Q2 2023 Biomarin Pharmaceutical Inc Earnings Call
Yes.
[music].
Thank you for joining Biomarin second quarter would be this conference call hosting today's call from Biomarin is tricky Mccarthy head of Investor Relations at Biomarin hit these.
Please go ahead traci.
Thank you J P and thank you everyone for joining us today to remind you. This non confidential presentation contains forward looking.
<unk>.
The business prospects of Biomarin pharmaceutical, Inc, including expectations regarding Biomarin <unk> 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 product programs actions of regulatory authorities availability of capital future actions in the pharmaceutical market and developments by competitors and those factors detailed in Biomarin filings with Securities and Exchange Commission, such as 10-Q, 10-K and 8-K reports.
On the call from Biomarin management today are J, J, B enemy, Chairman and Chief Executive Officer, Jeff <unk> Executive Vice President Chief Commercial officer. Thank you President worldwide Research and development, Greg Guyer Executive Vice President Marshall, Chief Technical Officer, Brian Miller, Executive Vice President and Chief.
Financial Officer, I will now turn the call over to Biomarin, Chairman and CEO J J P. MMA.
Thank you Tracy.
Many of you and thank you for joining us.
Today on this call we were very pleased with our progress in the second quarter.
More families around the world and gain access to box Gogo and the highly anticipated FDA approval group gave yes.
Has received.
The achievement of two milestones are key components of our growth plans.
Continued <unk> expansion and broke even last year.
Record revenues of approximately $1 2 billion in the first half of the year.
Represented 13% year over year growth and 16% gross excluding to that.
Our commitment to profitability was demonstrated again this quarter.
We were pleased to deliver a $56 million in GAAP net income.
As a result of strong product demand.
Q2, total revenues coming in at $595 million, including $113 million in box office revenues.
We are on a path to achieving our 2020 objectives doubled.
Double digit revenue growth.
Operating leverage.
This is expected to drive more than 30% growth in bottom line profitability in 2023.
Can we see it earlier this year.
We were very pleased to have received fda's approval overachieving or.
As we believe the demonstrated clinical benefit of this onetime gene therapy as transformative potential for those living with severe hemophilia a.
Eligible for treatment.
With combined U S and European addressable patient population of nearly 6000 patients.
Optimistic that <unk> will become the treatment of choice.
There is seeking an alternative.
Good morning, Seth.
The commercial team worked quickly to activate the first phase of launch following FDA approval and.
And we have been encouraged by the early signals of interest in Octavian.
Steve.
We have also made good progress in Germany, and other European countries during the quarter and Jeff will provide more of a launch details in a moment.
Turning to box Sogou, we continue to be impressed by the cadence of uptake worldwide.
As a result of continued strong demand we are raising full year guidance for the second time this year to between 404 hundred $40 million.
Representing a significant increase from our initial guidance in February .
<unk> $330 million and $380 million.
Jeff will provide additional detail on our books so the guidance in a moment.
Building on the significant demand for box to go for the treatment of Achondroplasia. We are pleased to announce today and plan to begin our pivotal program with box.
For the treatment of Hypochondriacs Asia.
With over seven years of efficacy and safety data from our clinical program and nearly two years of commercial experience in.
Okay.
We view of OXXO, but highly used.
Fast track Astral second new underserved patient population.
And can we provide more details in a moment, but suffice it to say we are rapidly executing on our expansion plans we talk so.
In summary, we are very pleased with Biomarin performance in the same quarter second quarter and year to date.
The global demand for box Togo continues to drive record revenue and margin expansion.
Supporting our confidence that we will suggest it.
It would be our first blockbuster product.
Hey, guys.
We're excited about the opportunity ahead and remain focused on launch execution, both in the United States and Europe , We believe our willing to raise awareness of breakeven among patients and physicians in U S. So a direct outreach to the hemophilia community will result in meaningful demand over the coming quarters.
Thank you for your continued support and now I will turn the call over to Jeff to discuss the <unk>.
Initial business updates Jeff.
Thank you J J and I'm very pleased with our commercial performance in the second quarter, resulting in $595 million in total revenues and representing 12% growth year over year equivalent to ban and 14% growth excluding two bands.
Contributions from our enzyme products in the quarter keep us on track to deliver full year 2023 guidance, but this franchise as well as provide significant contributions to biomarin. Its full year 2023 total revenues.
Turning to box Sogo today, we increased full year guidance again, as new patient penetration continues to exceed our aggressive expectations.
As noted in the press release today, we once again raised full year about Sogou revenues.
To between 404 hundred $40 million, representing 150% year over year growth at the midpoint of guidance.
Appreciating that the run rate for the remainder of the year may seem muted based on box sogou revenues of $201 million in the first half of the year. We note that we are managing temporarily tightened supply into 2024.
We are closely managing new growth, including limiting inventory stocking to ensure that we achieve our main goal, which is to ensure that patients maintain continuity of box.
Importantly, while we are focusing on inventory levels. In these patients starts our supply plan provides for hundreds of new patient starts in the second half of this year.
We do have ample drug substance on hand, which we manufacture at our novato facility and have sufficient capacity to meet all future demands for achondroplasia and other possible indications.
