BioMarin Pharmaceutical Inc. (BMRN) Q4 2014 Earnings Report, Transcript and Summary

Good afternoon, ladies and gentlemen, and welcome to the BioMarin Pharmaceutical Inc. conference call to discuss Fourth Quarter and Full Year 2014 financial results. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, Traci McCarty, Director of Investor Relations for BioMarin. Please go ahead, Traci.

Thank you, operator. Here today from BioMarin's management team are JJ Bienaimé, Chief Executive Officer; Dan Spiegelman, Chief Financial Officer; Hank Fuchs, Chief Medical Officer; Jeff Ajer, Chief Commercial; and Robert Baffi, Executive Vice President of Technical Operations. To remind you, this non-confidential presentation contains forward-looking statements about the business prospects of BioMarin Pharmaceutical, including expectations regarding BioMarin's financial performance, commercial products and potential future products in different areas of therapeutic research and development. Results may differ materially, depending on the progress of BioMarin's product program, actions of regulatory authorities, availability of capital, future actions in the pharmaceutical market and developments by competitors, and those factors detailed in BioMarin's filings with the Securities and Exchange Commission such as 10-Q, 10-K and 8-K reports. Now I'd like to turn the call over to BioMarin CEO, JJ Bienaimé. JJ Bienaimé: Thank you, Traci. Good afternoon, and thank you for joining us on today's call. So in the 2014 BioMarin delivered $751 million in total revenues which represents 37% total revenue growth year-over-year, driven in part by the exceptionally successful launch of our newest commercial product, VIMIZIM for the treatment of MPS IVA or Morquio A Syndrome. In addition we advanced all of our clinical development programs and as a result of our acquisition of Prosensa we added multiple new potential products to our portfolio for the treatment of patients with Duchenne Muscular Dystrophy. So 2014 was by far our most productive year-to-date and we begin 2015 while positioned to achieving new set of significant regulatory clinical and commercial milestones. Hank will discuss our full slate of regulatory rejecters for 2015 but I want to highlight our later stage product Drisapersen for the treatment of 13% of the Duchenne Muscular Dystrophy patient population or about 10,000 patients. Drisapersen is currently under rolling submission with the FDA and we are on track to submit the last module of the new drug application to the FDA by the end of April. In addition we expect to submit an application to the European Medicine Agency this summer and with the near term approval of Drisapersen in either of the US or Europe, we believe that we will reach profitability on a non-GAAP basis in 2017 and drive to further substantial profitability in the years after that. We continue to be optimistic that there is a potential pathway to near term approval for Drisapersen based on a number of factors. Some of the key factors are the urgent need for an improved treatment for boys with Duchenne Muscular Dystrophy. This entirely of our comprehensive dataset of over 300 patients treated with Drisapersen around the world and specifically the data that spans more than three years from three placebo controlled trials and two long term open label trials. Importantly, BioMarin has a track record of getting approval of orphan drugs based on a mixed dataset, and even mixed primary end points as evidenced by our product Aldurazyme. Our experience is consistent with FDAs record having approved 90 non-cancer orphan drugs without conventional evidence including many that have missed their primary endpoints. We are encouraged by the interactions we've had with the agency over the past few weeks and we look forward to a potential advisory committee meeting later on this year. On the commercial front, Jeff’s team did an exceptional job in 2014 launching VIMIZIM, driving first year product revenue to over $77 million. Moreover, we generated $751 million in total BioMarin revenue. Looking forward to 2015 we expect VIMIZIM revenues to continue growing as it penetrates more of the over 1,650 patients we have already identified. Then we'll describe more fully, we expect total BioMarin revenues to grow to $840 million to $870 million in 2015, although it is important to note that this guidance is based on current exchange rate and that demand is growing such that we would have been expecting $885 million to $915 million into our revenues for 2015 based on last year's exchange rate. In conclusion, we entered 2015 with a strong balance sheet, a portfolio of five marketed products and a pipeline of ten clinical and preclinical programs from which we expect a number of milestones and their readouts during the coming year. In the very near term we expect to complete the rolling NDA for approval of Drisapersen first in the US for treatment of patients with Muscular Dystrophy and shortly thereafter submission of the marketing authorization application for conditional approval of Drisapersen with the European Medicine Agency. We believe near term approval of Drisapersen in either of diseases will drive us to profitability on a non-GAAP basis in 2017. Till our accomplishments in 2014 I've set the stage for a very productive year both in terms of commercial success and clinical and regulatory milestones. We look forward to keeping you apprise of these important events throughout the year. And now Dan will discuss the 2014 quarterly and full year financial results in more detail, as well as provide our financial guidance for 2015. Dan?

