BioMarin Pharmaceutical Inc (BMRN) 2016 Q4 法說會逐字稿

Good afternoon, my name is Megan and I will be your conference operator today. At this time I'd like to welcome everyone to the BioMarin's 4Q and full year 2016 financial results conference call.

(Operator Instructions)

Thank you. It is my pleasure to introduce your host, Traci McCarty, Head of Investor Relations of BioMarin.

Thank you operator and thank you all for joining us today. With me from the BioMarin Management team are, Jean-Jacques Bienaime, Chairman and Chief Executive Officer; Hank Fuch, President World Wide Research and Development; Dan Spiegelman, Chief Financial Officer; Jeff Ajer, Chief Commercial Officer; and Robert Baffi, Head of Technical Operations.

To remind you this non-confidential presentation contains forward-looking statements about the business prospects about 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 upon 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's Chairman and Chief Executive Officer, J.J. Bienaime.

Thank you, Traci, good afternoon and thank you for joining us today on the call. So, 2016 was a momentous year for BioMarin, as full year revenues topped $1 billion for the first time, coming in $1.12 billion for the full year, an increase of 26% compared to 2015 full year revenue.

These results were driven by the approximately 50% year-over-year combined growth of Vimizim and Kuvan. Jeff and his commercial team have done an impressive job building out our ex-North America Kuvan business and adding patients on therapy for Vimizim.

In addition to commercial progress in 2016, we had a number of important developments and regulatory successes last year. We reported statistically significant results from each of our [clinical] studies with Pegvaliase, Brineura and Vosoritide and proof of concept results with BMN 270, gene therapy for hemophilia A.

In addition we had our regulatory filings accepted in both the US and EU from Brineura. We reported about exciting preliminary results on our BMN 270 gene therapy program and we begin our Phase III with Vosoritide at the end of last year.

Looking forward to 2017 double digit growth revenues is expected to continue and total revenue is expected between $1.25 billion and $1.3 billion. Also announced today, we anticipate (inaudible) of non-GAAP results in 2017.

In the years to come we intend to steadily increase bottom line results while continuing to reinvest in our pipeline. Dan and Jeff will provide more details on our commercial and financial expectations for the year.

On the development and regulatory side in 2017, we look forward to the potential approval and long term Brineura, in both the US and Europe, the Pegvaliase FDA filing in Q2, the start of the registration enabling Phase II B study for BMN 270 gene therapy, as well as additional data from the [cure] study and the announcement of next IND candidate. Our new gene therapy manufacturing facility is expected to be completed by mid-year enabling us to move the BMN 270 program forward without constraints on materials needed for the Phase II B registration enabling study in the third quarter. Dan will provide also some more details in a moment.

Before handing over the call to Jeff for more color on our commercial activities I would like to make a few comments about recent headlines published on our industry and specifically about drug pricing as it relates to [both] drugs. While there have been a lot of headlines in the US recently regarding increasing scrutiny of drug prices in general and even on some so-called orphan drugs, we believe that the products we have developed and plan on continuing to develop are, and we continue to be largely insulated from these issues for several important reasons.

As a first principle at BioMarin we focused on providing highly innovative medicines in rare and ultra rare conditions to patients, mostly children, who have either no or unsatisfactory treatment options. This is very different than repurposing or repricing older medications or older generic medications.

Due to the innovation we create our medications provide significant value to our patients and to the healthcare system. The value of this innovation is recognized globally where cost conscious single payer healthcare systems dominate.

As we have noted before, for the products we sell globally, the majority of our revenues ultimately come from outside of the US from single-payer systems and in fact our Medicare, US Medicare sales, represent less than 3% of our global revenues. But critical importance we price within a fairly narrow range globally.

In other words, single payer healthcare system from 65 countries around the world currently agree to pay essentially the same price for our medications as we currently charge the US government. Everyday we successfully justify the value of our medications all over the world and feel very confident that we can continue to do so in the United States even in the face of increasing price scrutiny.

So, despite the uncertainty that many companies are facing related to potential new pricing policy, we feel the highly innovative nature of our products provide a high level of protection to our business. Now, I will turn the call over to Jeff who will review the commercial business in more detail. Jeff?

Can you, J.J. We delivered strong sales results in 2016. And I am very pleased with total BioMarin revenues for full year 2016 exceeding the previous year by 26% and breaking the $1 billion mark for the first time.

Starting with Vimizim, patients on commercial therapy grew 40% in 2016 from further penetration in existing markets and new access to eight markets bringing the total number of active Vimizim markets to 41. 2016 also saw a continued rise in identified patients increasing the to over 2,000, with approximately half of the currently identified patients on therapy and the fact that we continue to identify new patients, there is opportunity for significant (inaudible) growth from here.

Vimizim net product revenues in the fourth quarter were $94 million or 59% higher than fourth quarter revenues of $59 million in 2015. For the full year, Vimizim net product revenue increased 55% year-over-year to $354 million and the franchise continues to benefit from robust underlying patient demand.

Last quarter we had communicated risks associated with order patterns in Brazil and Turkey. I am glad to report that we're seeing a return to ordering stability in turkey but we remain cautious on Brazil and will continue to monitor this situation closely. Looking towards full year 2017 Vimizim guidance we expect between $400 million and $430 million in full year revenues.

Moving on to Naglazyme, net product revenues were $75 million the quarter, a 25% increase year-over-year. For the full year, revenues of $297 million were essentially unchanged from the prior year. The number of commercial patients increased by 9% in 2016, an indicator of the strong and increasing underlying demand for are Naglazyme, which drives our expectations for revenue growth in 2017.

Quarterly volatility continued in 2016, with order timing in the fourth quarter from Latin America driving strong results compared to the fourth quarter of 2015. Based on these expectations our guidance for full year 2017, Naglazyme net product revenues is between $300 million and $330 million.

Now onto Kuvan. 2016 represented the first full year of global sales of Kuvan of BioMarin since the acquisition of PKU franchise in international markets from Merck Serono and we're very pleased with the results.

Kuvan net product revenues contributed $90 million to the top line in the quarter, an increase of 38% year-over-year. For the full year, Kuvan net product revenue was $348 million a 46% increase over 2015.

North American sales were paced by an increase of 15% in commercial patients year-over-year. And in the international markets we successfully navigated through the transition process and are now receiving orders directly from the majority of top markets world wide.

The combination of strong results in North America, combined with solid uptick internationally, gives us confidence of providing full year 2017 guidance of between $380 million and $410 million, an increase of about 14% over 2016 at the midpoint. We expect these results in 2017 to be driven by growth opportunities in both North America and the addition of new patients in the international markets.

