby N N him Libre against standard of care prophylaxis with respect to rock Fabian their determination was.
Brian R. Mueller: The decrease in income was primarily due to the absence of the $60 million gain on the sale of Deferred Apps commercial assets in the first quarter of 2020, and the impact of the U.S. Two-Band Generic Competition in 2021. Non-GAAP income decreased to $104 million in the first quarter of 2021 compared to Q1 2020 non-GAAP income of $117 million, also primarily due to the QVAN U.S. generic entry late last, Based on the expected timing dynamics of both revenue and expenses from quarter to quarter in 2021 and our business plans for the remainder of the year, we reaffirm full year 2021 R&D expense, SG&A expense, and bottom line guidance.
Rock Fabian would be a superior choice at a presumed cost of $2.5 million.
And so thinking about that in the situation of Germany.
Theres intaglio situation relies on cost offsets, indeed, but cost offsets of transfusions, which are relatively lower cost than them.
The cost offsets due to.
The ability to reduce or eliminate for.
Factory replacement therapy.
That's that's the main situation in addition, when we price them.
Rocked avian we intend to capture the full value of that product, which includes in part cost offsets, but also potentially superior clinical outcomes and quality of life benefits. So I think you've really got it on an apples to orange comparison here.
Brian R. Mueller: Lastly, with respect to total cash and investment, we ended the first quarter of 2021 with $1.4 billion, compared to $1.35 billion at the end of 2020. We set a goal of earning positive operating cash flow in 2021. And while the aforementioned timing dynamics also impact cash flow, the business is off to a strong start in 2021 with $114 million of positive cash flow from operations in the first quarter, in a solid cash position.
It needs to be.
Thoughtfully considered.
And if I may add also.
The price that they turned on it wasn't that long he was around it was close to $900000 Chris.
And I think initially we're thinking that day I understand that the market in Germany for the indication.
With Intel's on Whatsapp.
Well it doesn't force very small compared to southern Europe.
Other diseases, many covenants in south and you know what I'm, saying.
It's not worth the effort.
Which is a very different situation for us.
Germany is a pretty large market for us and you know from David.
Okay, great. Thanks for that and then my second question is on losses on it.
Brian R. Mueller: Biomarin's business fundamentals, as shown by our stable operating financial performance, put us in
Send that this program could be your strongest watch on that company's history. So you know what is the driving factor that makes you believe that this could be the largest brands now are you detecting high demand from like younger patients older patients parents advocacy groups like I guess I'm curious to know like one what gives you confidence on.
Brian R. Mueller: put us in good standing to manage through this year when our rapid growth is on pause in anticipation of the potential launches of Voxobo and Roktevi. And beyond our late-stage pipeline, our increasing investment in the early-stage pipeline sets up the advancement of the next generation of transformative biomarine products.
Q, how you are thinking about the adoption pattern you know assuming a profile. Thanks.
Operator: Thank you for your support, and we'll now open up the call to your questions. Operator? Alright, so as a reminder, to ask a question, you will need to press star 1 on your telephone. To withdraw your question, press the pound key.
Jeff do you want to start again.
Sure happy to Yeah, we're really excited about box I'll go on.
I'll start with the fact that we've got a really comprehensive clinical package that is supporting the.
The potential approval on launch so we've got very large and multi multi year effort behind defining than natural history and burden of illness behind achondroplasia, which hadn't been really well characterized before biomarin started working and which is.
Operator: Again, that is Star 1 on your telephone. We do have a question from Joseph Schwartz from SBB Lyrinc. You are now live.
Joori Park: Hi, I'm Joori Dayalian for Joe. Thanks for taking our question. First, how satisfied are you with your pricing discussions with the EU health authorities given that another gene therapy manufacturer recently decided to forego offering their gene therapy product in Germany after they didn't get a lot of traction for their premium pricing?
<unk> to our value proposition, we've got many years of durability expressed in the phase two we've got a very robust.
<unk> phase III study, that's augmented by the crossover arm.
JJ Bien-Aime: Jeff, do you want to answer that? I have some comments.
Jeffrey Robert Ajer: Sure, thank you. So, I think the first thing to recognize is Roctavian is a very different situation with respect to the value proposition compared to Synteglo, the product, and the situation that you referenced. I'll remind you that ICER in the United States recently reviewed Roctavian and Hemlibra against standard of care prophylaxis. With respect to Roctavian, their determination was that it would be a superior choice at a presumed cost of $2.5 million. And so, thinking about that in the situation of Germany, the Synteglo situation relies on cost offsets indeed, but cost offsets for transfusions, which are relatively lower cost than the cost offsets due to the ability to reduce or eliminate factor VIII replacement therapy.
From your one day your two and the full.
Two years on that phase III from the active.
Active participants in.
In addition, we have another.
The study that will read out in the not too distant future studying box ago in zero to four year olds.
And we have additional work ongoing so very robust.
Clinical program with very robust results that support that.
And the relatively large patient population to go after.
We mentioned that our EMEA operating region, which includes the EU in and Europe outside of the EU Middle East Africa on.
Unlocks a patient population roughly three times the size of the U S market. So there's a lot of patients there is a really powerful.
Our value proposition and yes, we know that our investigators are are excited about this program and to the extent that we've been able to communicate.
Jeffrey Robert Ajer: That's the main situation. In addition, when we price Roctavian, we intend to capture the full value of that product, which includes, in part, cost offsets, but also potentially superior clinical outcomes and quality of life benefits. So I think you've really got an apples to oranges comparison here that needs to be thoughtfully considered.
About this program in advance of launch without promoting it we were getting very good signals of enthusiasm back from the market.
I just would add to Jeff's day, it's a large opportunity we have.
And the estimates in the EMEA region.
11000 eligible patients there is no approved therapy for achondroplasia they'll competition some of those countries over 80% of the patients undergo limb lengthening surgery, which is very painful and potentially risky. So that's illustration of the unmet medical need in that.
JJ Bien-Aime: And if I may add also, I think the price that they turned down wasn't that low; it was close to $900,000 for treatment. And I think the issue that we're facing is that, as I understand it, the market in Germany for the indication that Zintegra was, was, Zintegra was... What we're looking for is very small compared to southern Europe. The disease is mainly prevalent in southern Europe. It was just not worth the effort, which is a very different situation for us, Germany.
In that region.
In the world for it go to a page on patients.
Yeah.
Alright. So next one on the Q is Corey Gossamer from J P. Morgan.
All lines.
Moving on for Cory Thanks for taking our question I guess, we just had a follow up on the store side.
Just spoke to the three ex greater patient population.
unknown: Okay, great. Thanks for that.
unknown: And then my second question is about VoxZogo. You said that this program could be your strongest launch in the company's history. So, you know, what is the driving factor that makes you believe that this could be the largest brand? You know, are you detecting high demand from like younger patients, older patients, parents, advocacy groups, like, I guess I'm curious to know, like, one thing that gives you confidence? And two, how are you thinking about the adoption pattern, you know, assuming approval? Thanks.
Can I get the sense of uptake initial uptake in geographies, comparing EMEA and U S.
What are your expectations there and then just how should we look at this.
Commercial opportunity.
You know at peak.
The split between these geographies.
Yes.
Yeah. Thanks for the question and then I'll refer you also to the.
The transcript from our earnings call for the fourth quarter of 2020, where I address this question on some level of detail. So.
We always anticipate that payer coverage for Biomarin drugs comes fastest we get the best pricing and the most rapid uptake in the United States.
Jeffrey Robert Ajer: Sure, happy to. Yeah, we're really excited about VoxOgo. I'll start with the fact that we have a really comprehensive clinical package that is supporting the potential approval and launch. So we've got a very large and multi-multi-year effort behind defining the natural history and burden of illness behind achondroplasia, which hadn't been really well characterized before Biomarin started working, and which is foundational to our value proposition. We've got many years of durability expressed in phase two.
Relative to that the EMEA region is a three ex because you noted larger opportunity.
Those price and reimbursement approvals.
Take a little bit longer to navigate we have to go market by market to do that that can take some time and then typically the patient uptake comes a little bit slower.
In spite of that debt.
It's exactly the EMEA operating region and other international markets become kind of a long term engine of growth for our brands and you can see that embodied in the continued.
Growth in patient demand for <unk>.
<unk> and Vimizim and even magazine, which has been on the market now for almost 16 years.
Jeffrey Robert Ajer: We've got a very robust phase three study that's augmented by the crossover arm from year one to year two and the full two years in that phase three from the active participants. In addition, we have another study that we'll read out in the not-too-distant future studying VoxOgo in zero to four-year-olds, and we have additional work ongoing.
But that's that's how we think about the uptake from the EMEA region relative to the U S opportunity.
And if I may add so again.
The market sizes eligible patients I can say about 11000 in the EU, but you mean, yeah that doesn't that does not include Latin America.