Thanks, J.J. Earlier today we issued our press release summarizing our financial results for the fourth quarter and the full year 2014 and I refer you to that release for full details. Today I will discuss the results of the quarter and full year, provide guidance for 2015, and also provide some thoughts on a longer term vision of our next move into operating profitability and accelerating revenue growth. I'm pleased to say that financial results for 2014 meet or exceeded our financial goals for the year. In Q4 we saw solid revenue growth in all of our major products, as a result total BioMarin revenue in Q4 increased 57% year-over-year to $230.9 million. In the fourth quarter VIMIZIM delivered $36.9 million and Kuvan grew 27% year-over-year to $57.4 million. Naglazyme revenue increased 29% year-over-year to $88.5 million in quarterly revenue driven in part by large orders placed by governmental agencies in Latin America. As a result of each product in the portfolio turning in above expectations Q4 sales, total 2014 BioMarin revenues increased to $751 million, growing 37% compared to 2013, and exceeding the high end of previously provided guidance range by over $40 million. With Q4 and full year revenues exceeding plan and total operating expenses coming in line with our expense guidance, we reported a full year non-GAAP net loss of $25.9 million compared to our most recent target for the year at $50 million to $65 million loss. We also reported a $134 million GAAP net loss for the year. It's worth noting that our near breakeven operating result for 2014 is a key reason why cash balances at the end of the year 2014 being essentially unchanged at $1 billion in cash balances at the end of Q4 2013. I would now like to turn to 2015 financial guidance, as J.J already indicated we expect 2015 total BioMarin revenue to be in the range of $840 million to $870 million. I note that this 2015 revenue forecast assumes that key currencies remain at the current exchange rate throughout the year. On a constant currency basis without the impact of recent substantial dollar strengthening, our total BioMarin revenue forecast in 2015 would have been approximately $45 million higher or between $885 million and $915 million. Please note that due to our hedging program and natural foreign currency expense offsets, although roughly 50% of our revenues are transacted in foreign currencies, the bottom line impact of the substantial currency moves we've just experienced is less than $20 million. In terms of revenue guidance on an individual product basis, we expect strong revenue growth in VIMIZIM as we penetrate more markets and achieve reimbursement in additional markets, and continued steady growth in patients on therapy and/or more mature products. For VIMIZIM and its first full calendar year sales, revenues for 2015 and expected in a range of $170 million to $200 million based on current exchange rates. On a constant currency basis our guidance for VIMIZIM would have been $185 million to $215 million. Naglazyme revenues for 2015 are projected to be between $315 million and $340 million, though on a constant currency basis our guidance would have been $335 million to $360 million reflecting the continued growth in patients even as Naglazyme enters its tenth year on the market. Kuvan which had an excellent year in 2014 with over 21% year-over-year revenue growth is expected to continue expanding into new patients and continue growing though at a somewhat more modest pace. For 2015 we expect Kuvan revenues between $210 million and $230 million, or 8% growth over 2014 at the midpoint of this range. Turning now to operating expenses; 2015 SG&A expenses are expected to be in the range of $360 million to $395 million with a majority of the increase due to expansion into additional markets for VIMIZIM, expenses associated with servicing more patients in all of our program, VIMIZIM and Naglazyme and Kuvan; and finally preparation for potential launch of Drisapersen and the integration of Prosensa into our operations. In 2015 R&D expenses are expected to be in the range of $610 million to $640 million including Drisapersen and the Prosensa integration. In total, roughly 75% of total R&D is invested in clinical programs with the balance invested in supporting our commercial products, and to a lesser extent, preclinical and early stage research. Looking beyond 2015 with revenues for our programs accelerating, we expect that R&D as a percent of revenues will decrease next year and in the years beyond that. In terms of projected bottom line results, in 2015 as we seek approval for Drisapersen and progress across our clinical pipeline, we expect that our operating loss as measured by non-GAAP will expand to a net loss of between $130 million to $170 million. Non-cash stock compensation expense and interest expense, as well as other tax, depreciation and amortization, accounting charges of approximately $230 million results in GAAP loss guidance of between $360 million to $400 million. Included in the projected 2015 GAAP only expense is approximately $70 million in contingent consideration expense associated with the contingent value rights granted to former Prosensa shareholders. Looking beyond 2015 we believe that the near term approval of Drisapersen in either of the US or Europe will take us to non-GAAP profitability in 2017. Moreover, growth in revenues and operating results are expected to accelerate substantially after 2017 if an early approval is achieved and even more so if PEG PAL and BMN 190 are able to make it to market after completing their current studies in Q1 2016 and Q4 2015 respectively. In summary, 2014 produced solid financial results with revenues of $751 million and a non-GAAP net loss of $25.9 million. 2015 will be a year of continued revenue growth, particularly for VIMIZIM and with the potential Drisapersen early approval moving to operating profitability is expected in 2017 with growing profits after that. Now I'd like to turn the call over to Jeff to provide an update on our commercial products and more on 2015 expectations.

Thanks, Dan. We are extremely pleased with the execution of the VIMIZIM commercial launch in 2014, and the resulting sales of $77.3 million since approval in the US last February, and then the EU last April. Sales were recorded in 19 countries at the end of the fourth quarter and VIMIZIM commercialization continues to proceed at the high end of our expectations. A substantial portion of clinical trial and EAP patients had successfully been converted to commercial product, physician and patient acceptance of the only therapy to treat Morquio A has been strong and we expect this fact to be an important driver of success going forward. Finally, we continue to identify additional Morquio A patients effectively expanding the available market. Looking forward to 2015 we expect further progress as the global commercialization of VIMIZIM proceeds. Specifically we expect to further build out established markets and continue opening new markets to VIMIZIM each quarter. We are confident in our ability to maintain VIMIZIM’s current price quarter in both new and existing markets, and as important we are to conclude negotiating final price in market such as France, Germany and Italy. New registrations and the conclusion of price and reimbursement processes in certain countries will allow us to make further progress converting clinical trial patients to commercial. In short, the commercial opportunity for VIMIZIM this year is high and we expect continued success in year two of the global launch of VIMIZIM. Now turning to our base commercial products; starting with Naglazyme, continued sustainable growth in patient numbers and significant orders from Brazil drove the 23% increase in sales year-over-year to $334.4 million in 2014. The unpredictability of ordering patterns in this region is expected to result in lumpiness in 2015, a dynamic that has existed since Naglazyme was launched nine years ago. Of all of our products Naglazyme has the largest exposure to foreign exchange fluctuations which impacted 2015 full year guidance, previously provided by Dan. However, it is important to remember that patient growth continues, the base of patients on Naglazyme remains impressively compliant and persistent, so the underlying strength of the business is intact. In May of this year, we will celebrate the tenth anniversary of Naglazyme’s first approval in US. We are delighted with the commercial progress this brand continues to make in a mature part of its lifecycle and believe Naglazyme serves as an example of the opportunities overtime associated with innovative therapies that treat chronic and rare diseases. BioMarin has also conducted important work to characterize the natural history of this devastating disease which has in turn helped reshape the standard of care for MPS VI. Earlier this month BioMarin sponsored a symposium at the 11th Annual World Symposium titled 'Emerging Issues in MPS, Management of Adult Patients' which is representative of this work. Physicians treating MPS are coming to terms with the challenges of treating adult patients that desire a high quality of life, their normal experiences of being adult, including college, a career, then some cases, a family. As we know from the original MPS VI natural history study conducted in 2003, patients with rapidly progressing form of MPS VI at that time were not likely to live into their 20s. Turning to Kuvan, revenue growth of 21% to $203 million with the full year 2014 was exceptionally strong. Continued sustainable growth in patients coupled with high rates of compliance and persistence drove increased demand in 2014. Favorable market conditions for Kuvan in 2014 are expected to apply also this year. These include a revised label, the availability of the powder for oral solution formulation, and professional PKU treatment guidelines favorable to Kuvan. We believe that increased utilization of Kuvan in pediatric patients last year is attributable to the combined effect of the introduction of 100 milligram Kuvan powder coupled with the revised label noting that pediatric patients from one month were studied in clinical trials. Additionally we believe that increased utilization of Kuvan in adolescence and adults is attributable to the combined effect of ACMG PKU treatment guidelines published January of 2014 coupled with case management services and patient education provided by BioMarin. For Kuvan in 2015, we expect continued steady growth but at a slower pace than last year. In closing, the commercial team delivered outstanding results in 2014. Fourth quarter results drove revenue exceeding our full year expectations by more than $40 million. I'm very pleased with the level of demand we are seeing for VIMIZIM, both in the US as well as other regions. The commercial launches meet the high end of our expectations to date and we look forward to continuing our commercial efforts in the US, EU and other international markets. For 2015 the commercial teams will focus on driving market penetration of VIMIZIM in substantially all marketed regions and continuing to deliver revenue growth across our commercial portfolio. Now I will turn the call over to Hank who will review the pipeline.