We've secured additional capacity at our fill finish CMO, which is the constrained element of the process. These accelerated steps will ensure we have ample supply to exceed full year 2024 consensus currently at $597 million on Factset and support growth beyond 2020.
Sure.
At the end of the second quarter more than 2000 children.
<unk> and 30.
<unk> 36 different markets, where being traded the stocks go.
Uptake to date represents 12% penetration of indicated patients in biomarin commercial footprint, highlighting the significant growth potential remaining.
Turning now to our Octavian, we've been very pleased with the U S launch progress since receiving FDA approval on June 29.
<unk> approval the team immediately began the outreach campaign educating stakeholders, including patients.
Hemophilia treatment centers or Htc's and payers on the value of broth caveat.
In the four weeks since approval, we've been pleased with the increasing inflow patient sub forms the number of executed or in process warranty agreements and the utility of our executed group purchasing agreement contracts that we expect will facilitate access and uptake of Octavian at hemophilia.
The treatment centers across the U S.
There are many commercial activities ongoing to facilitate access to rock Pavia.
We're currently in process of working with the largest most capable hemophilia treatment centers on site readiness on the payer side, our U S market access team has been actively engaging with payers to facilitate patient access and the issuance of coverage policies.
In advance of coverage policies being issued by Payors and once commercial rocks avian is available in the U S. We have the ability to get approval for individual patients through the medical exceptions process in summary, the U S. We are actively promoting more activity into the hemophilia community and the sales.
For US has been activated in all key regions, we expect labeled commercial activity and to be available to ship to pharmacies in August and look forward to updating you of our progress over the coming months as we stated on our Gen approval call. We expected could take from two to five months to complete.
Steps necessary before treatment with Ross caveats, depending Ah patients location.
Sure cadence of regularly scheduled visits with the HTC and completion of eligibility testing.
Moving briefly to our Octavian updates in Europe , we continue to make good progress in Germany, New AAV five antibody tests in Germany continue to come through resulting in a robust funnel of patients preparing for potential treatment with <unk>.
While final federal pricing negotiations are ongoing reimbursement for patients treated with rux avian is possible under named patient authorizations through individual insurers those sales would be subject to the final price once it has been established.
In Italy, and France, we are also making good progress our application seeking price and reimbursement approvals as well as other launch preparation activities are moving ahead in both countries, where we expect negotiations to conclude by Q4 of this year.
We continue to be encouraged by early interest in rock avian in other markets, including Argentina, and Saudi Arabia, where we have the potential to provide access to rock avian through named patient authorizations.
Together, we are pleased with the progress we are seeing in markets outside of the United States.
Briefly on full year 2023 were Octavian guidance, we maintain our current full year 2023 guidance of between $50 million to $150 million appreciating that we are at the start of launching a truly pioneering therapy, which has required significant effort to support novel reimbursement.
Arrangements as well as training for those providing where octavian treatment and follow up we believe there are a variety of potential outcomes over the next several months.
Our confidence in the guidance range is supported by ongoing progress in Europe .
Acquest from patients for CTX testing and treatment.
The inflow of patient consent forms and warranties in the U S and feedback from physicians globally as well as the onetime nature of both <unk> and treatment and reimbursement.
For perspective, the treatment of slightly more than 50 U S patients achieved the midpoint of current guidance. So stay tuned over the coming months as we track global launch progress.
In conclusion at the midpoint of 2023.
We are on track to achieve full year total revenue guidance.
One time treatment and reimbursement profile of Octavian lends itself to contributing meaningfully during the second half of the year.
<unk> continues to exceed expectations, resulting in two guidance increases so far this year.
Start of our new pivotal program of box, although for the treatment of Hypo contemplation.
<unk> the possibility of a new indication opportunities for a marketed product.
These opportunities are now layered on top of Biomarin established base business that delivers nearly $2 billion annually growing taken.
Taken together, we are well positioned to achieve financial growth and profitability goals outlined earlier this year. Thank.
Thank you for your attention and I will now turn the call over to Hank to provide an R&D update.
Thanks, Jeff and thank you all for joining us today, echoing JJ and jets enthusiasm for the June 29, food and drug administration approval of Octavian, we are extremely gratified that people in the United States living with severe hemophilia a.
As to this innovative therapy.
Our goal with each of Vibrance therapeutic interventions is improving health outcomes for people with genetic conditions and we believe Octavian clearly achieved that goal.
As we have stated previously we believe <unk> has the potential to treat a variety of genetic central conditions, many of which represent significant unmet need as J J mentioned, we have solidified our plans to begin the pivotal program with US I'll go through the treatment of Hypochondriac, Malaysia, we estimate the patient population in hypochondria pleasure across.
<unk> global territories to be approximately 15000 individuals and expect the full spectrum of disease to be elucidated over the course of the study.
As a reminder, hypocone interplay is a genetic skeletal dysplasia characterized by small stature and disproportionately short arms legs hands and feet.
As Dr. Andrew <unk>, who biomarin are supporting to run the phase III study of <unk> in a multitude of genetic central conditions has educated us for decades doctors had only one tool to improve outcomes in patients with skeletal diseases and it does not work well outside of growth hormone deficiency as is typical of Biomarin and we look forward to.
