NOVATO Could 3, 2020 (Thomson StreetEvents) — Edited Transcript of Biomarin Pharmaceutical Inc earnings convention name or presentation Wednesday, April 29, 2020 at 8:15:00pm GMT

* Brian R. Mueller

BioMarin Pharmaceutical Inc. – Senior VP of Finance, Performing CFO & CAO

* Henry J. Fuchs

BioMarin Pharmaceutical Inc. – President of Worldwide Analysis & Growth

BioMarin Pharmaceutical Inc. – Chairman & CEO

BioMarin Pharmaceutical Inc. – Government VP & Chief Business Officer

* Robert A. Baffi

BioMarin Pharmaceutical Inc. – President of International Manufacturing & Technical Operations

BioMarin Pharmaceutical Inc. – VP of IR

Evercore ISI Institutional Equities, Analysis Division – Senior MD & Fairness Analyst

* Kennen B. MacKay

RBC Capital Markets, Analysis Division – MD & Co-Head of US Biotechnology Analysis

* Peter B. Kim

* Philip M. Nadeau

William Blair & Firm L.L.C., Analysis Division – Co-Group Head of Biopharma Fairness Analysis

Sanford C. Bernstein & Co., LLC., Analysis Division – VP

Welcome to the BioMarin First Quarter 2020 Monetary Outcomes Convention Name. Internet hosting the convention name at this time from BioMarin is Traci McCarty, Vice President of Investor Relations. Please go forward, Traci.

Traci McCarty, BioMarin Pharmaceutical Inc. – VP of IR [2]

Thanks, Could, and thanks, everybody, for becoming a member of us at this time. To remind you, this nonconfidential presentation incorporates forward-looking statements in regards to the enterprise prospects of BioMarin, together with expectations relating to BioMarin’s monetary efficiency, industrial merchandise and potential future merchandise in several areas of therapeutic analysis and growth.

Outcomes might differ materially relying on the progress of BioMarin’s product applications, actions of regulatory authorities, availability of capital, future actions within the pharmaceutical market and developments by rivals, and people elements detailed in BioMarin’s filings with the Securities and Alternate Fee, similar to 10-Q, 10-Ok and 8-Ok studies.

On the decision remotely from BioMarin administration at this time are J.J. Bienaimé, Chairman and Chief Government Officer; Jeff Ajer, Government Vice President, Chief Business Officer; Robert Baffi, President, International Manufacturing and Technical Operations; Hank Fuchs, President, Worldwide Analysis and Growth; and Brian Mueller, appearing Chief Monetary Officer. We hope to maintain this name to 1 hour and in addition give everybody the chance to ask a query at this time, so we request that you just restrict your self to 1 throughout the Q&A portion of the decision. Thanks to your understanding. I’ll now flip the decision over to our Chairman and CEO, J.J. Bienaimé.

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Jean-Jacques Bienaimé, BioMarin Pharmaceutical Inc. – Chairman & CEO [3]

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Thanks, Traci. Good afternoon, and thanks for becoming a member of us on at this time’s name. We hope you and your households are wholesome and managing by these uncommon circumstances caused by the COVID-19 virus. So these are unprecedented instances, however the important nature of our medicines to the sufferers who want them has enabled BioMarin to climate the problem of COVID-19 fairly nicely. Equally as necessary, I need to underscore the extraordinary dedication of our staff who’ve saved operations operating easily as a way to preserve entry to our therapies all over the world.

Our first quarter file outcomes of $502 million of complete revenues or 25% progress over final 12 months, the testomony to the significance of our therapies and our diversified product base and industrial footprint. Due partially to the sale of Firdapse, GAAP web earnings within the first quarter was $81.Four million, exceeding our present full 12 months steerage vary of $20 million to $80 million.

Within the first quarter, we skilled minimal interruptions attributable to COVID-19, however we do anticipate the potential for extra significant enterprise disruptions for the rest of 2020 as a result of pandemic. Because of this, now we have chosen to scale back our full 12 months complete income steerage by round 5% or a complete of $100 million, whereas sustaining each GAAP and non-GAAP earnings totally estimated supplied earlier this 12 months. Regardless of potential near-term impacts to our industrial enterprise on COVID-19, our subsequent blockbusters, BMN 270, valoctocogene roxaparvovec, or (inaudible) valrox for hemophilia A and vosoritide for achondroplasia persevering with to advance, and Jeff will reveal our lately permitted model title for BMN 270 in a second.

Briefly on vosoritide for achondroplasia. Within the quarter, we introduced that primarily based on current conferences, a profitable assembly with well being authorities within the U.S. and Europe, we plan to submit advertising and marketing purposes to the FDA and EMA within the third quarter of this 12 months. If permitted, vosoritide would be the first drugs for the therapy of achondroplasia within the U.S. and Europe. So we’re delighted that this potential remedy proceeds a step nearer to regulatory.

In conclusion, BioMarin staff have risen to the evolving challenges of the COVID-19 pandemic, demonstrating a excessive stage of dedication and dedication to the sufferers we serve. The underlying fundamentals of our enterprise stays robust and our manufacturing and provide chain resilience. We have now constructed a sturdy base enterprise with important medicines transition the pipeline to handle bigger uncommon indications, diversified danger and positions ourselves for substantial success in each the close to time period and the long run. We’re assured in our capability to handle by this ongoing international well being disaster, whereas staying grounded in our long-term technique for achievement.

I might wish to say just a few phrases about Robert Baffi, who has made super contributions to the group during the last 20 years. Throughout this time at BioMarin, he has manufactured essentially the most advanced organic merchandise on this planet and visits essentially the most superior industrial scale gene remedy manufacturing functionality. His management, technical experience, foresight and dedication has performed a key position in the place we stand at this time, and we need to acknowledge his many contributions. Thanks, Robert. And we’re happy that he’ll stay with BioMarin by the assessment of BMN 270 valrox and the vosoritide advertising and marketing purposes to make sure manufacturing continuity because the successor, Greg Guyer, begins his journey with us in Could, coming from Bristol-Myers Squibb.

Thanks all to your continued help. And now I want to flip the decision over to Robert to say just a few phrases. Robert?

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Robert A. Baffi, BioMarin Pharmaceutical Inc. – President of International Manufacturing & Technical Operations [4]

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Thanks, J.J. Innovation has at all times been on the core of BioMarin’s success. Throughout my 20 years tenure because the Head of Technical Operations, has instilled within the firm just a few guiding ideas to foster a tradition of innovation: first, let science inform and lead decision-making; second, let compliance focus our efforts on affected person security and scientific outcomes; and third, let ingenuity create adaptivity and resiliency in our method to drug growth. These Three tenants, infused with the abilities of essentially the most devoted individuals I’ve ever labored with, have persistently enabled us to take analysis concepts quickly by growth, navigating the complexity of the regulatory approval course of in a extremely efficient and differentiated method to satisfy the wants of sufferers.

BioMarin’s management staff has shared and supported the imaginative and prescient for creating a completely built-in firm with technical operations, powers, scientific research and industrial demand, and is an integral element of strategic expertise growth paradigms for assuring the well timed supply of an uninterrupted provide of product.

Moreover, progressive and appropriately applied CMC methods linked to a quicker scientific design permits for fast growth and excessive success charges that profit each sufferers and shareholders alike. As an organization, we’re going by a number of transitions concurrently, difficult in some methods, invigorating in others. Our transition to profitability this 12 months supplies the assets to develop extra progressive therapies. Our transition to gene remedy product leverages our scientific manufacturing and industrial capabilities and locations us squarely on the forefront of the rising technological development in precision drugs. Our transition and technical operation management supplies the chance to construct an progressive method to drug growth to gasoline our progress.