Turning for a moment to market preparations ahead of a potential Brineura launch in the US and Europe this year, the precommercial work is proceeding as planned and we expect to be well prepared upon approvals. As we said previously the commercial strategy for Brineura is different than for the launch for Vimizim.

For Vimizim, in advance of launch, we had identified a large number of patients, many of which were able to gain access to Vimizim and which was a key in facilitating rapid uptick during launch. The dynamics for CLN2 patients are very different relative to Morquio A.

Due to the rapid decline and function of children with CLN2 it is not possible to have a large pool of identified patients that are both waiting for, and expected to be still suitable for, treatment following launch. So rather than existing patient identification, our primary focus is on raising awareness among physicians to facilitate early diagnosis.

The goal is to have patients screened and diagnosed early while they retain good function but these will be the best candidates to benefit from the therapy when approved. We are also working to identify and prepare potential treatment centers. Some key centers have gained valuable treatment experience through participation in clinical trials and expanded access protocols and we anticipate an official ATU approval in France resulting in orders in the second quarter.

We plan to leverage this experience and training new treatment sites following launch. Now I'd like to turn the call over to Dan to provide more detail on fourth quarter and full-year financials. Dan?

Thanks, Jeff. We have seen today's press release summarizing our financial results for the fourth quarter and the full year 2016. As Jeff already reviewed top line results, I will briefly cover other key 2016 results and then provide our thoughts for continued growth in 2017 and beyond.

In terms of 2016 operating expenses, across the board, they were in line with our prior guidance. Full year research and development expenses were $662 million and SG&A expenses were $477 million.

From the bottom line we reported a full year $630 million GAAP net loss which included $599 million of intangible asset impairment charges associated with discontinuing the Kyndrisa and Reveglucosidase alfa development programs in the second quarter. After reflecting the associated reversal of contingent consideration expense and a benefit from income taxes, the net GAAP impact of discontinuing these programs was $381 million.

Therefore, full-year GAAP net loss excluding the discontinuation of Kyndrisa and 701 was approximately $250 million. Full year non-GAAP loss was $36 million. BioMarin defines non-GAAP income or loss as GAAP net income and loss excluding interest, taxes, depreciation and amortization, as well as stock-based compensation expense, contingent consideration expense and certain other items such as the intangible asset charge associated with the Kyndrisa and 701 programs. BioMarin regularly uses these non-GAAP results and expectations internally to assess the financial operating performance and evaluate key business decisions related to our principal business activities, the discovery, development, manufacture and marketing of innovate biologic therapies.

We ended the year with $1.4 billion in cash, cash equivalents and investments. In 2016, gross capital expenditures for the year were $168 million driven by the build-out of the manufacturing facility in Shanbally to support commercial supply of Vimizim, office facilities in Nevada and San Rafael to support ongoing research and development activities, as well as starting construction of our new gene therapy manufacturing facility in California. In addition we added $83 million to inventory to support the continued growth of Vimizim and Kuvan and to prepare for the launch of Brineura.

I would now like to turn to financial guidance. As J.J. already indicated we expect 2017 total BioMarin revenue to be in a range of $1.25 billion to $1.3 billion. I would note that this 2017 revenue forecast assumes the key currencies remain at or around the current exchange rates through the year.

Our revenue guidance assumes the launch of Brineura in 2017 but we believe we can achieve this guidance should the launches be delayed. Our 2017 revenue growth is just under 15% based on the midpoint of our guidance. Beyond 2017 we anticipate annual revenue growth to continue at approximately 15% throughout the rest of the decade based on our current products plus the launches of Brineura and Pegvaliase. Beyond that time frame we expect revenue growth to accelerate further following the potential launches of products in our pipeline such as BMN 270 and Vosoritide.

Turning to operating expense guidance. In 2017, R&D expenses are projected to be in the range of $620 million to $650 million. While this would represent a decrease from 2016 R&D levels, we believe it is sufficient to drive development of our current portfolio and invest in next generation products.

Going beyond 2017 over the next few years we would generally expect an increase in absolute R&D expenditures while R&D as a percent of revenues will generally decline. 2017 SG&A expenses are expected to be in the range of $520 million to $550 million.

The increase in SG&A expenses in 2017 compared to 2016 is driven by launch and execution of Brineura in the US and Europe as well as Pegvaliase launch, preparation, and expansion into additional markets for Vimizim and Kuvan. Combined R&D and SG&A total operating expenses in 2017 will increase around 4% compared to 2016 levels, a significantly lower rate of growth than the 15% revenue growth rate.

Looking beyond 2017 and for the rest of the decade, we would expect the rate of future operating expense increases to continue to be lower than the revenue growth rate in order to provide increasing profitable. In terms of capital spending we expect an overall capital investment in 2017 to be similar to 2016. And between $160 million and $190 million, primarily in manufacturing and laboratory facilities.

In addition, there will be an approximately $100 million investment in additional inventory to support Brineura launch and continued growth in Vimizim revenues. Our GAAP net loss for 2017 is $140 million to $180 million. In terms of non-GAAP results we expect that our positive result will be between $30 million and $70 million. This non-GAAP, positive guidance for 2017, is the next step in the multi-year profitability plan that we laid out at the end of 2014.

In our Q4 2014 earnings call, shortly after closing the Prosensa purchase and at that time based in part on expectations for Drisapersen revenues, we set a goal fort company of non-GAAP profitability in 2017. Though Drisapersen was not ultimately approved and we worked to keep that 2017 break even or better commitment. Based in part on making portfolio decisions such as effectively swapping Talazoparib for ex-US Kuvan and Pegvaliase rights and terminating BMN 701, as well as effectively controlling overall spending, we have consistently improved non-GAAP results in the 2015 through 2017 period.

Looking beyond 2017 through the rest of the decade we expect these trends in improving non-GAAP results to continue and to have profitability steadily increase while also continuing to invest in the pipeline. Now, I'd like to turn the call over to Hank to provide an update on our development programs. Hank?

Thank you, Dan. Starting with regulatory and development activities, several programs advanced in 2016, laying the groundwork for our next stage of growth and potential approvals.

In the clinic, we announced in July of 2016 that BMN 270 gene therapy for the treatment of severe hemophilia A had demonstrated proof of concept results leading us to plan a potential registration enabling Phase II B study in the third quarter of this year. We are very encouraged by results to date with BMN 270.

As announced last month in our ongoing study, Factor VIII levels have stabilized, liver function looks fine and with the exception of one patient who is in the mild range, all patients are at least in the bottom of the normal range in terms of Factor VIII activity levels.