Ushering in a new era, and improving health outcomes for children with severe impermanent growth now beyond the Contra Glaser.
Following our interactions with the FDA and based on the emerging data set from Dr. <unk> study, we aligned on our study design Cieslak Sogo and this new indications.
Supported by our extensive clinical development program in achondroplasia and profile of box. So there is a natural regulator bone growth. We are pleased to be moving directly into a pivotal program in HEICO contemplation.
We plan to begin the six month observation of the study later that arm of the study later this year followed by a 52 week randomized double blind placebo controlled phase of the ADP 80 participants clinical trial.
Based on the enthusiasm we have seen without sugar for the treatment of achondroplasia. We're excited to get started in the first potential treatment option for children with hydro contemplation.
Briefly on the earlier stage pipeline, we have been working to put together an interesting and informative update across our pipeline programs for our upcoming R&D day on September 12.
This includes our publicly disclosed product candidates as well as other new updates the agenda includes being in $2 55 for hyper axial urea and chronic liver disease, <unk> 331 gene therapy for hereditary angioedema, VM and $33 49 for Alpha one antitrypsin deficiency.
And $3 51 for Duchenne muscular dystrophy, and BMS $2 93 for months and binding C. III protein deficiency closing hypertrophic cardiomyopathy.
Some fireside chats with key opinion leaders or.
Key areas of our therapeutic focus for Biomarin will be an important and interesting part of the R&D day, we look forward to sharing an update on what's been happening earlier stage pipeline and we hope that youll tune in to learn more about next potential commercial product candidates.
For your support and I'll now turn the call over to Brian to update financial results and the quarter over to you Brian .
Thank you Henk.
Please refer to today's press release summarizing our financial results for full details on the second quarter of 2000 2030, since J J and Jeff spoke to our revenue performance for the quarter and future revenue outlook I'll make just a few more revenue comment then we'll focus on the remainder of our P&L and other key financial updates this quarter.
As usual all results will be available in our upcoming Form 10-Q, which we are on track to file over the next couple of days.
As we have previously noted we do last year as a transformative year biomarin playing.
Laying the foundation of our growth strategy, driven buyback soco approval of Octavian in the EU double digit revenue growth and our important milestone is sustainable full year GAAP profitability in 2022.
As we closed the first half of 2023, we're pleased to build on that foundation with the approval of <unk> TV in the U S and strong first half financial performance that aligns to our long term objectives of continued revenue growth and P&L leverage.
<unk> $595 million of total revenue in the second quarter of 2023 is an increase of 12% compared to the second quarter of 2022.
Guarding our revenue outlook.
For the rest of 2023, we continue to anticipate strong double digit growth of 16% at the midpoint of our reaffirmed total revenue guidance as.
As Jeff mentioned earlier, we are pleased with our first half performance of box Sogo and given the first half revenue has come in over $200 million.
We felt it appropriate to note that the low end of our prior guidance is no longer in line with our expectations. So with that in mind. We have provided an updated view for the year raising guidance slightly to 400 $440 million.
Moving past revenue Q2, 2023 gross margin was 78, 5%, which is an improvement of one 6% as compared to the second quarter of 2022, we are pleased with our gross margin performance over the first half of 2023 as it reflects our fundamental objective to improve this metric through cost efficiencies and <unk>.
<unk> product mix.
R&D expense in Q2, 2023 of $177 million and SG&A expense of $215 million grew 12% and 9% versus Q2 2022, respectively and in line with our goals to grow expense base slower than revenue.
While we expect operating expense growth on a full year basis to aligned to that goal. We do anticipate a second half acceleration of expenses as we continue to progress our R&D pipeline, including the new Phase III study announced today for HEICO contemplated that as investments in the Octavian inbox over launches.
On the bottom line, we continue to deliver on our commitment to profitability with $56 million of GAAP net income in Q2, 2023 and $105 million of non-GAAP income.
This positions us to achieve our stated objective of sustained and growing full year GAAP profitability going forward. Today. We also updated our 2023, GAAP and non-GAAP income guidance to $165 million to $250 $15 million and 370 million to $420 million respectively.
Similar to our box Sogou revenue guidance adjustment our updated outlook for the bottom line reflects our strong performance in the first half of the year and continued revenue growth expectations in the back half of 2023 at the midpoint, we expect more than 30% of net income growth, which represents meaningful leverage versus revenue and is in line with our financial strength.
Information goal.
In closing we are on track to meet our objectives for 2023 and beyond the recent approval of Octavian in the U S. Coupled with a strong foundation in place, including the successful of October launch will further enable our ability to drive revenue growth expanding profitability and generate meaningful cash flows over the course of the next several years.
Thank you for your attention and we'll now open up the call to your questions.
Operator.
Thank you, ladies and gentlemen, we will now conduct the question and answer session. If you have a question. Please press star followed by the number one on your Touchtone phone.
Here at Raytheon acknowledging your request.
If you would like to concentrate request please press star two.
The center you lift the headset, if youre using a speakerphone before pressing any case one moment. Please for your first question.
Your first question comes from the line of <unk> from Jefferies. Your line is now open.