Thank you, Jeff. Our development and regulatory teams are working tirelessly to integrate Prosensa employees and clinical assets into the BioMarin organization. The commitment that our new colleagues have demonstrated preparing the last module of the NDA for submission even in a few weeks of its original timeline and at the highest quality has exceeded my expectations. We've been very encouraged by our recent interactions with the Food & Drug Administration, and believe that there is an opportunity for near term approval of Drisapersen for the treatment of Duchenne Muscular Dystrophy. We believe Drisapersen is potentially an effective treatment for boys with DMD because the totality of data suggests that Drisapersen has a very clinically meaningful effect on these patients as measured by the primary end point six minute walk test. Drisapersen has the largest set of clinical data of products and development and we believe we'll be the first to be submitted for approval and potentially the first to market in the United States and in Europe. We have data from three placebo controlled trials and two long term open label trials. Over 300 patients have been treated with Drisapersen with less than 1% discontinuation rates in the randomized phase of the studies, and less than 3% discontinuation if you look at all the extensions. Drisapersen is the only Duchenne Muscular Dystrophy product in development that has been granted breakthrough therapy designation and fast track designations with the Food & Drug Administration. Most importantly there is an urgent need for an approved therapy to treat boys with Duchenne Muscular Dystrophy. As we have stated previously, we believe the clinical results of the Phase III study can be understood in context, especially considering the efficacy data from prior trials. We believe we can demonstrate that while the complete data set for Drisapersen is not perfect, it is sufficient to yield support for a near term approval. As J.J mentioned, we are cautiously optimistic that we are on a pathway based on a number of factors including the urgent need for an approved treatment for boys with Duchenne Muscular Dystrophy. The totality of the comprehensive data set, not more than 300 patients treated with Drisapersen and specifically data that spans more than three years from three placebo controlled trials in two long term open label trials. We are also encouraged by the approval by the European Medicine’s Agency last year, Translarna, a non-competing drug for Duchenne Muscular Dystrophy based on a clinical phase III data and subsequent post-drug analysis. We believe that speaks to the motivation by health authorities to support therapies that demonstrate some level of clinical benefit for patients diagnosed with fatal and rare diseases. We are encouraged by our interactions with the Food & Drug Administration and are on track to submit the last module over the rolling new drug application by the end of April and the marketing authorization application in Europe this year. We will keep up apprised to material developments related to Drisapersen as they become available. Turning to another potential near term product opportunity, and one that will read out this year, cerliponase alfa, formerly known as BMN 190, for the treatment of CLN2 disorder, a form of late-infantile Batten’s Disease. The preliminary data shared in January from patients in our ongoing phase I, II study far exceeded our internal expectations. To remind you, evidence of disease stabilization was observed in all 9 patients who have been treated for at least six months with cerliponase alfa. Recall that based on natural history, patients in our study were expected to lose at least a point on motor and language function scoring within six months. We intend to share this very encouraging data with European regulatory authorities over the coming months while we complete the study and we plan to share the full data set in the fourth quarter of this year. Briefly on our other clinical programs, we expect to share data from two additional approval contest studies this year including results from the first three cohorts of patients in the phase II study of the BMN 111 for the treatment of achondroplasia, we expect to share that data late in the second quarter. And in the fourth quarter results from the first 20 patients enrolled in the phase II study with liver glucosidase alpha, formerly known as BMN 701 for the treatment of late-onset Pompe’s disease. Looking towards our other clinical stage products, during the fourth quarter we continue to enroll all five of our development programs and they are all moving ahead as planned. This year we expect to share data from the proven concept study of liver glucosidase alpha for Pompe’s. And to remind you we said at Analyst Day last December, once we have data in hand from these first 20 patients later in the year, we plan to reopen the studies to additional patients and administer liver glucosidase alpha that has been manufacturer using our new and improved purification process. Also this year we will share data from the first three cohorts with BMN 111 or achondroplasia, and the full dataset for BMN 190 or cerliponase alfa for CLN2 disorder. Our pivotal studies with PEG values [ph] formerly known as PEG-PAL for the treatment of phenylketonuria; and talazoparib, our PARP inhibitor for the treatment of metastatic breast cancer in patients with BRCA mutations will both continue to enroll this year. Earlier stage filings include both BMN 270, our Factor 8 gene therapy product for the treatment of Hemophilia A; and BMN 250, our enzyme replacement therapy that fuses NAGLU with IGF2 allowing for cell receptor mediated uptake and delivery to lysosomes in patients with MPS IIIB or Sanfilippo B Syndrome. We are very excited about these two new potential products as they leverage our in-house expertise in gene therapy and our successful track record delivering enzyme directly into the central nervous system respectively. In summary, our regulatory team is focused on putting a robust clinical data module for the Food & Drug Administration as part of our rolling new drug application submission in April. We're extremely pleased with the pace at which our colleagues from Lyndon [ph] have integrated in the BioMarin, we are confident that we are preparing the most thorough and accurate representation of Drisapersen dataset and we believe we can demonstrate a clinically meaningful benefit for patients with Duchenne Muscular Dystrophy. It's a very exciting time for BioMarin, and we're more confident than ever that we can deliver three to four new products to treat serious unmet medical needs over the next three to four years. And with that operator we would like to now open up the call for questions.