Recall that in order to be enrolled in our studies all subjects had to have severe hemophilia A with Factor VIII levels of 1% or less, prior to treatment. Briefly on the additional patients enrolled in the ongoing Phase I/II study, remember that we treated three new additional subjects with BMN 270 at 4 x 10'13 vector genomes per kilogram without steroid prophylaxis at the end of 2016 per our amended protocol agreed to by the MHRA in the United Kingdom last October.

Recall that we had the option to dose up to six additional 6 x 10'13 or 4 x 10'13 without steroid prophylaxis. Based on our early observations we are expanding from three patients to six patients treated with 4 x 10'13 and without prophylaxis based on what has been observed thus far in the first three patients treated with 4 x 10'13. We are very excited by the possibility of providing a one and done treatment option for people with severe hemophilia A and look forward to sharing our next update on this program before the start of the potentially registration enabling study in the third quarter.

We are also very encouraged and proud to have received PRIME designation from the EU earlier this month for BMN 270. To remind you, PRIME stands for Priority Medicines Regulatory Initiatives and was designated to BMN 270 based on the unmet need in hemophilia A, due to breakthrough bleeds in prophylactic treatment settings, leading to sequelae, which means the negative after affects of the (inaudible), including prophylactic, permanent joint damage as a result of repeated bleeding in joints.

This designation was further justified on the basis of preliminary clinical data in affected patients supporting on a single intravenous administration, results in sustained, restoration of Factor VIII activity, reduction of annualized bleeding rates and improved quality of life of treated patients. BMN 270 gene therapy is the first and only product candidate for hemophilia A to have received this PRIME designation so we are very pleased to have received this recognition for the program to date.

Turning to our gene therapy facility, it remains on track for completion in the second half of 2017 with the goal of producing material to support our potentially registration enabling clinical study and initial commercial demand. We believe that making the investment now in our own gene therapy facility will ensure that we have ample material to supply our registration studies and potential commercial launch.

The facility design was recently reviewed with US health authorities and the feedback was consistent with our plans for construction and operational control. The approach laid out was well received and discussed in depth with industry, academic, and health authority representatives. Our extensive in facility and process validation for our enzyme replacement products is a distinct advantage and positions us well to apply and adapt our successful strategies for validation to gene therapy production consistent with world wide regulatory requirements.

For example, our head of technical operations, Robert Baffi, recently presented facility and process validation considerations for gene therapy products at the 21st Symposium on the Interface of Regulatory and Analytical Sciences for Biotechnology health products.

Moving on to Vosoritide for children with achondroplasia, last year we shared positive 6 and 12 month data demonstrating a 50% increase in growth velocity and a dose of 15 micrograms per kilogram. Based on these data, last December we initiated a global Phase III study with Vosoritide in children with a achondroplasia, the most common form of dwarfism.

As we said we expect enrollment to take up to 18 months followed by one year in light treatment for all patients and this will be followed by an extension study. Our most recent data read out was from your newest program, BMN 250 and enzyme replacement therapy for the treatment of MPS IIIB, Sanfilippo Syndrome type B, a rapid and progressive neurodegenerative disease of young children.

In January we reported that in the dose finding portion of the study, the lowest dose of 30 milligrams per kilogram demonstrated a significant reduction of heparan sulfate a biomarker of brain tissue damage to the non-affected range. Since Zacharon review in January we have safely dosed escalated to the 100 milligram per kilogram dose and then the 300 milligram, our extension phase dose.

In the second part of the study we hope to demonstrate improvement in neurocognitive function, as measured by the development quotient, or DQ scale, which is a number expressing the development of a child, determined by dividing the age of the group into which the test scores place the child by the child's chronological age and multiplying by 100. Stay tuned for a program update later this year.

Turning to regulatory updates we have pa PDUFA date of April 27 for Brineura for the treatment of Batten's disease and we look forward to potential approvals in both the US and EU this year. With respect to an advisory committee, as we have said, we were told as part of the filing acceptance notice from the FDA that we should expect an AdCom and we have been preparing accordingly.

Announcements about AdComs are only made by the FDA through notice in the federal register and we know that the PDUFA date is drawing near. However, the FDA does have the ability to take action on the application without an AdCom. So, stay tuned and we will keep you apprised if anything changes.

In the European Union the committee for medicinal products for human use, of CHMP, meeting is coming up and we expect a decision -- and we could expect a decision from the European commission in the third quarter. We have been encouraged by our interactions with the MA and look forward to the next steps in the process to potential of approval of Brineura in the European Union.

And finally based on strong pivotal data with Pegvaliase for the treatment of phenylketonuria, our plan is to file the BLA in the second quarter of this year. This is a large opportunity and our commercial efforts will be supported by the groundwork we have done with Kuvan, our product for less [severely] affected patients with phenylketonuria. And with that operator, we would now like to open up the call for questions.

(Operator Instructions)

Salveen Richter.

Thanks for taking my questions. I have three. In terms of hemophilia A is there a factor activity level, say greater than 125% or so, that the FDA is telling you is unacceptable?

And then when we look at how you're dosing the next three patients at 4 x 10'13, how should we think about that as we look to dosing in your potentially pivotal program? And can you just comment on inter patient variability at this dose? Thanks.

Thanks Salveen for your questions. Let me just say that we're in the midst of our health party interactions on a global basis, and as you could tell from the PRIME designation the health authorities have seen a lot of our data.

And what I can say about your question about 125% is that that hasn't come up specifically. An upper limit of acceptable has not been specified to us by health authorities. And we are in the process of collecting further safety and dose response data and we have showed our strategy for picking a dose to taking in the registration enabling trial to health authorities and we continue to be authorized to treat patients both at the 4E13 level and 6E13 level, without steroid prophylaxis.

In terms of how we're going to pick the dose for the coming trial, that will be a combination of safety and efficacy data and I think as long as we can achieve -- I think the -- maybe an efficient way of saying this, the guiding principle will be to select the lowest dose which produces clinically relevant efficacy. And while I can't tell you what the results of the ongoing 4E13 dose study are, I can tell you that what we've seen has been sufficiently supportive, that we want to dose three additional patients at that same 4E13 dose level.

And again, I can't tell you exactly about variability but I will tell you that we're encouraged by what we are seeing, both in terms of activity and variability in activity. So that is all to say we're very encouraged by where we are and we think that we should be in a great position to start registration enabling trials as we've said, in the later part of this year.

Great. Thanks, Hank. And then just in terms of Brineura for Batten's, how should be interpret the lack of and FDA panel announcement to day?

I don't think I can say very much more beyond what I have already said. Just to recap when the application was filed by the Food and Drug Administration they told us to expect an advisory committee which is what they say for all new drug applications, Biologics License Applications.