Hey, thanks, so much so just any update on the 300 patients you've previously had interactions with regarding <unk> in the U S.
It sounds like you wont get commercial product into the distribution centers until late August , but I think you've previously mentioned youre going to see some leading indicators in terms of patient to act.
Been treated with the companion diagnostic.
Or have actually.
Gone to a treatment center of excellence, So I'd love any update on that number and then I guess number two on.
Hypo contemplated data can you comment a bit on why the FDA wouldn't require two years of phase III data for box they'll go like they did in hyper contemplation and also maybe what timelines would be for Noonan syndrome right. I think you have about five patients worth of data right. Now should we expect that you would need about 25 patients worth of data at the 15 microgram dose.
<unk> to be supported for phase II approval there. Thank you.
Yes, I want to start with the first question and then yes, hi attached I'll start with your <unk>.
First question.
It's absolutely the case that we.
We started with the U S launch with an estimated 300 qualified patients leads.
So these are individuals that had been in touch with <unk>.
Biomarin through either one of our digital properties or or an in person engagement and have opted in to further information as noted on our approval call a month ago.
That list of 300 is top priority for getting back to.
In different ways digitally and through our sales force and I can assure you that the team has been processing those leads in the last month.
And actively and as you noted.
We expect and in fact are seeing small pieces.
Of.
Signals of demand falling into place from.
From responses to those lead engagements too.
Patient consent forms coming in.
So things are looking really encouraging on that front, maybe with that I'll turn it over to Hank I'm Hypoconid quest.
Questions.
Yeah, Thanks, Geoff and thanks, <unk> for the inquiry in terms of the duration of the hypo contemplation.
In contrast to achondroplasia in which the FDA has been very interested in two years of data we've lined up with the FDA that a one year study would be support.
<unk> to support registration and I think that's driven by the comfort level there gating on the durability of Buck So go in disproportionate skeletal dysplasia.
And as regards timelines for news really for further development beyond <unk>.
Contemplation and hyper contemplation.
It does make sense that given that <unk> is an analog of the natural bone regulator the growth regulator.
It is anticipated that box so there could be effective across a variety of indications nunes and others. This is being borne out in Dr. Dauber is IFC evaluating a range of mutations as you noted he has treated at least three patients with <unk> syndrome for at least the year and their growth velocity is maintained above their baseline.
And importantly.
Good safety data are being collected in patients with numerous new units were in discussions with health authorities now to pin down anticipated eligibility comparator endpoints and study durations and as we finalize those study designs will communicate our plans more specifically as we have just done for hypochondriac laser but your question.
It really points out the exciting future potential of <unk> and other skeletal abnormalities.
Just on it's great safety record and its activity is a natural regulator of bone growth.
Okay.
Next question please.
Your next question comes from the line of <unk> Richter from Goldman Sachs. Your line is now open.
Good afternoon can you help us to understand the confidence in a octavian guidance for the second half in the context of the <unk>.
And EU dynamics. Thank you.
Okay.
Yes.
Maybe I'll start.
Jessica.
As Jeff said in the prepared remarks.
Based on the net price activity in the U S which is.
The close to $2 million.
The midpoint of our guidance.
We would be only 50 U S patients that.
Just to something special about <unk> because of the gene therapy as compared to a forecast of chronic therapy.
Is that.
Studying a patient early in the year or late in the year. It makes a difference in terms of revenue recognition.
Because you know what like <unk> for instance, as Tony said you start a patient on December one.
The revenues this year will be much smaller than we saw them. All every two years.
But for <unk> and.
If we treat efficiently on August 30th are on December 30 is essentially.
Although revenue so just.
Keep that in mind with this introduction, Jeff yes, Thanks, JJ I think thats exactly right and thanks for the question Salvi.
Other couple of things that I would add are.
Now seeing more.
Notable pathways that.
We expect to open up or brought TVN revenue I mentioned progress in all of Germany, Italy, and France, which are a priority.
European markets.
For price and reimbursement.
Remember.
I've been quoted on numerous occasions, saying typically takes 12 to 15 months to get through that process.
Now just a couple of weeks away from <unk>.
One year since approval. So so we should be getting to the end of the process.
And some more all of those markets between now and the end of the year opening up a pathway for training patients also the named patient markets I've quoted Saudi Arabia, and Argentina that we've been working diligently but quietly on in the background and finally, the United States, where we got.
Our approval at the midyear point.
Patients treated pretty quickly after approval. So all of those things add up to channels for being able to treat patients and I think adds to the confidence of being in that revenue guidance range.
Thank you.
Yes.
Your next question comes from the last Geoff Meacham from Bank of America. Your line is now open.
Hey, guys. Thanks for the question.
Just had a few so for Octavian in Europe I know, it's been a few months since you tweak.
Access strategy in Germany is there any metrics you can give us either activated centers or diagnostic volume. So just wanted to get a sense for the progress since since you had a shift in the reimbursement strategy.
And then on box Sogo, you talked about Dr. <unk> work expanding the indication base.
I guess the question is as you've rolled out globally in a condra plays a commercially have you identified hypochondriac pleasure patients I wasn't sure if the new phase III with sort of mechanism driven or kind of commercially driven thank you.
