TD Cowen's 43rd Annual Healthcare Conference. I'm Phil Nadeau, one of the biotech analysts here at Cowen. It's my pleasure to do a fireside chat with BioMarin Pharmaceutical. Those of you who follow our research know that BioMarin is one of our top picks for this year. We think it's 18% revenue CAGR over the next several years is one of the highlights of the profitable biotech industry. So we're really happy to have with us today Brian Mueller, the Executive Vice President and CFO. Traci McCarty is also here in the front row. Brian, we'll start maybe just handing it to you. In terms of the corporate outlook, can you give us a state of the company overview, biggest strengths, biggest challenges? What does BioMarin need to do to create shareholder value over the next couple of years? Yeah, thanks a lot, Phil. Thanks for having us and the opportunity to catch up today. We've had an eventful week so far. I'll go ahead and give a couple of the highlights. On Monday, we received news in the afternoon that the FDA deemed the three-year Phase III Roctavian data that we submitted substantial enough to require more review time. So that prompted a major amendment and an extension of our PDUFA date from what was March 31st to June 30th of this year. We've been signaling since last September that this was always a possibility. Both we and the FDA recognize that we had this large data set, 134 patients in the Phase III study, get to their third year and have that data available during the review of our BLA. So again, this was always a possibility and not a surprise under those circumstances. Yesterday afternoon, we were pleased to announce that the FDA has accepted our supplemental NDA to expand the use of Voxzogo in children under the age of five years old, since the drug is already approved for children older than five years of age. And we'll look forward to PDUFA date of October 21st in the U.S. for that application. And recall that in January, the European authorities validated our application to treat children with achondroplasia under the age of two years old in Europe, where today Voxzogo is commercially available for children greater than the age of two. So this is great news for families to look forward to the potential to start treatment as early as possible. In a disorder like achondroplasia with complex biology at the growth plate from birth, many believe that treatment early as possible will result in the best outcomes. We are seeing that. So in Japan, where we are approved without any age restrictions, we're observing very rapid uptake, including reports that we've treated infants at just two and three weeks of age, which has been really positive. The demand for Voxzogo around the world has exceeded even our own high expectations and as a result has given us the opportunity to achieve double-digit revenue and profitability growth here in 2023. Voxzogo has been a spectacular launch. And if these age label expansions come to fruition, 1,000 additional families will have access to Voxzogo, which is the only approved medicine that treats the underlying genetic cause of achondroplasia. So despite the timing shift with Roctavian PDUFA date, we're poised for another record-setting year of growth in revenue and profitability from our wholly owned portfolio of seven marketed products that we sell in almost 80 territories. So that's a brief overview of the business. I'll hand it back to you for questions, Phil. That's a great overview. I think investors are keenly focused on Roctavian's launch and approval in the U.S. Maybe starting here in the U.S., how confident is BioMarin that the issues raised in the 2020 Complete Response Letter have been resolved? Yeah, thanks. Good question. So first, maybe just a brief reminder on some of the context that led up to the Complete Response Letter. When we filed for what was accelerated approval back in 2020, it was a relatively limited data set. There were criteria out there specifically around accelerated approval for gene therapies and severe hemophilia A. And based on the data we had at the time, we had, I believe we met those criteria, but recognized that it was a very small data set. So for example, we had two years of data from our Phase II study, but that was just seven patients. And while we submitted an early cut of our Phase III data, it was just about 17 patients at six months. With durability, back to your question, Phil, with durability being one of the key questions by the FDA and that being a relatively small data set is part of what we believe drove their request in the Complete Response Letter for two years of data. Now here we are in first quarter of 2023. Not only do we have the two years of data from last January, which was the basis for the resubmission of our BLA, but now we have this third year of Phase III data, again, 134 patients. What we feel is important to note there is that the trends in the data are holding up well and Roctavian continues to be safe and effective even in its third year with 80% of patients achieving bleeding control, over 90% of patients not using their former standard of care, which was relatively regular injections of prophylactic Factor VIII. Roctavian is a single infusion where the body starts to produce its own endogenous Factor VIII. What elements of that data do you think will be most persuasive to physicians, patients, and payers when they consider adopting Roctavian? First, I believe it will be the enhanced bleeding control. Importantly, our Roctavian Phase III study was not a placebo comparator. It was a comparator against the standard of care, prophylaxis Factor VIII, and we still significantly reduced bleed rates, again, with a single infusion versus taking the chronic therapy, so better bleeding control, a single infusion, and that also involves just what we hear anecdotally in our studies is the freedom that comes with not having to take your medicine, and with solid, consistent factor levels, again, we hear anecdotes of patients living a different life, performing activities that they otherwise wouldn't have been able to do, more confidence, less fear, so we've observed pretty positive patient experiences. Can you walk us through the warranty model that you expect to implement in the U.S.? How