They then go on to say that -- as to when and whether there will actually be an advisory committee, that they ask us to refrain from commenting on that in the public domain until notification of it has occurred in the federal register. Now, what you've also noticed is that there are fewer advisory committees and advisory committees are getting cancelled and actions are being taken in the absence of advisory committees.

So the Food and Drug Administration can take an action by the PDUFA date without an advisory committee but I've also commented before that although the PDUFA date is a goal, it is also possible for the Food and Drug Administration to take little longer than the PDUFA date. So, that is what we know at this point. And we continue to work extremely hard to bring Brineura to patients in the United States and we also work extremely hard to bring Brineura to patience outside of the United States.

Helpful. Thank you.

Cory Kasimov, JPMorgan.

Thanks for taking the questions. I guess my first one on BMN 250 in light of the recent data at World and as you begin the process of measuring neurocognitive outcomes in MPS IIIB patients, can you describe maybe how complicated the process is or maybe how inherently variable this can be in this patient population?

I can a little bit. Let me first start by saying in quantitative terms the natural history of Sanfilippo Syndrome type B is maybe not as well described as Batten's natural history was at a similar point on development. There just hasn't been as much sample size put into it. And that is one challenge and we're working to augment that data set.

Another challenge is we're using development quotient which accommodates consideration of the patient's performance abilities on the numerator in their chronological age in the denominator. So the expectation basically is that that normal will be flat as you age.

It may not be possible to achieve normal in a patient with an ongoing neurodegenerative disease, so the evaluation of interest will be to look for attenuation of the change in development quotient. And that difference from Batten's also makes -- where the endpoint is not normalized for age that difference also makes the discernment effect a little bit more challenging.

But having said all that and pulling back, Sanfilippo Syndrome is a devastating condition. Patients have some significant morbidity well into their teens and have [lefality] in the 20s and early 30s, and so the idea of having enzyme replacement therapy and demonstrating a dramatic improvement in outcome, is in this context, we believe should be discernible, but of course we've got to collect the data and prove it.

Okay. And then a question on gene therapy program BMN 270. Recognizing that you still have to get buy-in from regulators, is there any consensus amongst your KOL's at this point as to what they think an optimal design might be for Phase II B trial for that drug?

Well, more at the level of principles than specific design considerations. I would say off the top a couple of key things. Not everybody is treated the same way globally.

Two big buckets of treatment patterns, prophylactic therapy and on-demand therapy. I think the expectation would be that we'd have quantitative data on outcome and both patients who are treated in an on demand context as well as in a prophylactic therapy context.

I think that the hemophilia community is very oriented to clinical outcomes as evidenced by bleed rate frequency, but also very important to them is the rate at which Factor VIII is used. I think the hemophilia community is accustomed to using Factor VIII levels to guide therapy and to interpret outcomes.

So I think that in a confirmatory trial context [stack rate] levels could be a key supportive secondary end point. Also, because of their confidence about the predicted validity of a Factor VIII level they are also very confident that a Factor VIII level above a certain amount would be reasonably likely to predict a clinical benefit which kind of speaks to another design consideration which is the opportunity for Factor VIII level based outcomes to initiate the approval process.

So that is something about population, that is something about end points. I think it is a little early yet to talk still about sample size and enrollment time lines, that sort of thing. Other than to say that our sense is that there is a huge need for improved care of hemophilia patients.

There is substantial morbidity that is not addressed by current Factor VIII replacement therapy, and that was recognized by the EMA and their prime designation. Even the best available therapy doesn't stop bleeding events and patients need to -- patients on replacement therapy live lives that are restricted in their activity because of their predisposition to bleed.

And a one and done treatment has the potential to restore the patient's clotting levels to physiologic levels, enabling patients to lead more normal lives. So, all that together, again, points us in the direction of being both very encouraged, excited, enthusiastic, and filling just a huge demand medically to push BMN 270 forward.

Thanks, Hank. Appreciate it.

Yup.

Matthew Harrison, Morgan Stanley.

Great, good afternoon, everybody, thanks for taking the question. Two for me. Just one on guidance. Can you just comment a little bit more specifically, will you be reporting ATU revenues for Brineura or will we see any of that this year?

And then second, related to guidance, you commented on Turkey, Brazil and some lumpiness for Naglazyme. I mean, any other impacts we should think about from ex-US lumpiness throughout the year for some of the other products.

And then separately on 270, can you just comment on the communication plan here? You're talking about an update on these six patients sometime maybe around the third quarter. Should we expect to see that update in addition to the Phase II, Phase III study design or could they come separately? Thanks.

Dan, do you want to start with the revenue recognition?

Well, yes, we would report revenues when they come, the ATU revenue's likely to be small enough that it probably wouldn't get its own line on the financial statements. But we would be happy to talk about it when it arrives.

And this is Jeff, Matt. I'll take the question, where we address Turkey and Brazil, previously we have noted that order choppiness also comes from other markets and in Latin America. So all of Colombia and Chile, as well as Brazil, those orders tend to come in large orders that are done relatively infrequently, so that can contribute to choppiness. Also I think we previously noted that certain countries in the middle east also have similar patterns.

So we get large and infrequent orders from places like Saudi Arabia and some of the smaller markets in there. And that's not suggestive that there is anything wrong with the performance of those markets. It is just that orders come in large chunks and infrequently. And I think thats it.

The cushion on that 270 communication (inaudible).

Yes, it is a little early to make an exact call on how the communication is going to unfold. I think we recognized there are two key components, which is what happened with the 4E13 does outcome wise and then separately what is the plan for the registration enabling trial.

And part of the reason that it is difficult is that we don't know what is going to get accepted to scientific congresses and when. And because of the huge interest of the scientific community in the program we do want to make sure that where we can get data presented at scientific meetings that we afford that opportunity for our scientific investigator colleagues.

But I do think that we should be able to count on hearing both the design of the registration enabling trial and the results of 4E13 doses in advance of the initiation of the Phase III -- the registration enabling trial whether they're together or not.

Okay. Perfect. Thank you.

Ying Huang, BofA Merrill Lynch.

Hi, guys, this is Aspen in for Ying, thanks for taking my questions. Just two on 250. First, the data presented at World's showed a couple AE's related to ICV device. I wonder if you guys had talked about that and if you have any plans to address that? And then have you seen any better effects with the 100 milligram dose in terms of HS reductions or any neurocognitive benefit? Thanks.

Okay, yes, so we did have a couple device related AE's in the Sanfilippo program initially. I would put together our results in -- the Batten's program and Sanfilippo program and say that overall we're really pleased by the tolerability, safety and convenience with intracerebral ventricular administration of drug.