Jeffrey Robert Ajer: So very robust clinical program with very robust results to support that, and a relatively large patient population to go after. We mentioned that our EMEA operating region, which includes the EU and Europe outside of the EU, the Middle East, and Africa, unlocks a patient population roughly three times the size of the US market. So there are a lot of patients. There's a really powerful value proposition, and yes, we know that our investigators are excited about this program. And to the extent that we've been able to communicate about this program in advance of launch without promoting it, we're getting very good signals of enthusiasm back from the market.
Asia, you know other regions, but steel and 3100 patients or so in the U S. So, let's say you know ballpark that we get on average reimbursement price other $150000 in Europe on <unk>.
<unk> thousand dollars in the U S. So that would be $1 $6 billion market in EU.
In EMEA and about $600 million of markets, adding to $2.2 billion market.
We chose to we just combined.
And the market is wide open there's no competition and we don't anticipate any competition for at least five to six years.
Great. Thank you.
Next one on a few is solving register from Goldman Sachs you were in our lives.
And Stefan first on being how are your discussions with the FDA had been progressing with respect to their willingness to allow you to submit rocky on a hot on hobby not faulty data thought thank you.
Jeffrey Robert Ajer: I just would add, as Jeff said, it's a big opportunity. We have estimates in the EMEA region of about 11,000 eligible patients. There is no approved therapy for echocardioplasia, and there is no competition. In some of those countries, over 80% of the patients undergo limb lengthening surgery, which is very painful.
Thanks.
The FDA has reiterated their request to see the two year data they said that before the.
The one year data and they repeated it after the one year data without looking at the one year data.
So that's why we have reiterated our working case to file Q2 'twenty two.
Yeah.
Thank you.
For Sandler you were in our lives.
JJ Bien-Aime: and potentially Risky. So that's an illustration of the unmet medical need for that in that region and in the world.
Hi, it's Chris Raymond here, Yeah. Thanks.
Just a couple of other pipeline questions I.
I guess first on on B M N. Three O. Seven I know you guys said last month, you were moving to the higher dose I think the 60 13 dose if I remember and that you'd share an update in the second half just on timing.
unknown: in that region and in the world for ecotropia patients. Alright, so next one on the queue is Corey Kasima from JPMorgan. You are now live. Coming on for Corey. Thanks for taking our question. I guess we just had a follow-up on the sore tide. You spoke to a 3x greater patient population.
Are we to wait until your R&D day for that or.
Could we get maybe something sooner and can you maybe just confirm if you've actually treated a patient at that higher dose.
Yet on that one.
And then maybe similar question on $2 55, P M and $2 55.
Again, I know you've been a little quiet in terms of what the what the target is is this another november reveal or can we find something get something from you guys earlier. Thanks.
unknown: [inaudible]
Jeffrey Robert Ajer: Yeah, thanks for the question. And I'll also refer you to the transcript of our earnings call for the fourth quarter of 2020, where I address this question in some level of detail. So we always anticipate that payer coverage for biomarin drugs comes fastest, we get the best pricing, and the most rapid uptake in the United States. So that's how we think about the uptake from the EMEA region relative to the US opportunity.
Oh, Hi, real Chris Yes.
Yes, I can confirm it's the 60 dose, yes, I can confirm that we've already treated patient.
I want to reiterate that our plan for data sharing more concretely in specifically will be when we picked the dose to take into the registration enabling program.
And I Unfortunately want to confirm that as regards $2 55 and ongoing data availability later this year for three of seven that we're going to remain somewhat coy about that for competitive reasons until we have much more clarity about next steps.
JJ Bien-Aime: And if I may add, so again, the market size is eligible patients, I'd say about 11,000 in the EU MIE or EMEA, that does not include Latin America, Asia, you know, other regions, but still, and 3100 patients or so in the US.
Great. Thank you, but all that said, we're very excited you know the PKU market is not in spite of just fantastic work in spite of how good Pelham Zika is there's plenty of opportunity to expand the PKU market and and $2 55 fits into our model of genetically validated and potentially transformative.
JJ Bien-Aime: You know, ballpark, that we get an average reimbursement price of $150,000 in Europe and $200,000 in the U.S., so that would be
Intervention. So we're very excited about the programs, we're just being a little bit coy for competitive reasons.
Thanks.
unknown: ,,,,,,, in EMEA and about $600 million market, adding to the $2.2 billion market between these two regions combined. And the market is wide open, there's no competition, and we don't anticipate any competition for at least 5 to 6 months. Great, thank you. Next one on the queue is Salveen Richter from Goldman Sachs. You are now live. This is Elizabeth on for Salveen. How are your discussions with the FDA going?
Next one on the line is still net due from Cowen and company you are now live.
Hi, Victor Rodriguez for Phil Thank you for taking my call.
I'm I'm curious.
Do you have any concerns on the effects from shortening the lead time that you have against competitors with Royal Caribbean now being delayed.
On to 2022.
Already commercial potential.
Harm that results from the delay.
I might start and maybe hand, it over to Jeff.
It's hard for me to imagine how.
On the commercial competitors won't end up having to do what we end up doing.
unknown: Next, you are now live.
It's pretty apparent from Pfizer sangamo product that there's attrition in factor activity from year, one to year two.
unknown: The FDA has reiterated their request to see the two-year data. They said that before the one-year data, and they repeated it after the one-year data without looking at the one-year data. So that's why we have reiterated our working case for file Q2-22.
And that was the agency's question of block caving, and frankly, they're there they've got on local a larger trial on potentially followed for longer than they are currently planning to and I don't have visibility into where they are with the commercial manufacturing so.
Christopher Joseph Raymond: Hi, it's Chris Raymond here. Thanks. Just a couple of pipeline questions. I guess first on BMN 307, I know you guys said last month that you were moving to the higher dose, I think the 6013 dose, if I remember, and that you'd share an update in the second half. Just on timing, Hank, are we to wait until your R&D day for that? Could we get maybe something sooner, and can you maybe just confirm if you've actually treated a patient at that higher dose yet on that one?
In spite of our delay if anything it feels like the spacing is either maintaining or growing.
And the one thing I'd say before turning it over to Jeff for his commercial interpretation of things since that.
As time goes by the Octavian data package, just gets stronger and stronger and stronger maybe Jeff do you want to comment.
Okay before Jeff I mean for me here.
I will say if you look at the most recent update that Pfizer was talking on the update was that it was actually with phase two product we don't need.
As far as I know when the phase III.
The variability of response was even greater than that.
Christopher Joseph Raymond: And then maybe a similar question on 255, BMN 255. Again, I know you've been a little coy in terms of what the target is. Is this another November reveal, or could we get something from you guys earlier?
With TV and the drop in factory levels at 381.
Greater than we just broke David so with this on.
As to what commodity.
COVID-19 vendors will have if any.
Chris.
Jeff.
Yeah, well stated Hank and J J, I guess I would just add debt.
Henry J. Fuchs: Hi RealChris, Yes, I can confirm that it's the 6E dose. Yes, I can confirm that we've already treated that patient. I want to reiterate that our plan for data sharing more concretely and specifically will be when we pick the dose to take into the registration enabling program. And I unfortunately want to confirm that as regards 255 and ongoing data availability later this year for 307, we're going to remain somewhat coy about that for competitive reasons until we have much more clarity about next steps. Thank you.
With an expectation that that.
That lead in the marketplace is likely not diminished by the moves that we're taking I am super excited about the potential too.
Go to the marketplace with five years or greater durability from our phase two studies.
And the largest phase three of any gene therapy completed with two years of data coming out from that never mind, the significant lifecycle management work, but we're already into that the competitors aren't I don't I wouldn't say that we're at a competitive disadvantage.
Henry J. Fuchs: But all that said, we're very excited. You know, the PKU market is not, in spite of Jeff's fantastic work and in spite of how good Palanzec is, there's plenty of opportunity to expand the PKU market. And 255 fits into our model of genetically validated and potentially transformative interventions. So we're very excited about the programs. We're just being a little bit coy for competitive reasons.
<unk> at all I would say the opposite our position got stronger not weaker.
Alright. Thank you that's helpful.
Another question on regarding.
You mentioned that you still see impact on the impact of call. We don't start on.
And I was wondering if you have seen any sort of recovery.
Reflected with the with the.
Vaccine rollout how does the vaccine raw basically accelerated this process at all on getting the there.
The patients into the clinic.
Jeff.
unknown: Next one on the line is Phil Nadeau from Cohen & Company.
Yeah, so in the United States, where we know that the.
Ernesto Rodriguez: Phil Nadeau from Cohen and Company, you are now live. Hi, this is Ernesto Rodriguez on behalf of Phil. Thank you for taking my call.
Vaccine is uptake is way way further along than it is in Europe, we haven't seen an explicit effect yet.
unknown: I'm curious, do you have any concerns about the effects of shortening the lead time that you have against competitors with Roktevian now being delayed to 2022? Or any potential commercial harm that results from the delay? I might start, maybe hand it over to Jeff.