After I first noticed that to Dr. Greg Guyer’s CV, I couldn’t assist however be impressed with the scope of his duty and the experiential selection and variety of his profession. In some ways, whereas a distinct journey, it shared lots of commonality with my very own after which to not allow us to vote to BioMarin. I’m assured and dedicated that the transition in technical operations at BioMarin from me to Greg will construct on the legacy of science, compliance and ingenuity, for our sufferers that may profit from the merchandise that may emerge from our efforts, for our staff and their careers, and for our shareholders as we grow to be worthwhile.

By way of licensure of our gene remedy manufacturing facility in help of BMN 270 approval, I am happy to share that the Well being Merchandise Regulatory Authority of Eire performed, on behalf of the European Medicines Company, a pre-approval inspection in Q1. This inspection includes an in depth assessment of the power, tools, course of, and analytical research and related documentations generated in help of validation, manufacturing and testing. Following this inspection, a CGMP certification was granted, permitting for industrial manufacturing and distribution of BMN 270 within the EU when the product is permitted.

At current, the inspection of the power by FDA is anticipated to be accomplished throughout Q2, permitting full licensure within the U.S. of the power in keeping with the August 21 PDUFA motion date. We have now greater than 400 doses of business BMN 270 prepared for potential launch later this 12 months, and stay very enthusiastic in regards to the prospects for introducing the primary gene remedy product for a bleeding dysfunction to the hemophilia neighborhood as quickly as attainable.

I thanks to your help all through my time at BioMarin. And now I might like to show the decision over to Jeff to debate the industrial enterprise replace. Jeff?

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Jeffrey Robert Ajer, BioMarin Pharmaceutical Inc. – Government VP & Chief Business Officer [5]

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Thanks, Robert. As we start 2020, I am very happy with the staff’s efficiency throughout all manufacturers and all areas throughout the quarter. As J.J. talked about, we achieved our highest quarterly income on file, with complete revenues of $502 million within the first quarter with web product revenues marketed by BioMarin, up 24% to $433 million. This achievement displays the elemental energy and progress of our enterprise regardless of near-term challenges associated to COVID-19, which I’ll tackle in a second.

On to ends in the quarter and beginning with Palynziq. Within the U.S., the pattern of accelerating income primarily based on a steadily rising base of sufferers on industrial remedy, together with development from induction and titration to each day upkeep dosing, continued in Q1. Within the early a part of the quarter, we did expertise a seasonal slowing of recent affected person enrollments and affected person begins, considerably mirroring our historic expertise with Kuvan in the USA. We’re reporting $35 million in Palynziq income for the primary quarter, with the vast majority of that income coming from the U.S.

In Europe, within the first quarter, a number of clinics throughout Germany continued to actively deal with sufferers with Palynziq and early uptake alerts are encouraging. Throughout the quarter, we made vital progress in Germany, including clinics that now have some expertise prescribing Palynziq and managing sufferers by the induction and titration part to each day upkeep dosing. Because the variety of industrial sufferers in Germany steadily grows, we anticipate significant income contribution from the EU beginning this 12 months. We anticipate finalizing value and reimbursement negotiations in Germany by mid this 12 months, an necessary step towards getting value and reimbursement approvals in different excessive precedence European markets.

Kuvan contributed $122 million in revenues within the quarter or 14% progress year-over-year, with most of that progress coming from the USA. Vimizim revenues grew 9% year-over-year, contributing $137 million within the first quarter, pushed by an 11% improve in sufferers year-over-year. That is reflective of the continued anticipated progress potential we anticipate for Vimizim.

Turning to Naglazyme. Revenues totaled $114 million, a 32% year-over-year progress for the well-established model. As with Vimizim, the influence from uneven giant order patterns makes the quarterly comparability troublesome. The variety of industrial sufferers on Naglazyme grew by 6% prior to now 12 months, and is indicative of the continuing progress potential for this model, almost 15 years since being permitted.

And at last, Brineura contributed $24 million in web product revenues, which represented 97% year-over-year progress. These revenues have been primarily flat over This autumn, and that was pushed by a modest year-end stock construct within the EMEA area in This autumn. Importantly, the expansion in Brineura revenues in comparison with prior 12 months displays an underlying progress of 86% in industrial sufferers. We’re seeing a web improve in sufferers benefiting from Brineura therapy as a result of success of our illness consciousness and affected person identification applications.

Taken collectively, we’re happy with first quarter outcomes and demand for our merchandise. And whereas we skilled minimal monetary influence within the first quarter attributable to COVID-19, we anticipate the potential for a better diploma of influence throughout the the rest of 2020 as disruptions of day-to-day operations of clinics and hospitals move by our enterprise.

Our international industrial groups will proceed to regulate to implement progressive approaches to have interaction with clinics and sufferers to make sure continuity of entry to our medicines. The place attainable, we’re supporting residence infusion efforts to assist mitigate influence. Nevertheless, some COVID-19 disruption, the brand new affected person begins in addition to to ongoing infusion middle visits from present sufferers are anticipated to proceed. Because of this, we’re decreasing complete income steerage by 5% on the midpoint to between $1,850 million to $1,950 million for the complete 12 months 2020. The overwhelming majority of at this time’s up to date complete income steerage displays changes to in line manufacturers, together with Vimizim, Naglazyme and Palynziq. And assumes our enterprise will return to normalized demand patterns within the second half of 2020. Though we didn’t give BMN 270 2020 income steerage in February, our 2020 complete income steerage did assume some contribution from BMN 270 in Europe.

And now I might like to finish my remarks with an replace on our hemophilia gene remedy program and introduce you to the supposed model title, ROCTAVIAN. In earlier calls, you’ve got heard references to valrox, which was an abbreviated type of our INN or worldwide nonproprietary title, valoctocogene roxaparvovec or alternatively, our program identifier, BMN 270. Each the FDA and the EMA have accepted ROCTAVIAN as our model title, and we stay up for adopting ROCTAVIAN as we get nearer to launch. Within the meantime, we’ll stop to make use of valrox, in order to not confuse it with our supposed model title.

Different key launch readiness actions have continued to progress. We have now primarily constructed out the industrial staff in the USA, and have added key people the primary precedence in markets within the EU. The vast majority of these new staff have substantial and various expertise in hemophilia. Our model campaigns additionally proceed to develop as anticipated and groups have pivoted to digital and digital platforms, permitting for ongoing engagement with {the marketplace} in lieu of face-to-face interactions. Clearly, sure actions are extra amenable to digital engagements than others, and the place COVID-19 is difficult us most within the short-term is with gene remedy instructional applications and web site readiness.

Thankfully, with the staff already on board, we anticipate being nicely ready to launch if we obtain regulatory approvals. Within the meantime, now we have lately completed some very constructive pricing analysis, which validated payer willingness to embrace ROCTAVIAN with the present knowledge set, and we’ll stay up for offering you with updates on our pricing at launch.

Thanks to your consideration, and I’ll now flip the decision over to Hank to offer an R&D replace. Hank?

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Henry J. Fuchs, BioMarin Pharmaceutical Inc. – President of Worldwide Analysis & Growth [6]

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Thanks, Jeff. I might additionally wish to echo J.J.’s expression of deep and heartfelt appreciation for the time Robert has spent with us. And in addition to welcome Greg Guyer, to the group the place the key sauce is bottled.

The R&D group is delighted that our subsequent vital product alternatives proceed to progress, significantly beneath the circumstances caused by COVID-19. The flexibility to return to work principally nearly and deal with the development of our progressive merchandise to this point, ROCTAVIAN and vosoritide has been particularly gratifying and a welcome distraction from the continuing pandemic. I need to acknowledge and thank our groups for his or her dedication and contributions throughout these difficult instances. I’ve been impressed by your flexibility and your capability to maintain the story going whereas we’re coping with the pandemic.

Beginning with ROCTAVIAN, and with a powerful and memorable model title, congratulations, Jeff, the FDA is dedicated to satisfy the August 21 PDUFA motion date. In Europe, our advertising and marketing authorization software submitting stays on accelerated evaluation right now. Nevertheless, the assessment process is to be prolonged by not less than Three months attributable to COVID-19 delays. Additional, as is the case with most filings that originally obtain accelerated evaluation, we consider there’s a excessive chance that our M&A will revert to a normal assessment process from accelerated evaluation. Primarily based on these assumptions, we anticipate the CHMP opinion by late ’20 or early ’21.

