Q4 2022 Biomarin Pharmaceutical Inc Earnings Call
Speaker 2: Welcome to the BioMarin fourth quarter investor update call.
Speaker 2: Hosting the conference call today for BioMarin is Tracy McCarty, Group Vice President of investor relations.
Speaker 3: Please go ahead, Tracey. Thank you, Paul, and thank you all for joining us today. To remind you, this non-confidential presentation contains forward-looking statements about the business prospects of Biomyrin Pharmaceutical, Inc., including expectations regarding Biomyrin's financial performance, commercial products, and its use.
Speaker 3: and potential future products in different areas of therapeutic research and development. Results may differ materially depending on the progress of Biomorin's product programs, actions of regulatory authorities, availability of capital, future actions in the pharmaceutical market, and developments by competitors. And those factors detailed in Biomorin's filings with the Securities and Exchange Commission, such as 10Q, 10K, and 8K reports. We do plan to end this call promptly at 5.30 Eastern time, so please reach out if you have questions. On the call today from Biomorin's management team, our JJ Bien-Aime, Chairman and Chief Executive Officer.
Speaker 3: Jeff Ager, Executive Vice President, Chief Commercial Officer. Hank Fuchs, President Worldwide Research and Development. Greg Guyer, Executive Vice President, Chief Technical Officer. And Brian Mueller, Executive Vice President and Chief Financial Officer. I will now turn the call over to our Chairman and CEO , JJ Bien-May. Thank you, Tracy. And good afternoon, everyone. Thank you for joining us on today's call. So as we communicated through our 2022, a truly...
Speaker 4: our sekaliverse.
Speaker 4: Our high performance in 2022, we flowed through 2023 and beyond, driven by our strongest global commercial launch on record with Voxelog and our profitable basins on business and the addition of Rotavian, a truly disruptive one-time, generative for those with severe hemopidia A. While the process of finalizing reimbursement in Germany has taken more
Speaker 4: to share that roughly 300 patients from the bleeding disorders community have engaged with BioMarine directly to learn more about rotavian. Many of them may not ultimately be eligible for treatment, but it is a good indicator of awareness and interest in rotavian ahead of potential approval this year. And Jeff will provide more detail in a moment, but suffice it to say that once the reimbursement side of the equation has been finalized,
Speaker 4: We are confident in both subscriber and patient interest in rotavian. We are extremely pleased to have delivered $2.1 billion in total revenues for the full year 2022, a record financial achievement for Barmaran. We will build on this result in 2023 with an intention to deliver over 15% top-line growth and significant operating leverage driving approximately 30% growth in bottom-line profitability based on the midpoint of our GAAP and non-GAAP guidance provided today.
Speaker 4: As plan we have made the transition to an running growth story. A unique accomplishment in our, in the biotech industry. And we thank you for your continued support. And I will now turn the call over to Jeff to discuss the commercial business update Jeff. Thank you, JJ. Very pleased with our record performance in fourth quarter, resulting in $538 million until revenues, representing close to 20% growth year over year, including Kuban and 27% growth, exf. Kuban. The strength of our enzyme brands provides more than a $1.6 billion foundation from which to layer on both Fox OGO and Rock Tavion, larger market opportunities. Turning to 2022, Fox OGO contributions, full year global revenue total $169 million.
Speaker 4: with growth expected to accelerate in 2023. Full year 2023 box logo guidance of between 330 million and $380 million represents over 100% growth from the midpoint as compared to full year 2022 results. With only 6% of the total addressable patient population receiving box logo treatment as of the end of the fourth quarter of 2022, there is significant room to grow from a combination of continued market penetration, new markets coming online, and potentially expanding the approved label indication for younger ages. The global launch of box logo exceeded even our high expectations for the brand in its first full year. We are pleased to share that as of the end of January , 2023, an estimated 1,264 children with achondroplasia were being-
Speaker 4: As we have turned the corner to sustainable gap profitability and with eight market as products, we have aligned the product guidance categories with our framework for growth. First, we now combine our enzyme products, including dimisim, maglisim, brinurapalensic, and alderosine, and exclude kubim. Second,
Speaker 4: We will provide individual product guidance for both BoxSogo and Rocktavian since they represent our new larger market opportunities and significant growth drivers. Going forward, we will still provide actual results for individual product revenues as listed on the first page of our press release issued today, and we will continue to comment on the key commercial drivers at the brand level as appropriate.
Speaker 4: We believe combining our enzyme products from a guidance perspective will make it easier to delineate the steady growth of our mature products as compared to the more rapid growth from our new larger brands. To that end, and briefly in our enzyme products, there were no surprises in either fourth quarter or full year results across the brands. As we have said previously, large irregular orders placed in 2022 and prior periods impacted growth rates for the full year.