Yet on the operations of our PKU clinics, but in my remarks, when I said, we're we're optimistic for PKU clinics will be able moving.
Increase their capacity as we go through the year it's.
It's exactly that vaccine uptake in the United States that grounds, our expectations of increased capacity later in 2021, what I would say is the by and large there's a lot of variability by clinic, but by and large the clinics in the United States had been opera.
unknown: It's hard for me to imagine how the commercial competitors won't end up having to do what we end up doing. It's pretty apparent from Pfizer Sangamo's product that there's attrition and factor activity from year one to year two, and that was the agency's question about Octavian. And frankly, they've got to enroll a larger trial and potentially follow for longer than they're currently planning to. And I don't have visibility into where they are with their commercial manufacturing.
<unk> at partial capacity since around Q2 of last year. That's what has allowed us to continue the growth that we've achieved over the last year with Paul on the particularly in the United States. So we are getting growth just not as rapid as we would.
Hope or expect and so as as conditions and the improvement in the United States, We do expect that our business uptake will pick up here.
unknown: So in spite of our delay, if anything, it feels like the spacing is either maintained or growing. Um, and, um, the one thing I'd say before turning it over to Jeff for his commercial interpretation of things is that, um, as time goes by, the Rocktavian data package just gets stronger and stronger and stronger. Maybe, Jeff, would you like to comment?
Okay.
And for taking my question.
Alright next one on the line he's Jeff's Nathan from Bank of America your in our lives.
Hey, guys for Capstone on for Jeff Thanks for taking my questions.
Just two from US first on rock, David and then one quick one on the short side on Rocky and so we have the five year on for your data coming up I think the last time, we spoke you've mentioned that the low dose is going to be debt. The other focus here for them for the readout.
unknown: Before Jeff, if you look at the most recent update, the Pfizer-BioNTech
unknown: Their variability of response was even greater than with Octavia, and the drop in factory levels at 3G1 was [inaudible]
Maybe you can walk us through again your thought process. There on how you think that low dose could be oh.
unknown: Transcribed by https://otter.ai
An arbiter for for the.
For the phase III longer term data.
Jeffrey Robert Ajer: Well stated, Hank and JJ. I guess I would just add that with an expectation that our lead in the marketplace is likely not diminished by the moves that we're taking, I am super excited about the potential to go to the marketplace with five years or greater durability from our phase two studies. And the largest phase three of any gene therapy completed with two years of data coming out from that, nevermind the significant lifecycle management work that we're already into, but the competitors aren't.
Thank you.
Yep.
Alright, well thank you.
But those numbers yeah, yeah, yeah, I'm here I don't have the numbers as an encyclopedia cause I did like maybe a quarter ago.
But the.
The framework that I that I think we carry is debt.
Can you just talk about chromogenic and medium because these are the lowest numbers on the board and everything else is kind of upside.
The median factor eight expression in the N F 17 after two years.
On the 301 study was.
Jeffrey Robert Ajer: I don't, and I wouldn't say that we're at a competitive disadvantage at all. I would say the opposite. Our position got stronger, not weaker. Thank you. That's helpful. And another question regarding funding. You mentioned that you still
On the order of like 14, IU per deciliter and at the end of two years of of after transduction in the for a group factory expression median was little bit lower closer to around 10 in the ensuing year after.
unknown: you still see the impact of COVID on new start? I was wondering if you have.
From that point for the low dose group in the third year factor eight expressions remained in the 789 IU per deciliter range and that was accompanied by extremely good hemostatic efficacy with an ADR that was around one or lower so assuming that.
Jeffrey Robert Ajer: I was wondering if you have seen any sort of recovery reflected in the... With the vaccine rollout, has the vaccine rollout basically accelerated this process at all of getting the patient into the clinic? Yeah, so in the United States, where we know that the vaccine uptake is way, way further along than it is in Europe, we haven't seen an explicit effect yet on the operations of our PKU clinics. But in my remarks when I said we're optimistic that PKU clinics will be able to increase their capacity as we go through the year, it's exactly that vaccine uptake in the United States that grounds our expectations of increased capacity later in 2021. What I would say is that, by and large, there's a lot of variability by clinic.
The decline in year three from a from 14 IU per deciliter is not worse than the decline was in the two O. One study then the expectation would be that the a b are in year three after the 301 dose was administered would be similar.
We're really close to zero.
And that gives us a lot of confidence and.
If the same thing as observed in the fourth year after transduction, it would augur well for maintain durability of the of rock TVN.
Jeffrey Robert Ajer: But by and large, the clinics in the United States have been operating at partial capacity since around Q2 of last year. That's what has allowed us to continue the growth that we've achieved over the last year with Palantir, particularly in the United States. So we are getting growth, just not as rapid as we would hope or expect. And so, as conditions improve in the United States, we do expect that our business uptake will pick up here.
Through three and for years after dose with the debt to be commercialized material. So so we see that.
In spite of having launched if you will a little lower that is to say achieved a slightly lower peak factory expression with the to be commercialized material. The patterns of of of a trajectory are starting to emerge with much greater clarity and namely what that clarity is is.
Debt following peak factor expression, there's a little bit of decline in the first year after that peak, but that decline decelerate as time goes by and also that decline is dependent on the initial height. So all of that together says if we do well at it we did well in year three after for <unk>.
unknown: Okay, thanks again for taking my question. Alright, next one on the line is Jeff Nicker from Bank of America.
unknown: from Bank of America. You are now online.
Aspyn: Hey guys, it's Aspyn on for Jeff. Thanks for taking our questions. Just two from us, first on Roktavien and then one quick one on the sore side. Roktavien...
That augurs, well for Octavian looks to be commercialized material and with the four year data that will augur well for the fourth year after the rock kv and administration.
unknown: We have the five-year and four-year data coming up. I think the last time we spoke, you mentioned that the low dose is gonna be kind of the focus here for the readout. Maybe you can walk us through that.
Hopefully that puts it at scale.
So if you look at the factory levels observed so far in the phase III trial in one year with all the patients on it two years with a 17 patient.
unknown: for the phase 3.
unknown: and Arbiter for the Phase 3 longer term.
They always tracking above the low dose to phase III.
unknown: I don't have the numbers as encyclopedic as I did maybe a quarter ago, but the framework that I think we carry is that, you know, it's like we were just talking about chromogenic and median because these are the lowest numbers on the board, and everything else is kind of upside. So, assuming that the decline in year 3 from 14 IU per deciliter is not worse than the decline was in the 201 study, then the expectation would be that the ADR in year 3 after the 301 dose was administered would be similarly close to zero. And that gives us a lot of confidence.
Consequently, they are starting to see if you believe in that case that factor. It is representative of what's going to happen. That's why they're there for your data for that we'd go to see.
Two weeks, so it's kind of potentially the worst case scenario.
Got it got it that's helpful. I appreciate that.
And just two really quick ones on the short side, so I just want to confirm that.
The FDA provided there their extension of that of the produce that there was nothing else. They brought up that they wanted to look at it the data package. It was it was just that they wanted for two year data.
And then I think you mentioned that there is a four to eight week turnaround from.
From the potential approval to shipping.
JJ Bien-Aime: And if the same thing is observed in the fourth year after transduction, it would auger well for maintained durability of Roctavian through three and four years after dose with the TB commercialized material. So, we see that in spite of having launched, if you will, a little lower, that is to say achieved a slightly lower peak factor 8 expression with the TB commercialized material, the patterns of trajectory are starting to emerge with much greater clarity.
Shipping orders.
On a confirmed that that means that we're going to see very low or negligible sort of guidance. This year. Thanks.
So maybe I'll start on the answers on the last question.
And then.
And then thank goodness for the other question on it.
So obviously the U S you know well.
By extension.
It will be late if it happens hopefully would be late November so you need to.
Youre going to see any revenues in the U S for folks up with it here, but hopefully you'll see some revenues from Europe.
JJ Bien-Aime: And namely, what that clarity is that following peak factor expression, there's a little bit of decline in the first year after that peak, but that decline decelerates as time goes by, and also that decline is dependent on the initial height. So, all that together says that if we did well in year 3 after IV-E, that augers well for Roctavian to be a commercialized material. And with the four-year data, it will auger well for the fourth year after the Roctavian administration.
Did you hear from look simple she is weird.
<unk> approval final approval.
Mid to late summer.
So we actually wont answer the first question for that for you.
Yeah Yeah.
So first of all the process.
Review at the FDA is that they can send me information requests really at any time.
That has continued.
That was before and that is true after the submission of two year data I think what's important about the submission on the two year data is they've got right on it and they started asking it was lots of questions about the two year data, which means theyre fairly deep into the review of it.
JJ Bien-Aime: If I may add also, if you look at the factor 8 levels observed so far in the phase 3 trial at 1 year with all the patients and at 2 years with the 17 patients, they're always tracking above the low dose. Consequently, in a sense, if you believe, in that case, that factor 8 is representative of what's going to happen...