[Operator Instructions] Our first question comes from the line of Joseph Schwartz from Leerink Partners. Your question please.

Great, thanks so much and congrats on a great quarter. I was curious, you said that you're encouraged by your interactions with the FDA, if you could characterize that a little bit more for us, what kind of things have they requested that you complete throughout the review here now that you've been in charge of that process. And also are you - how are you doing on the redosing of patients that were previously getting Drisapersen in the extension studies?

Yes, very good interaction with the Food & Drug Administration, at this stage what the conversations are typically about the format of the submission and the content of the submission, and we're pleased that essentially no new content has been requested and what's been asked for is simply information presented in a way that will facilitate review by the various different review divisions. So this is barely normal for this stage of the process. As far as bringing Drisapersen back into the clinic for patients who have previously received Drisapersen, we have so called extension studies ongoing internationally, and we plan to continue to increase the number of patients who can be - who stated drug administration can be resumed and that's an additional priority of the company to be working on concurrently. We've got a lot of resources here at BioMarin to add to the BioMarin Netherland team and we're selling those groups together in such a way that we can meet these various different needs in a timely fashion.

Okay, great, sounds promising. And could I just ask one on an early program BMN 250, how are you thinking about end points in that disease and I know you have a natural history ongoing, when can we expect data out of that phase study?

The first study for BMN 250 is going to really focus on dose escalation, safety, tolerability, method of administration, immunoglycans measured in the cerebrospinal fluid, and exploratory evaluations of some of the clinical outcomes observed in Sanfilippo syndrome. As to when first data readouts will be available, I think it's really too early to know when data will become available from the natural history study or the treatment study, we're really just getting underway at this point.

Okay, I'll stay tuned, thanks.

Thank you. Our next question comes from the line of Cory Kasimov from JP Morgan. Your question please.

Good afternoon guys, thanks for taking the questions, two of them for you. First of all big picture question, now that you guys have replenished your balance sheet with the recent capital raise, I'm curious how much of an appetite you may have for additional DD and the heels of the Prosensa acquisition? JJ Bienaimé: When we announced the Prosensa deal we also had to preannounce that we would like to replenish our cash balances and we did with the financing in January. But that doesn't mean that we are very hungry for any potential acquisition at this time. As I stated previously we are approached on a regular basis by other earlier stage Biotech companies that are developing drugs in the open space since we are a prominent player in the field. So when we are approached we always evaluate the assets and if we find the right assets at the right price we might continue on the business development front. But I think now our focus is on early stage buy [ph].

Okay. And then second question is how do you think about the potential evolution of the Batten’s market opportunity, obviously it's a small prevalent population but if BMN 190 is successful in keeping these patients alive, is this the type of market that can build upon itself? JJ Bienaimé: Yes, I mean I think when we - in January we talked about the earlier results of the ongoing trial, we communicated that the disease first of all we believe is under diagnosed and that's based on some studies in the UK whereby we come to do a survey to - for early detection of Batten Disease and finding some patients that Batten Disease and were under diagnosed and then the other reason why would be the prevalence could be more important than the current - if product DPT1 [ph] gets approved and if it's a significant impact on slowing down the evolution of the disease it could potentially increase the life expectancy of the patients and increase the prevalence.

Alright, thanks J.J.

Thank you. Our next question comes from the line of Philip Nadeau from Cowen. Your question please.

Yes, thanks for taking my questions. First a follow-up on Battens Disease for you Hank, the data that you presented in January was very impressive but I'm curious what you think the FDA and physicians will find to be meaningful improvement on the Hamburg/Cornell scale, is it one point difference versus historical control sufficient, do you have to show stabilization? What's your sense of work would be considered meaningful?

Well it's a little early to talk about how a health authority anywhere in the world is going to determine what they think to be a clinically meaningfully important improvement. I think what impressed us the most was essentially disease progression was halted, I mean another way of looking at that is there is a 100% stoppage of the progress of the disease. We were impressed by that, I think the investigators were impressed by that and that's what led them to want to open the study up for the treatment of pre-symptomatic effective siblings which of course has led us to disclose the data. But we're going to talking about these data with health authorities and certainly the observed magnitude of treatment benefit will be in a part of the topic of discussion and we look forward to giving you an update once we've had those meetings.

Great. And then my second question is on BMN 111, you again committed to give us the dose, the data from first three cohorts at the end of Q2. Where are you in enrolling the studies, have you moved in three cohorts to fourth or fifth cohort?

No, we've completed enrollment of the third dose level and we're gathering data from those patients.

And have you - I guess formally decided not to go to afford those cohort or is that decision yet to be made?