Hi, Jeff maybe I'll start with the question.
About Germany.
<unk> paid in.
JJ quoted on our approval call, we've actually got a really robust funnel of patients now.
That are in process for eligibility testing.
Going through the CTX testing process.
Boeing eligible patients to <unk>.
<unk> go through liver SaaS thinking of minutes, a prescription and reimbursement approvals so with.
JJ quoted a month ago, approximately 60 patients I view that as a really healthy.
Patient funnel, starting recall last fall, we said we estimated about 40 early adopter patients in Germany. So we're at one five X that number and that's before we get through a formal federal pricing reimbursement process. Those patients are making progress inside of the funnel.
And I understand it's frustrating not to see them popping out the other side is traded revenue patients, but I'm confident that they are making progress and that we will get there, particularly if we can come to an agreement with the federal authorities on pricing reimbursement, maybe I'll turn that over to Hank.
So good question.
Thanks, Jeff.
With a lot of the genetic conditions. When there is no treatment there tends to be no diagnosis and now with achondroplasia, gaining so much traction.
<unk> with hypochondria closure are identifying themselves are families with patients with hyperplasia identifying themselves and getting themselves forward. It.
To treatment centers for identification and in the case of Dr. Dobber study referral into.
Into his study and I think a lot of that is driven by the phenotypic similarity of achondroplasia and hypo kind of dysplasia.
To your point about mechanistic similarity.
And our expectation is that this will begin to extend into other skeletal disorders as more clinicians and more families recognize CMP is a natural regulator of bone growth and I think this is a process that could lead us to many additional indications and as I.
On the call stay tuned for further updates on the regulatory strategy to enable rock Teva into the box so I've got to be available.
For children suffering from other skeletal abnormalities beyond achondroplasia and hypothetical pleasure, so very exciting time.
Okay.
Great. Thank you.
Your next question comes from the line of Chris Raymond from Piper Sandler. Your line is now open.
Hey, Thanks, just a couple of questions.
First on.
The box Sogo supply issue, Jeff I Wonder if you could maybe expand a little bit I think I heard you say, it's why the full year 'twenty three guidance wasn't raised more.
And it's a supply issue at our CMO, but can you maybe expand on this like.
What exactly is the fill finish bottleneck.
I think you said you have supply to handle 2024 consensus, but just maybe could you put some brackets around the timing and the plan of action.
Could not be supply constrained like what's the what's the plan to sort of.
The deal with the situation.
It's no longer an issue and then.
Maybe for Hank on the pipeline.
Just looking at the verbiage on $3 31.
You've got two patients now where the expression trajectory has not yet into the therapeutic range, maybe can you sort of talk about.
<unk>.
What would drive a go no go decision for this program or just any more color on there on that thanks.
Okay great.
Great.
Greg Guyer, our head of.
Thank you the operations here.
So your remarks oversupply question, yes, Chris Thanks for the question and just maybe to clarify a little bit about what Jeff was talking about is that currently we are able to supply.
Box will go.
With many hundreds of patients starts in the second half of this year and have a supply plan.
Seats.
Even the 2024 consensus estimates that he mentioned earlier and Factset.
That said that supply remains tight from an inventory perspective. So we thought it was just appropriate just escalated to this group my team is doing everything we can to continue to escalate our accelerate supply.
From the CMO, which we use they're a great partner they are reliable dependable high compliance. So there's no issue. It's just trying to accelerate the supply availability faster than what we had planned and thats really attribute to our commercial team for really getting the type of penetration rates much faster.
Than we had expected and so we're working very closely with them to make sure that we can meet that future demand and also deliver on the full potential of the box over the long term.
So again, there is no manufacturing issue.
Okay.
Manufacturing details the drug substance, we manufacture ourselves here in California.
The <unk> is done.
I would say supplier.
Outside suppliers, there's a lot of lead time, when you want to increase the volume and that's why we built the ear because OXXO, who is doing way way better than anybody to yourself and TBD in terms of penetration thats whats creating.
Is there any limiting factor, but again.
And we have we have.
Greg shall be almost unlimited drug substance capacity I mean, nothing is limited, but I would say.
We can we can really drive.
Drug substance capacity to go way above a billion dollars of probably $2 billion up.
And if we get more down the road if you did hypo client successful unless we can even further.
So it's just a feel.
I'll finish bottleneck, which is temporary.
No that's a good problem to have.
But.
You are correct in your remark that actually if we didn't have that bottleneck, we would have increased.
Our guidance for 2000 <unk> high above what we are.
We didn't get it today, but at the same time the good news is that next year.
We have we believe that our plan, including what our supplier can do on the COPD shrunk.
All of us to easily beat the current consensus for <unk> and.
Florida.
Sure.
But Jeff you want to study diseases.
I'll state of things.
It was then.
Yes.
Yes, $3 31, yes, Chris we do have very clear criteria for stopping.
And.
Of note would be taken that at this stage one option could be before reaching those type criteria to raise the dose AAV five based therapies of a pretty good safety profile and so we could contemplate raising the dose.
The thing I'll mention is that new.
I'm not going to be very specific about this just yet but we.
With as much rock TV data as we have we have some new insights about optimizing gene expression in patients.