does that differ from the outcomes-based agreements being executed in Europe? And how would you imagine the trajectory of the launch will differ in the U.S. versus E.U.? Yeah, thanks. Great question. First, just a moment on the outcomes-based agreements, since this has been a dynamic area of work for us over the last several months. One element that has been illuminated over the last few weeks, which has been an update since our investor updates back in January, is the importance of this March 15th date and what is often referred to as the free pricing period in Germany. With a product like Roctavian, where there's a substantial upfront financial commitment based on the promise of the product performing and earning or returning value to the system by the offset of not having to take your prophylactic factor, it's important that with that high value upfront, that payers are comfortable and feel secure with that financial commitment that Roctavian will perform and they're protected. Likewise, BioMarin wants to protect the value of Roctavian. This is new and novel for a large high-value indication like severe hemophilia A, which drove us, and in the case of our first launch in Europe, Germany, to really negotiate these novel outcomes-based agreements, which first of all are complicated both financially in terms of the term that we're going to look at in terms of Roctavian's performance, the proportional value for any reimbursement in the event that Roctavian stops performing, and we are reimbursing that payer for some proportional value of Roctavian, as well as the terms of what return to prophylaxis looks like, which is the criteria for Roctavian's lack of performance. So we started back in early Q4, good faith negotiations with these payers, again, these new novel agreements. These are relatively highly administrative German healthcare systems working with our attorneys. So they were complex negotiations. Then there's actual logistics of turning documents back and forth. We had signed one outcome-based agreement back in December. This is one out of three sub-German health insurers that cover about 85% of German lives. We thought at the beginning of the year that we would have the next two in the coming weeks, and we're making progress. We've agreed to terms in some cases. However, back to my initial comment, this is where this March 15th free pricing period really started to be highlighted as a factor. While it was known and expected last year, this change to what was a one-year free pricing period in Germany to six months just became effective in January. And different from prior BioMarin launches and other therapy launches where companies often take advantage of this free pricing period to give access to the drug, recognizing that you'll negotiate a final price, which could be lower going forward. Because of the element of these outcomes-based agreements, it's important to negotiate and have these agreements that address both price and the terms of the outcomes-based agreement in advance. And because while we expect the price that will be negotiated in these outcomes-based agreements will be very close to the final German price that would be final later this year, we realized that there was little incentive for these German payers to negotiate contract and then start paying for Roctavian when they would be theoretically exposed to paying a higher price before this free pricing period. So that was, like I said, an illuminated aspect of these negotiations over the last few weeks and the importance of this March 15th date. We are encouraged by what is separate from these complicated negotiations and agreements. We are encouraged by the underlying demand signals there in the German marketplace. We've been out there working with physicians who are working with their patients. We've had a number of the diagnostic testing that's required to determine if you're eligible for Roctavian. That process is ramping up. So we're pleased to see and observe some of those dynamics and are just looking forward to the reimbursement pathway opening up. Briefly, back to your question, contrasting it with the U.S., we are not expecting the same level of individual outcome-based agreements payer by payer in the U.S. We plan to offer very similar protections around the value for Roctavian through these outcomes-based agreements, but we expect to do it in the form of a warranty that will be designed around similar criteria for return to prophylaxis and sort of a pro rata financial value protection for payers. But we plan to issue this as standard terms and conditions that will come with the dosing and purchase of Roctavian. We've characterized it similar to a warranty when you buy your car. A buyer of a car appreciates the value of the warranty. You know you've got protection against what could be material failures in the performance of the product. But when you buy your car, you don't negotiate that with General Motors or Ford. You just accept the terms that are offered. So we will have payer negotiations that we'll have to do on other aspects of getting reimbursement and access. But we've taken advantage of some of the safe harbor regulations that exist in the U.S. for pre-approval payer engagement. So our payer launch has been active for over three years now where we're engaging with payers on how they view Roctavian. We observe that U.S. payers are keenly aware of how expensive severe hemophilia A patients are in their systems today with a continued unmet need through their ongoing bleeds. So they're motivated by the promise and value of Roctavian, which is also supported by the ICER report, which is now final and concluded that Roctavian is valuable to the healthcare system at a price of $2.5 million. So that was a pretty positive external development on Roctavian's value proposition. When you provided 2023 Roctavian revenue guidance of $200 million, I believe BioMarin said high end was achievable if Roctavian was approved in the U.S. at the end of March. If not, it sounds like maybe the high end is less likely and the low end is coming more into focus. Can you talk a bit more about the guidance and what factors could take you to the high end versus the low end of the Roctavian number? Yeah, thank you. Great