We proceed to plan to share our 3 — our 4-year replace of the 6e13 vector genome per kilo dose in addition to the 3-year replace on the 4e13 vector genome per kilo dose in the course of the 12 months, however the type is as but to be outlined given the altering surroundings for medical conferences. We have now an information evaluation plan in place. We’ll transfer ahead with enterprise as ordinary, however the venue and technique for offering the replace continues to be fluid at this level. So thanks for bearing with us.

Importantly, we don’t anticipate COVID-19 to influence the time strains for completion of the ROCTAVIAN Section III trial. Enrollment was accomplished in November of final 12 months, and one of many advantages of being onetime therapy is that sufferers don’t have to obtain remedy on a persistent foundation. We’re additionally assured that the integrity of the continuing knowledge assortment for the examine — for this pivotal examine is being sufficiently maintained as residence well being care options align properly with the gathering of the first endpoint annualized bleed charge knowledge.

Turning now to vosoritide for the therapy of achondroplasia. As J.J. talked about, we plan to submit a worldwide advertising and marketing purposes within the third quarter of this 12 months. Our multipronged growth program, together with a long-term Section II scientific ends in 5 to 18-year-old kids, complete pure historical past knowledge, the continuing examine of newborns by 5 years and the extremely statistically vital placebo-controlled Section III trial makes for a really complete knowledge bundle spanning greater than 5 years of therapy with kids with achondroplasia. Once more, we are the beneficiary of lucky timing and that our pivotal submission knowledge learn out previous to the pandemic, and now a lot of the work may be concluded remotely. If permitted, vosoritide could be the primary and solely drugs designated for the therapy of achondroplasia within the U.S. and in European Union.

We proceed to stay up for publishing the complete knowledge from the Section III examine later this 12 months, and we’re happy to let you understand that our late-breaker has been accepted in an upcoming medical Congress. The presentation will embody 1 12 months progress velocity, peak Z scores, physique proportionality, security and subgroup analyses. So keep tuned for extra specifics as to when and the place these knowledge will seem.

The Section II examine of vosoritide in zero to five 12 months olds, known as examine 206, is continuing nicely, and we’re very happy that security knowledge from kids ages 6 months to five years collaborating in that examine will probably be accessible as a part of our registration bundle. We’re grateful that the timing of key research has aligned nicely with our pre-COVID-19 plans.

Transferring to BMN 307, our investigational gene remedy for phenylketonuria. We’re persevering with to organize new websites to open as a way to enroll sufferers when it’s safely accomplish that given the COVID-19 circumstances. We’re excited in regards to the prospect of BMN 307 because it represents a 3rd therapy for phenylketonuria in our PKU franchise and a second gene remedy growth program, leveraging our learnings and capabilities from ROCTAVIAN. At present, we anticipate the examine to start out later — we anticipate to start out the examine later in 2020.

The R&D group is energized by the alternatives earlier than us in 2020, with each ROCTAVIAN for extreme hemophilia A and vosoritide for kids with achondroplasia advancing in the direction of potential approvals. We’re hopeful that these progressive therapies will probably be accessible within the very close to future. We stay up for updating you on our progress over the approaching quarters, and thanks to your continued help.

And I will now flip the decision over to Brian to assessment the financials.

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Brian R. Mueller, BioMarin Pharmaceutical Inc. – Senior VP of Finance, Performing CFO & CAO [7]

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Thanks, Hank. Please seek advice from at this time’s press launch summarizing our monetary outcomes for full particulars on the primary quarter of 2020, and as ordinary, our complete report on the quarter will probably be accessible in our upcoming Type 10-Q, which we’re on observe to file over the following couple of days.

As Jeff talked about, we’re experiencing some modest impacts from the COVID-19 pandemic and consequently, now we have up to date full 12 months complete income steerage to between $1.85 billion to $1.95 billion. As Jeff famous,our up to date income steerage is predicated on the belief that our enterprise will return to normalized demand patterns within the second half of the 12 months.

Importantly, whereas we lowered our income steerage as a result of influence of COVID-19 on our industrial enterprise, we have been in a position to analyze our 2020 spending projections and make adjustment that allowed us to keep up our prior GAAP and non-GAAP earnings steerage regardless of the decrease income.

Transferring to working bills. R&D expense for the primary quarter of 2020 was $142 million and decrease in comparison with R&D expense for the primary quarter of 2019 of $184 million, principally attributable to much less R&D exercise for ROCTAVIAN, given its late stage of growth in addition to Palynziq following its approvals within the U.S. and Europe.

SG&A expense for the primary quarter of ’20 was $187 million, which was increased than SG&A expense for the primary quarter of 2019 of $162 million. The year-over-year improve was anticipated with the one largest driver, being the industrial preparation for the launch of ROCTAVIAN and the continued international launch of Palynziq. We additionally incurred some unpredicted overseas forex alternate losses throughout the month of March because the COVID pandemic negatively affected a few of our property denominated and a number of the extra risky international currencies.

Throughout the backside line outcomes, we reported GAAP web earnings of $81 million within the first quarter of 2020, in comparison with a GAAP web lack of $56.5 million within the first quarter of 2019. The advance in GAAP earnings was primarily attributable to increased income, decrease R&D bills and the achieve on the sale of the deferred tax property. With increased revenues and decrease R&D bills, non-GAAP earnings of $117 million within the first quarter of 2020 grew considerably as in comparison with Q1 2019 non-GAAP earnings of $25 million. Each of those first quarter 2020 backside line outcomes provides us an excellent begin in the direction of attaining our 2020 objectives of GAAP web earnings on an annual foundation for the primary time within the firm’s historical past, a substantial progress in non-GAAP earnings.

I might additionally like to the touch on the potential tax profit that we talked about final quarter which may be acknowledged within the second half of this 12 months. Our present 2020 GAAP web earnings steerage of between $20 million to $80 million, excludes the potential influence of intra-entity intangible asset transfers between BioMarin entities. If these intangible asset transfers happen, we estimate that the tax impact might end in a onetime noncash earnings tax advantage of higher than $500 million. As I discussed beforehand, you might have seen comparable transactions accomplished by a few of our bigger friends in current quarters.

Chatting with complete money and investments, we ended the primary quarter of 2020 with $1.15 billion in comparison with $1.17 billion on the finish of December 2019. The modest lower in complete money and investments throughout Q1 2020 was largely attributable to some timing of working money flows. Nevertheless, the numerous enchancment over the primary quarter of 2019 the place complete money and investments decreased by $105 million. This legitimate money place, coupled with vibrant enterprise fundamentals, put us in good standing to handle by the continued uncertainty associated to COVID-19.

In closing, the stronger efficiency of the enterprise throughout the first quarter of 2020, plus our constructive monetary outlook for the remainder of the 12 months, point out that 2020 needs to be a transformational 12 months for the corporate. And the prospects of worth to return from ROCTAVIAN and vosoritide, if they’re permitted commercially, give us an enthusiasm about our future.

Thanks to your help, and we’ll now open the decision to your questions. Operator?

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Questions and Solutions

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Operator [1]

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(Operator Directions) Our first query is from the road of Robyn Karnauskas from Suntrust.

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Robyn Kay Shelton Karnauskas, SunTrust Robinson Humphrey, Inc., Analysis Division – Analysis Analyst [2]

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And simply first off, congratulations to Greg. However to Rob, it was pretty working with you. I believe you introduced a breath of contemporary air to working with administration groups in all of my purchaser’s universe. So thanks a lot. I realized quite a bit. I assume I’ll start-up with some questions on ROCTAVIAN, and I hope I get that appropriately. So to begin with, what provides you confidence that in the USA, that there will not be any extra delays? Folks ask me this nonstop. After which while you discuss assuming regular operations go — resume within the second half, is that to start with of the second half? Do you may have a time line for that? If it goes into fourth quarter, might we see additional delays?

