BioMarin Pharmaceutical Inc (BMRN) 2013 Q1 法說會逐字稿

Good day, ladies and gentlemen, and thank you for your patience. You've joined the BioMarin Pharmaceutical first quarter 2013 financial results conference call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will be given at that time.

(Operator Instructions)

As a reminder, this conference may be recorded. I would now like to turn the call over to your host, Eugenia Shen of Investor Relations.

Thank you.

On the call today is JJ Bienaim, BioMarin's CEO; Dan Spiegelman, CFO; Hank Fuchs, Chief Medical Officer; and Jeff Ajer, Chief Commercial Officer. This nonconfidential 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 programs, actions of regulatory authorities, availability of capital, future actions in the pharmaceutical market and development 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.

And now I'd like to turn the call over to JJ, BioMarin's CEO.

Thank you, Eugenia.

Good afternoon. Thank you for joining us on today's call. Sorry, I have a broken voice. I was at the Bio meeting in Chicago, and I talked to too many people.

In the first quarter we continued to execute on our development goals as we head into another [potential regions] formative year for the Company. We made good progress in a number of important fronts including commercial, R&D, regulatory and business development. And we hit all of our stated milestones for the quarter and remain on track to meet our upcoming goals for the remainder of the year including potential approval on the launch of Vimizim at the end of this year. On the Commercial side of the business, our steadily growing sales have built a solid foundation for the Company. To support our expanding Commercial business we now have a presence in over 40 countries worldwide and an infrastructure that is immediately leveragable for future product launches.

On the Development side we continue to advance our pipeline, to generate value for the Company and our shareholders, and work toward delivering breakthrough treatments for patients suffering from rare genetic diseases. By mid year we will have six programs in the clinic, the most ever in the history of the Company, and potentially three programs in Phase III trials by the end of the year.

To recap our accomplishments this quarter we announced that the Phase I/II trial for Pompe disease exceeded our pre-specified go/no go criteria and that we plan to proceed to the next phase of development, a Phase II/III switching trial by the end of the year. We also announced encouraging data from PKU-016 trial. The data on better understanding of the disease will help strengthen our PKU franchise by allowing us to better execute our PEG-PAL Phase III study and could lead to further adoption approval.

On the regulatory front, we met our timeline of filing the BLA for Vimizim in the US, with a potential approval and launch before year end. We also submitted that MAA to the EU earlier this week and now have already received accelerated assessment studies for the EMA. The two filings were a tremendous effort on the part of many BioMarin employees, and I would like to thank them for their dedication to the Company and the Marquio community.

We also filed a CTA in the UK for BMN-190 for Batten disease. This indication lies at the core of our mission at BioMarin in developing first-to-market or best-in-class therapies for serious [unmet] medical disorders, and we are eager to start enrolling patients by midyear. In addition to developing our existing pipeline, we continue to look for strategic assets to augment our pipeline for future growth.

In the first quarter we acquired Zacharon Pharmaceuticals, which has a leading microbiology platform, two programs in need optimization. We also licensed a Factor VIII gene therapy research program for hemophilia A from University College London and St. Jude's Research Hospital. Gene therapy represents the potential to change the treatment paradigm for many diseases and is emerging as a viable way to treat genetic disorders.

These two assets further expand our [pregate] pipeline as well as our expertise and reach in the orphan disease space. Looking forward we have many important milestones ahead this year, including upcoming BMN-603 data at ASCO and several trial initiations, including three Phase II/III or Phase III programs in PEG-PAL and BMN-701 for Pompe and our [property] leader, BMN-673, all leading up to an expected of the approval of Vimizim by Europe.

Next, Dan Spiegelman will review the financials for the quarter, and Jeff Ajer will then provide more details on our commercial portfolio, and Hank Fuchs will provide an update on our R&D programs before we open the call for questions. And now I would like to turn the call over to Dan.

Thanks, JJ.

Earlier today we issued a press release summarizing our financial results for the first quarter, and I refer you to that release for full details. Following are some key highlights. Revenues from our approved products continue to grow, with a 9.7% increase in total revenue in the first quarter of 2013 compared to the first quarter of 2012.

This result was driven by a large year-over-year increases in Aldurazyme and Kuvan product revenues, more than offsetting a relatively small increase in reported Naglazyme revenues. Jeff will describe the revenue results in more detail later, but the small year-over-year increase in Naglazyme was driven by a $7 million order from Brazil that was delayed from the fourth quarter of 2011 to the first quarter of 2012. This boosted the Q1 2012 Naglazyme sales and made the year-over-year comparison appear low. However, the Naglazyme business continues to grow nicely, as there was an 11% increase in the number of patients on therapy year-over-year and a 10.2% increase in Naglazyme revenue in the first quarter of 2013 over the fourth quarter of 2012.