So the fact that they're deeply reviewing the two year data, they're continuing to ask questions about the application in general they've conducted there.
They're they're site inspection. This is feeling like they're working towards you have to do for action day.
unknown: [inaudible]
JJ Bien-Aime: Got it, got it. That's helpful, JJ and Hank. I appreciate that. And just two really quick ones.
Yeah.
Oh for Gaslog appreciate it thanks.
Excellent on NICU as Robyn for Nascar's from <unk> Securities.
All lines.
unknown: https://www.fda.gov
Hey, guys. Thank you so much for taking my question does this coupon for Robyn.
unknown: https://www.kenhub.com
You mentioned that the FDA did not even really look at the one year data it would be great to get any additional color you can give us on what sort of conversations you had around dropped haven any additional any idea on what they were thinking and also give.
unknown: I think you
unknown: mentioned that there is
unknown: This is a four- to eight-week turnaround time from...
unknown: I just want to confirm that that means that we're going to see very low or negligible disordered revenues this year. So maybe I'll start with the answer to the last question, and then Hank can answer the other question. So obviously, the U.S., you know, with the PDUFA extension approved.
That they've been on the two year data for a while now.
On how they can be the same as the.
For a bar for what would be acceptable on a two year data and finally on.
unknown: , , , , , , ,
JJ Bien-Aime: and hopefully, you will see some revenues from Europe. This year, for Voxobos, we anticipate approval, and final approval, in the mid to late summer.
Is there any concern that this could be a moving target could they want three year data.
Henry J. Fuchs: So, Hacks, you want to answer the first question? Oh, that's for you, I forgot. Yeah, yeah, we do so.
Well on that last piece I would say once bitten twice shy.
Meaning they.
They make the rules and we didn't exactly know that they were going to ship the goalposts until they shifted the goalposts and you know and I think the agency would say about themselves that their communication ability is maybe not the best it's ever been right now and you know they are you know.
Henry J. Fuchs: Yeah, yeah, we so first of all, the process of review at the FDA is that they can send me information requests really at any time. And, and that has continued.
Henry J. Fuchs: But that was before and that's true after the submission of your data. I think what's important about the submission of your data is that they got right on it. And they started asking us lots of questions about the two-year data, which means they're, you know, fairly deep into the review of it. And so the fact that they're deeply reviewing the two-year data, they're continuing to ask questions about the application in general, they've conducted their site inspection, and this feels like they're working towards their producer action date. [inaudible] Next one on the queue is Robyn Karnauskas from Tuvi Securities. You are now living in another world.
Back to the any further color on the why I think it all is as described in the in the and debt.
And the CRM that is to say they saw a decline.
Saw a decline in factory activity between year, one and you're too and.
And they want to make sure that that factory activity decline between year, one and year two is not consequential using the to be commercialized material in the steroid regimen that we used given that launch was a little bit lower and you know they they everybody's well aware, we are well aware of the end of 17.
That did great.
But there their attitude before the data was even looked at was we want at the end of 130 for for the two year population and I don't think there's really that much more insight to be had other than you.
unknown: Hey guys, thank you so much for taking our questions. This is Kripa on behalf of Robyn. You mentioned that the FDA did not even really look at the one-year Rocktavian data. It would be great to get any additional color you can give us and what sort of conversations you had around Rocktavian. Have they communicated the bar for what would be acceptable two-year data? And finally, is there any concern that this could be a moving target? Could they want three-year data? Well, on that last piece, I would say one's bitten twice shy.
When they see the data they'll they'll have a lot more information now and at the two year Mark with an N of 130 for if things go as they are expected to go.
We should see a clinical outcome, that's really fabulous.
Side effect profile at that point will be well defined all patients will be off of steroids. All of the L. T rises will come down et cetera, et cetera, and we'll be looking at factor eight trajectories.
If what has happened.
Basically already three different times continues to happen and that is to say and it's a complicated kind of concept to get across with the rate of decline is decelerating as long as the rate of decline is decelerating as it did.
Henry J. Fuchs: Meaning, they make the rules, and we didn't exactly know that they were going to shift the goalposts until they shifted the goalposts. And, you know, and I think the agency would say about itself that their communication ability is maybe not the best that it's ever been right now. And, you know, they, you know, back to any further color on why, I think it all is as described in the CRL, that is to say, they saw a decline.
In all prior years for the other doses, there and I think that.
They're going to be looking at well what what we just talked about in terms of how does the saga for a third year of protection and I think you know.
Given the magnitude of clinical benefit that we observed.
That really should be enough and I don't want to remind about the magnitude of clinical benefit because it's sometimes getting a loss from the arguments. We took people. It's not just it's not just that we compared ourselves to nothing you know we took people off of marginally effective standard of care. We took people off an enormously effective standard of care for.
Henry J. Fuchs: You know, they saw a decline in factory activity between year one and year two, and they want to make sure that that factory activity decline between year one and year two is not consequential to using the to be commercialized material in the steroid regimen that we used, given that the launch was a little bit lower. And, you know, everybody's well aware, we are well aware of that, and we are well aware of the N of 17 that did great.
Total equity factory therapy, if you give somebody 150 infusions a year. This stuff you they'll reduce their bleeding from 30 times a year, but like four times a year five times a year well, we took that away. These people would've bled 30 times, a year and they bled less than one around one time a year and then the second here they blurt around one.
Time of year, and even with those low factor of that lower factor levels for J J mentioned from the lower dose they didnt bleed in their third year.
Henry J. Fuchs: But their attitude before the data was even looked at was, we want the N of 134 for the two-year population. And I don't think there's really that much more insight to be had other than, you know, when they see the data, they'll, you know, they'll have a lot more information. And I think at the two-year mark with an N of 134, if things go as they're expected to go, you know, we should see a clinical outcome that's really fabulous. The side effect profile at that point will be well defined, all patients will be off of steroids, all of the ALT rises will have calmed down, et cetera, et cetera. And we'll be looking at factory trajectories.
So the treatment benefit here is large and I think if we just corroborate that in a much larger sample size.
On that that will really carry the day.
Very helpful. Thank you so much.
Next question comes from our cash so are you from Wolfe Research you are now live.
Hi, This is Neil from a cash thank you for checking ask questions on them.
According to your market analysis, how big is that your basketball market all breathtaking.
On a patient in the U S. And then you get a bit of.
Activity for example, based on our math they drop out like two to 3000 patients eligible for grass.
After taking into account like 85, HIV HVV and behavior data and also a mountain bell patient eligible on many of them do you think are interested in receiving gene therapy. Thank you.
Yeah, and again I think I'll, let Jeff answer that question again, just want to emphasize also against the euro.
Henry J. Fuchs: Basically, already three different times continues to happen. That is to say, and it's a complicated kind of concept to get across, but the rate of decline is decelerating. As long as the rate of decline is decelerating as it did, you know, in all prior years for the other doses, then I think that they're going to be looking at what we just talked about in terms of how this augers for a third year of protection.
In the U S. There's a lot of emphasis on the U S market. The European market is three times the size of the U S market. So eligible 9000 patients on the eligibility criteria. You mentioned, we're just at launch not Inc.
Sure we have late cycle management projects to actually expand the eligible population but.
That being said.
Oh I'm sorry.
Your question. Thank you.
Yeah. Thanks, J J so just the.
To sharpen the pencil a little bit when when we quote three ex larger patient population, we're talking about our EMEA operating region.
Henry J. Fuchs: And I think, you know, given the magnitude of clinical benefit that we observe, that really should be enough. And I don't want to remind you about the magnitude of clinical benefit because it's sometimes getting lost in the argument. You know, we took people, it's not just that we, you know, compared ourselves to nothing, you know, we took people off a marginally effective standard of care; we took people off an enormously effective standard of care, you know, prophylactic factory therapy. If you give somebody 150 infusions a year of this stuff, you'll reduce their bleeding from 30 times a year to like four times a year, five times a Well, we took that away.
Which includes the EU or Europe beyond the EU, Russia, Turkey, Middle East Africa about sort of thing and our logic on that is that and EU approval begins to substantially unlock the market not just for those countries in the EU, but for that.
Other markets, many of which key their actions off of an EU approval.
So as Youre doing your market analysis.
We would note that Theres 112000, hemophilia a patients around the world.
The 50% to 60% of those are severe.
When you take a cut for Ah patients that are less than 18 years old, which we presume will be our initial but not final label and you take a cut largely for.
unknown: These people would have bled 30 times a year, and they bled less than or around one time a year. And in the second year, they bled around one time a year. And even with those low factor, lower factor levels that JJ mentioned from the lower dose, they didn't bleed in their third year. So, the treatment benefit here is large, and I think if we just corroborate that in a much larger sample size, that will really carry the day.
On mild and moderate.
That's how you get down to an addressable patient population.