And the third query is, what are you listening to so far as like individuals prepared to have gene remedy procedures finished within the COVID surroundings as early as fourth quarter? Are individuals open to it? Is it separate from the hospitals? Or what are you listening to from the bottom?

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Jean-Jacques Bienaimé, BioMarin Pharmaceutical Inc. – Chairman & CEO [3]

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Okay. Hank, do you need to reply the query on the no delays with the FDA? Hank?

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Henry J. Fuchs, BioMarin Pharmaceutical Inc. – President of Worldwide Analysis & Growth [4]

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Thanks, Robyn, for the questions. The arrogance from the FDA is that we’re monitoring to our milestones and in some instances, they’re accelerating their work. So having been by a bunch of those lately, all of the indicators are pointing favorably. So far as willingness to dose, as you understand, we accomplished our dosing in our valrox scientific trials, and we’re experiencing a little bit of a delay within the PKU program. So I do anticipate that there’s some hesitance within the gene remedy scientific trial world. And I do not know if Jeff Ajer, desires to make any feedback about something he is heard about what may occur within the fourth quarter once we’re permitted.

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Jean-Jacques Bienaimé, BioMarin Pharmaceutical Inc. – Chairman & CEO [5]

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Sure. Jeff, do you need to give your perspective on how we’ll launch the product? I imply clearly, if we needed to launch at this time, it might be slightly bit difficult, however we’re seeing information each couple of minutes that the companies are beginning to reopen within the U.S. So — and all over the world, Germany, France. France is reopening their colleges in a few weeks. So I believe, the problem just isn’t — it is very exhausting to foretell when issues are actually going to return to regular or as near regular as attainable. We type of anticipate this to occur at the start of the third quarter, nevertheless it’s exhausting to inform at this time. However Jeff, do you need to give your perspective on the willingness of sufferers to be handled and the way our industrial staff goes to go about addressing this?

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Jeffrey Robert Ajer, BioMarin Pharmaceutical Inc. – Government VP & Chief Business Officer [6]

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Sure. It is an excellent query. And naturally, no one can predict the long run. So our staff has been targeted and perhaps I might begin with saying, luckily, now we have a staff in the USA that’s comprised largely of individuals with present relationships within the hemophilia neighborhood. So these individuals are busy making connections with clinicians, with hemophilia therapy facilities and with affected person advocacy organizations, all with the target of continuous to introduce BioMarin as a corporation to these audiences and supply alternatives for gene remedy, schooling, essential and extremely in demand locally, and in addition working on-site readiness. I believe one of the crucial decisive variables would be the capability and willingness or not of sure hospitals to do infusions, if we’re so lucky to have an permitted ROCTAVIAN product in This autumn. That may in all probability be considerably depending on the course of the COVID-19 scenario. However we’d additionally notice that whereas we have seen lots of disruption to our infusions of the enzyme merchandise, the disruption hasn’t been something near complete. And actually, we have seen much less disruption with Brineura infusions, that are indicative of the scenario the place hospitals and physicians can prioritize infusions in the event that they’re motivated and so they discover them to be significantly necessary. In order that’s our method for ROCTAVIAN, pursuing schooling, web site readiness, and we’ll see the place we are able to do infusions once we get that far. I personally have not gotten a sign that sufferers are going to be reluctant to take infusions once we get that far, and which may be reflective of the truth that our affected person engagement is fairly restricted within the preapproval setting. I will flip that again over to you, J.J., if you wish to direct on the resume to regular query.

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Jean-Jacques Bienaimé, BioMarin Pharmaceutical Inc. – Chairman & CEO [7]

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No. I imply I believe, I type of tried to reply that. Possibly do you need to give your perspective on the resume to regular? Jeff?

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Jeffrey Robert Ajer, BioMarin Pharmaceutical Inc. – Government VP & Chief Business Officer [8]

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Sure. So Robyn, I do not assume that we’re saying that our enterprise will probably be again to 100% to regular beginning the second half. I believe we’re utilizing the second half to offer some flexibility when it comes to the timing of that. My very own sense is that we’re anticipating to see the most important influence to our enterprise in Q2, we’d be rebounding in Q3 and with some luck, we’d be again to regular, pre-COVID ranges of demand in This autumn.

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Operator [9]

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We have now our subsequent query from the road of Salveen Richter from Goldman Sachs.

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Salveen Jaswal Richter, Goldman Sachs Group Inc., Analysis Division – VP [10]

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Robert, good luck with all the pieces. In order you look in the direction of the valrox launch, are you able to touch upon affected person screening, similar to an internet site that stood at about 400 people, I consider, again in February and an replace on the companion diagnostic? After which secondly, how ought to we take into consideration the complete 12 months Section I/II upcoming knowledge? And do you anticipate it can influence payer discussions?

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Jean-Jacques Bienaimé, BioMarin Pharmaceutical Inc. – Chairman & CEO [11]

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Hank, do you need to reply the companion diagnostic for issues which can be transferring alongside right here after which the opposite query on the Section II replace?

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Henry J. Fuchs, BioMarin Pharmaceutical Inc. – President of Worldwide Analysis & Growth [12]

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Does she additionally had a — sure, and the decide ins. I can begin with the companion diagnostic and a full 12 months replace after which flip it again to you guys for the influence on payers or the decide ins. Companion diagnostic, Salveen, doing nice. Every thing’s on observe. We totally anticipate to have an approvable companion diagnostic on the time of valrox approval in the USA. We totally anticipate to have a CE mark for Europe to be used in Europe when ROCTAVIAN, excuse me, is permitted. A 4-year replace on ROCTAVIAN, the expectation is — the principle focus goes to be clearly on bleed management. And secondary emphasis goes to be on the evolving sample of issue expression and whether or not there are something in particular person sufferers that mark, who’s extra weak to dropping issue expression if that is occurring or not. In order you understand, the examine has been overseen by an information monitoring committee, and so they haven’t reported something significantly someway to ask about examine 201. So we proceed to observe the sufferers because the protocol described and stay up for presenting the information in the course of the 12 months.

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Jean-Jacques Bienaimé, BioMarin Pharmaceutical Inc. – Chairman & CEO [13]

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So Jeff, do you need to discuss in regards to the payers and influence, I imply the Section II replace influence or like thereof on the payers?

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Jeffrey Robert Ajer, BioMarin Pharmaceutical Inc. – Government VP & Chief Business Officer [14]

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Sure. Thanks, J.J., and thanks, Salveen, for the query. The 4-year knowledge level is a vital a part of the rising scientific knowledge image. However I believe I might talked about on the earlier name that our payer launch was begun in This autumn of 2019. So we have a full payer administration staff on the bottom. They have been conducting requires the final Four months. And we have been utilizing the information that now we have. We have been utilizing the 3-year knowledge from final spring, and we have been utilizing the information from the GENEr8-1 interim knowledge reduce. That is the information that now we have. Payers have an interest within the query of sturdiness. That is a key query for them. I have never gotten any alerts from payers that they assume that the reply to that query is a binary one primarily based on what we see midyear from the 4-year knowledge reduce. However clearly, that will probably be an necessary a part of the image. And payers care in regards to the query of sturdiness.

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Operator [15]

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We have now our subsequent query from the road of Josh Schimmer from Evercore ISI.

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Joshua Elliott Schimmer, Evercore ISI Institutional Equities, Analysis Division – Senior MD & Fairness Analyst [16]

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Have you ever began to see any change in days receivable within the begin of the second quarter? And the way do you anticipate that to evolve over the course of the 12 months? And might you remark slightly bit on the insurance coverage protection shifts you might be seeing within the U.S. and the way you assume which will influence the enterprise, if in any respect?

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Jean-Jacques Bienaimé, BioMarin Pharmaceutical Inc. – Chairman & CEO [17]

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Brian, do you need to reply the times receivable questions? After which Jeff, the insurance coverage combine?