With gene therapy, and we're working very closely with the data monitoring committee and the investigators and study to incorporate those insights and if neither of those two are successful of course, we would meet our criteria, but it's still a little bit early for that program and as we resumed dosing and obtain more data will prove.
I'd further updates.
Thank you.
Your next question comes from the line of Robyn <unk> from <unk> Securities. Your line is now open.
Hi, Thanks, I'll be quick so three questions number one.
Compliance is very high end box they'll go can you elaborate and that gets to the competitive landscape and how it's a minute parents are.
Number two there's questions around high Bill Achondroplasia like do you have to do as many.
What is the long term study different insight into that and then I have one follow up thank you.
Maybe I'll start with a question on.
Compliance with box Sogo Robin as you note it is very high.
We're not able to measure that explicitly in all markets. So the one market that we can really dial in on that as the United States.
And our experience so far in the United States is very few drop offs and.
Compliance with the daily dosing.
As we measure it appears to be very high.
So so far so good.
Client side.
Yes.
And maybe I'll turn it over.
Okay.
Thanks, Jeff.
In regard to the Hypochondria pleasure question. One study, we've interacted with the food and drug administration and have a pretty clear picture of their requirements, which would be satisfied.
With one study and the reason for not requiring longer term follow up as regards randomized placebo controlled period is theyre growing satisfaction with the durability in fact, maybe even a little further depending on where achondroplasia is at the time of the regulatory action on hypochondria pleasure.
Even further follow up may no longer be required for hypo contemplation. So we had a great dialogue with the FDA.
And so far as there is an.
Excellent safety track record.
For <unk> in patients with hyper coach replace you with the accumulating excellent efficacy data in these sorts of supplemental new drug applications are not subject to necessarily the same demand since the initial.
So we're pretty excited and you mentioned you had a follow up question.
Yes, one follow up sorry, so there is so much fixation on when youll dose patients in Europe .
And I was just curious like if you thought about like letting us know earlier or during the analyst day.
So you said on that so maybe give clarity on when you might get the timing of that and.
And how much color you would get.
The excitement, but we're yet to see those.
Thanks.
It's actually one hi, Robyn.
Your.
Finish line competitor.
Recent call.
A German physician that German physician to announce on that call.
So that is scheduled to treat its first patient August 30 to 30 stores.
So that looked like this one is probably a good.
Yeah.
And then and then.
There is a possibility that we would treat also our first risk patients by the end of <unk>.
And then after that September should be where we.
You guys are already getting some real traction on.
Great. Thank you.
Your next question comes from the line of Phil Nadeau from Cowen. Your line is now open.
Good afternoon, Thanks for taking my questions as well.
A couple more on rock TV GJ. During your prepared remarks, you mentioned the consent forms received in the U S.
Adding confidence to the guidance.
Can you go into a bit more detail on the comment is that simply the 300 patients that.
As of the time of approval or have there been incremental consent forms received over the last month.
I'll, let Jeff answer that question do we I don't I don't want you to believe though that we already received 300 patient.
Patient consent form we havent, but they are they.
They are starting to roll in.
But maybe just provide some more color here, yes. Thanks for the question Phil.
These are really independent sets of patients. The 300 patients that we've quoted are qualified leads means we have a lead.
We've quantified that lead to be a hemophilia patient.
A sales rep at a competitor a company for example, and we're following those patients have opted in for further information patient consent forms on the other hand.
Our our our usual vehicle that we use for all of our programs, including for <unk> in the United States to conduct patient.
Intake into our case management system. So any patient that has come in with the patient consent form has been in touch with our case management system.
And has opted in for further services, depending that patient consent form might be coming in from a hemophilia treatment center, along with prescription or might be coming in independently.
As patient directed.
And in that case, we would we would connect them with the sales rep for a follow up so.
It's a mix.
But it's really really good that we have patient consent forms coming into our case management system. That's how it always begins for us with all of our programs, including rock gaming.
Would you care to disclose how many patient consent forms you have.
Not at this time.
Thanks for the offer.
Got it and then in terms of the centers themselves what do they need to do in order to make.
TV available for patient.
General.
Does there is there a formulary committee that has to accept productivity because the therapy.
Any other committees that you have to talk to get permission from before center, bringing activity into its efficiency.
It's a great and important question the notion of site readiness and unfortunately, there is no kind of simple one size fits all.
Christian some htc's.
Our connected to.
Larger health care system in those cases, and HTC might tap into.
The administrative procedures that you mentioned by formulary for example, and maybe also pharmacy services from the larger <unk>.
Patients.
And then in other cases, you have hemophilia treatment centers that are more or less stand alone and do all of that on their own. So site readiness looks different depending on what is the size capability.
HCC and are they connected or not with a larger healthcare institution.
Just a reminder, that the infusion of rock avian is relatively <unk>.
Trivial staff, but the more important things or issues like the administration formulary.
For example, navigating.
Payor interactions.
Product handling.
Very frozen product that has a high value for example.
Patient eligibility testing and counseling to determine if there is a patient with interest and if so.
In them forward in the process and then the follow up.
Following.
Following administration.
Since we talked about on the approval call so what's going on there none.
