On April 29, 2020 BioMarin Pharmaceutical Inc. (NASDAQ: BMRN) (BioMarin or the Company) reported financial results for the first quarter ended March 31, 2020 (Press release, BioMarin, APR 29, 2020, View Source [SID1234556752]).
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Total Revenues increased 25% to $502.1 million. The increase in Total Revenues was primarily attributed to increased Net Product Revenues which were $489.0 million in the first quarter of 2020, compared to $394.5 million for the first quarter of 2019. The increase in Net Product Revenues was attributed to the following:
•Naglazyme Net Product Revenues increased by $27.4 million, or 32%, primarily due to orders from Russia and Brazil;
•Palynziq Net Product Revenues increased by $22.3 million or 181%, driven by combination of revenue from U.S. patients achieving maintenance dosing and new patients initiating therapy;
•Kuvan Net Product Revenues increased by $15.1 million, or 14%, primarily driven by patient growth in North America;
•Brineura Net Product Revenues increased by $11.8 million, or 97%, due in large part to global patient growth;
•Vimizim Net Product Revenues increased by $11.4 million, or 9%, driven primarily due to orders from Brazil; and
•Aldurazyme Net Product Revenues increased $10.4 million, or 23%, due to higher sales volume to Sanofi Genzyme.
The increase in GAAP Net Income for the first quarter of 2020, compared to GAAP Net Loss for the same period in 2019 was primarily due to the following:
•increased gross profits of $79.1 million primarily driven by increased product sales;
•a net gain on the sale of nonfinancial assets of $59.5 million due to the divestiture and sale of the Firdapse business; and
•decreased research and development (R&D) expenses; partially offset by
•higher selling, general and administrative (SG&A) expense related to pre-commercialization activities for valoctocogene roxaparvovec, commercialization activities in support of the EU commercial launch and continued U.S. expansion of Palynziq, and foreign currency exchange losses.
Non-GAAP Income for the first quarter of 2020 increased to $116.5 million, compared to Non-GAAP Income of $24.8 million for the same period in 2019. The increase in Non-GAAP Income for the quarter, compared to the same period in 2019, was attributed to higher gross profit and decreased R&D expense, partially offset by higher SG&A expense.
As of March 31, 2020, BioMarin had cash, cash equivalents and investments totaling approximately $1.1 billion, as compared to $1.2 billion on December 31, 2019.
Commenting on first quarter 2020 results, Jean-Jacques Bienaimé, Chairman and Chief Executive Officer of BioMarin, said, "With the arrival of COVID-19 to the many regions where we do business, BioMarin employees performed in unprecedented ways to ensure the continued supply of our critically-important medicines to the people we serve. I am proud of the commitment and dedication demonstrated by our colleagues in these challenging times. Our strong financial results in the first quarter underscore both the essential-nature of our products to patients and the extraordinary efforts made to maintain supply around the world. In the face of the many challenges of COVID-19, our
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regulatory team further progressed our next two potential commercial products. The Biologics License Application (BLA) for valoctocogene roxaparvovec for severe hemophilia A was accepted for Priority Review from the FDA with an action date of August 21, 2020. This milestone represents a tremendous achievement for BioMarin, but the potential approval of the first gene therapy in any type of hemophilia is an even greater triumph for the hemophilia community. They have been waiting decades for this groundbreaking advancement and we are honored to be on this journey together. With an approval decision for valoctocogene roxaparvovec expected later this year, our commercial team prepares eagerly to launch what we believe is the most innovative product yet for people with bleeding disorders."
Mr. Bienaimé continued, "Based on positive interactions with U.S. and European regulatory authorities in the quarter, we plan to submit marketing applications in both regions for vosoritide to treat children with achondroplasia in the third quarter of this year. Our multi-pronged dossier of data encompasses long-term clinical results in 5 to 18 year-olds, natural history data, the ongoing study of newborns through 5 years, and highly statistically significant placebo-controlled Phase 3 results. The positive and significant results from our vosoritide clinical programs have led us to believe that this potential drug could be the first pharmacological treatment for the underlying cause of achondroplasia. Interest in our clinical studies with vosoritide has been extremely robust, demonstrating that families are keen to seek early treatment for their children."
Mr. Bienaimé concluded, "2020 is expected to be a transformational year for BioMarin, despite impact from COVID-19 in the near-term. The agility demonstrated by BioMarin employees in the face of this global pandemic has enabled the continued supply of our essential medicines to the patients who need them. And while we expect minor financial impact in the near-term, our business is well-positioned to weather such challenges. Our first quarter revenue growth and improvement in profitability support our belief that 2020 continues to look poised to be one of our most significant value-creating years to date."