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Brian R. Mueller, BioMarin Pharmaceutical Inc. – Senior VP of Finance, Performing CFO & CAO [18]

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In fact, sure. Thanks, Josh. We’re watching that carefully, together with all through March and April right here. We have not but seen precise disruption to our funds. We have got a steady base of consumers, steady provide chain and relationship from a money move standpoint with these prospects. So we’re hopeful that, that may proceed, however acknowledge that there is going to be some uncertainty with the pandemic and its influence on well being care programs. So we’re watching it, however no influence to this point. And Josh, like…

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Jean-Jacques Bienaimé, BioMarin Pharmaceutical Inc. – Chairman & CEO [19]

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Jeff, do you need to discuss in regards to the payer combine?

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Jeffrey Robert Ajer, BioMarin Pharmaceutical Inc. – Government VP & Chief Business Officer [20]

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Sure. Like different firms, we’re very watchful for alerts, seem like sufferers are dropping entry to personal insurance coverage due to being laid off and what occurs to these households and sufferers. I’d say we do not have something that constitutes a sign on that thus far. There have been a few anecdotal studies that we have collected, and we’re intentionally gathering any alerts that we are able to from our RareConnections hub program. So we have gotten anecdotes, so sufferers calling and saying that they are anxious in regards to the potential lack of insurance coverage. We have seen one affected person household shift from a non-public to a authorities plan attributable to lack of a job. And so I’d name these anecdotes and never a sign. However we’ll preserve watching and preserve you posted. A very good query. Thanks.

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Operator [21]

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We have now our subsequent query from the road of Cory Kasimov from JPMorgan.

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Cory William Kasimov, JP Morgan Chase & Co, Analysis Division – Senior Biotechnology Analyst [22]

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Congrats to Robert in your retirement. So my query is for Hank. I am simply curious, is there a cause aside from COVID why the EMA might revert the ROCTAVIAN MAA to plain assessment from accelerated evaluation, particularly because you already efficiently accomplished the pre-approval inspection? And was there any new knowledge or new analyses that have been requested by the company? Anything you may say there?

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Henry J. Fuchs, BioMarin Pharmaceutical Inc. – President of Worldwide Analysis & Growth [23]

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I believe the important thing factor about accelerated evaluation is that the majority merchandise fall off accelerated evaluation. And I believe that that is additionally additional compounded by the truth that that is a complicated medicinal agent. So I do not assume at this time’s remark about accelerated evaluation needs to be interpreted meaningfully in another way than once we initially filed the applying.

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Operator [24]

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Your subsequent query is from the road of Geoff Meacham from eBay (sic) [BofA].

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Geoffrey Christopher Meacham, BofA Merrill Lynch, Analysis Division – Analysis Analyst [25]

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I simply wished to ask slightly bit extra in regards to the dynamics within the base enterprise. I assume when you concentrate on the diagnostic path for brand new sufferers on various totally different merchandise, be it Vimizim, Brineura, Palynziq, et cetera, clearly, it is a fairly lengthy cycle. I simply wished to ask you for those who’ve seen any of those doctor interactions coming to — changing to digital. I am simply making an attempt to evaluate the — perhaps the long-term disruption to new begins past, say, third quarter of this 12 months.

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Jean-Jacques Bienaimé, BioMarin Pharmaceutical Inc. – Chairman & CEO [26]

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Jeff, do you need to take that one?

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Jeffrey Robert Ajer, BioMarin Pharmaceutical Inc. – Government VP & Chief Business Officer [27]

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Sure, I might be glad to. So relative to the bottom enterprise and the dynamics, I’d say, we anticipate the near-term influence from missed infusions to be increased than the influence from delayed affected person identification and affected person begins. In all probability the disruption to affected person begins could be bigger for Palynziq at this level as a result of Vimizim, all of Vimizim, Naglazyme and Brineura have a bigger beginning base of sufferers. So the incremental new sufferers approaching may have a smaller influence. And there are anecdotal studies, however clinics are shifting their interactions with sufferers to digital visits. That is one thing that’s clearly exterior of BioMarin’s purview. So we solely have incidental studies on that, and that is not one thing that we’d search to become involved in. Nevertheless, I believe for sure facets of the identification and affected person begin pathway, we do see sufferers transferring ahead. In order that course of has not floor to a halt precisely, nevertheless it has been disrupted. And thanks, Geoff, for that query. I hope I’ve addressed your considerations.

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Operator [28]

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Subsequent query is from the road of Akash Tewari from Wolfe Analysis.

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Akash Tewari, Wolfe Analysis, LLC – Director of Fairness Analysis & Senior Analysis Analyst [29]

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Are you able to give some colour on how the FDA might use that new prophy trial on valrox beforehand introduced? Would it not be attainable to have that knowledge pooled together with your Section I/II knowledge as part of a separate efficacy evaluation in your label? And the way lengthy will that take to occur? And I simply wished to make clear one thing. Your 2020 steerage included the influence of valrox gross sales solely in Europe. I simply wished to ensure I heard that appropriately.

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Jean-Jacques Bienaimé, BioMarin Pharmaceutical Inc. – Chairman & CEO [30]

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So Hank, you might begin on the FDA [prophy].

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Henry J. Fuchs, BioMarin Pharmaceutical Inc. – President of Worldwide Analysis & Growth [31]

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Sure. Sure. Akash, that examine begin goes to be delayed due to the pandemic. And in any case, it was ancillary to the preliminary software and registration. The best way I give it some thought is within the preliminary opinions that the companies are , they’ve some knowledge in sufferers handled with on-demand steroids. They’ve some sufferers which can be handled with prophylactic steroids. Medical doctors are type of break up, some like prophy, some like on-demand. We have simply dosed a 130-patient scientific trial with on-demand steroid use. And so due to this fact, we have been fascinated about growing the pattern measurement of the expertise that now we have with prophy steroid use. When these examine knowledge can be found, we might definitely make them accessible medically in medical communications. After which we take into consideration additionally how that could be tied along with the Section I/II prophy examine to help a label complement. That is fairly far down the street from the place we’re. And I believe now we have a very robust knowledge bundle at launch in regard to steroids and easy methods to use them.

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Jean-Jacques Bienaimé, BioMarin Pharmaceutical Inc. – Chairman & CEO [32]

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So, once more, as a steerage, Akash, so to make it clear, our authentic 2020 steerage, which we gave once we reported This autumn, included some anticipated revenues in valrox in Europe. The revised steerage, which is given at this time assumes no valrox revenues in Europe as a result of now we anticipate that really, the approval in Europe, we very — on the very finish of this 12 months, early subsequent 12 months in order that’s why.

Though we’ve not given the place the valrox quantity was, I simply need you to know that the brand new steerage assumes no revenues for valrox in Europe. Sorry, ROCTAVIAN.

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Operator [33]

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We have now our subsequent query from the road of Chris Raymond from Piper Sandler.

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Christopher Joseph Raymond, Piper Sandler & Co., Analysis Division – MD & Senior Analysis Analyst [34]

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I simply wished to drill down slightly bit on Palynziq. So Jeff, I believe I heard your commentary from the slowdown in new begins occurring at the start of the quarter. As reminiscence serves, I believe there was a little bit of a slowdown that began additionally in This autumn. And simply noting that while you take a look at the product-specific steerage modifications that this sort of stands out as, I believe by my math, it is midpoint to midpoint is down 10%, whereas the others that you just modified have been down much less. Simply — I’m wondering for those who might simply perhaps give slightly bit extra colour. Is that this — is there one thing extra endemic, I assume, occurring with Palynziq?

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Jeffrey Robert Ajer, BioMarin Pharmaceutical Inc. – Government VP & Chief Business Officer [35]

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Thanks for the query, Chris. So within the Q1 earnings name, we might pointed to slightly little bit of a seasonal slowdown in This autumn for Palynziq when it comes to affected person begins and affected person enrollments, and now we have traditionally seen that additionally with Kuvan. That is principally a seasonal — the vacations.