Speaker 4: As a result, Vemasum ended the year closer to the lower end of full year 2022 guidance, and Naglazone ended at the higher end of 2022 guidance. We were pleased to see our efforts to drive new patients initiating Pelon's zig therapy in the U.S. and Europe result in net product revenue growth of 7% in 2022 as compared to 2021 and achieve $255 million for the full year. In 2023, we will continue to maintain our base patients on Pelon's zig and continue to drive growth through new patients' starts primarily in existing markets. Turning now to Rocktavian, for which we have guided to 2023 full year revenues of between $100 million and $200 million based on the current uncertainty of U.S. approval. Echoing JJ's enthusiasm for Rocktavian prospects ahead, there are numerous encouraging signals from the hemophilia community in both Germany and the United States. The privacy regulations in Europe preclude us from having patient-level data.
Speaker 4: But we know that 10 people have completed companion diagnostic testing to determine eligibility for rotavian. Based on seropositivity work previously reported, we have an expectation that a portion of these patients would be AAV5 negative and otherwise medically eligible for treatment. As JJ mentioned, in the United States, where we have had time and opportunities to engage with the hemophilia community in advance of launch, we have had direct contact with roughly 300 patients seeking more information about rotavian treatment. These are adults with hemophilia A who we plan to follow up with directly upon launch. As a patient-focused organization, we are thrilled to see the growing interest in rotavian and we look forward to updating you on progress treating patients commercially.
Speaker 4: Turning now to the reimbursement side of the process, in Germany, we are pleased to have a major payer agreement in place to enable reimbursed treatment with Rocktadian, a process that was more extensive than anticipated. As a result, the commercial ramp for Rocktadian in Germany has been hindered by the lengthy process of finalizing additional outcomes-based agreements with insurance organizations while we pursue a federal agreement on reimbursement. Recall that the timing for achieving federal reimbursement takes approximately one year, so these outcomes-based agreements have been a gaining step to facilitating reimbursed access to treatment in the free pricing period following approval. We are pleased with our progress, with a significant percentage of hemophilia patients now covered.
Speaker 4: by the executed outcomes-based agreement and negotiations well underway with insurers covering essentially 100% of the German population. An important and upcoming milestone is March 15. The new free pricing period in Germany is now six months, down from 12 months historically, and ends on March 15. That means that the terms of federal reimbursement will be retroactively applied to any patient treated after March 15. That has the practical impact of de-risking for insurers, the price and terms for any patients treated with Roctavian after March 15.
Speaker 4: Beyond reimbursement, we've made steady progress in other important aspects of the launch in Germany, including patient eligibility testing, site readiness, medical education, and promotion of rocktavian. Building on this progress, we were pleased to attend two key congresses in Europe in February , which provided significant opportunities to engage with the hemophilia community and promote rocktavian for the first time. Bimorin's presence at IHAD, the European Association of Hemophilia and Allied Bleeding Disorders, included a well-attended promotional symposium highlighting efficacy and quality of life data for rocktavian. At GTH, which is the German Society for Thrombosis and Hemostasis, we have a very special event, the German Society for Thrombosis and Hemostasis, which is a very special event.
Speaker 4: We had an opportunity to engage with German physicians directly, many of whom shared feedback reflecting confidence in both the clinical outcomes and the safety profile of Rocktavian, indicating that their centers are ready to dose Rocktavian. We will continue to pursue similar opportunities to engage with the European bleeding disorders community going forward. In anticipation of US approval this year, whether on our current targeted PDUFA date of March 31 or later, the US commercial team is preparing for launch. The activities underway include site readiness, payer discussions, warranty refinement, and promotional materials preparation. The supply of Rocktavian to meet both European and US demand has been manufactured, so we stand ready to go upon potential approval. Relative to site readiness in the US, we are looking at the
Speaker 4: We have identified and are focused on a relatively small number of the largest and most capable hemophilia treatment centers to be ready to treat with rock tavian at or shortly after launch. We are committed to the concept of hemophilia treatment centers being the site of treatment for rock tavian for appropriate patient selection, post treatment follow up and monitoring, and more generally, due to the complexity of hemophilia management. Relative to reimbursement, our team is actively meeting with payers in the US in advance of launch addressing both clinical aspects of hemophilia and the potential value of rock tavian and business discussions focusing on the warranty structure for an outcomes based agreement. The value of the warranty is its simplicity and speed of implementation. It allows us to offer a uniform outcomes based agreement to all purchasers without the need and time required for negotiating contracts. Our expectation following the US approval
Speaker 4: and with a warranty that comes with purchase, is that we will be able to navigate pair of prevals based on medical exception for initial patients similar to our experience with previous launches. In conclusion, in 2023, we anticipate increased demand for all our brands included in our guidance line items, including our enzyme products, boxego and rock pavian, combined and from the midpoint of full year 2023 guidance provided today. We expect total residents with the 15% growth this year, underscoring our commitment to growth and sustainable profitability. Thank you for your attention, and I will now turn the call over to Hank to provide an R&D update. Thanks.