And we'll be working on lifecycle management activities that would allow us potentially in the future to start to unlock part of that age limited segment zero to 18.
unknown: The next question comes from...
unknown: Akash Tewari from Wolf Research, you are now live. Hi, this is Leo on behalf of Akash. Thank you for taking our questions. According to your market analysis, how big is the addressable market for Octavian for severe burns?
And mild moderate population perhaps overtime.
Thank you.
Next one on line is can mean Mackay from RBC capital markets you were in our lives.
Hi, Thanks for taking my question and congrats on the quarter on maybe one for for Hank another one for Hank.
unknown: [inaudible]
unknown: are interested in receiving gene therapy. Thank you.
From from where we're sitting it seems like P. M. On three of seven is kind of thing upside to valuation and I think this is maybe partially because some of the competitive PKU gene therapy data out there are super encouraging can you maybe sort of help us with what you see is pretty differences between three of seven.
Jeffrey Robert Ajer: And again, I think I'll let Jeff answer that question again. I just want to emphasize that, again, the Europeans, I know.
JJ Bien-Aime: In the U.S., there's a lot of emphasis on the U.S. market. The European market is three times or more the size of the U.S. market, so eligible 9,000 patients.
JJ Bien-Aime: And the eligibility criteria you mentioned were just at launch, not in the future. We have late cycle management projects to actually expand the eligible population.
The competition that's out there as it relates to the expression cassette or construct or even the vector itself to really help out some some confidence in the potential there. Thanks.
JJ Bien-Aime: That being said, Jeff will answer your question. Thank you. Yeah, thanks, JJ.
Well.
<unk> five is a little bit better known to us than any other AAV might be for almost any other company just because of having a large amount of both clinical experience, but also manufacturing experience.
Jeffrey Robert Ajer: Thanks, JJ. So just to sharpen the pencil a little bit, when we quote a 3x larger patient population, we're talking about our EMEA operating region, which includes the EU or Europe beyond the EU, Russia, Turkey, the Middle East, Africa, that sort of thing. and you take a cut largely for mild and moderate, that's how you get down to an addressable patient population, and we'll be working on life cycle management activities that could allow us, potentially, in the future, to start to unlock part of that age-limited segment 0 to 18 and mild and moderate population, perhaps over time.
We have an enormous amount of preclinical data on almost every single nucleotide in the cassette I mean every single thing that's kind of been tested for specific reasons. When it comes to matters like codon optimization for spacers for tails or are those sorts of things. So we we leveraged a lot of the knowledge that we've gained in there.
Building on <unk> to build an even more potent phenylalanine hydroxylase and I think if you don't have just as much experience is bizarre group has in terms of designing vectors testing them in mice testing them in non human primates, and then ultimately bringing them to humans and being able to iterate what you've learned.
unknown: Next one on the line is Kenine Mackay from RBC Canada.
If you don't have all that experience then you just sort of flying blind.
unknown: Live from RBC Capital Markets, you are now live. Hi, thanks for taking the question and congrats on the quarter. Maybe one for Hank, another one for Hank.
I think debt there.
They can be encouraged that they've got some expression on phenylalanine hydroxylase, but they're pulling back from that dose rather than leaning into a dose that's even more effective.
Henry J. Fuchs: From where we're sitting, it seems like BMN 307 is kind of staying upside to valuation, and I think this is maybe partially because some of the competitive PKU gene therapy data out there aren't super encouraging. Can you maybe sort of help us with what you see as the key differences between 307 and the competition that's out there as it relates to the expression cassette or construct or even the vector itself to really help add some confidence in the potential there?
Because of our confidence on the safety profile for Octavian and what we've seen so far we're very confident that the dose level that we're at it's going to produce meaningful ex.
Extremely meaningful.
You know fee reduction levels.
So I think at the end of the day the real answer to your question is our view of the competition is that we're going to end up being.
More effective by virtue of having a better vector design.
The details of which are kind of inside that got to the vector.
And if I may add on so we are testing those patients with COVID-19.
Henry J. Fuchs: Well, AAV5 is a little bit better known to us than any other AAV might be to almost any other company just because we have a large amount of both clinical experience and manufacturing experience. We have an enormous amount of preclinical data on almost every single nucleotide in the cassette. I mean, every single thing has kind of been tested for specific reasons when it comes to matters like codon optimizations or spacers or tails or those sorts of things.
The anticipated.
Manufacturing process and scale that would be used for commercial product.
Got it thanks again.
Okay.
Next one on the line is gena Wang from Barclays Your non life.
Thank you for taking my questions on Q1 is regarding <unk> Octavian Hank you mentioned day, you know if he did not see the one year data on.
Are you planning to have additional discussion with the FDA regarding possibility of early submission with more data.
So that's the first question and also on same rock TV and I think that you mentioned that $2 5 million would that be the benchmark price.
Henry J. Fuchs: So we leveraged a lot of the knowledge that was gained in the building of broctavian to build an even more potent phenylalanine hydroxylase. And I think if you don't have just as much experience as our group has in terms of designing vectors, testing them in mice, testing them in non-human primates, and then ultimately bringing them to humans and being able to iterate on what you've learned, if you don't have all that experience, then, you know, you're just sort of flying blind.
Europe, and if you can give a little more color regarding to install them and how many years you are thinking and I have a quick question regarding the.
Fox Sogou, we use the five year data from phase one two study to the FBA.
Would that be.
Five year data had some decline would that be any concern there.
So I think what you asked.
Question one question three.
And Jeff and I will your question too.
Henry J. Fuchs: You know, I think that they can be encouraged that they got some expression of phenylalanine hydroxylase, but they're pulling back from that dose rather than leaning into a dose that's even more effective. Because of our confidence in the safety profile of broctavian and what we've seen so far, we're very confident that the dose level that we're at is going to produce meaningful, you know, extremely meaningful, you know, fee reduction levels.
Sure.
We press released when your data so you know.
What when I say the FDA didn't do the one you data on it I mean, we did submit we didn't make a submission versus the press release.
If you're asking about additional discussions you know we're in a fairly regular dialogue with our decision on all sorts of matters.
On the if you're asking me.
What I say no if the FDA said you know we rethought. This then we really would like to take never mind. The 27 times that you've asked us in the times that we've communicated to you that we want to see the two year data if they changed their mind and said would you submit the one year data I would say hell yeah.
Henry J. Fuchs: So I think at the end of the day, the real answer to your question is our view of the competition, which is that we're going to end up being more effective by virtue of having a better vector design, the details of which are kind of inside the guts of the vector. And if I may add, also, we are testing these patients with...
You're asking me if I have stopped to bringing it up no I haven't sat bringing it up I think I'm trying to reflect to you that.
Not as a result of an evaluation of the day to themselves. The agency is recapitulated their request for the two year data to form the basis of the submission.
unknown: This is the anticipated manufacturing process and scale that will be used for commercial products.
That was that request was made before the one year data, even though adjusted and was carried through without any change.
unknown: [inaudible]
unknown: Got it. Thanks again.
Our will remains high our confidence in her Octavian is enormously high we're dealing with an agency debt.
unknown: Next one on the line is Gina Wong from Barclays. You are now live.
unknown: In Europe, and if you can give a little more color regarding the installment, how many years are you thinking? And I have a quick question regarding FOXSOGO. Will you submit the five-year data from the Phase 1, 2 study to the FDA? Would that be, we saw the five-year data had some decline. Would that be any concern?
They're busy and they make the rules on this this is the this is the edict they've issued.
On the OXXO ago.
As you pointed out.
You know as the kids get older of course, you know the.
The rate the relative increase in growth velocity is not going to be as great, which is of course, what animates the desire to treat younger and younger children and I do suspect this will be.
Henry J. Fuchs: Hank, would you answer questions 1 and 3, and Jeff and I will do a question too? Sure. You know, we press-released the one-year data, so, you know, when I say the FDA didn't do the one-year data, what I mean is we didn't make a submission.
<unk> some of our.
Discussion around for example, labeling considerations.
Next up clearly is gonna be on there.
The European Union like I said.
In labeling discussions.
You too will know shortly the resolution of.
How at least the first health authority is viewing long term durability.
unknown: Here's the press release.
I mean I think in the most recent updates from some patients in the data set on the face of that reached five years.
Henry J. Fuchs: If you're asking about additional discussions, you know, we have a fairly regular dialogue with the division on all sorts of matters. If you're asking me, would I say no? If the FDA said, you know, we rethought this, then we really would like to take, never mind the 27 times that you've asked us and the times that we've communicated to you that we want to see the two-year data, if they changed their mind and said, would you submit the one-year data, I would say hell yeah.
They are getting close to their final adult height, something on that basically there and as you know.
As you get to a search for your fan out was those highest even when you're unaffected by achondroplasia you're of course velocity goes down substantially.
On the pricing in Europe, I start that have just been answered.
More details about.
Your question I think it was $2 $5 million by ICR.
In the U S to be cost effective.
They have not done an analysis on the U S market and you haven't done it on the European market.