We're going to - we have not formally decided on the beginning of the enrollment of our fourth cohort and I'd say stay tuned for a data update in the second quarter for a more substantial progress report.

Great, thanks for taking my questions.

Thank you. Our next question comes from the line of Heng Weng [ph] from Bank of America-Merrill Lynch. Your question please.

Good afternoon guys and thank you for taking my questions as well. First of all, I noticed that the timeline for finishing the NDA for Drisapersen is slightly pushed from March to April. I suspect it's just formatting, any additional requests from FDA that caused the delay? And then secondly also on the VIMIZIM guidance here, can you provide a little bit color on what is excluded in that guidance, what additional territory launch are you expecting in 2015? And then just lastly on BMN 111, I think you guys talked about potentially expecting maybe 80% to even 100% increase in growth here, should we hold that for any update expect to release in late second quarter. Thank you.

I'll start and then I will probably come back to answer 111 question with Jeff as a sandwich in the middle. So the NDA timeline you pointed out was March and as of this call is down April, it's really driven by - it's a complicated dataset, and we want to make sure that the information that is presented is presented as clear way as possible and that information that's made available for viewers is presented in a way that enables them to do their job in the most efficient way possible and we had a similar experience at the tail end of the VIMIZIM submission where we decided to take just a little longer to facilitating more fact style review. I think what we learned out at the VIMIZIM application process is that a little bit of extra investment to facilitate review goes a long way towards showing an effective review process and effective decision making. JJ Bienaimé: And I may add so from perspective that we've been in control of the database for less than six weeks.

Jeff, if you want to take the second part of that question and come back to me?

Sure, this is Jeff, I will answer the question about VIMIZIM guidance. So previously we have set expectations and we're presently doing business in 50 markets with Naglazyme and it's our intention to get to all of those 50 markets with VIMIZIM but it's going to take certain years or little bit more to do that. Earlier today we disclosed that through the end of Q4 we successfully gotten into 19 markets, that includes many but not all of the top major global markets. So in that set of 19 markets there is what we think plenty of growth potential for getting new patients and continuing to convert clinical trial patients onto commercial VIMIZIM therapy. Combined with that we've got roughly 31 markets to go to get into and we guided that - it's our expectation that we'll be announcing successfully gotten into additional new markets each quarter of this year. So all of those new markets are essentially virgin territory for naïve to treatment patients and conversion of clinical trial patients where they exist. So if you add those two together in very short terms, we’d say building out our penetration in existing markets of 19 plus new penetration into new markets and penetrating naïve patient pools.

And as to your last question, we have not set a target of efficacy to make it go or no go decisions for CMP 111 in achondroplasia, we have described the quantitative difference between growth velocity of achondroplastic children and normal children, and we have described quantitatively what would be required to catch up in achondroplasia patient to a normal child in growth if therapy is delayed in its administration in the prevalent population. The establishment of the target of efficacy for decision making purposes is many facet, it includes consideration of growth velocity, safety, proportionality, potentially other efficacy signals and we have not established what our go criteria are because of the complexity of those interacting dynamics, nor have we evaluated the third cohort of data because as you know the study is ongoing. So I'd say stay tuned again for a readout in the second quarter on the comprehensive dataset and more information at that time.

Thanks for the color.

Thank you. Our next question comes from the line of Yaron Werber from Citi. Your question please.

Hi, this is Kumar [ph] for Yaron, thank you for taking my question. So far drisapersen, what do you think would be the focus of the ad com panel and also given that drisapersen has breakthrough designation, is it possible for it to be approved earlier than the end of the year timeline?

Thank you for the question on focus of attention on the Advisory Committee, I'm expecting that this will be a question throughout the course of the year and I think the answer to that is relatively general during the course of the year. Advisory Committee’s focus on general considerations of safety, efficacy, data quality, data integrity, interpretability of the data etcetera; we don't have any more specific information today about what the more specific focus will be as time goes by. Having not submitted the application we don't know what review designation - sorry, having not completed the submission of the NDA we don't know what review designation we'll receive and we don't know therefore what PDUFA action date we'll receive. It is possible that as you know that action can be taken prior to PDFUA date but it is way too early to talk about, even what the PDUFA date is.

Okay, great. Thank you.

Thank you. Our next question comes from the line of Terence Flint [ph] from Goldman Sachs. Your question please.

Hi, this is Camren for Terence [ph], taking her questions, I had a couple on drisapersen. First of all if it's not approved, do you think you can still achieve profitability of the current portfolio of approved products? And then second, if you are approved, do you think there is a possibility that you would have the indication restricted only to ambulatory patients, and if so, can you quantify what percent of the eligible 10,000 patients that would represent. Thanks.

Well the second question is to the labelling, it's clearly premature to discuss what the labelling ramifications and negotiation might be, I would say that in case of for example, Aldurazyme, where we had an issue, as J.J. mentioned in his prepared remarks about the primary end point of the clinical trial, or as we experienced with Naglazyme where there were imbalances and randomization; in either case did that result in confinement of the label to a specific patient population. I think it's sort of a general principal in the orphan disease space that labelling tends to be relatively broader than simply the pivotal trial that's been conducted. So although it's - although there is some background that's worth having about labelling in the orphan space, sorry again, just to remind that we're early in the process here and can't really comment on expectations for product labelling at this stage. JJ Bienaimé: And to collaborate on what Hanks said, you would think labelling - we are going to - we are looking into implementing some studies, additional studies to document the potential benefits of drisapersen on non-ambulatory patients and on upward limb mobility for instance which is very dramatically impacted by the disease. I mean in other practical simple way the answer to your question is that there will be patients assuming drisapersen is approved and treated, there will be patients on drisapersen for years that eventually might become non-ambulatory and imagine the difficulty after these patients saw you in a wheelchair say sorry now you cannot get the drug anymore.

