2023-06-30 18:08:43 ET
Summary
- BioMarin Pharmaceutical Inc. received FDA approval for ROCTAVIAN for adults with severe Hemophilia A.
- Net product revenues of VOXZOGO grew by 346% year-over-year to $87.8 million.
- In the coming months U.S. and European Union will decide if VOXZOGO should be expanded to treat another 1,000 achondroplasia patients.
- Total revenues for Q1 of 2023 came in at $596.4 million, which was a 15% year-over-year increase from the same time period the prior year.
BioMarin Pharmaceutical Inc. ( BMRN ) is a good speculative biotech play to look into. The last time I wrote an article on this pharmaceutical company, it had only submitted a regulatory application of ROCTAVIAN for the treatment of patients with Hemophilia A, but had not yet received FDA approval for it. Well, now it has been able to score a huge win, in that it was able to receive FDA approval of ROCTAVIAN for the treatment of adults with severe Hemophilia A. This is a huge win for these patients, as it finally allows a new way for them to control their bleeds following a single, one-time infusion. It remains to be seen how well this gene therapy does for severe Hemophilia A patients in the U.S. market, but at least it was able to expand its market opportunity towards another market.
A good thing about BioMarin is that it doesn't only need to rely on one marketed drug to continue to build sales. It has another drug which has been performing pretty well known as VOXZOGO. This drug has been approved across 35 markets for the treatment of achondroplasia.
Things are looking good for this drug, because of the increased uptake of it, it was able to raise full-year 2023 revenue guidance to be between $380 million to $430 million. It can further expand its market by finding out if it is given the green light from the U.S. and Europe, on whether or not it can expand access of VOXZOGO to younger patients. If granted, then this would open the door for BioMarin to be able to target another 1,000 patients.
Lastly, the Q1 earnings came in strong as well, as the company continues to deliver steady growth. Total revenues for Q1 of 2023 came in at $596.4 million, which was a 15% year-over-year increase from the same time period the prior year. With FDA approval of ROCTAVIAN for severe Hemophilia A adult patients achieved, plus the ability to continue to expand sales in 2023, these are the reasons why I believe that BioMarin Pharmaceutical Inc. is a good speculative biotech play to look into.
FDA Approval Of ROCTAVIAN For Severe Hemophilia A Patients Achieved
BioMarin was finally able to receive FDA approval of ROCTAVIAN for the treatment of adults with severe Hemophilia A. As I stated before, it had already achieved regulatory approval for this gene therapy for this patient population in Europe in August of 2022. However, it now has U.S. approval of this gene therapy for severe Hemophilia A under its belt. Not only does it help this biotech to help expand its revenues, but it also achieved a first. In that, it is the first approved gene therapy for severe Hemophilia A in the United States.
A big reason on why BioMarin was able to eventually receive FDA approval is probably because of the global phase 3 GENEr8-1 study. Why is that? That's because it was the largest phase 3 trial done for any gene therapy being used to treat patients with Hemophilia A. This gene therapy not only works well, but seems to be durable as well. It was shown that 112 patients, who were followed up at an average of a 3-year period, had a mean annualized bleed rate [ABR] reduction of 52% or 2.6 bleeds/year. Another point that proves this, is that a majority of those who took ROCTAVIAN continued to respond three years and beyond, without the need to use prophylaxis to control bleeding.
Hemophilia A is a genetic disorder caused by a defective or missing factor VIII clotting protein. This disorder can be obtained with no previous family history or passed down from parents to children. Why is a defective or missing factor VII protein bad? That's because without having such a protein, the blood can't clot, and thus bleeding can't be controlled. While Hemophilia A approval is at least good in expanding revenue potential, there are two downsides to make note of.
The first is that BioMarin states that it could target about 6,500 adults from severe Hemophilia A. However, this might dip down to 2,500 patients, because in order for patients to take ROCTAVIAN they have to take an FDA approved test. That's because this gene therapy can only be given to patients without antibodies to adeno-associated virus serotype 5 [AAV5] detected by such a test. Despite the small patient pool, gene therapy companies might still be able to generate revenue.
Of course, that's if they can prove that a one-time infusion of ROCTAVIAN is worth the cost. The gene therapy might be sold for about $2.9 million. Gene therapies are expensive, because of them possibly being effective over a 4-year period. At least BioMarin is going to continue testing out this gene therapy over a 15-year period. If it can prove longevity over an extended period of time, then that might eventually help to boost sales.
