On April 25, 2018 BioMarin Pharmaceutical Inc. (NASDAQ: BMRN) reported financial results for the first quarter ended March 31, 2018 (Press release, BioMarin, APR 25, 2018, View Source [SID1234525680]). For the quarter ended March 31, 2018 GAAP Net Loss was $44.1 million, or $0.25 loss per basic and $0.26 loss per diluted share, respectively, compared to GAAP Net Loss of $16.3 million, or $0.09 loss per basic and diluted share, respectively, for the quarter ended March 31, 2017. The increase in GAAP Net Loss year over year was primarily due to higher research and development expenses for expansion of our clinical programs related to BMN-250, valoctocogene roxaparvovec and vosoritide, largely offset by higher gross profit from increased Aldurazyme and Kuvan net product revenues. In addition, higher selling, general and administrative expenses in support of the ongoing commercial launch of Brineura and for the anticipated launch of pegvaliase contributed to the increase in GAAP Net Loss in the quarter compared to the same period last year.
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Non-GAAP Income for the quarter ended March 31, 2018 was $21.3 million, compared to Non-GAAP Income of $34.3 million for the quarter ended March 31, 2017. Similar to the GAAP results for the quarter ended March 31, 2018, the decrease in Non-GAAP Income was primarily due to increased research and development expenses, partially offset by increased gross margins on net product revenues, as well as higher selling, general and administrative expenses compared to the same period last year.
Total revenues were $373.4 million for the quarter ended March 31, 2018 compared to $303.7 million for the quarter ended March 31, 2017, an increase of 23%. For the quarter ended March 31, 2018, Aldurazyme net product revenues increased $46.7 million year over year, or 241%, of which $27.2 million is due to the different revenue recognition principles applied as a result of our adoption of Accounting Standards Codification 606 Revenue from Contracts with Customers, (ASC 606), and $19.5 million due to the timing of product sales to Genzyme. Vimizim net product revenues increased by $11.3 million, or 11%, year over year, due primarily to an increase of 16% in the number of Vimizim commercial patients. Kuvan net product revenues increased $6.8 million, or 7%, year over year, driven by a 9% increase in the number of commercial patients on Kuvan therapy in North America and continued growth in ex-North American territories. Naglazyme net product revenues decreased $5.6 million, or 7%, year over year during the quarter ended March 31, 2018, primarily due to the timing of government orders in certain countries. The number of Naglazyme commercial patients increased 4% year over year.
As of March 31, 2018, BioMarin had cash, cash equivalents and investments totaling approximately $1.7 billion, as compared to $1.8 billion on December 31, 2017.
Commenting on first quarter results, Jean-Jacques Bienaimé, Chairman and Chief Executive Officer of BioMarin, said, "2018 is a year of execution as we aim to achieve numerous value-creating catalysts across the business. In clinical development, we intend to complete enrollment of our global GENEr8–1 pivotal study with the only late-stage gene therapy product for the treatment of Hemophilia A, valoctocogene roxaparvovec. Concurrently, we continue to anticipate reaching roughly $1.5 billion in Total Revenues for the full-year 2018, per our guidance. On the regulatory front, following the acceptance of our Biologics License Application for pegvaliase for the treatment of phenylketonuria (PKU), which received a Priority Review designation, we anticipate FDA action by the end of May 2018. In the quarter, we were also pleased to have submitted the Marketing Authorization Application for pegvaliase in Europe."
Mr. Bienaimé continued, "The adult PKU market is primed for an efficacious treatment option that lowers Phe while allowing for near normal protein intake. We understand that the PKU community is anxiously awaiting the potential approval of pegvaliase given the dramatic phenylalanine (Phe) reductions observed in our Phase 3 studies. We are very excited to be on the cusp of the second potential product approval in less than two years, following the approval of Brineura in 2017. On the heels of a potential pegvaliase approval, we are also thrilled to announce our next gene therapy program for PKU that leverages both our expertise developing and manufacturing AAV products as well as our long-established commercial footprint selling Kuvan. We are not aware of any other company of our size that has six commercial products, a stable of potential blockbuster late-stage clinical product candidates and over $1 billion in annual revenues. I believe BioMarin is unique in our industry and that we are only beginning to unlock the value of both our base business and development pipeline."