Kuvan also continue to show strong growth in demand. While the first quarter is traditionally the weakest quarter of the year for Kuvan, which is why Q1 2013 sales lag behind Q4 2012 revenues, year-over-year sales showed a nice 17.5% increase. Aldurazyme reported revenues grew 39.2%, driven in large part by a lower net product revenue transfer charge in the first quarter of 2013 compared to the same period in 2012. Importantly, Aldurazyme revenue reported by Genzyme increased 5.4% year-over-year.

With respect to operating expenses, for the quarter they were in line with our guidance and consistent with the growth in product portfolio and commercial operations we've discussed. One nonstandard financial item during the quarter was the partial exchange of convertible notes due in 2017, which we completed in the first quarter. In total, 13 holders of our 1.875% convertible senior subordinated notes agreed to exchange $215 million in aggregate principal amount of the notes for approximately 10.6 million shares of common stock, the shares that the notes convert into. Approximately $110 million of the notes remain outstanding as of March 31, 2013.

The total combined cash payments made for the note conversions was $12 million, with $18.1 million of total interest savings from accrued and future interest payments that will no longer be required, resulting in $6.1 million total net savings to BioMarin. While this redemption results in a net P&L charge this year, the interest savings will be a benefit in the coming years.

Turning now to guidance for 2013. We are reaffirming our previously provided guidance for all items and remain confident that we will meet these financial goals. Guidance is being reaffirmed and no changes to operating expenses or net loss are required, even after taking into account the expenses with the newly licensed gene therapy program for hemophilia A, and the full-year impact of the convertible bond retirement expense.

Now I would like to turn the call over to Jeff, who will provide an update on our commercial programs.

Thanks, Dan.

Starting with Naglazyme, Q1 2013 sales of $69.4 million increased 10.2% over Q4 2012 sales. This strong quarter-over-quarter growth reflects continued modest but steady growth in the underlying business coupled with the fact that Q1 is generally a seasonally strong quarter during the year. Regarding Q1 being a seasonally high quarter, as Dan mentioned, we usually see some big orders from certain countries that have large, lumpy order patterns, in part determined by their fiscal year, including Kuwait, Qatar and Saudi Arabia.

Brazil continues an unbroken string of quarterly orders without a miss since Q1 2012, but the Q1 2013 order was smaller than the big order received in Q1 of 2012. The combined effect of order timing is why revenue in Q1 2013 increased only 1.2% over Q1 2000 -- Q1 2012, even though the patient base has grown 20% over the last 12 months. Addressing more completely the growth in the underlying business, there was continued modest growth in patients on treatment, minor geographic expansion and continued high patient compliance without the material supply disruptions. First commercial shifts during the quarter were recognized to Israel and Libya. While important, these new markets will contribute only minor overall growth now and going forward.

As for Kuvan, sales of $37.6 million in Q1 2013 were in line with internal expectations for the quarter but a decrease of 6% from Q4 2012 sales of $40 million. This reflects the normal and expected seasonality with Kuvan. Q4 is usually the high quarter, followed by a dip in Q1 that does not indicate a dip in the underlying business. The Q4 to Q1 dip is driven by dynamics of the end of the insurance year, followed by the disruption in the start of the new insurance year. An upcoming event of note is PKU-016 data to be presented at ICIEM in Q3 2013.

Turning now to Vimizim, patient mapping continues and the number of patients mapped has grown to over 1,300. There is no material change in the relative proportion of patients identified by region. Adult patients are relatively underrepresented in all regions except EMEA. We expect continued increases in the patient mapping through 2013, though no large or dramatic increases. New patients will come from disease awareness efforts currently underway and from our efforts to reach new call points this year, mainly skeletal dysplasia specialists and orthopedists.

Commercial efforts this year focused on promoting disease awareness of Morquio A and highlighting the multi-systemic nature of the disease. We are conducting symposia at genetics meetings, as well as attending and promoting symposia at skeletal dysplasia and orthopedics meetings.

Also, there have been and will continue to be numerous peer-reviewed publications about different aspects of Morquio A, contributing to the overall understanding and natural history of the disease. On the marketing front, we are conducting market research and preparing branding and educational and support materials to be prepared for the first Vimizim launches anticipated to be in the US, followed by the EU. There'll be modest hiring and training of new employees during the course of this year, particularly in the US, to be prepared to launch.

Now I will turn the call over to Hank Fuchs, who will review the pipeline.

Thanks, Jeff.

As JJ noted earlier, we have met our stated objectives for the quarter and remain on track to hit the remainder of our development goals for the year. Starting with Vimizim for MPS IVA, a we submitted the BLA to the Food and Drug Administration at the end of the first quarter and the marketing authorization application to the European's Medicines Agency earlier this week. Priority review status was requested in the United States and, assuming an eight-month review timeline, we could receive approval by the Food and Drug Administration by the end of the year.