VOXZOGO Sales Are Starting To Grow At A Rapid Pace
Sales of VOXZOGO are starting to grow at a rapid pace thanks to continued global expansion and patient uptake. This drug achieved regulatory approvals in late 2021 and early 2022 and has achieved impressive growth. How so? Well, consider that growth has been impressive when comparing Q1 of 2022 to Q1 of 2023. In Q1 of 2023, the net product revenues of VOXZOGO came in at $87.8 million. However, when looking at the prior year things were very different in terms of sales. Net product revenues of VOXZOGO in Q1 of 2022 came in at only $19.7 million. This means, that over a 1-year period, there was a growth of VOXZOGO sales of 346%. If such a growth rate continues in the coming years, then this drug will do well to increase revenues for BioMarin. Another piece of evidence that points to continued growth of this drug would be revenue guidance given by the company.
It raised full-year 2023 sales guidance of VOXZOGO to be between $380 million and $430 million. A big reason for the sales guidance is what I stated in the beginning above, which is that growth had accelerated in several markets. Specifically, there was growth acceleration noted in Brazil and Japan for this drug for the treatment of this patient population. In addition, consider that as of the end of March 2023, only 1,500 children with achondroplasia were being treated with VOXZOGO across 35 active markets. Why do I bring up the number of patients who are currently treated with this drug? It is because there is potential for BioMarin to be able to expand the use of VOXZOGO to another 1,000 patients. It is expecting to receive guidance from the U.S. and Europe on whether or not each territory will allow it to expand the use of this drug towards younger age groups. If granted, then it would open the door to target the other 1,000 patients I made note of directly above. The sales growth of VOXZOGO is already strong and if another 1,000 patients are added, then this could cause additional sales growth acceleration for it.
Financials
A good thing about BioMarin is that is a pharmaceutical company, which has already received many regulatory approvals. It is starting to do well in growing VOXZOGO sales, especially with the year-over-year increase in Q1 of 2023 sales by 346%. In looking at all of its approved products in its earnings, this was the largest year-over-year percentage increase I found. The second best year-over-year increase in Q1 of 2023 was with respect to ALDURAZYME's net product revenues, which increased by 41%. ALDURAZYME is an enzyme replacement therapy designed to address the underlying cause of mucopolysaccharidosis I [MPS I]. However, it's important to note that this drug is manufactured by BioMarin, but commercialized by Sanofi ( SNY ) in the U.S., European Union and internationally. Other drugs which contribute to a fair amount of BioMarin's revenue are VIMIZIM and NAGLAZYME, which generated net product revenues of $189.2 million and $123 million in Q1 of 2023 respectively.
In all, this company did well with respect to its recent earnings announcement. Total revenues for Q1 of 2023 were $596.4 million, which was an increase of 15% compared to the same time period in the prior year.
Risks To Business
There are several risks that investors should be aware of before investing in BioMarin. The first risk to consider would be with respect to the use of ROCTAVIAN for the treatment of adults with severe Hemophilia A. Despite just receiving FDA approval of this gene therapy for this patient population, there is no guarantee that sales will come in strong. Especially, when you consider that it is only targeting about 2,500 severe Hemophilia A patients. Plus, you have to also consider the risk with respect to pricing. As I stated above, the price of ROCTAVIAN is expected to be about $2.9 million. There is no assurance that insurers and payers will want to pay out this amount for patients.
Not only that, but there is no assurance that patients who are currently taking an effective Hemophilia A treatment such as HEMLIBRA, will want to switch to ROCTAVIAN. In such a case, this gene therapy may have to be discounted to be sold or altered in price eventually.
A second risk to consider would be with respect to VOXZOGO. First, even though Q1 2023 year-over-year net product revenues grew by 346%, there is no guarantee that the same will be achieved in the coming quarters. Secondly, there is a possibility that BioMarin will be granted expanded access use of VOXZOGO for achondroplasia towards another 1,000 patients from the U.S. and European Union, but no assurance that it receives the go ahead for these additional patients.
Conclusion
The final conclusion is that BioMarin is a good speculative biotech play to look into. As I stated above, it has been able to achieve FDA approval of ROCTAVIAN for the treatment of adults with severe Hemophilia A. While it remains to be seen if the high price tag will allow it to generate substantial revenue from this patient population, a positive is that it at least finally got the green light from the FDA to sell it. What's impressive, based on the most recent Q1 of 2023 earnings report, is that sales of VOXZOGO have started to take off. Especially, when you consider that net product revenues of this drug for achondroplasia, grew by as much as 346% to $87.8 million.
I think BioMarin Pharmaceutical is still a safe company to invest in, because of the sales growth it has achieved in the most recent quarter. Again, total revenues for Q1 of 2023 came in at $596.4 million, which was a 15% year-over-year increase from the same time period the prior year. With FDA approval of ROCTAVIAN for severe Hemophilia A adult patients achieved, plus the ability to continue to expand sales in 2023, these are the reasons why I believe that BioMarin Pharmaceutical Inc. is a good speculative biotech play to look into.
For further details see:
BioMarin: FDA Approval Of ROCTAVIAN And Massive VOXZOGO Sales Increase