Speaker 4: Thanks, Jeff, and welcome. Thanks, everybody, for joining the call. In 2022, Vyman's R&D organization was extremely gratified to see the enthusiasm from families interested in voxel treatment for their children with achondroplasia. We look forward to engaging with the health authorities to potentially expand the label in the United States and in Europe . With voxel, it's accessible to children of all ages in Japan starting from birth. We're hopeful that the younger children and infants under the age of two years in Europe and under the age of five years in the United States will have the same access should health authorities be supportive. Moving on the demonstrated safe and persistent growth-promoting effects of voxel and achondroplasia, given its mechanism to stimulate endochondral bone growth at the genetic level, we are very encouraged about the potential for voxel to benefit those from other natural disorders. Later in the year with voxel, we look forward to results from the investigator-sponsored trial evaluating voxel's potential to treat other genetic forms of short stature, including hypochondroplasia, NPR2 deficiency, and Noonan syndrome, just to name a few.
Speaker 2: We plan to engage health authorities and align on the best path forward for clinical development in new potential indications later in this year. Moving to Rocktavian, as JJ said, 2023 regulatory milestones are tracking the plan. Having recently submitted the three-year Phase 3 Rocktavian data as requested by the FDA, we continue to expect the PDUFA target action date of March 31 until further notice. Should the FDA determine that the three-year data submission does represent a major amendment and thereby extending the PDUFA action date, we will share that update publicly. In the meantime, we continue to experience a high level of engagement with the agency as we are still under active review. The pre-licensure inspection of our gene therapy facility was conducted in December . Vymerin has provided responses to comments and observations received at the close of the inspection, and the company believes that all findings are addressable. The FDA has also planned some clinical study site inspections that will take place this quarter prior to the PDUFA date so the review process is tracking to expectations. In January , we're pleased to share the three-year Phase 3 results from the Rocktavian Pivotal Program. Based on the dramatic sustained reductions in bleeding rates with no new safety signals, factor VIII utilization and factor VIII utilization rates observed at year three, we're confident Rocktavian's potential to be an important treatment option for those with severe hemophilia.
Speaker 2: due to the risk of breakthrough attacks that are extremely burdensome and potentially life-threatening. The disease is due to genetically determined loss of a key protein regulating the inflammatory cascade responsible for these attacks. The available therapies on the market have confirmed the effectiveness of replacement, much like in the case of replacement factory therapy and hemophilia. We've shown in three studies with BMN331 gene therapy that mutant mice and non-human primates that a similar dose to that employed in the clinical studies of Octavian.
Speaker 2: can provide ample and constant expression of C1 inhibitor protein within the therapeutic range to patients. We expect that continuously expressed levels of protein will provide improvements in the disease course of hereditary oendrine over the available existing therapies. The first patient who was treated at the 6013 dose has had an early increase in C1 inhibitor levels that may ultimately be therapeutically relevant, which is exciting. We look forward to enrolling the second subject of this dose and following the response of the first. We have many other assets moving forward in the early stage pipeline including the BMN351 for BSN-D, BMN349 for alpha-1-antitrypsin deficiency, and BMN293 for bimycin-biting C3 hypertrophic cardiomyopathy, all of which we intend to update in more detail at RD Day in September . Thanks for your call, and I'll now turn the call over to Brian to update financial results from the quarter. Brian ? Thank you, Hank. Please refer to today's press release summarizing our financial results for full details on the fourth quarter and...
Speaker 4: of the last several years. BOMERIN's durable and growing enzyme products business has helped BOMERIN reach gap profitability. We are launching two of the highest potential products in company history with Boxogo globally and Rocktavian outside of the U.S. And we are investing in BOMERIN's largest ever early stage research pipeline intended to fuel growth throughout this decade and beyond. Specific to Q4 2022, BOMERIN's revenue growth is close to 20% in the fourth quarter and continued focus on managing operating expenses helped us achieve our financial goals of double digit revenue growth and leverage gap, net income and non-gap income.
Speaker 4: It is noteworthy that we recognize approximately $23 million of charges to SG&A expense in 2022, mostly in Q4, resulting from our organization's optimization announced last October , which drove a small gap net loss in Q4. Importantly, we were able to accommodate that charge without adjusting our profitability goals for the year. For 2023, the highlights of our guidance include continued double-digit revenue growth, 16 percent at the midpoint of our guidance, and continued leverage with profitability growing at a rate roughly double our revenue growth rate. As recently announced, beginning with the first quarter of 2023, we are changing our methodology for calculating our non-gap income to recognize the maturity of BOMER and its profitable business and better align with our peer group. Details of the revised method are in our press release, and a full reconciliation of prior reported periods for 2021 and 2022 is available on our website. Another noteworthy change is the grouping of our revenues now that we have eight approved products, which Jeff touched on earlier.