In addition. the European Medicines Agency has accepted our request for accelerated assessment, based on the premise that Vimizim could satisfy an unmet medical need and is of major interest from the point of view of therapeutic innovation and public health. Vimizim is the first BioMarin product that has qualified for accelerated assessment, which offers the potential to accelerate approval by over four months. However, we would like to caution you that most cases do revert to standard review timelines.

As a result of our educational efforts and positive chatter in Marquio patient and physician community, disease awareness is growing and, along with it, demand for Vimizim. We are happy announce that last week we opened our first expanded access site in United States. We will continue to add sites and enroll patients leading up to approval to allow for additional access to Vimizim.

Moving onto the next data point in our development pipeline, BMN-673 for genetically defined cancers, we are finalizing the design of our first Phase III study in BRCA mutant breast cancer. We have successfully concluded our end-of-Phase II meeting with the FDA. We will have poster presentations with an update on our Phase I/II program in solid tumors at the upcoming ASCO meeting in early June in Chicago, and we plan to have dose-expansion data at 1 MIG for approximately ten additional BRCA ovarian and ten additional BRCA breast cancer patients. We will also have enrollment updates on Ewing sarcoma and small cell lung cancer.

As for next steps, we're still planning to start a Phase III program by end of year, and the data will ultimately drive our decision. Turning to BMN-701 for Pompe's disease, during the first quarter, we announced results for our Phase I/II study. The results exceeded our pre-specified requirements for proceeding to the next phase of development. We have decided to initiate a Phase II/III program by the end of the year.

The Phase II/III switching trial will be conducted in late-onset Pompe patients who have been previously treated with algluosidase alfa using full-scale material from our revised manufacturing process. Subject to discussions with health authorities, the proposed study design is a single arm trial with treatment at 20 milligrams per kilogram administered every other week for 24 weeks. The respiratory parameter, maximum inspiratory pressure, will be the primary endpoint and secondary objectives will include maximum expiratory pressure, six minute walk test, and safety.

Through our discussions with industry experts we have gained increased confidence in identifying maximum expiratory pressure as the primary endpoint. There is an average annual decline in maximum inspiratory pressure of 3.2%, and this gradually leads to death of the patient. Maximum inspiratory pressure and maximum expiratory pressure are appreciated by many experts as the best measure of respiratory muscle strength and improvement in these domains represents an important benefit to the overall health status of Pompe patients.

As for the remainder of our pipeline, all programs are advancing to the next stage of development and generating value for the Company. We are in track to initiate the Phase III PEG-PAL trial for PKU, phenylketonuria, in the current quarter and by midyear. And we plan to initiate the Phase II trial for BMN-111 for achondroplasia and the Phase I/II trial for BMN-190 for Batten's disease.

These three opportunities are attractive for different reasons. PEG-PAL is largely de-risked clinically, as the primary end point of lowering blood phenylalanines has been unequivocally demonstrated in the previous Phase II trials. In addition, the commercial Kuvan infrastructure is immediately leveragable, with Kuvan sales reps calling on the same treating physicians, and known Kuvan non-responders that could be ideal candidates for PEG-PAL.

BMN-111 has a well-understood disease pathway and encouraging data from our Phase I study, along with an attractive market opportunity. And BMN-190 lies in our sweet spot of enzyme replacement therapy and, depending on results from our Phase I/II study, may have an expedited regulatory pathway.

Finally, as JJ mentioned, we are very excited about our recent license agreements for hemophilia A gene therapy and the acquisition of Zacharon, both ideal strategic fits which develop our core competencies, fuel our pipeline and continue to future growth. And with that, operator, I'd now -- we would now like to open the call for questions.

(Operator Instructions)

Tim Lugo, William Blair.

I actually had a question on Vimizim. I saw at the world meeting a poster on patients with attenuated disease and these were essentially almost adult patients. I assumed they'd be heavier. Will these patience be on the Vimizim label and are you planning on starting any studies specific in this patient population near term?

I'll start. This is Hank. Thanks again for your question. Our expectation -- obviously we're not in labeling discussions yet but I think that regulatory practice has been to apply relatively general criteria to the package inserts of the product when it's launched. So we don't have an expectation that the label will or won't include specific subsets of patients. And as to whether we need to do additional studies to address the medical need, our belief is that the results of our trials will indicate that Vimizim should be used early in the course of illness independent of either genotype or phenotype and exactly how that turns out will be the subject of future conversations with health authorities.

I know JJ's voice isn't great right now but maybe you can talk about this, Hank. In the past it's always been discussed that Vimizim would be the largest product or one of the most successful products for BioMarin. Obviously street expectations are a little bit greater than that. Can you maybe benchmark Vimizim versus some of the other successful launches we've such as Cerezyme and Replagal, some of the other products outside BioMarin?