Henry J. Fuchs: If you're asking me if I have stopped bringing it up, no, I haven't stopped bringing it up. I think I'm trying to tell you that Not as a result of an evaluation of the data themselves, the agency has recapitulated their request for the two-year data to form the basis of the submission. That request was made before the one-year data even existed and was carried through without any change.
Rice's of comparable agents on.
On the factor because we pay for therapy are lower in Europe in some countries.
Not that much lower in other countries.
So obviously, if you use those metrics.
For the price might probably be lower than $2 $5 million, but you still got to be pretty significant here I mean, Jeff do you want on your perspective.
Yeah, I think that's very well stated J J and Jean I think you also inquired about.
Installments from I might address that part of the question.
unknown: So our will remains high. Our confidence in Rokavian is enormously high. We're dealing with an agency that, you know, they're busy, and they make the rules, and this is the edict they've issued. On Voxogo, as you point out, as the kids get older, of course, the rate, the relative increase in growth velocity is not going to be as great, which is, of course, what animates the desire to treat younger and younger children.
And then of course, we've heard about other companies talking about installment payments for their programs.
Not sure what drives that we've had extensive interaction with European payers and we have established relationships to facilitate that.
And when we talk about European markets, we're not talking about a monolithic viewpoint of course every country, particularly the major ones.
It has a different viewpoint some of them have different models upon which they.
Review products like walked avian and Buck so go to come to their pricing decisions. What we have heard is an appetite for risk based agreements not everywhere, but in.
unknown: And I do suspect this will be, you know, potentially some discussion around, you know, for example, labeling considerations. Next up clearly is the European Union. Like I said, we're in labeling discussions, and you too will soon know the resolution of how at least the first health authority is viewing long-term durability. Dave, I mean, I think in the most recent updates, some patients, you know, in the data set on phase two that reached five years...
And a number of key markets. So we won't be focusing on installments theres been no signal of a desire for installments that I'm aware of we will be focusing at least in certain markets on having a risk based agreement what I like about the risk based agreements both in Europe, where there.
They can be used and also in the United States.
With payers it would would be willing to do that is that allows us the possibility of maximizing.
unknown: They are getting close to their final adult height; some of them are basically there. And as you know, as you get closer to your final adult height, even when you are unaffected by achondrophagia, your course velocity...
The potential value that we capture for rock avion with the offset but we're at risk.
Biomarin is at risk to cover if.
JJ Bien-Aime: On the pricing in Europe, I'll start and have Jeff then answer some more details. More details, but your question was $2.5 million by ICER in the U.S. to be cost-effective. They have not done an analysis on the U.S. market. They haven't done it on the European market.
If a patient or patients don't achieve the maximum benefit and I'm I'm personally and professionally.
Okay with that trade off I think it's a good one.
Yeah.
Great. Thank you.
Yeah.
Next one on acuity synergy charter for a day from Guggenheim Securities you were in our lives.
JJ Bien-Aime: The prices of preparatory agents for factory-regulated patient therapy are lower in Europe than in some countries, but not that much lower in other countries. So, obviously, if you use those metrics... The price might probably be a little lower than $2.5 million, but it's still going to be pretty significant here.
Hi, guys. Thanks for taking all the questions. This is Aaron on that yet I just wanted to ask.
About <unk> 307, what day levels do you think would be commercially viable do.
Do you need to get down to 120 360 or 600.
Jeffrey Robert Ajer: Yeah, I think that's very well stated, JJ. And Gina, I think you also inquired about installments, so I might address that part of the question. And, of course, we've heard about other companies talking about installment payments for their programs. I'm not sure what drives that.
And can you say anything about any immune response is it looking like it's going to be similar to a octavian.
Thanks.
Yeah.
And you want to start.
Yeah, well, let me just start by saying that that pounds. He can get people under 600 pounds. You can get people under 350 sounds you can get a fraction of patients to normal what would be really cool for gene therapy, and you're going to be to get everybody normal on a normal by it and.
Jeffrey Robert Ajer: We've had extensive interaction with European payers, and we have established relationships to facilitate that. And when we talk about European markets, we're not talking about a monolithic viewpoint, of course. Every country, particularly the major ones, has a different viewpoint. Some of them have different models upon which they review products like Roktavion and Boxogo to come to their pricing decisions. So we can achieve the maximum benefit, and I'm personally and professionally okay with that trade-off. I think it's a good one.
That's the working direction now whether that ends up.
Being actually a 100% or we'll.
But we'll let the day to tell that story, but.
We're looking for the profile of the product to be normal normal diet.
And we believe that even at the dose that we're now testing that that's within.
Within striking distance.
You know how how low it has to go as a matter of medicine and science that are still a little bit on defined and I think the easiest thing for us to do is day to get people in the normal range and then went on.
Argue about how low matters.
Jeff did you want to add anything.
unknown: Next one on the queue is Debjit Chattopadhyay from Guggenheim Securities. You are now live.
And then he might be.
Yeah. So based on what we observed for either 213 dose a lower dose and based on the experience with little caveat in that we observe going from 13 to six each for the 30th.
unknown: Hi guys, thanks for taking all the questions. This is Aaron on Debjit.
unknown: This is Aaron from Debjit. I just wanted to ask about BMN 307. What fee levels do you think would be commercially viable? Do you need to get down to $120, $360, or $600? And can you say anything about any immune responses?
Very steep response curve.
We believe there is a good chance debt.
That's where the 60 13 dose.
Net to normal fee level that is the objective have you seen that case measure of commercial opportunity, but it's a good question you're asking there even if we couldn't quite get there if we could get to something similar to probably is equally there is still on opportunity, but it's not our objective.
unknown: Is it looking like it's gonna be similar to Roctavian? Thanks. Do you want to start? Yeah.
Jeff.
Net.
Henry J. Fuchs: Yeah, well, let me just start by saying that pound Z can get people under 600 pounds, you can get people under 360 pounds, you can get a fraction of patients to normal. What would be really cool for gene therapy to do would be to get everybody normal on a normal diet. And that's the direction we're going in. Now, whether that ends up being actually 100% or not, we'll let the data tell that story. But, you know, we're looking for the profile of the product to be, you know, normal fee, normal diet.
Nothing to add well stated thank you.
Next one on the line is Matthew Harrison from Morgan Stanley You are now live.
Hello. This is cost us on for Matthew I have a quick question on <unk> 331 would you be able to provide some color around the design of these trials and how do you plan to differentiate from cotton therapeutics on the market.
Okay.
You know, it's it's a little early you know we're planning to file the IMD and oftentimes you get a little bit in D. C back.
That could inform.
No I think the main competitive advantages natural replacement.
As opposed to bio engineered molecules that require compliance.
I think one other things that.
unknown: And we believe that, you know, even at the dose that we're now testing, that's within striking distance. But how low it has to go is a matter of medicine and science that are still a little bit undefined. And I think the easiest thing for us to do is to get people in the normal range, so then we don't have to argue about how low it matters. Jeff, did you want to add anything in terms of what the community might be? Also, based on what we observed with the 2E13 dose, the low dose, and based on the experience with Octavian that we observed going from 2E13 to 6E13, there was a very steep response curve.
That makes gene therapy special is the sort of persistence presence of what you're trying to replace.
Combined with.
Resulting therefore incomplete disease control without.
Having to sort of chronically taken medicine or modify.
Dosing or safety et cetera. So when you know when we talked to patients in these communities for our gene therapy products that they're there they're drive is to be free of their condition and we see these things as potentially market expansion opportunity. So you asked about 331, but just again to illustrate with 307 you know.
The problem with phenylketonuria for decades has been their spend on only one approach to management and that's to eat food that is completely free of phenylalanine.
unknown: We believe there is a good chance that with the 6013 dose we'll get to normal fee levels. That is the objective. Obviously, in that case, a measure of commercial opportunity. But it's a good question you're asking there. Even if we couldn't quite get there, if we could get to something similar to Polynesia, we believe there is still an opportunity. But that is not our objective. Geoff York, have anything to add? Nothing to add; well stated, thank you. Next one on the line is Matthew Harrison from Morgan Stanley. You are now live.
Some people trivialize that until that's you know, it's a convenient sorts of diet thing and it's not need. These alternative therapies are not without side effects are not without challenges and Ah patients take drug holidays, when they get sick as a consequence of that and therefore their dream has to be done with their condition and any number of years that we can provide that as a.
As an alternative for their current therapy is being viewed very highly on location communities. So on three tier one stay tuned for more specifics on trial designs.
unknown: Hello, this is Kostas Son for Matthew. I have a quick question about 3.3.1.
And we'll keep you or both.
Thank you.
Next one on the curious Paul Matisse from Stifel. You are now live.
unknown: Would you be able to provide some color around the design of this trial and how you plan to differentiate it from current therapeutics on the market? Thank you. I know it's a little early.
Hey, Alex on.
Paul Thanks for taking the question I think I apologize I missed this earlier, but just wondering with debt extension for discharge is there any indication that there may not be a non.