Speaker 4: By grouping our enzyme products together, we have the opportunity to guide investors to the quote-unquote base business that we've referred to over the last couple of years in its entirety. This was also an opportunity to recognize that while Kuvan for PKU has been an excellent product for biomarine for more than a decade, Kuvan is no longer a source of growth and is a decreasing focus for biomarine. We are now in the third year of US generic competition and are expecting two new generic competitors in Europe , and we feel that now is the right time to cease providing specific annual revenue guidance for Kuvan. While we are not specifically guiding to Kuvan for 2023, total revenue guidance still includes Kuvan, and we thought in this transition year that it would be helpful to share that our assumed contribution in 2023 for Kuvan is about $125 million globally.
Speaker 4: As Jeff mentioned, we'll continue to report actual sales for each brand on a quarterly basis. The last noteworthy change to our external reporting metrics is increasing the prominence of earnings per share on a GAAP and non-GAAP basis. While we expect it will take the anticipated growth over the next few years to scale our earnings per share, as a profitable enterprise, we recognize the importance of this financial metric and believe it will be helpful for investors to both measure our performance and understand our planned future financial growth. We appreciate your flexibility through these changing financial metrics. While reporting consistent metrics for many consecutive years was important, we hope to
Speaker 5: It is equally important that Bioparma's reported information reflect the current and future state of the corporation, which we are pleased to observe as a unique double-digit revenue and leveraged bottom-line profitability Bioparma growth story. Thank you for your attention, and we'll now open up the calls to your questions. operator? If you would like to ask a question, please press star one on your telephone keypad now. You'll be placed into the queue in the order received. Please be prepared to ask your question when prompted. Once again, if you have a question, please press star one on your touchstone keypad now. And our first question comes from Salveen Richter from Goldman Sachs.
Speaker 5: reported information reflect the current and future state of the corporation, which we are pleased to observe as a unique double-digit revenue and leveraged bottom-line profitability biopharma growth story. Thank you for your attention, and we'll now open up the calls to your questions. Operator? If you would like to ask a question, please press star 1 on your telephone keypad now. You'll be placed into the queue in the order received. Please be prepared to ask your question when prompted. Once again, if you have a question, please press star 1 on your touchstone keypad now. And our first question comes from Salveen Richter from Goldman Sachs. Your line is open.
Speaker 6: Good afternoon. Thanks for taking my question. With the 10 patients that have gone through the companion diagnostic test here to be administered rock cave in, I just want to confirm that they're in Germany. But then my question really is on the end to end aspect here. So one you've negotiated with one of the key payers, but you've got this retrospective aspect that comes in on the federal side, so should we assume that really the use is going to play out from a reimbursement standpoint more in 2Q onwards this year? And then where does the infrastructure aspect play, you know, come into play with regard to getting infusion centers ready and so forth? Help us just understand, you know, when we could really start to see revenue flow in for these patients. Hi, Salveen. Thank you for the question. Happy to address that. First to confirm, yes, the 10 CDX tested patients are all in Germany. And I think you're raising an important issue about kind of the end to end nature of and timing of getting revenues. We're super happy to have one of the outcomes based agreements, one of three large umbrella groups signed up with our outcomes based agreement. And what we think is that certainly a proof of concept for the principle of going out and negotiating these agreements while we're pursuing a full federal reimbursement.
Speaker 4: that will take about a year to get in place. And indeed, the fact of having one of those insurance contracts in place facilitated really the uptake of what through last week was about 10 patients CDX tested. So that train is starting to roll and that's an important one because having a patient CDX tested indicates all of the following. It indicates interest on the part of the patient and the prescriber. It's an important step in checking eligibility. And as we've gleaned from the German prescribers in particular, they're not really CDX testing just to find out kind of informationally about AAV5 seronegativity. They're testing because it's an important step to confirm on the way to writing a prescription. So all of those signals are important. I do think that once we get our first patients treated commercially, it'll be an important proof of concept eagerly watched inside of Germany. And I think that we'll be able to push additional patients.