It's JJ here. I can talk a little bit. Again, this is based on the relative size of the market population for MPS IV as compared to MPS I and MPS VI. And we believe that there is a good chance that the market is two times as large as the MPS VI market and maybe more. This is why we believe it's a $600 million plus new market opportunity, but that's all we can see at this time. As you know, we only finally discover the true size of the market once we start marketing the drug. We have boots on the ground in different areas of the world to identify patients. We did underestimate the market for Naglazyme at launch. We thought at launch it would be $150 million product peak sales and is already close to $300 million. I think the underestimation here is going to be lower because we have more people already around the world. But at this time it's only -- it's a market (indiscernible) patient is only two times Naglazyme. It's $500 million to $600 million product, which will double the sales of BioMarin.

Michael Yee, RBS Capital Markets.

Thanks. It's Mike Yee from RBC. In terms of 673 at ASCO, can you just better frame our expectations for what data we'll get in breast/ovarian, as well as understanding how much data we'll get in Ewing's and small cell. The follow up to that is I know there's guidance to start a pivotal study in Q4, can you better explain which of those indications is most likely to go? You basically said you're finished discussions or design of a Phase III in breast, so is that what our expectation should be? And maybe comment on the fact that there was another competitor out there, [Nuraporin] today basically announcing a move into Phase III as well. So put that all in context.

Hi, Mike. That's a lot of questions. Let me see if I can remember them all. I think the first one is to better frame the ASCO expectations in terms of the BRCA mutant population. As I said, we've enrolled at least 10 additional ovarian BRCA patients -- ovarian patients and 10 additional BRCA breast patients and we will provide a snapshot at that point of best response to date, which could include the number of immediate progressors, the number that have stable disease and are ongoing treatment, the number who have experienced partial responses, confirmed partial responses, complete responses, confirmed complete responses. A little difficult to predict the distribution of those outcomes because the studies are still ongoing, but we'll give you as current an update on those tumors as we can.

As regards Ewing's and small cell, I think it's still pretty early for those tumors for us, so I think the right expectation to have there is that you'd get an update on enrollment numbers and, of course, if there -- if the enrollment numbers our meaningful and the data readouts are meaningful at that point, we'll provide an update as to outcome, provided that the outcomes are reasonably clear. As you said -- as you pointed out, we did -- we are saying that our first Phase III trial is going to be in BRCA mutant breast cancer. We are aware that there are competitive molecules out there in the clinical development arena. I'd say as we sit here today, we feel pretty confident about our asset and, just to remind you of the greatest hits about that confidence, are, number one, it was designed to have better potency, selectivity and pharmacological properties; number two, in the clinic, it has shown by far the greatest potency in terms of the doses at which you first observe response activity. It has the highest ratio between the MTD and the lowest dose at which you first observed activity so, it's selectivity design appears to have translated into the clinic. None of this would be possible without having the predicted pharmacological properties of good absorption, long half-life, appropriate for daily administration. And so we think that we have the best PARP inhibitor.

We will be presenting probably the most current -- I don't know what the other companies are going to present at ASCO, but to our knowledge, basically we have the most recently enrolled patients and the highest number of recently enrolled patients. I think you'll get the freshest look from our ASCO update about our compound. What we've seen and what we've talked about so far is pretty dramatic response activity at pretty dramatically low doses with a pretty acceptable safety profile. But other than that, I can't really say more competitively. We look forward to ASCO. We will provide you a lot more details and you'll get a lot more insight into our specific development program. (background noise) I hope I didn't put Mike to sleep.

Mike are you still there?

Okay. We'll go to the next question.

Actually, I would like to add also that as far as we know [dis farrow] has not implemented new studies in breast. They acquired the product from Merck. So whatever triggered their decision to publicize they're moving in breast today as far as we know is not based on a new deal. Next question?

Cory Kasimov, JPMorgan.

First of all, maybe to ask Michael's question another way with regard to 673, how much are your development decisions driven by what the competition is doing in terms of competing for sites, patients, etcetera? And then also on 673, are you going to have a meaningful amount of data in the abstract for ASCO? Is that just more of a placeholder at this point? And then, on Vimizim, I may have missed this but did you say whether or not you've heard from the FDA yet on priority review status? I know you have accelerated assessment in Europe.

Haven't heard from the FDA prior to review status. The abstract is a placeholder abstract and how much of our development decisions are driven by competitor, not so much. I think the way I've looked at it is in the way I think we and our expert colleagues have looked at is to try to match the biology in the drug in the most optimal fashion. We just have a real strong belief that it makes a lot of sense for the first indication to be in BRCA mutant cancer for a variety of reasons. We're aware of the competitive situation and we're going to try to let, A, data speak about that and, B, at the end of the day, the trial results will determine which of the compounds ends up being first and which of the compounds ends up being best.