So from Thanksgiving in late November, by Christmas and New 12 months, we see disruption to clinic exercise and slowed affected person enrollments. So we noticed slightly little bit of that in This autumn for each Kuvan and Palynziq. And clearly, our focus now’s on selling Palynziq that is why we addressed it.

And equally, in Q1, recall, we have traditionally seen slowdowns in our enterprise for Kuvan. And we’re seeing type of an analogous sample within the early a part of Q1. That is not associated to the vacations in This autumn. That is associated to the reset of insurance coverage insurance policies of copays, cumulators (sic) [accumulators] and in some instances, sufferers switching to new insurance policies and in lots of instances, the necessity for a brand new prior authorization for sufferers. That was actually an early Q1 phenomenon. By February, we have been seeing new affected person enrollments and begins selecting up. That was actually an encouraging signal for Palynziq in February and March. After which because the clinics in the USA and Germany started to be shut down in March from the COVID-situation, we’re experiencing now an actual slowdown in affected person enrollments and affected person begins. And I anticipate that may proceed largely till the clinics are again up and in a position to proceed their operations. Once more, recalling that with Palynziq, affected person begins are directed to be beneath the supervision of a well being care skilled that may handle potential opposed occasions, not less than for the primary injection.

I hope that solutions your query, Chris.

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Jean-Jacques Bienaimé, BioMarin Pharmaceutical Inc. – Chairman & CEO [36]

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Sure. And in addition for Palynziq, each the sufferers and the clinicians need to be licensed that they’ll — that the affected person can obtain the product and know easy methods to cease and test after which that the doctor can find out about how managing the potential aspect impact. That is why there undoubtedly has been, in late March and in April, a slowdown within the new sufferers. However we consider it is non permanent. And when the PKU clinic reopen, so that you hopefully will see an acceleration of recent sufferers right here.

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Operator [37]

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We have now our subsequent query from the road of Phil Nadeau from Cowen & Firm.

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Philip M. Nadeau, Cowen and Firm, LLC, Analysis Division – MD & Senior Analysis Analyst [38]

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Congrats on the progress. I additionally need to ask a query on the steerage. It appears to be like just like the Vimizim steerage was reduce by about $30 million and Naglazyme by $20 million. I am simply curious, one, what have you ever been seeing in April? How far aside can these infusions be pushed earlier than sufferers see some influence on their signs? And two, like what quantity of sufferers worldwide are in a position to get these infusions at residence? And so due to this fact, perhaps will not have a lot of a disruption to make use of.

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Jean-Jacques Bienaimé, BioMarin Pharmaceutical Inc. – Chairman & CEO [39]

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Jeff?

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Jeffrey Robert Ajer, BioMarin Pharmaceutical Inc. – Government VP & Chief Business Officer [40]

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Jim (sic) [Phil], thanks for the query. So — and the discount in steerage on Vimizim and Naglazyme is proportional to the bottom of gross sales that we’re speaking about. So what we’re seeing is a comparatively uniform influence up to now relative to the dimensions of the enterprise for every of Naglazyme and Vimizim.

We’re seeing extra disruption in residence — sorry, extra disruption in loss infusions in markets the place residence infusion just isn’t a well-established apply. So we all know usually that residence infusion, the place residence infusion is a longtime apply, that compliance charges are increased. And we have seen much less disruption in these markets the place sufferers are residence infused. Now we have a really various international enterprise for each Naglazyme and Vimizim. So I do not need to attempt to report high-level numbers of what p.c of sufferers are residence infused or not. However our techniques have been in markets the place techniques to intervene and attempt to preserve our enterprise on observe. In markets the place we have residence infusion as a longtime apply, we’re making an attempt to push extra sufferers into that channel, and that channel is comparatively open. In markets the place residence infusion just isn’t a longtime apply, we see this as a possibility in some locations to attempt to get it established. And so we have had some success in locations like Brazil and Argentina and Colombia and Spain, for instance, in pushing sufferers into residence infusion, the place it isn’t a longtime apply or alternate infusion websites, these being perhaps a smaller hospital that is nearer to residence, much less impacted by COVID-19 scenario or in some instances, one thing like a retail infusion clinic the place sufferers can go. And we’re seeing some constructive impact of that already on our enterprise.

Naglazyme and Vimizim are merchandise the place we all know sufferers haven’t at all times been utterly compliant. So in all probability lacking one or a number of infusions is — might not be noticeable to the affected person or the doctor. For Brineura, then again, each infusion may be important, and we’re luckily seeing a a lot increased stage of compliance and fewer disruption with that a part of the enterprise. I hope I’ve addressed your query there, Jim (sic) Phil .

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Jean-Jacques Bienaimé, BioMarin Pharmaceutical Inc. – Chairman & CEO [41]

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And truly, if I could add, really, the virus scenario might be — you’ve got talked about it may be useful to really transfer lots of the therapies from the — in these international locations which can be behind U.S. and Western Europe, transfer the therapy and infusions from the hospitals into both the properties or locations which can be nearer to the sufferers, which really general is nice information and may really enhance compliance in the long run.

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Operator [42]

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We have now our subsequent query from the road of Matthew Harrison from Morgan Stanley.

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Matthew Kelsey Harrison, Morgan Stanley, Analysis Division – Government Director [43]

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Simply 2 shortly from me, I assume for Hank. Hank, I did not see a touch upon the press launch, and I am sorry if I missed this, perhaps you commented throughout your remarks. However any influence to enrollment within the final group of sufferers that you just want for the complete pivotal examine for valrox? After which on PKU gene remedy, is there something you are able to do by including some extra websites or something to perhaps velocity up or cut back the delay that you’ll face right here earlier than you begin? Or is it principally only a delay till you are in a position to begin?

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Henry J. Fuchs, BioMarin Pharmaceutical Inc. – President of Worldwide Analysis & Growth [44]

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Matt, 270 — I am sorry, ROCTAVIAN Section III enrollment, I believe, you have been asking about. We accomplished in November, and so we’re not presently enrolling anybody additional as regards our preliminary approval. So excellent news on ROCTAVIAN, the confirmatory trial totally enrolled.

And so far as the form of the generalized restart, now we have lots of conversations with investigators and there is reopening occurring in several methods and elsewhere at totally different instances, and we’re actually making an attempt to get a deal with on the place a web site goes to have the ability to dose the primary affected person on the resumption of scientific trials. I do not precisely have a readability on when that is going to be or the place that is going to be.

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Operator [45]

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Subsequent query is from the road of Paul Matteis from Stifel.

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Alexander Thompson, Stifel, Nicolaus & Firm, Included, Analysis Division – Analysis Analyst [46]

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That is Alex on for Paul. Simply wished to see how your pondering has developed on pay-for-performance for gene remedy as a mannequin within the U.S.?

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Jean-Jacques Bienaimé, BioMarin Pharmaceutical Inc. – Chairman & CEO [47]

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Jeff, do you need to tackle that one?

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Jeffrey Robert Ajer, BioMarin Pharmaceutical Inc. – Government VP & Chief Business Officer [48]

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Sure. Thanks, Alex. It is an excellent query. We’re actually going into a brand new mannequin for reimbursement with ROCTAVIAN. And the payers are very taken with maintaining with gene therapies which can be coming to the market, ROCTAVIAN being maybe one of many first significant gene remedy manufacturers to hit. They need to ensure that they don’t seem to be falling behind. And it is actually the shift from how do you create a reimbursement surroundings that — for a onetime sturdy therapy in a mannequin that’s accustomed to paying for persistent therapies over time. And what the payers have instructed us is that, one, they perceive that there is limitations up to now in firms’ skills to create pay-for-performance agreements that do not create issues with authorities value reporting, and I am positive you perceive the problem there. Medicaid greatest costs and AMPs that may set off a cascade of decreasing value to government-paid sufferers, that is an issue. They perceive that. They’ve additionally suggested us, BioMarin, that outcomes-based agreements are necessary to them. It is a means of shifting the danger from their shoulders again to the producer for each response and sturdiness over the time. They’ve instructed us that it is necessary, and so they’ve instructed us that agreements which can be restricted to 23% or much less of the acquisition value do not significantly excite them. They do not contemplate that to be an answer.