None of those things involve a big hurdle, it's mostly a bunch of smaller things that need to be done.
A whole list of them that is rather be spot for each hemophilia treatment center and our team is on it.
Great and then last from me about follow up that you just mentioned how corners or the liver.
Enzyme and sector monitoring requirements is that something that you can make very easy for the patient.
Blood tests.
Liver function tests are on a panel, but probably most of us do once or twice a year. It's a simple blood test at the same time that that simple blood test is being taken.
Used for factor expression levels and so forth.
Sure.
Helping the patients.
That's right so for a lot of patients, it's as simple as going to a very nearby.
Lab.
Testing facility.
In the case of patients.
Don't have convenient access to that we have programs to assist.
Perfect. Thanks for taking my questions.
Your next question comes from the line of Joseph Schwartz from Leerink Partners. Your line is now open.
Great. Thanks, so much our checks in Germany indicate that there is still some uncertainty about how many and which sites will be able to administer <unk> Octavian. There. So I was wondering if you could talk about how this rulemaking process works and how you expect it to play out is this part of the reimbursement negotiations which are.
To wrap up in September or is this something separate and then in the U S. Our checks underscore the importance of contracting with the sites that the initial ordering and longer term follow up on patient performance can be done reliably. So I was wondering sort of a follow on to Phil's question. If you can give us any insight into.
The extent of contracting that you've been doing with HTC is in the U S. Thank you.
Let me start with Germany, So you've heard me talk over the last.
Year or even longer about.
The hub and spoke model for treatment.
But the major markets.
In Europe have been rallying around and that's the hemophilia treatment community in Europe , not the Biomarin is a driver behind that so the notion is that in Germany. For example, the largest and the most capable hemophilia treatment centers would be.
Hub centers for both screening and testing patients and that there would be smaller less capable.
Hemophilia treatment centers that would be spoke centers and those spokes centers would probably do all of the screening and rep and recommending a treatment.
Treatment would be done at the hub Center, and then likely back to the spoke center for follow up after after treatment.
There may in fact be a little bit of uncertainty.
On the entire list of who the hub and spoke.
But but from a practical perspective, we're focused on engaging with.
With all of the the significant hemophilia treatment centers in Germany, and it doesn't really matter very much from a promotional.
It'll perspective.
Which centers do infusions.
Which centers refer infusions.
On Germany, you mentioned contracting and I'm not sure exactly.
What kind of contracting.
Talking about in the United States, There would certainly need to be an agreement reached between a treatment center.
Per on the level of reimbursement for rock KVM, which might involve a patient's specific contract between a hemophilia treatment center on a payer we think that that's likely and not up.
A big barrier at all to proceed with the treatment there might also be contracting between spoke.
Spoke sites to use the analogy spoke sites in hub sites in the United States. If there is a if there is a desire on the part of a hemophilia treatment center to refer one of their patients to a more capable center or one that's further along and site readiness for treatment abroad caveats.
All of those things are possible I haven't personally heard that there are any barriers to preceding due to contracting if you've got something more specific.
So.
That's good.
Sorry.
Sure.
It hasn't escaped some.
Elizabeth.
Yeah.
Basically all patients in the U S will be treated with <unk> TV.
Emil figures treatment centers are you won't get treatment centers.
That.
Receiving.
<unk> be discounts.
Basically statutory for the centers.
Let's take the wrong it will be initially more than 20% and then it might go down to 17.
5% or whatever but it's ronnie to 20%.
That's 20% of the <unk>.
Awesome.
So our WAC is $3 million of patients so 20%.
Is $600000.
That would go into pockets of the Ace.
<unk>.
Per patient.
So you might be helpful.
You might have this information.
This information is interesting.
Very much so thanks again.
Our next question comes from the line of Paul Matteis from Stifel. Your line is now open.
Hey, thanks, so much for taking my questions.
<unk> Jeff.
The supply issue or I guess capacity issue temporarily impact how you market the drug and how might that impact the way you.
Sort of interact with health care providers and patients if and when the label is expanded before the capacity constraint.
It is fully resolved.
And then on block cave and just in terms of the timing the two to five month timing that you spoke to.
Around approval I think it took around seven months to dose. The first <unk> patient can you just outlined a couple of key reasons in your mind for why you think you can get this done so much faster than CSL that thanks, so much.
Yes. Good question I'll start on the on the October and then Jeff can chip.
Chip in.
Again when.
In our prepared remarks, we.
We said that.
For 2024.
We will have.
Ample supply to beat the current consensus.
She is close to $600 million.
<unk>.
Price that includes potential increase of.
I mean literally especially in terms of new patients new patients are under age of five.
If that does occur sometimes.
Thats already into it or so.
It doesn't change.
Anything in there.
Remarks that we made in this respect I mean, Greg.
Adherent no and by the time Hypoconid comes this supply issue will not be one we'll have plenty of supply because we're not going to get hypo com the hydrocarbon indication.
I do.
I just meant younger patients, but okay. Thanks, yeah younger patients, but that's already again.
The current consensus is significantly above.
The top of our guidance for this year I'll call on them for ABB and we are very comfortable with.