Robyn Karnauskas of Deutsche Bank.

Just a quick question on your strategy now for going ahead in breast first. I know that you made some comments on the last call about how maybe breast might have a higher chance of success. I was wondering now that you're making that decision if you could give more color on your thoughts around that and whether or not you are going to completely rule out going not in ovarian. What are your thoughts? Just help me understand the strategy behind the order of attack?

Hi, Robyn. As you know, cancer drug development often involves a series of activities, and I think what we're talking about today is what's the first thing the Company is going to sponsor. I've been fairly explicit about in the past not ruling out, for example, BRCA ovarian cancer. Today, even still I wouldn't rule out -- I'm not saying anything about our decision about Ewing's or small cell because I'm saying explicitly we don't have enough data to decide one way or the other. The thing that I think we find compelling about breast cancer as a development opportunity are probably first and foremost, a relatively low amount of platinum use in breast cancer in general, a belief that platinums are active but they're not approved. And therefore, because of the relationship between the mechanism of platinum's activity and the mechanisms PARP inhibitors' activities, therefore, a high belief in ¶

the likely activity of a PARP inhibitor and a relatively low worry about either confounding of platinum use or potential for cross resistance. It's an indication that unlike ovarian cancer is unconfounded by platinum use. Secondly, sadly, breast cancer is a terrible disease and there is a short time to endpoint readout. Thirdly, it's known that good PARP inhibitors like ours have good single-agent activity in BRCA mutant breast cancers, and I think the medical community is really keen on developing a relatively well-tolerated therapeutic option as single agent-therapy in the molecularly defined space.

Now, none of that compare/contrast says anything bad about ovarian cancer as a target indication. It's all to say that breast cancer, BRCA mutant breast cancer, has a lot of features that cause it to pop to the top our list as a development -- Company-sponsored development opportunity. And I say, stay tuned as to at ASCO about further decisions that we'll make in what's obviously a very competitive area and also an area that is really ripe for investigation.

Salveen Richter, Canaccord.

Just another one of the PARP data. For the data we'll see at ASCO, how long will the 10 patients in the BRCA breast arm have been on 673 at that time point? And then also, when you look at running a Phase III, are the patients -- or is the study going to be in all BRCA breast patients or are you looking at a subpopulation such as triple-negative patients within BRCA breast? And then just a question on Ewing's sarcoma and small cell lung, if they work are you thinking of running a parallel path here with a couple of different indications going forward?

We could imagine a path that has a couple of indications proceeding simultaneously, but -- and so we're not ruling anything in today or anything out today. I think data are going to really drive a lot of those decisions. As to the included patient population, I think it's fair to say that I believe that the majority of BRCA mutant breast cancer patients are in fact triple negative but there's not an explicit strategy to say you must be triple negative. The eligibility criteria are likely to be simply around confirmed BRCA mutant status. And as to duration of follow-up at the time of ASCO, it kind of depends on the activity. As I sit here today, that could encompass a range from as short as three or four months of duration in some patient, to as long as well over a year in some other patients. So it kind of depends on the activity of the drug and the buns are still in the oven, as they say.

Chris Raymond, Robert Baird.

On 673, just a couple questions. I know it's a different disease setting but AstraZeneca's decision to file for a conditional MA with [Olipad] in Europe. Has that changed your thinking at all in terms of is there a chance perhaps you could have a package you could pull together, for example, in breast?

What I know about what AstraZeneca has is a couple of completed randomized, controlled clinical trials in a triple-digit number of patients. We'll have a 12.5 single-arm patients, so I'm sure that JJ would love my answer to this question to be in the affirmative, yes, Chris, we can pull that together. But I think that's reasonably unlikely. And was there another part to your question?

Yes. Also in terms of the conduct of the breast trial, can you just confirm, are you going to be testing every patient for mutational status or will you rely perhaps on prior diagnosis? What's the protocol there?

Probably a little bit of both. I don't know that's it a ubiquitous practice to test all patients who have breast cancer for BRCA mutant status around the world. And -- but some patients who have a very strong family history or who are at institutions who have an interest in genetically defined cancers or who have strong cancer genetic services, we'll be keen to participate. We'll have some pre-identified patients, so -- probably a mix. Very difficult to predict how much of one and how much of the other at this point.

And if I could sneak one more in on 701, can we assume then if you start the trial with MIP as your primary endpoint that FDA has absolutely signed off of that as the (indiscernible) end point?

