BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) has been able to greatly capitalize on sales of its approved drug Voxzogo [vosoritide] for the treatment of patients with achondroplasia. The reason was that it was able to achieve 900 new patient starts in the 1st half of 2024 and this drug was responsible for delivering strong growth. So much so, that the company raised its full-year 2024 revenue guidance slightly higher. What also contributed to its growth was several other enzyme drugs which had also been approved to treat patients with different disorders.
These other drugs helped to drive 15% growth in Q2 of 2024, compared to the same period the prior year. While this company is delivering on the revenue front with approved therapies, there might be a chance to further increase shareholder value. How so? Well, that’s because it is in the process of developing a drug known as BMN351 in a phase 1/2 study for the treatment of patients with Duchenne Muscular Dystrophy [DMD]. Having said that, data from this trial is expected by the end of 2024. The key thing here is that this first drug is targeting such DMD patients who are amenable to exon 51 skipping.
Not only that, but as I will note below, this next-generation ASO incorporates two mechanisms of action [MOA] that could improve upon existing oligonucleotide treatment options. In terms of its Hemophilia A gene therapy program, using Roctavian to treat these patients, it is scaling back to a few territories. It wants to see how well it can increase revenues in these territories only first and to also reduce expenses to become profitable with it. With a considerable increase in revenues for Voxzogo for the treatment of achondroplasia, plus data from the phase 1/2 study using BMN351 for patients with exon 51 skipping amenable DMD, I believe that investors could benefit with any potential gains made.
A Possible Surprise Candidate Might Breathe New Life For Investors
The thing to note about BioMarin is that it has done well to get several enzyme products approved for the treatment of patients with rare disorders. It has also been able to obtain regulatory approval for its lead product Voxzogo and Roctavian. However, I believe that there might be a candidate that could possibly bring a massive surprise to investors. I’m talking about the development of a next-generation antisense oligonucleotide [ASO] candidate by the name of BMN351, which is being developed for the treatment of patients with Duchenne Muscular Dystrophy who are amenable to exon 51 skipping. This use of this next-generation ASO is being explored in an ongoing phase 1/2 study targeting this specific DMD patient population.
Before going over this trial, plus any catalysts to come out of this program, it is first important to understand what this disorder is and what the possible market opportunity for it could be. Duchenne Muscular Dystrophy is a type of muscle disorder whereby there is a lack of dystrophin protein that helps to keep a person’s muscles intact. What’s wrong with having a lack of dystrophin? Well, it leads to muscle degeneration and movement weakness. These patients experience several debilitating symptoms and eventually may even end up wheelchair bound. The several possible symptoms that these patients with this muscle wasting disorder might experience are as follows:
- Inability to walk
- Having trouble getting up
- Difficulty walking up stairs
- Facial weakness being present
- Inability to jump.
The global Duchenne Muscular Dystrophy Treatment market size is expected to reach $8.19 billion by 2029. This is a massive market opportunity, but like most oligonucleotide companies, the goal is to target a specific subpopulation of DMD. In this case, the company is looking to use BMN351 to target such patients who are amenable to exon 51 skipping. What this means is to skip over the troublesome genetic exon mutation and then allow for the body to produce a shorter functional dystrophin protein to restore muscle movement. It is not a complete cure of the disease, but it does help plenty of patients. Having said that, it is said that about 13% of DMD patients are amenable to exon 51 skipping.
To test out whether BMN351 will work as a next-generation ASO, it is being tested in the ongoing phase 1/2 open-label, dose-escalation study for the treatment of exon 51 skipping DMD patients. A total of up to 18 patients are expected to be recruited into this study and will then be split up into several cohorts being given different dosing treatment schedules. Like all early-stage studies, the first focus is safety, and this is to be evaluated consistently over a 73-week period. The other focus will be on how well this drug is absorbed or metabolized into the patient’s body or pharmacokinetic concentration pre- and post-infusion. Most notably, there are two efficacy measures that I see, which are being deployed for this study, that are crucial. These other outcome measures are 6-minute walk test [6MWT] and North Start Ambulatory Assessment [NSAA] score. Both of these are functional score measurements used to determine DMD disease severity. The goal is to see if a drug like BMN351 is going to end up actually helping these patients. This is where a catalyst opportunity comes into play that might provide a boost for shareholders. It is expected that the biotech will release data from this phase 1/2 study by the end of 2024.