So we have been engaged on methods for outcomes-based agreements for ROCTAVIAN. We expect that we have probably obtained some issues that may work for payers. We’re on the market speaking to payers proper now. And possibly for aggressive functions, I will not go into the main points of what that each one appears to be like like. However I believe now we have a possible path ahead that may tackle outcomes-based agreements, needs from payers.

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Operator [49]

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Subsequent query is from the road of Mohit Bansal from Citigroup.

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Mohit Bansal, Citigroup Inc, Analysis Division – VP and Analyst [50]

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Congrats, and thanks very a lot for Rob as nicely from my aspect. Good luck together with your subsequent a part of your adventures.

Now I believe simply wished to get slightly bit extra colour on the form of restoration you’re pondering in your base case. If I heard appropriately, you’re assuming normalcy in fourth quarter, your assumptions, is that honest? Or you’re assuming that it may very well be wish to — second quarter will probably be down, third quarter beginning to get well and fourth quarter may very well be utterly regular? Or the way you’re fascinated about that may be very useful.

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Jean-Jacques Bienaimé, BioMarin Pharmaceutical Inc. – Chairman & CEO [51]

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Jeff, you need to — I will say just a few phrases on that slightly later, however why do not you get began?

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Jeffrey Robert Ajer, BioMarin Pharmaceutical Inc. – Government VP & Chief Business Officer [52]

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Sure. So thanks, Mohit. Everyone is busy predicting the long run right here, which is troublesome to do in regular circumstances and doubtless fraught with much more troublesome — difficulties to do exactly, given the present scenario. However we began seeing disruptions to our enterprise on the finish of the primary quarter, which didn’t influence our monetary efficiency within the first quarter. However as we started the second quarter, we knew the disruptions that we’re seeing would move by to our enterprise as described. We shortly obtained in gear to start out taking mitigating actions, primarily on missed infusions as I’ve described, and we expect that these mitigating actions are having an influence.

So sure, we’re anticipating that we’ll see the most important influence to our enterprise within the second quarter. And that the circumstances relative to our enterprise could be enhancing as we undergo the top of second quarter, by the third quarter. And our goal is to have one thing that appears like pre COVID-19 ranges of demand that we’re in a position to tackle and facilitate within the fourth quarter.

You possibly can inform from the extent of our steerage reductions the magnitude of the anticipated influence to every of our totally different manufacturers. In order that’s a means of type of quantifying our expectations for every of the totally different manufacturers relative to the dynamics that I have been describing. So hopefully, it is attainable so that you can join the dots slightly bit between the qualitative and the quantitative piece.

Possibly I might pause there and see if J.J. has different ideas.

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Jean-Jacques Bienaimé, BioMarin Pharmaceutical Inc. – Chairman & CEO [53]

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No, I imply, I simply need to spotlight that it’s certainly very troublesome for us to forecast the place issues are going to go. It appears to be like like issues are getting higher in most components of the world, however we’re not out of this advanced scenario that the virus has created. So once more, we assume right here the principle influence being in Q2, some restoration in Q3 and hopefully, This autumn probably again to regular. However it can rely quite a bit on how shortly the economies are reopening in several components of the world. And in addition, as a few of you understand, there are talks that there may very well be a second wave of the virus, like there was in — for the 1918 Spanish flu. Hopefully, if there’s one will probably be minor, and there will probably be extra therapies accessible by then, however all that is very exhausting to foretell. So right here we do not assume a big third or second wave of the coronavirus seeing the world in This autumn. So if that does not occur, then we’re comparatively assured in our steerage right here.

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Operator [54]

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We have now our subsequent query from the road of Tim Lugo from William Blair.

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Timothy Francis Lugo, William Blair & Firm L.L.C., Analysis Division – Co-Group Head of Biopharma Fairness Analysis [55]

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We’re virtually 2 years into the approval of Palynziq right here within the U.S., and we clearly have generic Kuvan approaching. Might you give us your up to date ideas of how most of the Kuvan sufferers will probably be transitioned on to Palynziq by the point the generic involves market right here within the U.S. on condition that we clearly have bigger well being care disruptions given COVID?

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Jean-Jacques Bienaimé, BioMarin Pharmaceutical Inc. – Chairman & CEO [56]

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Jeff?

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Jeffrey Robert Ajer, BioMarin Pharmaceutical Inc. – Government VP & Chief Business Officer [57]

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Sure. So nice query. We have now seen, up to now, with the uptake of Palynziq in grownup sufferers, we have seen virtually 40% of Palynziq sufferers coming from sufferers which can be on industrial remedy with Kuvan. And primarily, what that’s indicating are PKU sufferers that have been being handled with Kuvan that have been having a response however not seeing the magnitude of a response that they’ve desired and in search of Palynziq as a extra highly effective different. So 40% is a fairly large proportion of our new Palynziq sufferers coming over from Kuvan.

Clearly, in the USA, we’re beginning with a reasonably large pool of grownup sufferers on Kuvan. So whereas we’re seeing a fabric shift of that grownup affected person base over to Palynziq for causes that I’ve described, I would not say that, that represents something close to a majority of these sufferers. As we go right into a lack of exclusivity interval later this 12 months, one of many issues that we’re inspired by is, even when now we have a Kuvan affected person that goes on to a generic type of the product, that we actually have not misplaced them endlessly. We’re related to them by the clinics, we’re related to them from our hub companies, with their opt-ins and knowledge, our scientific coordinators are related with them. And Palynziq stays a viable choice going ahead for any affected person, any grownup affected person that’s not seeing the type of response they’re in search of on Kuvan or a generic model of Kuvan. So we’re optimistic about our market potential and alternative within the U.S. for Palynziq, type of within the medium and long term.

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Operator [58]

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Subsequent query is from the road of Kennen MacKay from RBC Capital Markets.

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Kennen B. MacKay, RBC Capital Markets, Analysis Division – MD & Co-Head of US Biotechnology Analysis [59]

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I need to say congrats to your entire staff for these Q1 outcomes that actually present that BioMarin is operationally and clinically and commercially navigating these actually unprecedented instances forward of actually any of our expectations.

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Jean-Jacques Bienaimé, BioMarin Pharmaceutical Inc. – Chairman & CEO [60]

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Thanks.

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Kennen B. MacKay, RBC Capital Markets, Analysis Division – MD & Co-Head of US Biotechnology Analysis [61]

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So I additionally had one other housekeeping query on steerage right here. The total 12 months 2020 steerage for a unfavorable 5% headwind form of implies $100 million hit right here at midpoint. And once more, it appears like expectations of the overwhelming majority of that’s going to return in Q2 excluding perhaps slightly bit form of dragging on by the remainder of the 12 months and pertaining to the form of early removing of ROCTAVIAN in This autumn in Germany. I am simply making an attempt to form of handle my Q2 expectations. Ought to I actually be fascinated about the overwhelming majority of that $100 million hit coming in Q2?

After which lastly, I simply really feel compelled to offer a ultimate congrats to Jeff and anybody else on the staff who helped give you the ROCTAVIAN title. I believe that is an superior model title, and it appears like a steel track. Actually, actually preferred it.