Absolute sign off in FDA only occurs in two cases. One is when you're absolutely on clinical hold or when you've absolutely received approval of your drug. So insofar as the start of the Phase III trial is somewhere in between those two extremes, I don't think they'll be any absolutes to anything. But I think we'll talk about what requirements for registration are and why we believe that maximum inspiratory pressure is a reasonable and acceptable primary endpoint, and I think you'll have to determine for yourself about the likelihood that that becomes an acceptable outcome from a registration perspective when that trial is concluded.

Eun Yang, Barclay's.

So not to beat a dead horse again but, Hank, can you remind us, is it fair to assume that you will have much more mature data for BMN-673 at ASCO for the ovarian cancer patients versus breast cancer patients? Secondly, out of the 1,300 patients you have already identified for MPS IV A here, can you remind us how many of those are actually in the United States versus [excious]?

The answer to your first question is, yes, we will have more data on BRCA ovarian cancer patients. That's just a consequence of the fact that one of our PI's has had a very long interest in BRCA, PARP inhibitors and in ovarian cancer specifically. So while AstraZeneca was in undecided mode about what to do with ovarian cancer, there was this huge demand for participation in clinical trials with PARP inhibitors in England in particular. When we showed up with our Phase I/II study, we were the supply to satisfy that demand and for that reasons, our Phase I/II trial and, to our good fortune, was really filled quickly with a lot of ovarian cancer patients during dose escalation. So, yes, it's a fair assumption to say that we're going to have more data and more mature data on ovarian cancer at the coming ASCO update. And the second question I believe is for, Jeff --

How many patients --

So we've previously disclosed that approximately 20% of the identified Morquio A patients reside in North America, that's principally the United States, secondarily Canada. I believe that we have previously guided towards approximately 15% for the United States.

Worldwide.

If I may have a follow up here. When do you guys think you might get some sort of feedback from both FDA and EMA for both MIT and for BMN-701.

Closer toward the end of the year than where we sit today. There's a process we've got to -- as you know a cell line to talk to them about and a Phase III trial to talk about, and so those conversations will be ensuing, probably over the summer and into the beginning of the fall.

Phil Nadeau, Cowen and Company.

First one on Naglazyme's performance in the quarter. You mentioned several factors that led to strong quarter-over-quarter growth. Could you give us some sense of the 10% growth, how much was contributed by each factor? And then second on Vimizim, could you give us some idea of the number of patients that you could have on expanded assess at the time of the approvals in the US. And we have a similar program in Europe, and I'd be interested to hear a similar figure for that program as well.

Okay. This is Jeff. I'll cover the growth in Naglazyme. So 10% quarter-over-quarter, so 10% Q1 to Q4 of 2012 and relative to the modest growth over Q4 -- sorry, Q1 of 2012. What we've noted is that there's order timing. The differences are principally related to order timing. On the positive end we have a number of countries that typically order big in the first quarter. I mentioned a few of them in the opening remarks. We also mentioned that while we have contiguous orders from Brazil, this year's Q1 order was smaller than last year's Q1 order. We also mentioned about 11% growth in patients year-over-year and relatively modest quarter-to-quarter growth in patients.

So if you take your 11% and divide it by four quarters, that's roughly what we're talking about quarter-to-quarter from Q4 of last year to Q1 of this year. I would boil that down and say good growth dynamics in the underlying number of patients on therapy, the year-on-year quarter-to-quarter analysis confounded by a mix of big orders, some coming larger than last year and some coming in smaller than last year. So that much on Naglazyme. Sorry, would you mind clarifying your second question?

Sure. It was on Vimizim. Can you give us some sense of the number of centers, the number of patients you could have on compassionate use or expanded access by the time of the FDA approval?

Hank mentioned that we've had our -- opened up our first expanded access site in the United States. And it's very early to tell how many patients will get enrolled in this expanded access program. But if you think about the United States being around 15% of the total number of identified patients, worldwide of 1,300 plus, and taking into account the fact that the United States is a principal country for clinical trial participants, you can do the math and take a guess. I would say something in the mid double-digits might be an appropriate expectation.

Can you remind me --can you do some similar programs in Europe and if so have you begun a process to implement those?

The expanded access program that is set up in the United States is relatively unique to the United States. Outside of the US, France has a program, we refer to it as ATU; Italy has a program, the moniker for that is the 648 program. These are programs that we are intending to submit to and which could possibly enroll pre-EU approval patients on Vimizim. Outside of those programs, principally what we're talking about are name patient sales opportunities, which could potentially open up after a major market, meaning either the US or the EU, registration.

Kim Lee, Janney Capital.

Just a question on PEG-PAL here. When would you decide whether or not you would go for accelerated approval and when would we find out about that update?