Key Program Highlights
Gene therapy product candidate for phenylketonuria (PKU):
Today, the Company announced that a gene therapy product will be the next IND (after BMN 290 for Friedreich’s ataxia) candidate for the treatment of PKU in 2019. PKU is an autosomal recessive disorder in which phenylalanine hydroxylase, the enzyme that metabolizes the amino acid phenylalanine (Phe), is deficient. PKU leads to high levels of neurotoxic phenylalanine, which would affect neurocognitive development, if left untreated. In preclinical models, BioMarin’s PKU gene therapy product candidate demonstrated sustained, normalized Phe levels without hypophenylalanemia in an ongoing study and out to 53 weeks at the last observation. The product candidate will be an AAV vector containing the DNA sequence that codes for the phenylalanine hydroxylase enzyme that is deficient in people with PKU.
Valoctocogene roxaparvovec (formerly referred to as BMN 270) gene therapy for hemophilia A:
In December 2017, the Company announced that it had dosed the first patient in the global GENEr8-1 Phase 3 study with the 6e13 vg/kg dose of valoctocogene roxaparvovec for the treatment of patients with severe hemophilia A. The first patient in the GENEr8 pivotal studies to receive valoctocogene roxaparvovec that was manufactured in BioMarin’s new commercial gene therapy facility will be dosed in the near future.
The global Phase 3 program includes two studies with valoctocogene roxaparvovec, one with the 6e13 vg/kg dose (GENEr8-1) and one with the 4e13 vg/kg dose (GENEr8-2). Both Phase 3 GENEr8 studies are open-label single-arm studies to evaluate the efficacy and safety of valoctocogene roxaparvovec. The primary endpoint in both studies will be based on the factor VIII activity level achieved following valoctocogene roxaparvovec, and the secondary endpoints will be annualized factor VIII replacement therapy use rate and annualized bleed rate.
In the second quarter BioMarin intends to begin a Phase 1/2 Study with the 6e13 kg/vg dose and with approximately 10 patients who produce neutralizing antibodies against AAV5.
Also announced today, the Company intends to provide an update on the ongoing Phase 2 program with valoctocogene roxaparvovec at the World Federation of Hemophilia 2018 World Congress next month. BioMarin plans to share a two-year update of the 6e13 vg/kg dose cohort, as well as a one-year update of the 4e13 vg/kg dose cohort.
On March 21, 2018, BioMarin announced that the International Society for Pharmaceutical Engineering selected the Company’s gene therapy manufacturing facility as the 2018 Facility of the Year Category Winner for Project Execution. The recognition highlighted the company’s successful construction of the facility in Novato, California, which took less than a year to transform basic infrastructure into one of the first gene manufacturing facilities of its kind in the world.
Pegvaliase for phenylketonuria (PKU): On March 28, 2018 the European Medicines Agency accepted BioMarin’s submission of a Marketing Authorization Application for pegvaliase. The U.S. Food and Drug Administration accepted the Biologics License Application (BLA) for pegvaliase and granted priority review status in August 2017, with the current Prescription Drug User Fee Act Action Goal Date of May 25, 2018. Pegvaliase is a PEGylated recombinant phenylalanine ammonialyase enzyme product to reduce blood Phe levels in adult patients with PKU who have uncontrolled blood Phe levels on existing management.
Vosoritide for achondroplasia: Vosoritide, an analog of C-type natriuretic peptide (CNP), is being studied in children with achondroplasia, the most common form of disproportionate short stature in humans. Vosoritide has demonstrated sustained increase in average growth velocity over 30 months of treatment in 10 children, who completed 30 months of daily dosing at 15 µg/kg/day. Over this period of time, patients experienced a mean cumulative height increase of approximately 4 cm over what their baseline growth velocity would have predicted.