There is always kinks that you have to work out at the beginning of the studies to get things humming, and we're reasonably confident that we'll be able to do that in the Sanfilippo program as we did in the Batten program. As regards -- the biological activity in the 100 milligram dose, we haven't released those data yet, stay tuned.

Although I will say it's going to be hard to get a whole lot better than where we were since we were more or less in the normal range already at the low dose. So set your expectation that we're not going to see like dramatically better biochemical efficacy than normal.

And then as to the first peaks at clinical activity data we don't start collecting clinical data until we got into the dose expansion phase and into the cohort expansion phase, so that is after we initiate enrollment of the 300 milligram dose. So, it will be a while yet before we have outcome data from the open label trial to talk about.

Okay. Thank you.

Chris Raymond, Raymond James.

Good afternoon, guys, this is Laura Chico on for Chris. I've got two questions, first on Brineura, I just wanted to make sure we were understanding correctly on the AdCom, I think there is some language from FDA that states they have to provide notice to you by 60 days before the PDUFA date. Is that an accurate interpretation or are you saying the 60 day guidance isn't necessarily set in stone?

And then the second question is related to BMN 250. There was some data you showed at World relating to gray matter volume declines and just curious if there are some reasons why treatment might actually reduce brain volume? And then perhaps a bigger picture, what is the most appropriate time range to begin to evaluate changes on an MRI basis?

Okay. Let me start with the first one, 60 days, is that firm and fast? I didn't, in the moment have a synthesis of all of the previous AdComs schedulings, but I would be shocked if the FDA, as a matter of practice, is always noticed 60 days in advance. Clearly the FDA has a lot of flexibility, and that's why in my prepared comments I did acknowledge that it is February 23 and the PDUFA date is April 27. We recognize the same thing.

But, again, until they notice that there is an AdCom in the federal register, we can't comment on whether or when there will be an AdCom and as I pointed out the trend line recently is fewer and fewer AdComs and there is no obligation of the FDA to make an AdCom -- to have an AdCom before taking an action date. We working hard with the FDA and do everything we can to enable them to take their action by the end of April.

As J.J. mentioned, at JPMorgan, it is a complicated study, it's a natural history control study, you know that the FDA wants to be careful about applying natural history data to pivotal trials -- and you know that's pivotal decisions. And we are working hard with them to enable them to come to a conclusion. You're second question, was that about 250 or was it about Brineura?

Sorry. Sorry, Brineura. Yes.

Yes, okay.

Yes.

Okay. So the data that we showed was that -- so in the -- it has been shown that there is loss of volume of cortex as the disease progresses. Let's interpret that -- let's understand that more colloquially. The brain is melting as a consequence of the disease and brain matter is turning into a -- it's being liquefied.

The rate at which that happens is slower on Brineura than not treated on Brineura. And in -- the longer you follow patients, the more deceleration of that cortical gray matter loss is. We interpret this as all good and reflective of treatment -- the very large treatment benefit we observed.

So, our interpretation is it's all good. Dan just handed me a note because he's a better research analyst than I am and pointed out that the Kyndrisa AdCom announcement was October 15 and meeting was November 24. So, even in our own -- I forget, even in our own experience FDA has noticed later than the 60 day period. Thank you, Dan. That's it.

Thanks, guys.

Yup.

Mark Schoenebaum, Evercore ISI.

John Scotti in for Mark. I had a couple of questions on the guidance. So, the15% revenue growth throughout the decade is that something that you feel you can achieve every year, or should we think about that as lumpy?

And then also on the magnitude of OpEx leverage, you obviously mentioned that you are going to have a lot of OpEx leverage but specifically I think 2017 the midpoint of OpEx guidance about 3% growth from 2016. So is that -- I mean, should we think about that as a fair run rate for OpEx growth on an absolute basis going forward relative to the 15% revenue growth? Or is OpEx growth going to be much higher than that? I'm just trying to get a handle on more quantitatively what we should model for OpEx leverage. Thanks.

Yes, so we're not in a position to give OpEx guidance more specifically than we have other than to say that it will be -- we're committed to having it be less than revenue growth. I would say that the magnitude of the difference in 2017 is almost, by definition, as big as it can be. So I think you should expect it to be less than that on average in the future years.

And though revenue growth will have some lumpiness on an annual basis, in and around 15%, sort of consistently year-over-year, is what we're both shooting for and forecast. Does that answer the question, John?

Yup, thanks a lot, Dan.

Sure, no problem.

Mike Yee, RBC Capital Markets.

Hey, thanks for the question. Two topics, first was on gene therapy update. Just broadly speaking in talking with FDA and EMA, I guess what are the one or two big topics of discussion and specifically are you trying to harmonize two in order to obviously run one study to satisfy both? And since you got PRIME, is it safe to assume that obviously you got the breakthrough?

And then my follow-up question is just on Kuvan. Can you just give us an update on the IP timelines, given there was a second filing. So, I just want to clear up that one. I know you have a first settlement it is (inaudible) we want to settle that second one. Thanks so much.

Okay, actually I might kind of flip your questions a little bit and I'm going to start with the probe for breakthrough. You can't get breakthrough designation until you file an IND, we're still in the process of filing US IND. We did the studies outside the United States initially, so until we repatriate the IND, we can't apply for the breakthrough designation.

On your other question, what are the one/two big topics, we're relatively early in the discussion. We're not planning on starting the pivotal trial until third quarter or so. And this is going to sound a little cheeky, but honestly this is the real honest answer, the one or two tough topics are how can we help you go faster? It fundamentally is what is behind the prime designation and we did a lot of work with the EMA in order to get into that slot so that they could have the resources and the structure to be able to help us go faster.

Without getting into specifics about our conversations with the Food and Drug Administration, suffice it to say that it is not substantively different.

Very helpful.

(Multiple speakers) regarding the Kuvan, I thought you had a subsequent question on this before I get to Kuvan?

No, I think I'm good. So, on Kuvan there is one settlement, there is a second one just to be clear, it's all disclosed. Are you trying to get that one settled as well? What is the timing of that, are we going to hear about a courts start, just remind us about that just so we're all squared up on Kuvan.

We had a settlement with Dr. Reddy and we have announced and what happened is after we settled with Dr. Reddy the FDA actually switched the priority filing dates between Dr. Reddy and Park which was all surprising but that is the way it is. We actually have been in discussion with Park for a potential settlement and then we couldn't get to an agreements on the (inaudible) last year and we're getting close to a potential trial so we decided to put this on hold.

So there is a trial that is scheduled for sometime this summer and there should be a decision shortly thereafter. So, I think it is pretty unlikely at this time that we would (inaudible) invest of the trial. It is possible but I would say unlikely. So that is kind of where we stand.