We are we have enough supply to significantly beat the current 2024 contestants whatever their patients are.
Jeff you want to add anything you may be just a couple of metrics to put it into perspective at the end of Q1, we are at.
Bye.
Our 500 patients on treatment around the world at the end of Q2 2000 patients on treatment around the world, that's a big increase quarter to quarter.
We've guided that our our supply plan just through the end of this year allows for hundreds of additional patients to gain therapy. So.
Internally with how we're looking at this as the.
The overall demand is not a big surprise, it's just coming soon.
Sooner and the uptake.
Is coming faster and markets that we are gaining access to so gaining access center.
Last our uptake in those markets.
We were planning on.
We still need and want that patient base to grow and so it doesn't fundamentally alter our.
Our launch of this.
Rod This is a really good growth trajectory for us, we're just bumping into some ceilings in certain places and where that's happening or prioritizing keeping kids that have started or will start make sure that we've got continuity of supply because what we really don't want to have happen is for kids.
We have started to supply that go off therapy.
That much on cocoa Andre Octavian.
Sure.
For Octavian, we're highly motivated to treat patients in the United States as rapidly as possible.
On the one hand.
We are a new entrant to hemophilia, we've been preparing for this day for a number of years, but it's not like we have an existing therapy.
We need to cannibalize, what the treatment of our our gene therapy.
And we've taken steps for example.
Having a group purchasing organization contract signed.
Four we even got approval, we took those steps to facilitate rapid access.
Moving as quickly as possible warranty we've got the warranty.
So those are differentiating factors I can't speak for.
I can't speak for the other manufacturer, but we're moving as rapidly as possible, while I think the steps that we've taken so far would.
It would be consistent with that desire to move fast and.
Several payers have already signed the warranty contract I presume, they're intending to cover OXXO, otherwise there'll be no need for them to do that.
Thank you.
Yes.
Yeah.
Your next question comes from the line of Gena Wang from Barclays. Your line is now open.
Thank you for taking my questions, maybe just follow.
Yeah.
Paul.
A question and answer Jay can you comment maybe four.
<unk> 2023 revenue.
Do you expect the most revenue from Germany, All U S and regarding U S peers, what is the feedback on one warranty program. Since you just mentioned and how many centers in line under the coverage.
Right now please.
Sure.
Second question is regarding the Voc circle.
Hi, hypochondriac pleasure so regarding the six months observation study would you be looking for to help define the pivotal study and our full 52 week pivotal study what is the trial assumption and how much you actually learn from that Dr. Andrew adult learners.
Trial.
Maybe I'll start and I'll, let J J so.
In.
In terms of revenue expectations for <unk>, and where as I noted.
Sal beans question.
Part of the confidence in our guidance is not only the U S approval that we received when we did the pre.
We named for the United States.
But the fact that now almost 12 months from the the conditional approval in Europe .
We're approaching that period of time, where you would expect we would be able to finish getting through formal price and reimbursement.
<unk> at least in the initial major markets in Europe that together with.
What I've described on a couple of occasions the questions is what.
What we think is a rapid start in the United States.
And even the possibility of named patient sales in other markets those channels give different different opportunities for patients to get treated and contribute.
To revenue in terms of percent coverage in lives that actually we don't have coverage policies issued in the United States, yet at least that I'm aware of.
Those policies can take anywhere from 1% to 12 months to issue I've seen some draft language around.
Coverage policies that have not yet been issued that would indicate that those coverage policies will be consistent with either a label or clinical trial inclusion criteria, which are both of which would be fine.
We haven't seen those coverage policy start to be issued yet so I can't comment on what percent of covered lives in the United States and maybe I will turn it over to Hank for the questions on box hunger on hyper com.
Yes Janet.
Six months prospective run and so it's important to document baseline annualized growth rate prior to randomization into the study and as we've talked about before one of the things that we observed.
<unk>.
The growth disorder area is that the knowledge of that baseline growth rate is really important to be able to interpret subsequent changes in growth velocity.
It is important for randomization purposes.
As I mentioned is.
Of the 80 participants, which is a little bit smaller than the study.
So go in Achondroplasia, we're where we are expecting a relatively similar magnitude of effect of.
Of course that can be tuned depending on what that baseline <unk> run in as for the baseline population, but just to remind you in the 110 patients study of boxes on achondroplasia. The P value was 10 to minus 13. So we don't anticipate needing to power the study quite as aggressively as we did in eight countries.
A pleasure and we're reassured about all of this based on the evolving data that we've seen from Dr. Dobber as has the FDA been reassured that we can go directly into a phase III clinical trial.
So thanks for the questions.
Thank you.
That's inclusive during a portion of our conference call, we will turn it back to Biomarin CEO J J b enemy.
Closing remarks.
Thank you operator, and thank you all for joining us on the call today.
Outstanding execution across our business led to record revenues in the first half of 2023.
We wish more children use box over around the world.
And families are treatments with the only approved medicine.
<unk>.
Cause I think Asia.
And we are well on our way to begin treating patients in the U S and Europe is what came.
<unk> over the coming months.
So for the remainder of 2023, we plan to build on the foundation of growth and profitability achieved in the first half of the year.
We have a huge support and have a good day.
Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.