The thing is that there are already oligonucleotides approved to treat DMD patients, especially EXONDYS 51. If this is the case, then how can BioMarin separate itself from this PMO and other oligonucleotide therapies like it? It will be through a different mechanism of action [MOA] and hopefully some type of competitive advantage eventually like improved safety or efficacy. The thing is that BMN351 is designed to achieve exon 51 skipping by targeting a novel alternative splicing enhancer site. Plus, genetic modification of incorporating a 5′ triethylene glycol molecule and 5-methylcytosines to improve pharmacological properties of the drug.
Financials
According to the 10-Q SEC Filing, BioMarin Pharmaceutical had cash, cash equivalents and investments of $1.78 billion as of June 30th of 2024. As I stated in the beginning above, the company is in a good position because it is already generating substantial revenues for several approved products. A lot of these therapies have helped it to continue to see a growth in revenues. Consider that in Q2 of 2024, total revenues were $712 million, which was a 20% year-over-year increase compared to the same period in the prior year.
What exactly contributed to this growth? Well, most of its therapies being sold helped to contribute such growth, including enzyme therapies such as: Vimzim, nagalzyme, adlurazyme, brineura and Palynziq. All of these treatments were able to generate 15% growth for the company during the quarter.
However, the most important therapy from it, would be Voxzogo. Why is that? It is largely because of the massive growth that was observed for this clinical product, far beyond all other products that it has. Consider that sales of this drug increased by 62% to $184 million in Q2 of 2024. Another way to look at it is that there was a 73% increase year-over-year of the children receiving this treatment. Can sales eventually increase beyond such a scope? I believe so and that is because of two possible expansion opportunities that might be possible. This would be regarding eventually being able to use Voxzogo [vosoritide] for the treatment of patients with hypochondroplasia and idiopathic short stature.
Risks To Business
There are several risks that investors should be aware of before investing in BioMarin Pharmaceutical. The first risk to consider would be in terms of Voxzogo sales. While there was a massive surge in the amount of patient starts [nearly 900 in the 1st half of 2024], there is no assurance that such a growth trend will continue in the next part of this year. Not only that, but there is no assurance that the sales growth of 62% year over year will be maintained.
The second risk to consider would be in terms of the possible expansion opportunities of Voxzogo, which I have stated above. Again, the goal is to see if this drug is capable of being able to be used for other treatments like hypochondroplasia and/or idiopathic short stature. There is no assurance that this drug will be able to pass all clinical trials relating to the targeting of these indications, nor that it will be approved for any of these indications in the future.
The third and final risk to consider would be in terms of the development of BMN351 for the treatment of patients with DMD amenable to exon 51 skipping in the ongoing phase 1/2 study. Data is expected to be released by year-end. There is no guarantee that the results to be released will turn out to be positive, nor that it will be enough to move towards the next stage of clinical testing. Plus, it is highly expected that the market is going to look at this ASO and compare it to other existing exon 51 skipping oligonucleotide therapies like EXONDYS 51. There is no guarantee that BMN351 will be shown to be superior to this or any other oligonucleotide specifically targeting this DMD patient population.
Conclusion
BioMarin has been able to deliver solid revenue growth for its investors, and I believe that it will continue to do so in the coming quarters. As I have shown above, growth has not faltered for any of its approved products from its pipeline. All the enzyme therapies have been able to generate 15% growth for the company and then Voxzogo continues to see a very higher percentage, 62% year-over-year growth. One possible fallback for the company would be with its gene therapy product Roctavian, which it is scaling back up on in terms of territories and manufacturing.
The goal is to only focus this product for the treatment of patients with Hemophilia A in specific territories, such as: United States, Germany and Italy. The purpose is to see if this therapy can at least do well in terms of growth for these specific territories. Plus, reducing operations to these territories would mean an ability to be profitable with this product by the end of 2025. Plus, to reduce operational expenses of Roctavian by $60 million. I believe that BioMarin has set itself up well for the long term, and will continue to deliver for shareholders with Voxzogo growth.
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