Okay. Thank you.

Joseph Schwartz, Leerink Partners.

Hi, guys, thanks for taking the question, this is Dae Gon dialing in for Joe. Two quick questions, one on 270 and one on Brineura. So, on 270, I know you can't go into the specifics of the data from the new 4E10^13 but in terms of your internal expectations, what -- can you comment on the patient variability range that you would be comfortable with going forward?

And on Brineura, based on some of your experiences with the EAP programs, is there some kind of an analog when we start modeling the launch trajectory? Thanks.

Can I comment on level of variability that I would be comfortable with? I had occasion to look at the variability of our 6E13 dose now that we've had a little bit longer duration to follow up. Because one of the considerations really is that when you have patients with different time courses, as they're coming up, things may seem more variable than when you get to steady state.

You know, I've looked at the variability of our expression levels relative to the variability of the most furthest advanced other gene therapy that's been in the clinic. Let me remind you that there is no other Factor VIII gene therapy in the clinic to our knowledge.

So the comparison would be to Factor 9 gene therapy. Now most of the Factor 9 gene therapy expressions that occurred at relatively low levels. There is one company that has got reasonable activity because of the use of an artificial pro coagulant expression cassette.

Our variability at 6E13 is comparable to the variability that others have noted in expression. And it's an acceptable level of variability, and that was really one of the key considerations of choosing hemophilia as one of the first gene therapies, that is to say there is not a tightly regulated system in the sense that the normal range of Factor VIII has itself a three-fold level of variability.

So we're pretty comfortable with the level of variability we've seen so far and I say unless it is like a lot worse at a different dose level, it does not pose a kind of a show-stopper. And I would only again reemphasize that a consideration that is on the table is that -- that some patients will end up outside of the normal range.

We have one patient who is under the normal limit and one patient who is over the normal limit. We believe both of those patients are experiencing pretty substantial clinical benefit and we believe that those patients are exposed to a fairly negligible level of risk.

And that is not just our belief about that. Because clinician investigators are willing to enroll patients at high dose levels and health authorities are willing to allow us to does not just patients in a coming clinical trial but conceivably in registration enabling trials at that high dose. So, all of that is my way of saying we're reasonably comfortable with the level of variability that we're seeing and it was a big factor in choosing Factor VIII gene therapy as our gene therapy target.

(Inaudible)

I don't know whether Jeff should answer that or Hank should answer that.

The Brineura EAP will be a little bit different than EAP in the sense that with Vimizim we had prescribers who were really quite [vatsaul] at diagnosing and treating somatic forms of mucopolysaccharidosis.

With Brineura there are two kinds of complications. First, is procedurally it is different. There is the insertion of the end-dwelling brain device, the training for sterile technique for infusion of brain associated materials. And second is the pace of the disease development is such that -- is such that we really want to try to concentrate on finding patients earlier more than building up a inventory of prevalent patient population.

So we think of the EAP primarily to serve the humanitarian purpose of enabling patients to have access and secondarily, to enable a larger group of physicians to become experienced with the procedure and the study and finding patients. Jeff, did I do a reasonable job?

Did that address your concern? I think what you're trying to do is get a revenue launch trajectory model. Have I got that right?

Yes, I guess I was just trying to get a bigger picture since just some of the things I've heard from patient advocacy was that patients were actually dialing them to find out where they can go to get the drug for their respective children. So, I was wondering if that would be front loaded launch, or if it's more of a gradual launch?

I can share with you how we're thinking about some of the dimensions of launch trajectory modeling, and building off of Hank's remarks. Other than the patients that are in the clinical trials and in the relatively small number of patients that are expected to be in early access programs, and those patients generally with an expectation that their disease progression has stabilized on therapy, we don't expect where a large number of warehoused patients that will be a big bolus going on to treatment at launch.

However, there are compelling cases of children that are appropriate for treatment and will be appropriate for treatment at the stage of progression that they're in, with a diagnosis, and we expect that those patients would be highly interested, motivated and making a compelling case for getting onto therapy, so that will be a boon. We're going to be very careful about providing adequate assessment of treatment centers and then providing training and in-servicing so that those treatment centers can be successful treating children with this relatively complicated delivery mechanism.

And then in terms of our own modeling we note that with an incidence rate of 1 in 200,000, which is not too low compared to some of the other epidemiology that we work with, a key to building up the base of patients on therapy will be getting them screened, diagnosed, and led to therapy relatively early in their progression of disease. Kind of a tricky thing given the rapid progression of the disease.

So that is a critical, critical commercial success factor. With an expectation that those patients stabilize and will be stable over time, and you can see how that patient population will build up materially as we get into launch. That's how we're thinking of it.

Perfect. Thank you so much for the color.

Andrew Peters, Deutsche Bank.

Good afternoon, this is Carlos in for Andrew Peters, thanks for taking the question. First, given that you mentioned that you hit guidance without Brineura this year, does that range then imply a initial view of what the CLN opportunity could be for 2017?

And then also with the announcement of the gene therapy facility will be coming on line later this year, how do you think about the opportunity to expand your gene therapy expertise into other areas, other diseases and when do you think you might be able to better describe these ambitions for potential programs? Thank you.

So I think your first question was whether the fact that our guidance for 2017 incorporates both the potential revenues from Brineura launches, or without -- does that comment on 2017 revenue thoughts for Brineura and, yes -- I mean, yes, it does. I mean, we've indicated just went through that we don't think this market is a warehouse of patients bolus market.

Plus, don't forget in general for our products, the vast majority of the revenue opportunities are outside of the United States which takes some time, generally speaking, to get reimbursement and to get centers set up. So, we think a lot of the Brineura opportunities, obviously for patients but also as a commercial opportunity, in the Naglazyme and Naglazyme-plus area, but it is not a rapid first year uptick.

I might be able to address the second part of your question from an R&D strategy point of view. And say, yes, we're really excited about BMN 270 hemophilia and where the part of this [still on] probably the biggest commercial opportunity in any gene therapy program, for sure for replacements -- for replacement therapies.

We want to be careful we don't stumble across the finish line there, so we're very focussed on making sure 270 works. As to what else can come into the pipeline we certainly do consider synergies with existing capabilities.

Our track record is we started with an incredibly small facility and generated three different protein products out of that relatively small facility. And Robert's team when they're thinking about the design of the gene therapy facility is giving quite a lot of consideration to the potential to use it for other things, but let's not get the cart before the horse. We want to make sure that we get 270 across the finish line and our next IND, we haven't tipped to what it is going to be, it could be a protein, could be a small molecule, could be a gene therapy, you just have to stay tuned and hope that the competition will not figure out what we're going to do next before we announce it.