question. So yeah, firstly, we tried to account for all of the material uncertainties when we gave that Roctavian 2023 revenue guidance, which was $100 million-$200 million. It's mostly hinged on the two key geographies at the moment, which is Europe and the US. The first uncertainty in development that we need to watch and monitor is in Germany. I gave the overview of the dynamics a moment ago. So from here, as we look forward to the rest of Q1, Q2, and the second half of the year, the pace and extent of commercial uptake in Germany is going to be one of, excuse me, one of the material key considerations that's going to drive Roctavian performance within that range. Then, of course, the other in the U.S. is PDUFA. The high end of the range did account for a possible March 31st approval action. So with now the major amendment in hand and a June PDUFA date, if we are indeed launching in the second half of the year, that would make the high end of the range less likely. What's noteworthy is while the change in the PDUFA date and potential launch is an additional three months with a drug like Roctavian, where we expect gradual increases in uptake and its launch, the quarter of revenues that we will now be missing is not just the first quarter because of the delay. It's actually the last quarter in the scenario if we would have been launching in March. So it is a key consideration, but it is still early in the year. That's why I started with the European launch. By the way, beyond Germany, we do hope to get other European markets, get access to those other European markets later in the year, like France and Italy would be the next priority. So that's another element that is key to the launch that we'll need to monitor developments. So still earlier in the year, we'll definitely monitor developments closely over the next few weeks, and we'll plan to give a more robust update on our Q1 earnings call likely at the end of April. Maybe I'm focusing out a bit. How big of an opportunity does Roctavian address in the U.S. and Europe? And I guess, what do you think the geographic breakdown will be in terms of revenue between the two locations, maybe both today in this year as well as ultimately at peak? Yeah. Again, subject to those dynamics that I just mentioned in Europe and the U.S., how those play out in actuality will affect the mix of the current year. But again, in that $100 million-$ 200 million, we did account for the material considerations in all those scenarios. In the U.S., just in terms of market size, after taking into consideration the entry criteria for our Phase III study, which was testing negative to antibodies to the AAV5 vector, no current or prior inhibitors to Factor VIII, severe Hemophilia A adult population, and then other testing such as healthy liver and whatnot. After working down the funnel of the total severe Hemophilia A population, that gets us to 3,000 eligible patients according to our math in the U.S. So that's a pretty large market opportunity over time. And by the way, we do have clinical studies going that aim to test Roctavian in some of those populations that were restricted from entry into the Phase III study. So if those show that Roctavian has a positive impact in those populations, those are rather really significant label expansion opportunities over time. But 3,000 patients in the U.S., globally, it's 13,000 patients across all of our markets. It's roughly a similar number of patients in Europe. So the way we, one, while it's a very different product, different disorder, the mechanics of our historical launches, and I might even point back to the Voxzogo launch, because we get leverage out of our global commercial footprint and our global commercial operations and launch experience, we're able to reasonably, with modest effort based on our experience in leveraging the existing organization, get access more rapidly to a global launch than a company that would be doing its first launch. Again, Voxzogo, after its first full year on the market, we shared last week that we're selling in 34 different countries. That's only possible because we're plugging into existing infrastructure, both market access, pricing, reimbursement, as well as actual launch and physician and patient support. So that same infrastructure will support Roctavian as we've seen because of the high value and complicated outcomes-based agreements that we'll have to negotiate outside of the U.S. on a country-by-country basis could take additional time. But we view the ability to leverage our global organization and have several countries coming online. And then within those countries, over time, penetrating those markets as deeply as possible is a large opportunity. Turning to Voxzogo, I'm sure I'm going to be the first person to ask you about the BridgeBio data that came out on Monday, and any thoughts on those results and their potential impact on the competitive environment? Yeah, of course. Thanks. So first, it's difficult under the best of circumstances to compare results of two different studies given differences in key baseline patient characteristics, small sample size, and the lack of a placebo comparator. It's also difficult to know how durable an initial effect will have over time until more data accumulate. In achondroplasia, durability is an important consideration because the underlying mechanism of action in the disease is so adversely affected by the biology of growth plates, which is why the FDA is keenly interested in durability. I'll share a recollection and reminder of the Voxzogo development program. But you might recall back in 2018, there was an advisory committee meeting around the treatment of achondroplasia with pharmaceuticals. It wasn't specific. The advisory committee meeting was not specific to our program of Voxzogo, although I think we were the only late-stage Voxzogo or achondroplasia program at the time, and one of the outcomes of that advisory committee meeting was the FDA's desire to see a durable effect through two different studies in two age groups for two years in duration, and we didn't have that at the time because we had already started our Phase III program. We were hopeful that we would be able to share with the FDA that we can answer those same