And this is Dan, with respect to profitability I mean, our focus right now is on getting drisapersen approve early in one of the territories and growing VIMIZIM revenues, you postulated what happens if drisapersen doesn't get early approval, we would still be working towards profitability but the pace and the timeline will be a function of what additional work if any were doing for drisapersen, so the exact details of that would come if we get there which we're not planning to.

Thank you. Our next question comes from the line of Mark Schumbum [ph] from Evercore ISI. Your question please.

Hi guys, this is Shawn filling in for Mark. I just had a couple of questions. So the first on drisapersen, given that ex-US is the majority of the market have you guys begun to identify the DMD patients worldwide and would you wait for a global regulatory fillings after you see something happen in the US or EU or that's something you can do in parallel? And then on VIMIZIM, so you've been following Naglazyme patients for ten years now, and have you quantified how earlier treatment would increase patient weight through adolescence compared to natural history? And then I guess lastly, should we expect the trial for VIMIZIM ’07 trial under phase to read out this year and then would you apply for label revision if the data look good? Thanks. JJ Bienaimé: Lots of questions.

Sorry. JJ Bienaimé: The right person is Jeff, you want to answer that question on patient identification?

Yes, so let's start Shawn with your question, ex-US patient identification; we think we know a little bit about DMD based on epidemiology and the specific incident of exon 51 mutations and we've guided that we think that's about 10,000 patients. We also think that - so we think that the epidemiology is pretty well characterized, we also think that boys with Duchenne Muscular Dystrophy don't experience the same kind of diagnostic delays that we've seen for example with MPA VIA, IA, and IVA; so that gives us a degree of confidence that these patients are being diagnosed. Perhaps not always genetic mutation analysis which will be important, one of the hallmarks of BioMarin success has been our ability to go beyond epidemiology and to actually locate the positions that diagnose and treat these patients and then get a read on how many and where these patients are. So I would guide that we intend to go out and actively begin that work this year including in international markets, and I would also guide that, that is not the trivial effort, so that will take some time and effort. Maybe I'll turn it back over to Hank on…

Our process [ph] show that the plan is to file with the Europeans Medicine Agency shortly after the US submission of the new drug application. As far as rest of the world, certain countries do take their action on the basis of having submitted in the US, for having submitted in the European Union or based on action taken in either of those territories. We have - beyond the US and the EMEA, we have a complicated math of when the file and sequential roll out, the key really starts with US and EMEA submission which will be processed nearly contemporaneously. JJ Bienaimé: Another question on the…

Yes, presently I don't believe the label is restricted to patients who are under five, and mostly the information about patients under five spreads by academic presentations and scientific meetings, I don't believe that we've committed to specific timetable for presenting the data but just as soon as it's sufficiently mature to be discussed in public I think that will begin the communication process, we don't see that as being something that's gated by a health authority action. And in fact in the real world it's pretty widely accepted that the earlier you start therapy for inborn errors that better the long term clinical outcome. So I think VIMIZIM is probably the - there is the least negative pressure overall in this therapeutic indication because of the history of all that's been established in enzyme replacement therapy, really good. JJ Bienaimé: So I think there was another question on the early treatment leading to patients in their weight increase, Jeff you have some…

Yes, just following on the logic that Hanks set up, earlier events leads to better outcomes in different ways, healthier patients are frequently larger or gain weight even without getting taller, just by virtually being healthier. I don't think that we've fully characterized that in a scientific sense but qualitatively that would be our experience in the conclusion from Naglazyme certainly.

Thank you. Our next question comes from the line of Andrew Peters from UBS. Your question please.

Great, congrats on the progress and thanks for taking my question. I had one really kind of more bigger picture question on the market opportunities, DMD, I just wanted to understand now that the Prosensa acquisition has closed, how is outreach to the community been going and what sort of plans do you have to kind of increase the profile relative to sort [ph] little bit whose been a little bit more active, at least in the US on that front. And then touching on an earlier question on 111, I just wanted to get an update on any goals for pediatric study and moving it to younger patients. Thanks. JJ Bienaimé: I'll give a start, I think we have initiated on that first to outreach - community outreach, patient’s organizations specifically, KOP leaders [ph]. As you pointed out, there is definitely a big difference between US and Europe where US threat to have the bigger presence in Europe, not very well recognized as compared to Prosensa but we are trying to reach out in different parts of the world in this respect. I mean, Jeff you want to add some color to that or Hanks, I mean Hanks on the KOL and Jeff on the patients organizations?

Well, Prosensa has a great relationship with global KOLs now in Netherlands, and couldn’t possibly more pleased by the mutual respect and support that's out there for the efforts and from my exposure in terms of patient advocacy relationships, I wanted to say we are blessed to work in a world where there is such strong patient advocacy at the level of research development communication, the scientific process, the regulatory process, those are pretty high level of comprehension of the process and how to interpret scientific in clinical trial data and so that process had begun before we were on the scene and continues. I recently went to a very large patient organization meeting and was just overwhelmed by how committed the advocacy organizations worldwide are to advancing the cause of Duchenne Muscular Dystrophy, how committed they are to collaboration as a way of being collaboration with each other, collaboration scientists and medical doctors, collaboration, advocates and industry; it really is a great area to work in and I can see why there is an enormously high level of mutual commitment and trust that exists between patient advocacy organizations and the people around them.

Absolutely nothing further to add. JJ Bienaimé: And there was a question on BMN 111, sorry, what was the question?

So BMN 111 pediatric plans - the pediatric plans and study in young children?

So the other criteria for the present study goes down to age five, we do plan to initiate studies in patients that are under age five with a more severe forms of the disease. In our time, just to remind people, with Aldurazyme we didn't begin studies in younger patients until post marketing commitment and in the case of VIMIZIM the pediatric studies patients under five were studied as part of the approval plan and we're starting even earlier studying patients who are under five; in achondroplasia, although we haven't committed a specific timeline for starting those studies. Thank you Jeff, for assist on the question.