The Company’s multi-pronged program was developed to demonstrate the ability to improve clinical outcomes in children with achondroplasia. The program includes four distinct areas of focus to support global approval. Currently enrolling, the global Phase 3 study is a randomized, placebo-controlled study of vosoritide in approximately 110 children with achondroplasia ages 5-14 for 52 weeks. The study will be followed by a subsequent open-label extension. Children in this study will have completed a minimum six-month baseline study to determine their respective baseline growth velocity prior to entering the Phase 3 study. The feeder study in the U.S. is fully enrolled and the Company expects to complete enrollment of the Phase 3 study in mid-2018. BioMarin expects to provide top-line data in the second half of 2019.
The long-term, open-label Phase 2 program to corroborate maintenance of effect is anticipated to provide over 5 years of clinical data at the time of the planned New Drug Application submission. Given the importance of early intervention in this indication, the Company intends to begin an infant/toddler study in 2018 in children 0-5 years old. Finally, the Company has undertaken a Natural History program to augment clinical understanding of outcomes of untreated patients for comparison to treated patients.
BMN 250 for MPS IIIB (Sanfilippo Syndrome, Type B): On February 7, 2018 at the WORLDSymposium 2018, the Company updated preliminary results from the Phase 1/2 trial with BMN 250, an investigational enzyme replacement therapy using a novel fusion of recombinant human alpha-N-acetylglucosaminidase (NAGLU) with a peptide derived from insulin-like growth factor 2 (IGF2) for the treatment of Sanfilippo B syndrome or mucopolysaccharidosis IIIB (MPS IIIB). In 6 of 6 BMN 250-treated subjects, normalization of heparan sulfate (HS) levels, a biomarker in the cerebrospinal fluid (CSF), was observed. Normalization of liver size in 3 of 3 BMN 250-treated subjects from the dose escalation arm of the study was also observed. These data suggest that BMN 250, which is administered via intracerebroventricular (ICV) infusion, reaches peripheral circulation and has activity in somatic organs. Development Quotient (DQ), a measure of cognitive function normalized to age, was also observed. In 3 of 3 treated patients from the dose escalation arm of the study, preliminary data suggest stabilization of cognitive DQ at the high dose of BMN 250 in all subjects. Patients with untreated Sanfilippo B syndrome usually show progressive decline in DQ.
Invented by BioMarin, BMN 250 is being studied in a multicenter, international clinical trial evaluating safety and tolerability, as well as cognitive function of patients with Sanfilippo B receiving BMN 250. Designed to restore functional NAGLU activity in the brain, BMN 250 is administered via ICV infusion, the same delivery modality used to treat children with Brineura.
BMN 290 for Friedreich’s Ataxia: In the fourth quarter of 2017, BioMarin announced that it had selected as its next clinical drug development candidate, BMN 290, a selective chromatin modulation therapy intended for treatment of Friedreich’s ataxia. Friedreich’s ataxia is a rare autosomal recessive disorder that results in disabling neurologic and cardiac progressive decline associated with a deficiency in frataxin. Prior to the lead compound being acquired by BioMarin from Repligen Corporation (Repligen), it demonstrated increases in frataxin in Friedreich’s ataxia patients. On the basis of these results, the Company selected an improved candidate, BMN 290, for its favorable penetration into the central nervous system and cardiac target tissues, and its preservation of the selectivity of the original Repligen compound. In preclinical models conducted by BioMarin, BMN 290, a compound derived from the original Repligen compound, increases frataxin message expression in brain tissues more than two-fold. Currently, there are no approved disease modifying therapies for Friedreich’s ataxia. The Company expects to submit the IND application for BMN 290 in the second half of 2018.