Fair enough. Thank you.

Phil Nadeau, Cowen & Company.

Thanks for taking my questions. Just two. First one on commercial and then one on the pipeline. Commercial on Vimizim, your guidance for 2017 implies a pretty big deceleration versus 2016, is that due simply to annualizing Brazil? So, your conservatism over Brazil, or are there another dynamics going on in the market in 2017?

Hi, Phil. Jeff, here, I'll take that one on. Actually, I think the deceleration is maybe more of a percentage of growth deceleration than an absolute deceleration. I think we've noted -- we've noted over the past four quarters that the rate of patient addition which drives our revenue growth, is still robust. That is, it is slowed since the early launch quarters.

So we're still expecting robust patient growth at the kind of level that we have been experiencing for the last few quarters, and that's driving our expectations of revenue growth going forward. There is some choppiness and order timing that we take into account as it relates to the 2017 year guidance, and of course we're taking into account some expectations of turbulence in Brazil and a couple of other places.

Okay.

J.J. here, I would just like to add that we haven identified over 2,000, patients we believe there is a chance we, over time, might be able to identify 3,000 patients. But generally when we identify patients we get them, the vast majority of them (inaudible) takes a while sometimes, we don't always gets them there. And a the current price for the product, we basically are identified over $700 million of business so there is still very significant room for growth here. We're just continuing the instability in many markets around the world. We just want to be a little careful here.

Got it. Okay.

We got a second part of your question. You got another question, Phil?

Yes, just one for Hank and it is on the Brineura review. I think after JPMorgan lot of people are commenting on the slide that you guys put up the showed the concerns that the FDA had, or the questions the FDA about the Brineura review.

Now today, maybe I'm reading too much into things but it seems like you're more encouraged by the interactions that have happened over the last six weeks -- including Brineura in your guidance. You didn't come out and say there wasn't going to be a panel but at least it was partially suggested. So, are we right to interpret that you're maybe feeling better today than you were six weeks ago? Or am I just way reading into things too much?

The latter. Over reading.

Is there any change in your feel about the application over the last six or eight weeks?

You know, everyday is a new day, Phil. I don't think we should be measuring by how I feel today or tomorrow (laughter). All I can tell you is we think we have really good and compelling data. We know that the Food and Drug Administration is a tough reviewing body.

J.J. identified the elements of the review -- considerations, those are the elements of the review. On some level I think you have to make up your own mind as to whether you think it should be approved or not. We're certainly doing everything we can to get this medication to American patients. At the same time that we're doing everything that we can to get this drug to European patients as well.

Got it. Thanks for taking my questions.

Yup.

Geoff Meacham, Barclays.

Hey, guys, this is Evan on for Jeff. Thanks for taking the questions. First one on Pegvaliase. Has there been any updates on your interaction with FDA and are you -- anything else that needs to happen for the second quarter submission?

And then the one on 250, do you think you'll be able to follow a pivotal trial design plan similar to what we saw for Brineura? And that this trial that you're conducting could essentially serve as a pivotal trial for filing? Thank you.

On Pegvaliase, I think we've said we've completed our dialogue with the Food and Drug Administration in terms of what we need, so I wouldn't expect any -- well, I don't anticipate that there will be any further updates about the filing time line as it pertains to the Food and Drug Administration. We're working really hard and there is a lot in the file, it's a big program, it's a complex program, our plan is to get it done in the second quarter.

But, you know, it's also a case that because it is big and complex we wanted to make sure we do it really well. So, the team is working really hard on managing both of those: do it on time and do it well.

And as far as the prediction of the design of the 250 trial it is really early. I think it depends on, to some extent, whether there are reliable activity signals that come out of the Phase I/II study and how reliable and how big those are. If they are gigantic like they were with Brineura, maybe we can imagine a study that leads to registration that's Brineura-like, or if they are of a more -- of a smaller nature they may need a contemporaneous control arm to satisfy health authorities.

What I would say is that the context of the disease being just a little less aggressive than Batten's disease, and little less well developed natural history, inclined to believe that it is less likely that it will be Brineura-like registration program. But it is again also too early to be definitive one way or the other about that.

And one final follow-up on Pegvaliase. Have you gotten any indication, or hence that FDA may call for a panel?

Well, so let's think, we're filing in potentially three months and then action date will be somewhere later. So, it's really pretty early to speculate (laughter).

And again we're right on top of a PDUFA date and I can't tell you whether there is going to be an AdCom for Brineura. So, clearly it's early.

Fair enough. Thanks for taking the questions. Appreciate it.

Ian Somaiya, BMO Capital.

Thanks for taking my questions. I have two, both on the hemophilia program. So, the first is just really on the potential recruitment of the Phase II B study, just what steps are you taking or can you take to help drive the recruitment there?

And, second, help us understand what who is an appropriate patient in a commercial setting for gene therapy, for 270 specifically? And how representative your Phase II B trial will be and in that -- representing that patient population.

Hi, Ian, on recruitment not much to say about that, yet, other than the benefit here is huge and it's really attracted a lot of people's attention. There are 50,000 severely affected hemophilia patients in the developed world.

So I think a reasonably, it is not a ultra-rare -- or (inaudible) it is not an ultra-rare population, together with a huge benefit, together with a huge unmet need in terms of recurring bleeding, I don't know that I would say that recruitment should be viewed as a big challenge in this.

Actually, I think there was a survey done recently by one of the analysts on the line here, that show that the majority of hemophilia patients were looking forward to gene therapy and were very interested in actually being treated with gene therapy. So, assuming the survey is representative of reality, we shouldn't have any real problems recruiting here.

Just as I think about that second part of my question, where we introduce price into it, obviously there is potential for an opinion from the payers. And just curious how you're thinking about the magnitude of the treatment benefit you're likely to provide which is obviously life changing.

Price given the benchmarks that have already been set, with the currently available therapies and how do you access the entirety of the population as opposed to limiting it to the most severe?

Well, maybe I'll start and then Jeff can comment. I mean right now the first trial and the data we're generating is in severe hemophilia patients, which are patients that express less than 1% of Factor VIII at this time. And we understand and, Jeff, correct me if I'm wrong, that it is about half of the hemophilia populations which would be around 50,000 patients in the world, that's a pretty significant number.

On the pricing issue, actually, early Hank alluded to the fact that treatment varies in different parts of the world but definitely in the US and several European countries the vast majority of (inaudible) patients are treated with prophylactic regimen. In US the average cost of recombinant Factor VIII injections for prophylactic regimen is north of $250,000 a year.