Speaker 4: I mentioned the March 15th date. That's when the free pricing period ends. From a practical perspective for the German insurers, all of what we eventually negotiate at the federal level will be retroactively applied to patients treated after March 15th. So, from a practical perspective, this is a de-risking date for the German insurers. And kind of a qualitative comment on the German insurers, these are government entities. And, you know, and they behave like bureaucracies. And they move with the speed of bureaucracies, one of the things that we're learning. So, on infrastructure readiness, I've talked before about the hub and spoke model. And I would say just like my comments about the United States having targeting a small number of the largest and most capable hemophilia treatment centers to be ready at or shortly after launch in the US, I would say that's the status of those hub centers in Germany. They're essentially ready to go. We need to start pushing patients through for treatment. Thank you.
Speaker 4: Thank you. Our next question comes from Jeff Meacham from Bank of America. Your line is open. Great afternoon, guys. Thanks for the question. Had one clinical and one commercial on Roktavian. I guess, Hank, for the three-year data, is it just having to go through the details, for example, in all the case reports, or was there any real new information at the three-year time point? I guess I'm trying to figure out what the hurdle is that constitutes a major amendment, in your view. And then commercially, just to follow up on the last question, when you think about testing being a gating factor in Germany, is there a strategy to maybe streamline this, and are there lessons to be learned?
Speaker 2: In Germany that you can you know roll across the big five and broadly across the EU that that may help on board patients A little bit more efficiently. Thank you Yeah, hi Jeff You know, it's really a subjective assessment as to whether any submission constitutes a major amendment And I can't really give you any kind of guidance of one way or the other about how to interpret any action I do or don't take I think at this point it would be all speculative I mean, it's we'll let you know if we hear that it's going to be amended and otherwise We're going to stay relatively quiet And over to the companion diagnostic question If this was certainly a learning a learning step for us in Germany
Speaker 4: In fact, optimally, we would have preferred to see patients coming through for companion diagnostic testing faster and in more numbers. And had that happened, we would have used that to put as a point of leverage to put pressure on the insurers to get these outcomes-based agreements signed. The logic of the German physicians to say, well, we want to make sure that patients have access to commercial rockavian before we push them through for companion diagnostic testing.
Speaker 4: Italy is our priority, other strategic markets in Europe that we're really focused on. The reimbursement process takes about a year to get through. So we're anticipating we could have reimbursement approved in Q4 of this year. And really in those markets, we have to have the reimbursement in place before we can start promoting and moving on.
Speaker 5: on patients. So it's a different environment than that we will be working through in other markets in Europe . Thank you. Thanks. And our next question comes from Phil Nadeau from Cohen and Company. Your line is open. Good afternoon. Thanks for taking our questions. A couple follow up questions on German reimbursement and then one on the US for Octavian. Excuse me. In terms of the outcomes based agreements, Jeff, it sounds like what you're saying is anything that is negotiated now will sort of be almost invalidated when there's federal reimbursement. It'll be retroactive to March 15th. So I guess we're kind of curious why would one of these
Speaker 7: bureaucratic insurers spend the time and effort that negotiates something if it's not going to be relevant for that much longer. What implications would that have on patients starting on therapy in Germany over the next couple quarters before you're within a short period of time from federal reimbursement being clear? That's the German question. Then in terms of the US, Hank, are there any guidelines as to when the FDA needs to let you know whether the submission is deemed a major amendment? Can they go right up to the hours after the approval of the FDA? It is complete.
Speaker 4: send you a letter the night before, or is there a certain amount of time before Purdue, if they have to let you know? And then also in the US, will you let us know when you're labeling discussions? Thanks. And then we start with Jeff. Yeah, thanks for the question, Phil, about the contracting process in Germany. Having these outcomes-based agreements provides a framework for CDX testing and other aspects of patients gaining access to therapy. So there's still value in these agreements coming together, even after March 15th. The terms of the federal reimbursement will supersede, but there are other aspects that have value. But you're absolutely right. I mean, the urgency to act was probably higher in Q4 of last year, when there was a substantial gap in time between then and the end of the free pricing period. As we're approaching March 15th, the urgency around those outcomes-based agreements goes down.
Speaker 4: But similarly, the risk for the insurers also goes down. So, they'll have the benefit of retroactively applying whatever we wind up with for federal reimbursement, which, a reminder, that takes about a year in Germany to get to. So, there will be this six-month period where it'll be helpful to have those agreements in place to treat patients. And the risk for those insurers on the financial terms is markedly reduced. And if I may add, I think having also discussions on outcome-based agreements should help in terms of the final reimbursement price for Germany in general. Because we believe that the likelihood you have a better reimbursement price at the federal level in Germany is higher if we have outcome-based agreements in place than if we don't. So, that's why they are helpful. And then the second part of your question, so.