Hi, Kim. I think a way to think about this is we're -- we have been and we will continue to do the full development program. It's our belief and expectation that we'll demonstrate a neurocognitive benefit and so we -- and that would be compelling for patients and it would be an outcome that's worth having. We're going for a full approval. Now, what -- I think that the good news of the FDA's decision that blood [fee] could serve to support a conditional/accelerated approval is that if we don't hit it in our first trial, it doesn't mean all is lost because in that circumstance they'd be willing to let. I think what they're saying is, they'd be willing -- subject to the review of the data, they'd be willing to let PEG-PAL get on the market with a post-marketing commitment to further corroborate the neurocognitive benefits. So we're going for full approval and accelerated approval is a good guy, if you will, in the event that our full approval studies don't quite get there in terms of the neurocognitive benefit.

And when you -- just to follow up, when you refer to your first study that if you don't hit that study, are you talking about the open-label one or the randomized control one or do you think you need to hit both those studies?

The open-label one is really a safety study that's essentially a feeder for the randomized study. So it's -- to get the full accrual in the randomized study we need to funnel patients through, if you will, the feeder study. So we're really talking about full approval being driven by the randomized trial, which necessitates the feeder study.

Brian Abrahams Wells Fargo Securities.

I had a question for Hank on 701. Hank, you got good KOL feedback on the criteria for moving 701 forward from Phase II. I'm curious if you could maybe talk a little bit about any discussions you might've had with thought leaders post the Phase II data to get their impressions on how they might want you to further elicit potential differentiation in the next studies such that they'd be convinced to use the agent. Is it all about MIP or are there other differentiating features that they might want to see as well?

Like to see in our achievable -- I think the feedback post call has been fairly consistent with the pre-call feedback, which is Pompe's disease is a myopathy. Respiratory impairment is one of the most profound abnormalities in patients with Pompe's disease across the entire spectrum of illness severity and dura -- and length of the disease. Therefore, it is not surprised that a better glucosidase alfa shows up as having improvements in respiratory muscle strength. So I think if there's anything that they'd like to see that's not -- that's an extension of what we talked about when we first talked about the data are is, help us understand all the different ways in which improvement in respiratory muscle strength might be clinically observable in terms of, for example, independence from continuous ventilation or improvement in sleep-disordered breathing, or help us understand the quality of life impairment that results from respiratory muscle weakness, or the validity of using maximum expiratory pressure as a endpoint for a registration trial. I don't think there's been any kind of substant change -- substantive change since we have announced the data but more of a -- of an elicitation of a, yes, this makes sense biologically and now let's see how this applies in the most profound way to the population of patients who have Pompe's disease.

If I may add, we -- I think one of your competitors did check with an opinion leader in New York who said that if indeed in the [switches three] we demonstrate that we improve MIP as compared to when the patients were on [Mimizyme] -- he would switch all his patients to our products. Ourselves, we are going to do some advisory boards in the coming weeks to actually confirm this on a larger number of KOL's. Do want to talk about it a little bit, Jeff?

We have some work ongoing checking in with KOL's. There's a couple of mechanisms to do that. One is checking individually and the other is an advisory board setting. We have a series of two advisory boards coming up in May and June, one focused principally on European physicians, one focused on US and Latin American physicians. The first advisory board is really going to get into some of the clinical trial aspects and feedback from the advisors on our clinical trial program. The second of those two series will focus more on some of the commercially relevant questions that we have, gain a better understanding of how physicians will evaluate their patients and make a decision between different agents.

Thanks very much for the color. That's very helpful. One more quick question, if I may. You've obviously moved quickly with the Vimizim BLA and MAA filings. Just wondering if you could remind us of the status of the rest of world's filings for the drug, where you stand relative to the plans you laid out at your Analyst Day a few months ago?

I think we said we have a tiered approach that's driven to some extent by the requirements for registration as well as the market size. I don't remember that we gave a very specific number of what the target for this year was. I think you can think about that as a handful or so and we're very much on track of meeting our submission expectations. I think that, as JJ said and as I repeated in the prepared comments, we really mode through the US and the European submissions, which were by a very large factor the largest submissions that BioMarin had ever undertaken. We're a pretty experienced submissions group. We've got a health authority approvals in more than a couple of dozen countries around the world, and so taking on something very much larger, as we are with Vimizim application, these guys just did a great job of it so we're optimistic on the filing timeline front.

Josh Schimmer, Lazard Capital Markets.

Hank, for the 111 program, would you expect to see an increased in alkaline phosphatase or collagen cross linkers with therapy? If so. how soon might we see them after dosing and did you see them in Phase I? Then maybe you can give some color on other early signals of activity you might be able to see and when?