Thank you. [Operator Instructions] Our next question comes from the line of Ian Somaiya. Your question please and you're from Nomura Securities.

Hi, thank you very much, it's Matthew on for Ian, two following manuals if I may. First I want to ask on one of the earlier stage pipeline products, BMN 270 for hemophilia, I know the phase I/II study is expected to begin in the second half of - in the first quarter, later this quarter, I just was wondering if you could give us some color on sort of the larger clinical goals for the program or really said in other way, how should we be thinking about what will be considered a good data coming out of that? And then on VIMIZIM, I know you're not providing any update any more on the size of the registry of the number of identified patients so what I was hoping as you might be able to give some color around maybe the geographic distribution of patients that are currently on drug, I mean how that maybe compares to sort of what you've previously described as overall distribution of mercurial patients. Thank you. JJ Bienaimé: I can start with the later one which is the distribution, as we've said we think ultimately and 1,650 plus patients that we've identified will be roughly 15% in the United States, 45% in Europe and so on. At the moment since the United States launched first, the United States is disproportionate in our current VIMIZIM patient profile though we expect it to normalize over the next couple of years.

On the hemophilia program, so filing the clinical trials application or help authority permission for initiation of clinical trials this quarter and we expect that actual administration of study medication to begin in the following quarter. The goal of the first study is dose response safety and activity of the gene therapy and producing circulating factor VIII levels. We think a good target to aim for is a steady state factor VIII level of about 5% or more, the higher you get the more impact you have on patients presumably in terms of reducing the need for prepelactic factor therapy, the need - the reduction of breakthrough bleeding and so on. So that's how we're thinking about the initial part of the program and then ultimately sort of success criteria. Again, because we have even gotten a clinic it is little early to talk about what would be a win but that gives you a little bit of a sense of how clinicians think about management of hemophilia with factor replacement therapy.

Thank you. Our next question comes from the line of Salveen Richter from SunTrust. Your question please.

Thanks for taking my questions. Just firstly, now that you've integrated Prosensa and given the FDA interaction how does it impact clinical development for the three exon skipping programs that are in phase II?

Hi, Salveen. We're on track with what has been underway, we're continuing the other exons as had been previously implemented. I think that we're at a stage of gathering safety pharmacodynamics activity and in some cases PK data, and we're coming to a point where we'll have accumulated an update that make decisions on what the next steps are. We're working on the NDA for drugs producing around the clock, we're setting up a dedicated team to work on, we have set up a dedicated team to work on the initiation of the extension studies to resume studying drugs on person/patients who have previously received drug as a person. As J.J. mentioned, we're working on defining and implementing ancillary studies or supporter studies for various person and in addition, we're working on implementing studies, further studies for the other exons including exon etcetera. So there is quite a lot of activity, no significant changes of any kind as far as the program at this stage.

Thank you. Our next question comes from the line of Christopher Raymond from Robert W. Baird. Your question please.

This is Alison Bramston [ph] for Chris Raymond, thanks for taking the question. So first, could you provide any color on compliance rates, are you seem to - coming off therapy and could you give a sense maybe how many and reasons? And second back on to BMN 250, would the competitor out there can give us starting on Sanfilippo, be a trial. How should we be thinking about patient recruitment, wont it be challenging to sign out patients from the study with two players actively pursuing patients?

Okay, this is Jeff, I'll take the first part of the question Alison. In terms of VIMIZIM compliance rate, great question, I can't give you a quantitative answer but I'll give you a qualitative answer and that is we lost remarkably few patients that has started VIMIZIM all the way back to the clinical trials including the EAP program in the United States, and now with a year of commercial experience under our belt. So we have previously guided for Naglazyme that's a key success factor in maintaining and building that business as a high rated compliance and persistence with the therapy over the time. We're anticipating that there will be different issues that emerge for Morquio A patients related to MPA VI, but so far the experience has been very positive and qualitatively would say compliance and persistence very high. I'll turn over it Hank.

So on BMN 250 the initial natural history and safety studies are reasonably small and there are certainly and sadly inadequate number of patients in the world available for clinical trials, it reminds me of the early days of the development of VIMIZIM when there was - we were launching a natural history study and somebody else was launching a natural history study and the question came up is it really possible for two to coexist and of course, here we are five years later having enrolled over 300 patients in that initial study several hundred patients had randomized in controlled clinical trials and launching VIMIZIM only five years later. And I kind of feel like BMN 250 is in a similar place, we have a lot of experience with intracellular ventricular delivery, direct delivery to the affected organ, we have a lot of experience measuring retro glycans [ph] in biological fluids using a proprietary technology that's really available specifically to BioMarin because we developed it. So we think there are lot of reasons to participate in BioMarin clinical trials, we feel like we have a really good relationship with academic clinicians and most importantly there is a huge demand for new therapies for MPS IIIB, Sanfilippo Syndrome, and that we want to work hard to assess whether BMN 250 is that product that can help patients. JJ Bienaimé: And based on our experience with TPP1 in inter cerebrovascular attritions [ph] might be in some respect a better role of administration than IV in terms of no to various huge infusion associated with reactions.

Thank you. Our next question comes from the line of Robyn Karnauskas from Deutsche Bank.

Hi guys, thanks for having in. On just a big picture question, you have a lot of specifically this is within the prepared remarks, and you're talking about earning positivity in 2017, do you probably understand what are the key moving parts for you that would just step forward or backward from an earnings perspective? And then on the hemophilia program, where are you out with manufacturing as far as critical with the FDA and review for that product? Thanks.

On the earnings front, the driver is new revenues and continued growth of our existing products and that's why we've said that on early approval with drisapersen either the US or Europe would be the basis on which we believe we could be profitable in 2017 and I commented that potential for additional revenues from PEG PAL and 190 would be accelerators to that going forward. JJ Bienaimé: The top line growth from existing products comes to the only approval of drisapersen and potential launch of PEG PAL and/or TPP1.