durability and age group variability questions through our existing programs, which included a long-term Phase II study where we had five years of data in a number of patients, the large Phase III study, which was placebo controlled. That was the other factor that the FDA wanted to see. And then our second age group study was the under five study. So those circumstances are what drove the conditional approval. But because the FDA, we believe, remains so keenly interested in durability and final adult height, we're pleased to have aligned with the FDA on what that pathway looks like for Voxzogo to achieve final adult height and the value of that confirmatory evidence. So for those factors, it's difficult to do an apples-to-apples comparison at that level of nuance. But our scientists are looking at our data through some different lenses. And if there's a way to make that data more apples-to-apples, stay tuned. We are pleased, like I said, to have alignment with the FDA, not just for the pathway to full approval, but that it's available so widely in the U.S., as I mentioned, as young as newborn infants in Japan. And then lastly, just to share, as I mentioned at the beginning, pleased that the supplemental NDA has been accepted, which we hope will give access to children under five in the U.S. and under two in Europe. Voxzogo's launch has consistently outpaced expectations, and BioMarin last year raised guidance, I think, 4x. That's right, 4x. Do you expect that same pace of patient accruals to continue through 2023? Was there a bit of a bolus in 2022, or do you see more consistent growth over the next several quarters? Great question. Thanks, Phil. We do expect continued rapid uptake. There likely was some early adopter effect. We have similar conversations about Roctavian. There's motivated physicians that are following development programs in rare disease. There's physicians that have experience in BioMarin clinical studies. And then there's presumably patients and families that are watching drug development from the sidelines. So that was likely the case for Voxzogo and some motivated early adopters. But I don't think we'd refer to it as a bolus. We announced last week that we had 1,264 patients globally on the drug. And while that has been very rapid uptake, I'd point to the large market opportunity of achondroplasia, again, meeting our criteria of growth plates open within our marketed territories. We estimate that amount of global market opportunity at 18,000 patients. So while we're excited and we're thrilled that we've got the 1,264 patients on therapy, that's still less than 10% market penetration. And as I noted earlier, those 1,264 patients are coming from 34 markets, again, leveraging our global infrastructure. So the dynamics we're seeing are both the continued market penetration in existing markets, which, using the U.S. as an example, is a large single geography, but there's still work to do to reach new prescribers and promote the product. And then these additional countries coming online, likewise, getting penetration over time. So we still have a ways to go with Voxzogo and believe that 2023 will have continued rapid uptake, as implied by our guidance, which at the midpoint is doubling revenues from 2022, which was already a fantastic result. You mentioned just earlier about the alignment with the FDA over converting accelerated approval to full. I think investors are keenly paying attention to that, given the chances that if that happens, subsequent competitors would have to actually show changes in adult height to get it on the market. Any sense of when you will file for full approval? Yeah, great question. We know it's a keen area of interest, and for that exact reason, we're not sharing the details of the criteria or the timing. Again, pleased to have alignment. I'll share that we do believe that we can meet those criteria with programs that are currently running instead of new studies, so that's also important. Maybe in the last minute to talk about the rest of BioMarin, how times have changed. What are the pushes and pulls to guidance this year for the base enzyme replacement therapy business? What could drive growth? What are the risks to hitting the numbers? Yeah, thanks. So first, we're pleased to be able to have provided guidance, and we'll continue to report detailed actuals. But to talk about this base business we've referred to over the years to now be able to give guidance for this enzyme business, there's several dynamics there. I wouldn't say there are any push and pulls that are akin to these Roctavian dynamics. But on the core enzyme replacement therapy products, the largest products being Vimizim and Naglazyme for MPS IV and MPS VI, the two of those products together are over $1 billion of that enzyme business. We've observed that while those products have been on the market for a long time, they're still growing in the mid-single digits and in certain periods, even high single digits. So the largest portion of that portfolio is still growing. Palynziq is included. And just a reminder, while Palynziq had some setbacks and has been a bit slower to recover since COVID impacted new patient starts, that remains a really large market opportunity. There are thousands of adult PKU patients in the U.S. and Europe that would be eligible for Palynziq, of which is only partially penetrated. Our initial focus for Palynziq was converting adult Kuvan patients to Palynziq because we knew generic competition was coming in the U.S. a couple of years ago. We've largely been through that effort. So now marketing strategies are starting to pivot to other adult PKU patients. So again, that product probably has a slightly higher growth rate. There's still some challenges to do to find and establish the alternate prescribers because we're trying to be less reliant on those geneticist prescribers. These are often historically pediatric PKU clinics seeing adult PKU patients for Palynziq. But there could be upside if we're able to, over time. We're still very confident that Palynziq is going to be a large drug, and there could be upside over time on Palynziq. Perfect. With that, I think we're out of time. Thanks so much, Brian. Thank you, Phil. Appreciate it. Thank you, everybody.