That's a great question, Josh. I think it's a reminder about achondroplasia. It doesn't get enough necessarily play related to the fact that is a little bit earlier in the pipeline. But the biology of this has been really pretty well elucidated. In disease models in healthy animals treated with BMN-111, we've seen biological responses to therapy in the form of, say, alkaline phosphatase as early as three months after the initiation of therapy, and we can see widening of the growth plates on MRI in animals treated with BMN-111 in as early as one month. So we do expect to see biochemical and anatomical changes potentially fairly quickly, and that like are other [stelva] dysplasia programs in mucopolysaccharidosis, that's a little like the gags in MPS where you get a actually fairly quick read on whether you're on track or not. That I think is one of the things that makes the 111 program a very exciting program from a development perspective. On the bad new side is if there is bad news and you don't get the efficacy and you do get the toxicity, then you have to waste a lot of money. But what's happened for us more practically is that on the good new side is that you start to see action even in advance of seeing the clinical outcomes happen. So thanks for the reminder about 111. It's a really exciting program.

Carol Werther of Summer Street.

I was just wondering, are you thinking about having the same pricing for Naglazyme with Vimizim?

This is Jeff. I'll take a first swipe at that one and let JJ fill in if he has any further comments. We've guided previously that the price for Vimizim is expected to be between, at the low end, our annual pricing for Aldurazyme -- Genzyme's annual pricing for Aldurazyme, which would be approximately $250,000 per patient per year, and $400,000 per patient per year at the high end of the equation, which would roughly equate to current Naglazyme pricing. So in general, Vimizim is an enzyme replacement therapy that treats a very small population of patients around the world. So that puts the Vimizim price into that kind of a ballpark range. We're currently assessing the benefits that can be expected to patients. Some of those answers we've seen from the more 2004 study. We are looking at the other studies ongoing, 2005, 2006, 2007, and the 2008, which have not yet completed, to see if they add anything else to the story. We're also considering the relative size of the patient populations, and we're considering the global environment for introducing a new product. Recall that the last global product BioMarin introduced and priced was in 2005. That was eight years ago, and the last regional major product was 2007. That was Kuvan. So we haven't completed all of that work but I think that we can define that range pretty well.

The only thing I'd like to add is that we will -- we are going to continue to do all this analyses and we will communicate the price when the product is approved.

And then further, just follow-up, do you think they'll be a panel meeting in the US and is there any reason not to get accelerated approval in the US?

As for that, I can't elaborate. It's likely there will be a panel meeting because that's kind of where the idea is moving now. You have panel meetings most approval for new molecular entities, so I'll let Hank see if he has another opinion?

On the one hand, that's where they're moving and, on the other hand, they've been reviewing and approving things without panel decisions also. I think we're in the good situation of having hit statistical significance on our primary endpoint, so if there was something that was going to escape the panel then it would be this. But if the FDA does pop up and say they want to have an advisory committee, I wouldn't be surprised either because that's their norm. And as far as accelerated approval in the US, that's a very period specific term, and so I think that if you're asking do we expect priority approval -- priority review, which would be the mechanism that's relevant here, I think it's a reasonable expectation to have, given the rare disease, urgent unmet medical need but until they give you that designation you don't have that designation.

My last question. Do you expect to have sales in the EU next year?

Oh, yes, this is Jeff. I can answer that question. We expect to have an approval in the EU and to be able to launch early in 2014. The process of getting price and reimbursement approved in Europe is complex, market by market, and does take time. But the answer is, yes, we do expect to have sales generally in the EU next year.

Kumar Raja, Citi.

This is Kumar [Rein] for (indiscernible). My question is what are the next steps in development of Factor VIII gene therapy and when can we expect it to enter the clinic?

The next steps are the selection of a development candidate. And a development candidate in our case would be -- the elements of selecting a development candidate would be to select the specific gene construct, the specific promoter, and there are some other nuanced technical aspects of the delivered gene therapy. I think we've been saying that we hope that to have our candidate in the clinic either at the end of 2014 or at the beginning of 2015. We're on track for that, but as to more specific updates I think it's a little early to give.

Thank you. At this time I'd like to turn the call back over to Mr. Bienaime for any closing remarks.

Thank you. In summary, we are pleased with the steady growth of our commercial portfolio and the advancement of our pipeline, which is resulting in a value generation for the Company. We are looking forward to many clinical milestones in the coming year. In June at the ASCO meetings we will be presenting data from our ongoing Phase I/II trial in [folic] tumors and a Phase IIi trial likely in BRCA breast cancer by the end of the year. PEG-PAL, BMN-111 and BMN-190 are all moving to the next phase of development. We also look forward to a possible FDA approval for Vimizim by the end of the year. It should be a transformative event for the Company with the potential to double the revenues of BioMarin and bring us to the next phase of growth and maturity. Thank you for your continued support and for joining us on today's call and goodbye.

Thank you, sir. Ladies and gentlemen, that does conclude your program. You may disconnect your lines at this time. Have a great day.