Henry J. Fuchs: You know, if it's a little early, you know, we're planning to file the IND, and oftentimes, you get a little bit of IND feedback that could be helpful. And I think the main competitive advantage is natural replacement as opposed to bioengineered molecules that require compliance. I think one of the things that makes gene therapy special is the sort of persistent presence of what you're trying to replace, combined with resulting, therefore, in complete disease control without having to chronically take a medicine or modify dosing or safety, et cetera. So when we talk to patients in these communities about our gene therapy products, their drive is to be free of their condition. And we see these things as potentially market expansion opportunities.
From the FDA.
Well they have communicated that specifically.
Now whether whether the submission changes that we havent had any indication that that's the case, but so far they have so far they have said to us no unexpected and you should remember that they had an AD com in 2018 and that substantially our program follows entirely the specification for that AD com.
And the only difference between the.
On the AD com.
Now in the Fda's articulation. This income was a little bit more divided on the necessity of a two year.
Placebo controlled trial.
Siding considerations like pediatric ethics prospects for benefit was holding therapies from pediatric patients for two years, not one year that preclinical data could or long term clinical data or biomarkers could substantiate durability claims.
Henry J. Fuchs: So you asked about 331, but just again to illustrate with 307, the problem with phenylketonuria for decades has been there's been only one approach to management, and that's to eat food that is completely free of phenylalanine. And some people trivialize that and say, well, it's a convenience or it's a diet thing, and it's not. You need these alternative therapies are not without side effects, they're not without challenges, and patients take drug holidays, and they get sick as a consequence of that.
That was the 2018 AD com. Since then we've actually provided the FDA the second year of debt contemporaneously controlled trial anyway. So at this point.
They'd be going back to an AD com net that's already basically answered all of these questions too.
In our favor.
So we don't anticipate anything anytime but don't know.
Great. Thank you.
Next question comes from Mohit Bansal from Citigroup your non.
Lives.
Yeah.
Okay.
We lost some of it.
Alright, so for the next one we do have Tim Lugo from William Blair Your in our lives.
Henry J. Fuchs: And therefore, their dream is to be done with their condition, and any number of years that we can provide that as an alternative to their current therapy is being viewed very highly in our patient communities. So on 331, stay tuned for more specifics on trial designs and Rocky P. Abbas.
Alright, Thanks for taking my question and digging into the early stage pipeline you gave us a little color on the early stage assets from our press release.
Do any of these.
That have kind of on prime area like fast market development path potential.
And I also believe you have a partnership with genomics up in Toronto, covering I think for products when.
When do you expect to start to see some candidates roll out of that partnership.
unknown: Next one on the queue is Paul Marie Strumstiefel. You are now live.
Yeah.
Hi, real high real Tim and I'm really glad that the operator for that real time of life.
unknown: Hey there, this is Alex. I'm with Paul.
Okay.
Uh huh.
Debt.
I have to say that all of the assets that we consider we aspire to be first to market now we haven't always been able from a talented it took us a little longer for short type taken a little longer and sometimes the biology from it turns out to be a little bit on a complicated human from you'd like but we are sticking with the the fundamental model of Biomarin for discovery and.
unknown: Thanks for taking the question. I think, apologies if I missed this earlier, but just wondering with this Caducei Extension Purpose Award, Ty, is there any indication that there may now be an ADCOM from the FDA? Thanks.
<unk>, it's Ben.
unknown: Well, they have communicated that specifically. Now, whether the submission changes that, you know, we haven't had any indication that that's the case, but so far, they have said to us that no ADCOM is expected. And you should remember that they had an ADCOM in 2018, and that substantially, our program substantially follows entirely the specification of that ADCOM. And the only difference between the ADCOM now and the FDA's articulation is that the ADCOM was a little bit more divided on the necessity of a two-year placebo-controlled trial, citing considerations like pediatric ethics, prospects for benefit, withholding therapy from pediatric patients for two years, not one year, so that preclinical data could, or long-term clinical data, or biomarkers could substantiate durability claims.
Genetic precisely understood etiologies targeted therapeutics.
<unk> effects rapidly with transformative results.
The GAAP collaborations that we're doing that have just been announced all neatly fit into having that potential and I think part of the pipeline pivoted Biomarin is to really institutionalized what we did with premier.
I'm really pleased to report that.
You see JJ a lot you see henkel ITC, Jeff age or a lot behind the scenes for these incredibly clever people.
So Kevin Eggan for example, who's our new head of research just up the nominal cell and molecular biologist.
Dave Jacoby, who led the clinical development program for Bryn Europe by the way. Both of these guys are hardly trained guys. They're also getting along for that reason and that this day, they've Jacobi did it clinically for Britain Europe. He wants to do it again, we recruited Kevin that's what Kevin wants to do over and over and over again, so I don't think that part of Biomarin.
unknown: That was the 2018 ADCOM. Since then, we've actually provided the FDA with the second year of that contemporaneously-controlled trial anyway. So at this point, you know, they'd be going back to an ADCOM that has already basically answered all these questions in our favor. So don't answer somebody's name, Tom, but you don't know.
It's going to change I think the part that's going to evolve is looking at those bigger assets potentially looking at assets. It can be an extendable into other indications or or really leveraging our platform technology, even more than what we were just talking about with three of seven where we built a better better better vector faster for three of seven five.
Two of our expertise that we wanted to do that across the advanced medicine space.
unknown: but don't know. Great, thank you. The next question comes from Mohit Bansal from Citigroup. You are now live. Unfortunately, it looks like we lost Mohit.
So short answer is yes, Tim everything we are about is looking for these medical conditions that we can transform from quick.
Quickly through genetic insights.
unknown: Alright, so for the next one, we do have Tim Loga from William Blair. You are now live. Thanks for taking the question. And digging into the early stage pipeline, you gave us a little color on six of the early stage assets in the press release. Do any of these assets have kind of a binary like fast market development?
Good day here in the deep genomics partnership up in Toronto, I think you have for compounds up there.
Same basic concept.
On that.
We learned in our antisense oligos.
Program for Duchenne that the first target you find.
unknown: Development Path Potential. And I also believe you have a partner.
Effective may not be the best we went about that through a much more manual process of tiling and then tweaking chemistry retailing tweaking chemistry retailing once we matched through all that we realized that we had come upon a much better biological approach.
unknown: And I also believe you have a partnership with Deep Genomics up in Toronto covering, I think, four products. When do you expect we will start to see some candidates roll out of that partnership? Hi Realtim, and I'm really glad that the operator pronounced Realtim alive. Poor no-hit.
I've talked before about the you know the nature of the genetic condition in the targeted therapy it needs to fit in like a key sits on a lock.
Henry J. Fuchs: You know, I have to say that all of the assets that we consider, we aspire to do our best to market. Now, we haven't always been able, you know; Palantir took us a little longer, the short-sighted has taken us a little longer, and sometimes the biology turns out to be a little bit more complicated than humans can invite, but we are sticking with the fundamental model of biomarine for discovery and development: genetic, precisely understood etiologies, targeted therapeutics, discernible effects rapidly with transformative results.
And and and the keys and these conditions can be highly highly refined and specific.
And there's another area by the way that Kevin is phenomenally interested in the subject of RNA metabolism. So the concept is debt.
As you learn from how genes are structured you'll learn more and more about the regulation of RNA metabolism, which will give you insights into how to more quickly design and this is a setup now that's that's really.
Quite ripe for machine based learning artificial intelligence, just because theres. So much massive amount of genetic information that reminder, that the coding sequence any human it's vastly smaller than you would have otherwise expected and all that they used to call out other DNA junk, it's not junk its regulatory elements. So Kevin is really intent on leveraging the deep.
Henry J. Fuchs: The collaborations that we're doing that have just been announced all neatly fit into having that potential, and I think part of the pipeline pivot at Biomarin is to really institutionalize what we did with Brinura. I'm really pleased to report that, you know, you see JJ a lot, you see Hank a lot, you see Jeff Ager a lot. Behind the scenes, there are these incredibly clever people.
Genomics collaboration and figure out how to power through the identification of regulatory target from the genome that are gonna be transformative as therapeutics.
Henry J. Fuchs: Kevin Eggan, for example, who is our new head of research, just a phenomenal cell and molecular biologist. Dave Jacoby, who led the clinical development program for Brinura. By the way, both these guys are Harvard-trained guys, and they're also getting along for that reason. And Dave Jacoby did it clinically for Brinura. He wants to do it again. We recruited Kevin. That's what Kevin wants to do over and over and over again.
Repute ex.
That's very interesting thank you for the color.
Yep.
Next question comes from Mohit Bansal from Citigroup Your line.
Great. Thanks for taking my question and sorry about the mishap earlier.
Maybe a bigger picture question gene.
Gene therapy space appears to be facing some challenges lately, obviously, you face that I can retrieve on but there are safety issues coming up and.
Some of these agents have no.