Speaker 2: There are guidelines or desk instructions, I guess the agency might call them, around time to process submissions. But bear in mind that these guidelines are kind of lower in enforcement and visibility than say PDUFA. They don't always hit their PDUFA, so I don't know that there's any real enforcement or tracking around guidelines. So I would plan that it's possible that they could notify us at any time. And as far as our communication, back to you, of the coming milestones, we don't plan to inform you about when we enter, when or if we enter labeling conversations. You know that there's a lot of back and forth. I think the thing that everybody's trying to figure out is what the action that the agency is going to take. We won't know what that action is.
Speaker 2: until they tell us and then we'll share it with you. But I do want to commend the agency around their diligence. I mean, they're clearly working very hard on this application. We're almost in daily contact with them. And we, like you, look forward to their decision on or before the PDUFA date. That's very helpful. Thanks again for taking our questions. And hopefully, they don't delay the PDUFA.
Speaker 6: Our next question comes from Jessica Fye from JPMorgan Chase. Your line is open. Hey guys, good afternoon. Thanks so much for taking my questions. Couple more sticking with Rocktavian. First, how many U.S. centers do you expect to be ready to go on day one? And second, when you say the FDA's findings on the Rocktavian manufacturing site are addressable, can you comment on whether they have been addressed at this point? And if not, when you expect them to have been addressed by? Thank you. If we could start with Greg, our head of technical operations, can answer the question. So thanks for the question, Jessica. So yes, we...
Speaker 2: responded pretty closely after the inspection in December . There was one additional clarification which they wanted, which we gave them. And since then it's basically been radio silence. So, you know, we, as Hank said, we're in communications with the agency a lot. But we have heard nothing more since, you know, several weeks ago, probably late in December . So we believe almost all the issues have been resolved. Most of them were procedural. Those SOPs and things have been updated and, you know, we are preparing for launch. And relative to your question on the US Center, it's just good. Yeah, there's.
Speaker 4: approaching 150 hemophilia treatment centers in the US, and those range from the very large comprehensive care centers, you might call them, to much smaller hemophilia treatment centers. So our intention is, as we noted in the prepared remarks, is to have a small number of the most capable and largest centers ready to go on or shortly after launch. We haven't guided to a specific number, largely because we don't think it's that relevant, but we'll be targeting a focus group of the biggest, the most capable centers to be ready to go. Next question. And our next question comes from Chris Raymond from Piper Sandler.
Speaker 4: 150 hemophilia treatment centers in the US. And those range from the very large comprehensive care centers, you might call them, to much smaller hemophilia treatment centers. So our intention is, as we noted in the prepared remarks, is to have a small number of the most capable and largest centers ready to go on or shortly after launch. We haven't guided to a specific number, largely because we don't think it's that relevant, but we'll be targeting a focus group of the biggest, the most capable centers to be ready to go. Next question. And our next question comes from Chris Raymond from Piper Sandler. Your line is open.
Speaker 8: Hey, thanks guys, and if you'll bear with me another rock-a-ving question. So there are two of them actually kind of related. So I just want to square a couple of things. JJ, at the beginning of last month, I think I heard you, when you're talking about this dynamic, you project that German commercial patients would be treated in the first quarter if not this month, which I took as January . This March 15th date, when insurers are de-risked, is that a new learning for you guys? I don't think I've really heard that date before, sort of that dynamic. And then maybe a related question, and I know you guys don't give quarterly guidance, but I guess a clumsy way of asking, this setup would seem to maybe make a pretty negligible Q1 rock-a-ving in revenue. Am I making the correct assumption there? Thanks.
Speaker 6: Yeah, I think we said, I don't remember exactly, I think we've seen the coming weeks, you know, back in January , within January . This March 15 date is not a new date. We knew that this would be coming. So we still hope to have some patients with, you know, this in Q1. But Brian , you want to take it from there? Yeah, thanks, Chris. It's Brian . I think that you've interpreted correctly, you know, Jeff described the current dynamics. We're closing in on those first patients with the patients undergoing testing. Here we are February 27th, so two-thirds of the way through Q1. So I think JJ's right, we'll hope for a few patients, but not the material trend that the guidance would apply, if you will. Great. Thank you. And our next question comes from Robin Karanaskis from Truist Securities. Your line is open. Hi, this is Nishant. I'm on for Robin. Just a couple of questions, one on BoxerGo. So with regards to long dynamics now...
Speaker 4: launch trajectory, I think the question was about what are you seeing in terms of age distribution and uptake? You specifically mentioned Japan. And so, I would comment that Japan indeed has been – we've seen rapid uptake in Japan since we got reimbursement approval last August .
Speaker 4: Remember, Japan is an established market for treating achondroplasia. So it's unique in that aspect. And we've been fortunate to tap into that established care model for achondroplasia in Japan. In addition, Japan is an established market for treating achondroplasia in Japan.