2020 Full-Year Financial Guidance
Due to the uncertainty surrounding the COVID-19 pandemic and the potential impact on its business, BioMarin is reducing its guidance for Total Revenues and Net Product Revenues for Vimizim, Naglazyme and Palynziq for 2020.
Item Provided February 26, 2020 Updated April 29, 2020
Total Revenues (1)
$1,950 to $2,050 $1,850 to $1,950 Vimizim Net Product Revenues $560 to $610 $530 to $570 Kuvan Net Product Revenues $430 to $480 Unchanged Naglazyme Net Product Revenues $380 to $420 $360 to $400 Palynziq Net Product Revenues $180 to $210 $160 to $190 Brineura Net Product Revenues $85 to $115 Unchanged Cost of Sales (% of Total Revenues) 20 % to 21 % Unchanged Research and Development Expense $675 to $725 Unchanged Selling, General and Administrative Expense $780 to $830 Unchanged
GAAP Net Income (2)
$20 to $80 Unchanged
Non-GAAP Income (3)
$260 to $310 Unchanged
(1) Updated Revenue guidance reflects BioMarin’s projected impact of the COVID-19 pandemic on its global revenue sources, mostly in the form of demand interruptions such as missed patient infusions and delayed treatment starts for new patients. The updated revenue guidance assumes stabilization of such interruptions in the second half of 2020.
(2) 2020 GAAP Net Income guidance does not reflect the potential impact on non-cash GAAP income tax associated with the tax effects of potential intra-entity intangible asset transfers between BioMarin entities as a result of changing international tax laws. Any such changes, if implemented, are not expected to have an impact on operations or cash flows in 2020 but may have an impact on GAAP Net Income in the form of an income tax benefit of potentially greater than $500 million.
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(3) All Financial Guidance items are calculated based on U.S. GAAP with the exception of Non-GAAP Income/Loss. Refer to Non-GAAP Information beginning on page 10 of this press release for a complete discussion of the Company’s Non-GAAP financial information and reconciliations to the corresponding GAAP reported information.
Key Program Highlights
•Valoctocogene roxaparvovec gene therapy for severe hemophilia A: The FDA review of the BLA, under Priority Review, for valoctocogene roxaparvovec is on-track with a PDUFA action date of August 21, 2020. On December 23, 2019, the Company announced that the European Medicines Agency (EMA) validated the Company’s Marketing Authorization Application (MAA) for valoctocogene roxaparvovec which has been in review under accelerated assessment since January. Although the MAA remains under accelerated assessment at this time, the Company expects the review procedure to be extended by at least 3 months due to COVID-19 delays. Further, the Company believes there is a high possibility that the MAA will revert to the standard review procedure, as is the case with most filings that initially receive accelerated assessment. Because of the combination of these events, the Company expects an opinion from the CHMP in late 2020/early 2021.
The Company recently received EMA licensure of its gene therapy manufacturing facility for the production of valoctocogene roxaparvovec, an important step in obtaining regulatory approval of the product in the EU. The Health Products Regulatory Authority (HPRA) of Ireland conducted, on behalf of EMA, a pre-approval inspection in the first quarter and issued a cGMP certification in the second quarter. The inspection of the facility by FDA is expected to be complete during the second quarter, which would allow for potential licensure of the facility in the U.S. consistent with the August 21st PDUFA date.
The marketing applications are based on the Phase 3 interim analysis and the updated three-year Phase 1/2 data from patients treated with valoctocogene roxaparvovec. The Company believes that both submissions represent the first time a gene therapy product for any type of hemophilia indication is under review for marketing authorization by health authorities.
BioMarin has dosed 134 study participants in the full GENEr8-1 Phase 3 study with 52-week results expected in the first quarter of 2021. Although the trial is open label, BioMarin has implemented a data access plan designed to substantially mirror a blinded trial. This plan restricts the release of any ongoing data to a small group of medical personnel monitoring and managing the trial, and then, only to the extent necessary to perform their monitoring responsibilities.
BioMarin intends to provide a four-year update with the 6e13 vg/kg dose subjects and a three-year update with the 4e13 vg/kg dose subjects from the ongoing Phase 2 study in mid-2020.