So it is a very important metric which a relatively significant amount of money and that is just an average that you guide us in the pricing here.

Basically in terms of pharmaco economic analysis this is one of the few indications where are some very [clear] metics as to the cost of [cure] and therapy. And that is just the cost of recombinant Factor VIII injections and that does not include all of the costs of the burden of the disease as Hank said.

When you have joint deterioration, joint destruction, need for joint surgeries, and emergency room visits, the cost is very significant on an annual basis for those patients.

For that reason, that is why prophylactic therapy in spite of that expense that J.J. just mentioned, is the standard of care. And the residual morbidity of unprophylact patients is quite substantial.

And Jeff, do you want to add anything to that?

I think you have done great unless Ian has any specific in addition.

No, that answers my question. Thank you.

Tim Lugo, William Blair.

Thanks for taking the question, this is Raj on for Tim. In your prepared remarks, I believe, the midpoint of the Kuvan revenue for the 2017 revenue is 14%. Can you just break that out into North America into international. You said 15% increase in commercial patients year-over-year in 2016?

So you're asking about since a breakout of the Kuvan, growth in 2017?

Yes, based on the 2016 growth in North America, as well.

Yes, I think I'm just going to have to point you to the mix between US and North America in 2016 is the best guidance we're in a position to guide to. The growth rates won't be dramatically different in the two regions, so the relative relationship should stay similar.

Okay. Fair enough. And then with a competitive -- on 270 with a competitor launching a Phase I/II trial in the near term, can you just remind us on the IP and is there a potential for, you know, future overlap down the line?

Overlap of what exactly?

I believe he's asking whether there is intellectual property conflicts between our product and some of the others being launched.

We don't believe so. There is one patent in the gene therapy field that could have potentially have created some issues but is expiring I think in around 2020 or so. So, it becomes kind of irrelevant. But besides this one, I'm not familiar with anything else that could create a freedom issue here for us.

Great, and then just one last one J.J., it sounds like gene therapy manufacturing in 2017 and IND coming from in-house, what is the appetite for BD with your balance sheet looking pretty solid right now?

So (inaudible) we will announce another IND candidate this year. Might or might not be a gene therapy product. Might or might not be coming from the outside. I would say it's probably likely come from the inside research.

So that is not so, we did have a pretty significant pipeline that Hank's and Robert's team are managing. So we are pretty busy.

That being said, we always loot at what is available on the outside because we are getting asked to look at some potential assets on the going-forward basis. So, there are some ongoing discussions but (inaudible) to the bar is relatively high, but if we do find the right asset for us strategically, at the right price, there could be some (inaudible) the next few months.

Thank you.

Keenen MacKay, Credit Suisse.

Thanks for taking my question. Just a quick one on gene therapy. I was hoping that you could just give us a little bit more color and help us understand how long the patients had been on steroids and off steroids as of the last update? And then how that relates to the upcoming data that we'll see without the use of prophylactic steroids? Thank you.

We haven't given the details on the steroid duration and partly that is because we're still settling out and we want to see what happens at 4E13, we want to see what the final dose selected is. So I would say stay tuned for more exact metrics on that.

The fundamentally, though, the thing I want to remind people about is we're talking about a very short course of steroids in the grand scheme of things. And for example, at our JPMorgan update, as compared to our World federation hemophilia update only six months earlier all patients had gotten off of steroids.

So we're not talking about a life of steroid therapy, we're not even talking about a year of steroid therapy. We're talking about weeks or months of steroid therapy and these kinds of regimens of steroids are pretty well tolerated.

Okay, thank you, I appreciate the color.

Stephen Willey, Stifel.

Thanks for taking my question, this is [Prucher Rumal] on for Steve. So a question of Brineura, so do you expect administration to be in a setting similar to what was used in a phase III trial or do you expect administration to be allowed in the outpatient setting and potentially even in a home [infusion] setting over time? Thank you.

I'll start by saying our clinical experience has been in a more carefully observed setting than at home, for example. And I don't know that we're going to be super fast at moving patients from more intensive to less intensive oversight until we have a bit more track record and experience of safely managing infusions, and I guess the other thing to say about that is that none of this is final really until the products label is final, which won't happen until the product is approved.

Okay. Thank you.

Jenn [Yhi], with [Ikitelli].

Thank you for taking my questions. I have a two longer terms question. First on 270 I'm wondering further down road would you plan to build your commercial infrastructure yourself or you'd also consider acquiring from outside? Second, on Brineura, if it is approved I'm just wondering what your thought on voucher? We've seen that recently the value has come down from last two transactions. Do you have any plans to sell it or keep it for yourself? Thank you.

So I think the first question was we had commercialization of plans for gene therapy.

Manufacturing and insourcing or outsourcing.

Oh, manufacturing (multiple speaker). I'm sorry, the line is a little scrambled here. Can you repeat the question, please.

So, my first question on gene therapy. I'm asking about your commercial plan further down the road do you plan to build your commercial infrastructure yourself or you would also consider acquiring from outside?

Yes, so, Jeff here, we would plan to commercialize our BMN 270 program internally and not to externalize that effort.

You had the same question for Brineura?

Yes, second for Brineura. We've seen that the voucher, if it is approved I'm just wondering what is your thought on that. We've seen that the voucher, the recent value has come down from last -- .

So, you talking about the priority review voucher?

That's correct. So, just wondering -- .

Whether we would sell this voucher or keep it?

Right.

I mean, we haven't decided yet considering that many other products we're certainly developing would (inaudible) many of them would qualify for voucher also or there is likely would sell it but we haven't decided.

Thank you.

There are no further questions at this time so I'd like to turn the call over to the Chairman and CEO for your final remarks.

Thank you, operator. So in summary, 2016 was a momentous year for BioMarin, commercially from a regulatory and development respective. So we achieved over $1.1 billion in revenues, we are laying the ground work for substantial returns going forward and top line growth in 2017 is expected to be around 15%, while our expenses will increase by about 4%.

So, in the midst of a transformation from a small one or two product company, to what a profitable growth story, with multiple [late day] shots on goal, a number of which have blockbuster potential. So, we begin 2017 from a position of strength as our approved products are expected to drive record revenues again.

So we await the outcome of our next potential approved product in Brineura, we intend to file the BLA for our next product Pegvaliase next quarter. It is going to enroll the global (inaudible) study and to move our gene connected product into registration and enabling study or studies.

On the heels of the (inaudible) BMN 250 for Sanfilippo type B will continue to enroll into the expansion phase of the study and we have 60 page filing of a new IND molecule to answer with (inaudible) in the second half of this year. Thank you for your continued support and for joining us today.

And that does conclude today's conference call. You may now disconnect your lines.