Speaker 4: If Botsego is approved for all age patients in Japan, there is no younger limit. And indeed, we've seen a lot of interest and uptake in the younger patient segments in Japan. In other markets, to the extent that we have visibility into this data, which is somewhat limited in Europe because of data privacy regulations. You know, a year ago, I was commenting on the diversity of the age segments that we're seeing patients start at. We're seeing very young patients and even patients that were teenagers starting treatment. Today, I would say that the data looks like it's concentrating towards younger patients starting therapy, which we think is a good dynamic and bodes well if we can get approval for younger age segments in Europe and the United States.
Speaker 2: And finally, to note, just a little bit of a plug, the data that we have would suggest really high compliance with patients being treated so far, which is encouraging. And on your question on 331, there's really no further update to give. I mean, past what we talked about at JPMorgan, we have an individual patient who is beginning to express, moving into the normal range, which, you know, there's a lot of variability in the week-to-week visits, and we have another patient to treat before we can make a determination about whether this dose level appears good enough or we want to expand to another dose. So, encouraging start, but stay tuned for more.
Speaker 2: Just a little bit of a plug. What the data that we have would suggest really high compliance with patients being treated so far, which is encouraging. And on your question on 3.31, there's really no further update to give. I mean, past what we talked about at J.P. Morgan, we have an individual patient who's beginning to express, moving into the normal range, which there's a lot of variability in the week-to-week visits, and we have another patient to treat before we can make a determination about whether this dose level appears good enough or we want to expand to another dose. So encouraging start, but stay tuned for more. As a reminder, if you do have a question, please do not hesitate to contact the Medical
Speaker 6: Please press star 1 on your touchstone keypad now And our next question comes from Matthew Harrison from Morgan Stanley Your line is open Great good evening. Thanks for taking the questions. Um, I guess just one follow up on on Vox OGO Jeff Can you just maybe talk in a little bit more detail about? How you're thinking about the contributions the guidance this year is this mainly? geographic expansion and new patient ads or you also Expecting as part of guidance to see younger patients Be added into the label and therefore drive uptake and then just a corollary that Hank Can you just talk about some of the things you're thinking about in terms of other indications for Vox OGO and sort of the progress There thanks very much I mean, I'll start off and then turn it over to Hank the the guidance for Vox OGO reflects the current trajectory that we're on with respect to new patient additions and You know in the base of patients remaining pretty compliant and contributing to revenue this year So we're following the overall trajectory of that launch it is true that a global launch is really the sum of
Speaker 4: of individual markets launching. So it's a very dynamic situation. We're in 32 markets now, including all of our strategic markets. Like I mentioned a minute ago, we've gotten a lot of rapid uptake in Japan. That's a big strategic market for us, and we're relatively early into that launch cycle. Other big markets like Germany and the United States, we've been in longer, but we've still got plenty of room for growth. We do anticipate that we would see the benefit of having expanded labels this year, but that's not fundamental to the guidance range, I would say. That would be helpful, but not fundamental. Yeah, because if we do get approval, we've got an age extension, it's not gonna happen before Q4, so it's not gonna have a major impact on our revenue this year, but it would be good for Q4. Thanks. Yeah, to say a little bit more about VoxEgo indications, we've covered this briefly, and there's not really a ton more to update about, other than to say that.
Speaker 2: Based on genetic data, the expectation is that a natural regulator of bone growth like Baxoga would be relevant in conditions beyond just that mutation that causes achondroplasia. Most alike to achondroplasia is a condition called hypochondroplasia, which affects the same gene but with different mutations that cause achondroplasia. And we've got some interesting preliminary data that an investigator has been working up at DC Children's in an open-label investigator-sponsored trial. In addition, there are a number of other mutations both in the same pathway or in related pathways that also should be amenable to therapy with Baxoga. And he is now, Dr. Dauber has expanded his clinical trial to include patients with a variety of other mutations, including new names or NPR deficiency. And one could imagine a conversation with regulators in which we're talking about the eligibility criteria for a pivotal trial.
Speaker 9: these other OVAs with the two important regional insurers. Maybe just clarify what has to happen for that to play out this quarter to start actually generating uptake. And then more broadly on your annual Rockavian guidance, what's your assumption on how backend loaded the number might be, especially at kind of a mid to high end of the range.
Speaker 9: And maybe comment just a little bit on your expectations for U.S. reimbursement and how long it will take for that to get on board. Thanks. I guess I'll start and Jeff can hear. So we already have, as we communicated a while back, we already have one SICFON in Germany that signed up. So if one of the patients that is eligible after the compiler diagnostic is a patient that's under the umbrella under that SICFON, that patient could be treated any day. But hopefully if we do end up signing another OVA or two other OVA's with a patient, that
Speaker 4: All their sick funds, then it increases the probability that a patient will be treated this fall, or this quarter, sorry. So, with this, Jeff. The next part of the question was back-end loaded guidance and maybe I'll do that. Yeah, I'll handle it. Thanks, Jeff, thanks, JJ, and thanks, Paul, for the question. So, first of all, maybe just a quick color comment on this Rockavian guide. It's a wider range than you've seen in our other established products, but that's because it's a launch year in Europe and as we've touched on already on this call, the timing and, of course, approval itself has some uncertainty in the US. So, the way you can think about the guidance generally is the earlier we can get more of those German patients and then other European markets later in the year, fully online.