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Jean-Jacques Bienaimé, BioMarin Pharmaceutical Inc. – Chairman & CEO [62]

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Thanks. So I believe Jeff type of addressed that query, once more, that we do see certainly the vast majority of the hit on our revenues is Q2. There will probably be a success in Q3 as in comparison with what we have been anticipating as a result of as an illustration, some Palynziq sufferers that have been alleged to be began and are — have been delayed. After which all the pieces will get delayed with that, some missed infusion that may nonetheless be in all probability occurring in late Q2 and perhaps early Q3, though it is exhausting to foretell. However — and perhaps Brian may give his personal perspective on this. If you wish to chip in, Brian, on this? You have got a…

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Brian R. Mueller, BioMarin Pharmaceutical Inc. – Senior VP of Finance, Performing CFO & CAO [63]

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Sure, in fact, J.J. Thanks. And I believe — so what we have commented on Canada is that the disruption will probably be worse in Q2. I do not assume we are able to predict with certainty what — how that may really translate into ordering patterns. We already level to our annual income steerage as the first indicator for the industrial model and fewer so quarter-to-quarter as a result of we all know that country-by-country particular ordering patterns shift drastically attributable to timing.

So relying on no matter stage of provide was available in these sure territories the place we’re experiencing some disruption in infusion and whether or not and when they are going to order subsequent in addition to how that spills into Q3, I do not assume we are able to put our finger on the precise ordering sample. So we duly level you to the annual steerage.

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Operator [64]

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We have now our subsequent query from the road of Gena Wang from Barclays.

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Peter B. Kim, Barclays Financial institution PLC, Analysis Division – Analyst [65]

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That is Peter B. Kim for Gena Wang. I assume on — query on valrox. Because it switches to a normal assessment, does EMA need to see the complete — the Section III knowledge to make their resolution?

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Jean-Jacques Bienaimé, BioMarin Pharmaceutical Inc. – Chairman & CEO [66]

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Hank? Hank, you there?

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Henry J. Fuchs, BioMarin Pharmaceutical Inc. – President of Worldwide Analysis & Growth [67]

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Sure. I am undecided I heard the complete query. Is it attainable to repeat it?

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Peter B. Kim, Barclays Financial institution PLC, Analysis Division – Analyst [68]

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Positive. The query was, in a case the place EMA assessment switches to a standardized course of, standardized assessment, would EMA want to see the complete Section III knowledge to make our resolution?

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Henry J. Fuchs, BioMarin Pharmaceutical Inc. – President of Worldwide Analysis & Growth [69]

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Actually an possible chance. I believe it is slightly untimely to speak about what kind of turns may occur in a assessment. As you understand, we — nicely, traditionally, we do not give very detailed feedback about the place we’re in assessment as a result of it is very troublesome. It may be very troublesome to interpret it and issues can get settled. So I believe the message of at this time is due to COVID, whereas we’re on accelerated evaluation, the assessment has been delayed and since accelerated evaluation is sophisticated to remain on, sophisticated additionally by the superior nature of the therapeutic, there could also be an additional delay. We really feel snug guiding you to an expectation of an opinions in This autumn — This autumn this 12 months, Q1 of subsequent 12 months. However assessment is definitely not full, and issues might change additional.

The excellent news, I’d say — I imply, after which I solely flip that round, so the excellent news is have been that to occur if we’re totally enrolled with a pivotal trial. So it isn’t like we’re not like the corporate that put the accelerated approval examine into the regulators after which haven’t even began the confirmatory examine. We have completed the enrollment within the confirmatory examine.

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Operator [70]

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Subsequent query is from the road of Ellie Merle from Cantor Fitzgerald.

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Eliana Rachel Merle, Cantor Fitzgerald & Co., Analysis Division – Analysis Analyst [71]

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Congrats on all of the progress. Only a query on vosoritide. Out of your current discussions with the regulators across the submitting, I assume, what was their newest perspective on how a lot efficacy knowledge it’s worthwhile to have a label that covers ages beneath 5? Or whether or not form of the protection knowledge from the continuing research, coupled with the Section III in ages over 5 could be sufficient for a broad label?

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Jeffrey Robert Ajer, BioMarin Pharmaceutical Inc. – Government VP & Chief Business Officer [72]

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Eliana, thanks for the query. These conversations are at a a lot earlier stage than the place these sorts of questions get answered. The negotiation goes to be what’s — what’s within the bundle. And what will probably be within the bundle would be the security knowledge on sufferers who’re older than 6 months of age and as much as 5 years of age, along with the pivotal examine. They’re nicely conscious of that, and so they’re additionally very nicely conscious that their advisory committee suggested them that they need to anticipate that use will begin in very younger kids on the time of the preliminary licensure. However past that, we’ve not had concrete conversations about labeling.

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Jean-Jacques Bienaimé, BioMarin Pharmaceutical Inc. – Chairman & CEO [73]

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And let me — by the way in which, the primary 2 cohorts of the beneath 5 research are totally enrolled. Research enrollment of the third cohort, which is points from age of — from start to six months of age. Couple of sufferers have been enrolled. It has been slowed down slightly bit, in fact, by the virus, however the first 2 cohorts are totally enrolled.

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Operator [74]

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Subsequent query is from the road of Vincent Chen from Bernstein.

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Vincent Chen, Sanford C. Bernstein & Co., LLC., Analysis Division – VP [75]

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Congrats on the progress. To follow-up on John’s earlier query on insurance coverage protection shifts. If sufferers have been to shift from industrial to authorities insurance coverage, roughly what web value influence do you anticipate to see to your portfolio? And which merchandise could be simpler, if any? Are there causes to assume that your portfolio may really be considerably extra insulated than the, I assume, the biopharma sector as a complete?

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Jean-Jacques Bienaimé, BioMarin Pharmaceutical Inc. – Chairman & CEO [76]

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Jeff, do you need to attempt that one?

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Jeffrey Robert Ajer, BioMarin Pharmaceutical Inc. – Government VP & Chief Business Officer [77]

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Sure, that is an excellent query, Vincent. We have now authorities costs, now we have 340B reductions, relying on the place sufferers are getting their care and we have industrial sufferers. And for our portfolio in the USA, we do not contract for or low cost our industrial portfolio. So if we had a considerable shift in sufferers transferring from industrial plans to love Medicaid, for instance, you can see a person affected person producing much less web income. Primarily based on the variety of sufferers that we have in the USA, now we have to see a reasonably large shift in sufferers over to the federal government manufacturers earlier than we might see a fabric influence on our type of gross to web for revenues in the USA. After which fascinated about the USA as part of the diversified international enterprise, in all probability the larger a part of our enterprise within the U.S., nicely undoubtedly the larger half, is our PKU franchise relative to our enzyme sufferers.

So I am sorry for musing whereas I am answering. I believe it is an excellent query. We’ve not seen something that even comes near a sign of greater than anecdotal studies of a affected person right here or there dropping their personal insurance coverage and transferring over to a security web insurance coverage. So I believe it is a theoretical factor, however we’ve not seen something near that but occurring. Thanks.

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Operator [78]

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There are not any additional questions right now. I flip the decision again over to our Chairman and CEO, J.J. Bienaimé, for closing statements.

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Jean-Jacques Bienaimé, BioMarin Pharmaceutical Inc. – Chairman & CEO [79]

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Proper. Thanks, operator. And I simply need to, in conclusion, say that in these unprecedented instances and the need of progressive therapies which have been developed by BioMarin and others have by no means been extra related to the individuals who want them. It’s the well being care trade that may change the course of the continuing COVID-19 pandemic.

One of many good aspect impact of the virus is that the pricing of medicine just isn’t making the headlines anymore, for apparent causes, which is an efficient information for us. And — however within the face of this very actual near-term disaster, I stay very assured that — in BioMarin’s capability to ship on the super alternative for worth creation that now we have earlier than us. So our underlying fundamentals stay robust, and we’re nicely positioned to efficiently handle by this unsure financial surroundings. The important progress drivers are in place. Having constructed a profitable base enterprise, transition our pipeline to handle bigger uncommon indications and lay the muse for vital profitability with ROCTAVIAN and vosoritide approvals. All of these positions BioMarin for substantial success in each the near-term and the long run. So thanks, once more, to your continued help, and keep secure. Goodbye.

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Operator [80]

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Thanks, presenters. Women and gents, this concludes at this time’s convention name. Thanks all for collaborating. It’s possible you’ll now disconnect. Presenters, please keep for the submit convention.



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