And this is Robert Baffi, relative to your question about our gene therapy manufacturing, we are in the final stages of compiling the regulatory documentation that would support introduction into clinical trials. We're literally in the last stages of that, so we have had not had direct feedback yet from regulatory agencies who expect that very soon and we're very confident with the package and the dataset that we will be providing.

Thank you. Our next question comes from the line of Shin Keng [ph] from Wells Fargo. Your question please.

Hi guys, this is Shin sitting in for Brian, thanks for taking my question. A couple of questions on BMN 111, I was wondering what are some key secondary measures you guys are looking for in the upcoming data that might collaborate 111’s positive effect on bone growth and clinical meaningful growth [ph]. And on the safety side, if you do see cardiovascular signal, how should we think about the risk benefit assuming that you do see a clinically meaningfully efficacy?

Hi, this is - just to introduce myself, this is Hank, and I'd be happy to take that question. As regards to the secondary outcome measures, I think one of the most interesting and important ones is proportionality. Here comes [ph] what's important and they say scathe the slate which is characterized by disproportionate growth of bones. So in addition to increasing total stature of an outcome variable which is sort of main efficacy variable, that's - a related question is are you restoring proportionality, and we showed some slides at Analyst Day comparing the ratio, the upper body, the lower body but you could also think about measuring probably the upper arms, and the lower arm, or the upper leg to the lower leg, etcetera. And we think that will be important information to help us understand the extent to which we'll reverse saying the fundamental underlying defect in achondroplasia which is aberrant signaling under the control of constitutively after FGFR3 [ph]. So turning to the second part of your question, if it turns out that there is a safety signal that is occurring at the same dose that there is an efficacy signal and there isn’t a dose below that which causes an efficacy without a safety signal then we can think about ways to mitigate that safety signal which might include for example, dosing patients when they are recumbent, dosing patients at night, splitting the dose. But I think that it's important to recognize that patients with achondroplasia are - and their families are highly motivated to have medical therapy for achondroplasia. As we talked about at Analyst Day, the currently available therapy is surgical remediation of disproportionality and its complications, those surgeries are difficult, complicated and an available medical alternative would be greatly wanted. And so I think that we have a lot of options in the queue of how to maximize the therapeutic benefits and minimize the potential side-effects.

Thank you. Our next question comes from the line of Tim Lugo from William Blair. Your question please.

Hey guys, this is Raj [ph] for Tim, thanks for taking my question. Just a quick one again on BMN 111, regarding the study design, are you seeing the majority of patients the completed cohorts to-date that are enrolling openly to proportion and regarding that 18 month timeframe, just given the growth hormones that is in short stature, that is out for a little longer by 24 to 36 months, do you think there is a potential for the open label to be extended if you want to use it for regulatory filings? Thanks.

Yes, as we retain or drive a person [ph] and it's true for VIMIZIM and all the products before it, we do extension studies for it in the severe chronic diseases, obviously with achondroplasia, the consideration really is that administration of the experimental agent would be appropriate up till the time the growth plate grows as to numbers of patients disposition of numbers of patients in ongoing studies, we won’t comment on that but we do plan extension studies and I think there is second part to your question. Well, the growth hormone I think is on some level irrelevant compared to growth velocity as primary outcome variable, some considerations of sustained improvements in growth velocity. I do think that these extension studies will play an important role in supporting the interpretation of the data, both in terms of phase II data but also in terms of supporting registration. It's a little bit I'm going to talk about at this stage what's going to - what the primary end point of the registration directed trials is going to be, what the design is going to be, and what length of follow-up is going to be required just for registration because we haven't really test the proof-of-concept point just yet, so I would say stay tuned.

Thank you. Our next question comes from the line of Michael Yee from RBC Capital Markets. Your question please.

Hi, thanks. This is John on behalf of Mike Yee. I'm sorry if this is addressed early as I got disconnected in middle. In the beginning you mentioned that the FDA interaction is regarding drisapersen, it has been very encouraging and that you expect potentially early approval. Yet on an earlier question you sort of characterized a content of the discussion as with normal steps without stage. So can you just provide more color on your reason for encouragement, perhaps that's been a change in tone. And is there related exploitation to still run to confirmatory post-marketing studies? Thank you.

Yes, this is Hank and I'm from BioMarin. I think it’s one thing to read about corresponding to another to actually engage in it directly. So I think the extent to which we are pleased with the progress that's been made with the Food & Drug Administration comes from just being involved in it directly ourselves. And there is clearly collaborate tone, I've said before that the FDA, in other settings that they are really excellent outstanding reviewers of an application, I think we're all benefited by the fairness, the comprehensiveness, and the insight that their review has generated. And then that specifically leads to a comment about confirmatory studies themselves, there has been some preliminary signaling about what might be required. We continue to believe that we will be able to fulfill any potential requirements for post-marketing registration, post-marketing commitments for confirmatory studies, but as we are just about to enter the review process it would be premature to speculate any further on what the specific content of review is. The really important principle is that post-marketing requirements must match issues raised during the reviews, so stay tuned, be patient with us and allow the time for the review to occur, and as we do that we believe that the outcome of that review will be better for everybody, patients especially.

Thank you. This does conclude the question-and-answer session of today's program. I'd like to hand the program back to management for any further remarks. JJ Bienaimé: Thank you, operator. So in summary BioMarin continues to meet or exceed its financial, commercial, clinical and regulatory roles. The strong foundation that we've put in place in 2014 including the acquisition of Prosensa and the DMD franchise with the potential near term opportunity for approval of drisapersen, continued progress of our robust development pipeline, the strongest new product launch today at BioMarin of VIMIZIM worldwide, continued growth of our legacy products including Naglazyme and Kuvan, and we're selling our cash reserves to enable our path to profitability; all these factors position BioMarin for a very busy and fruitful 2015. So we thank you for your continued support and joining us on today's call. Bye.