Speaker 4: And then the earlier US approval that we get would push us towards the higher end of that guy. And the longer or later that those things happen would push us towards the lower end. And specific to your question, you're exactly right that given the uptake trends, given both those European and US dynamics would suggest that it is back-ended and you'd expect the larger portion of revenues to come in the second half of the year. And then back to the third part of the question about US reimbursement. And you've seen this from Biomorin before, right? When we get approvals in the US and we're able to, for high value and high value added therapies, we're able to get reimbursement going in the United States pretty quickly.
Speaker 4: That's based on a couple of dynamics. One is we've got an experienced team out there, and we know how to get through the medical exception process while we're waiting for coverage policies to be issued. And for Rocktavian anyway, there's always going to be or likely to be always a prior authorization process step there that we know how to navigate. The U.S. system is highly diversified. That's both a challenge and an opportunity for us relative to going through a federal reimbursement process like we are in Germany and France and Italy, where at least in France and Italy, you have to get all the way through the process before you can treat patients, and that takes a year. So that's just for the same purpose.
Speaker 4: Relative to the US, I've mentioned in the prepared remarks, the warranty is a key aspect of facilitating rapid patient uptake. The warranty is something we offer with purchase. It's an outcomes-based agreement. It covers risk for insurers.
Speaker 4: We offer it with the purchase of Rockavian means we there's no negotiating the terms and we don't have to negotiate and get to Contract signature with lawyers involved in rounds of review and that sort of thing. So the warranty is an essential element and finally You know pricing correctly to give US Payers a financial incentive To to support Rockavian is important and to that end We have the final report from ICER in the United States
Speaker 4: It said, you know, Rocktavian is a dominant choice relative to Heem Libra, and they previously concluded that Rocktavian was a dominant choice relative to Factor 8 replacement therapy at a presumed price of $2.5 million. So that gives us a lot to work with in terms of lining up price and the financial incentives. Thanks. Our next question comes from
Speaker 10: that and then also as we look towards the the steroid prophylaxis study for Octavian in Q2, can you just maybe talk about like what you need to see there to I guess feel like you're confident that the steroid prophylaxis either does or doesn't really impact therapy? Yeah so I think your for the first part of your question was about boxoga.
Speaker 2: and feeling pretty good about the timeline of that. On the prophylactic stewards study, I think a key reminder there is that this study is still underway and we don't have a precise date yet per when we're gonna share the information with you.
Speaker 2: The concept was twofold. One was to evaluate whether starting corticosterotherapy prior to the initiation of the liver inflammatory response, whether that could lead to a higher factor or expression initially. That was one key part that's being tested. And just to remind you that as part of the story of the first few patients we had treated, trying to understand whether the difference in the phase one results and the phase three results has anything to do with the corticosteroid regimen. So one part of the study is to address that question. But the other most important part of that is to see if that in simplifying the corticosteroid regimen and evaluating overall durability, whether there's an even simpler...
Speaker 8: approach to take with corticosteroid management. I think it'll take probably a few years actually for that story to really fully be understood. So early days in the journey around prophylactic steroids. And our last question comes from Josh Schwimmer from Evercore ISI. Your line is open. Thanks so much for taking the questions and for squeezing me in. For the patients in Germany who are undergoing the AV antibody screening, do you have an estimate for how many will be eligible and how many would drop out? I think in the US you've said it might be around 20 to 25 percent of patients who fail the screening criteria. And then for those patients who fail, are they going to be eligible for the AV5?
Speaker 4: existing antibodies trial that you're running and when may we get those data? Hi Josh, I'll start. We have published data on seroprevalence in our key markets and that's guiding our overall thinking.
Speaker 4: We are not allowed to get patient-level information in Europe due to GDPR. You're aware that so we're really blocked except from some aggregate data. With ten patients going through the CDX testing process, that's a small end. I don't know how that's going to line up against a larger population when we get there.
I cannot stop. So, and as far as eligibility, yeah, these patients, you know, could conceivably subject to other eligibility criteria. But yes, they would be eligible for trial in the AAV5 positive study that we have up and running.
Thanks very much. Yep. And we have no further questions in queue. I'll turn the call back over to our Chairman and CEO , J.J. Byami.