Both the safety issues some of them are tissue relative to some of them by Jean <unk>.
Any benefit related.
Henry J. Fuchs: So I don't think that part of Biomarin is going to change. I think the part that's going to evolve is looking at both bigger assets potentially, looking at assets that can be extendable into other indications, or really leveraging our platform technology even more than what we were just talking about with 307 where we built a better vector faster for 307 by virtue of our expertise. And we want to do that across the advanced medicine space. So the short answer is, yes, Tim, everything we are about is looking for these medical conditions that we can transform quickly through genetic insight. It's good to hear from you.
Any thoughts any updated view on on what is happening around the gene therapy and how does how does how do you think about going forward picking up and has to go after.
Given this backdrop in terms of prioritizing which targets to go after as well as digital to go after in terms of you know Dave your.
Existing therapies.
Debt to feed those kind of things. Thank you.
I guess I'll start J J.
It's good to hear your voice on glad to realize it sounds like the operator did PPR or something.
You know.
So the what.
What we experienced with oats had is obviously not new.
Sorry, not novel in the context of you know.
You see a lot of this happening with them now we were fortunate Brad Glasscock who's our head of regulatory.
unknown: And the Deep Genomics Partnership up in Toronto. I think you have four compounds up there. Yeah, same basic, you know, concepts in that. We learned in our Any Sense Oligos program for Duchenne that the first target you find of effect may not be the best. We went about that through a much more manual process of tiling and then tweaking chemistry, retiling, tweaking chemistry, retiling. Once we had gone through all that, we realized that we had come upon a much better biological approach. You know, I've talked before about the nature of the genetic condition and the targeted therapy. It needs to fit in like a key fits in a lock.
Listen influential partner in Paducah negotiations.
And so I think we have.
An opportunity to have some insight on whats going on on the attack.
And this is all public information you know otitis basically understaffed and Seber also happens to be doing a lion's share of the work on COVID-19 obviously.
The vaccine so you're talking about an understaffed and otherwise incredibly busy group.
And I previously commented that debt conservativism is not an unusual reaction to that sort of thing from a regulatory perspective, and we've seen that before.
unknown: And, and, and the keys to these conditions, you know, can be highly, highly refined and specific. And there's another area, by the way, that Kevin is phenomenally interested in, on the subject of RNA metabolism. So the concept is that, you know, as you learn from how genes are structured, you'll learn more and more about the regulation of RNA metabolism, which will give you insights into how to more quickly design. And this is a setup now that's really, really cool. I think that's it for me.
And I think also that the field is just so novel that the nature of the kinds of questions.
That get asked are you know are being asked him here you know you only get one shot at these things for the most part.
And you know.
If there are alternatives to therapy people ask us about questions about durability more than they would otherwise ask when.
When there are when there aren't alternatives for therapy. So that's created a lot more to be thought about by a group that is also.
Henry J. Fuchs: It's very interesting. Thank you for the call.
Relatively thinly staffed doesn't have an impact on how we pick and how we develop you bet. It does clear.
unknown: This question comes from Mohit Bansal from Citigroup. You are now live. Great, thanks for taking my question, and sorry about the mishap earlier. Maybe a bigger picture question. The gene therapy space appears to be facing some challenges lately. Obviously, you face the regulatory one, but there are safety issues coming up, and some of these agents have, you know, those safety issues, some of them are tissue-related, some of them are gene-related,
Clearly if you can offer a patient.
Something where they have no other choice, it's going to be a little bit clearer to be able to develop that.
And if they have choices, you're going to have to have a bit more robust of a program now I think <unk> is a good exemplification of that.
Maybe if there was no such thing as factor replacement therapy, and you know we took people who were taking nothing in led 30 times, a year and put them on gene therapy, and they stopped bleeding, we might be on it being having anything you'd be talking about on rock Damian second commercial year, but the fact is that they there is factor replacement therapy. So what we did there was we did a proper.
Henry J. Fuchs: Any thoughts, any updated view on what is happening in the gene therapy world and how do you think about going forward, picking up areas to go after given this backdrop in terms of prioritizing which targets to go after as well as which diseases to go after in terms of, you know, if there is existing therapy versus if there is no existing therapy, those kind of things? Thank you. I guess I'll start, JJ. Mohit, it's good to hear your voice. I'm glad you're alive.
Comparison of factor replacement therapy to rock kv on gene therapy in the absence of factor eight gene therapy replacement. So we had to do a bigger more robust program because it will be available on the alternative therapy. So these considerations are there.
You know the other pet Overstaffed Understaffing thing, it's just come to like more recently, but the evolution of requirement for a conservative Mis as you go in with very innovative things in spaces, where there is available therapy, but our remaining unmet need is I think the complexity that you're seeing agency deal with and I think.
Henry J. Fuchs: It sounds like the operator did CPR or something. You know, so what we experienced with OTAD is obviously not new. I'm sorry, not novel in the context of, you know, you see a lot of this happening with them. Now, we were fortunate. Brad Glasscock, who's our head of regulatory affairs, was an influential partner in the PDUFA negotiations. And so, you know, I think we have an opportunity to have some insight into, you know, what's going on at OTAD. And this is all public information.
You know as we accumulate more data more mass more experience.
Yes.
On a per at level with benefit risk decisions will improve and its great that biomarin is the sponsor of a lot of that stuff because we're leveraging all of that learning for the rest of our pipeline.
Henry J. Fuchs: You know, OTAD is basically understaffed, and CBER also happens to be doing the lion's share of the work on COVID, obviously due to vaccines. So you're talking about an understaffed and otherwise incredibly busy group. And I previously commented that conservatism is not an unusual reaction to that sort of thing from a regulatory perspective. And we've seen that before. You know, and I think also that the field is just so novel that the nature of the kinds of questions that get asked are being asked in there. You know, you only get one shot at these things, for the most part.
Super helpful. Thank you Cheng.
Mhm.
And there are no further questions at this time I will now turn the call over back to Jean Crazy anyway.
Thank you all for your continued support.
So many opportunities ahead for Biomarin.
The momentum towards our next significant phase on growth is building.
Again, I want to reiterate we had positive operating cash flows on the $114 million in the first quarter, which is a major losses compared to last.
Last year first quarter.
<unk> represents the strength of our underlying business.
Well go next to large product opportunity in box they'll go and work with you.
The insights, we expect 'twenty to 'twenty two to be financially transformational year for Biomarin.
Henry J. Fuchs: And, you know, if there are alternatives to therapy, people ask about questions about durability more than they would otherwise ask when there is an alternative to therapy. So that's created, you know, a lot more to be thought about by a group that is also, you know, relatively thinly staffed. Does it have an impact on how we pick and how we develop? You bet it does.
Thank you on.
Have a nice afternoon.
Thank you everyone for joining you may now disconnect have a great day.
[music].
Okay.
[music].
Henry J. Fuchs: Clearly, if you can offer a patient, you know, something where they have no other choice, it's going to be a little bit clearer to be able to develop that. And if they have choices, you're going to have to have a bit more robust of a program. Now, I think Valrox is a good example of that. You know, maybe if there was no such thing as factor replacement therapy and we took people who were taking nothing and bled 30 times a year and put them on gene therapy, and they stopped bleeding, we might not be having anything to be talking about in Roctavian's second commercial year.
Okay.
[music].
Henry J. Fuchs: But the fact is that there is factor replacement therapy. So what we did there was we did a proper comparison of factor replacement therapy to Roctavian gene therapy in the absence of factor A gene therapy replacement. So we had to do a bigger, more robust program because of the availability of alternative therapy. So these considerations of, you know, they're not the OPAT understaffing thing; it's just come to light more recently.
Okay.
Yeah.
[music].
Henry J. Fuchs: But the evolution of the requirement for conservativeness as you go in with very innovative things in spaces where there is available therapy but a remaining unmet need is, I think, the complexity that you're seeing the agency deal with. And I think, you know, as we accumulate more data, more mass, more experience, the comfort level with benefit-risk decisions will improve. And it's great that BioMarin is the sponsor of a lot of that stuff because we're leveraging all of that learning for the rest of our pipeline.
Henry J. Fuchs: This is super helpful. Thank you very much, Hank. If there are no further questions at this time, I will now turn the call over back to JJ.
Yes.
Yes.
[music].
JJ Bien-Aime: Thank you all for your continued support. I would say that with so many opportunities ahead for Biomarin, the momentum towards our next significant phase of growth is building. Again, I want to reiterate, we had positive operating cash flows of $114 million in the first quarter, which is a major growth as compared to last year's first quarter. It represents the strength of our underlying business. And with our next two larger product opportunities in Voxogo and Roxavian within sight, we expect 2022 to be a financially transformational year for Biomarin. Thank you, and have a nice afternoon. Thank you everyone for joining us.
Okay.
Yes.
[music].
unknown: Have a nice afternoon,
unknown: BF-WATCH TV 2021 BF-WATCH TV 2021