•Vosoritide for children with achondroplasia: On April 6, 2020, the Company announced that based on recent meetings with health authorities in the U.S. and Europe, it plans to submit marketing applications to the FDA and EMA in the third quarter of 2020. The marketing applications are based on positive final results from its randomized, double-blind, placebo-controlled Phase 3 study evaluating the efficacy and safety of vosoritide. The placebo-adjusted increased change from baseline in growth velocity after one year of treatment with vosoritide, the primary endpoint, was 1.6 cm/yr (p<0.0001). Vosoritide is an investigational, once daily injection analog of C-type Natriuretic Peptide (CNP). The study enrolled 121 children aged 5 to 14 with achondroplasia, the most common form of disproportionate short stature. The results were consistent across the broad patient population studied. Vosoritide was generally well tolerated with no clinically significant blood pressure decreases.
On November 14, 2019, the Company provided an update on the ongoing Phase 2 study of vosoritide which demonstrated over 54 months that children in cohort 3 (N=10) of the study, at a dose of 15 µg/kg/day, achieved a statistically significant (p< 0.005) cumulative mean additional height gain of 9.0 cm compared to children, matched for age and gender, in a new comprehensive natural history achondroplasia dataset (N=619). 2.2 cm of this additional increase occurred in the last 12 months of treatment further informing our understanding of vosoritide’s ongoing treatment impact. These data are expected to corroborate maintenance of effect at the time of anticipated marketing application submissions later this year.
The vosoritide development program includes four distinct areas of focus to support global approval. In addition to the completed Phase 3 study and ongoing Phase 2 study in children ages 5-14 years, the global program includes a large contemporaneous natural history study which is underway.
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The fourth component of the Company’s global development program with vosoritide, includes a large Phase 2 study in infants and young children (newborn to 60 months old) with achondroplasia, to determine the impact of treatment in this age group. Cohorts 1 and 2 include children from ages 6 months through 5 years of age, and has completed enrollment. Completion of enrollment of cohort 3, which includes children ages 0 to 6 months old, is expected to be somewhat delayed due to impact from COVID-19.
•BMN 307 gene therapy product candidate for phenylketonuria (PKU): On January 13, 2020 the Company announced that both the FDA and the Medicines and Healthcare Products Regulatory Agency (MHRA) in the U.K. have granted the Company Investigational New Drug (IND) status and approved its Clinical Trial Application (CTA), respectively, for BMN 307.
The impact of COVID-19 has created uncertainty about when it will be safe for patients to be dosed in PHEARLESS, our Phase 1/2 study of BMN 307. The Company currently estimates that dosing will begin in the second half of 2020. In the meantime, new sites are currently being prepared to open and enroll patients. All subjects participating in the PHEARLESS study will receive product made at commercial scale from BioMarin’s award-winning gene therapy manufacturing facility. Both the FDA and EMA have granted BMN 307 Orphan Drug Status.
Preclinical data with BMN 307 demonstrated a lifetime Phe correction sustained at 80 weeks in mouse models. BMN 307 is an AAV vector containing the DNA sequence that codes for the phenylalanine hydroxylase enzyme that is deficient in people with PKU.
•BMN 331 gene therapy product candidate for Hereditary Angioedema (HAE): On November 14, 2019, the Company announced its third gene therapy candidate, BMN 331, for the treatment of Hereditary Angioedema (HAE). BioMarin plans to build on its ever wider and deeper expertise in developing gene therapies for severe hemophilia A and PKU to improve efficiencies in the development process, and to optimize capsid and transgene design. The Company is monitoring developments surrounding COVID-19 but expects to begin IND-enabling studies in mid-2020.
•Vosoritide for the treatment of Dominantly Inherited Short Stature (DISS): On November 14, 2019, the Company announced that vosoritide will be studied in broader genetic statural abnormalities starting with dominantly inherited short stature (DISS), as part of a research collaboration with Children’s National Hospital. The Company plans to build on its learnings with vosoritide in achondroplasia and look for efficiencies in the development process, particularly around pre-clinical research and manufacturing. The Company is monitoring developments surrounding COVID-19 but currently expects the trial with vosoritide for DISS to begin in the second half of 2020.
•Gene Therapy manufacturing productivity increases capacity: On January 13, 2020, the Company announced that significant improvements in productivity in the gene therapy facility had increased capacity for up to 10,000 patients per year, depending on dose and product mix.
BioMarin will host a conference call and webcast to discuss first quarter 2020 financial results today, Wednesday, April 29, 2020 at 4:15 p.m. ET. This event can be accessed on the investor section of the BioMarin website at www.biomarin.com.
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Conference ID: 6194595
Conference ID: 6194595