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BioMarin Pharmaceutical inc (NASDAQ:BMRN)
Q3 2021 Earnings Call
Oct 27, 2021, 4:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Welcome to BioMarin's Third Quarter 2021 Financial Results Conference Call. Hosting the conference call today from BioMarin is Traci McCarty, Vice President of Investor Relations. Please go ahead, Traci.

Traci McCarty -- Vice President of Investor Relations

Thank you, Grace. Thank you, everyone, for joining us today. To remind you, this nonconfidential presentation contains forward-looking statements about the business prospects of BioMarin Pharmaceutical Inc., 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 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.

On the call today from BioMarin management are J.J. Bienaime, Chairman and Chief Executive Officer; Jeff Ajer, Executive Vice President, Chief Commercial Officer; Hank Fuchs, President, Worldwide Research and Development; Greg Guyer, Executive Vice President, Chief Technical Officer; and Brian Mueller, Executive Vice President, Chief Financial Officer. We hope to keep this call to an hour, so respectfully request that you limit yourself to one question during the Q&A portion of the call. Thank you so much. I will now turn the call over to BioMarin's Chairman and CEO, J.J. Bienaime.

Jean-Jacques Bienaime -- Chairman and Chief Executive Officer

Thank you, Traci, and good afternoon, everyone. Thank you for -- all for joining us today. BioMarin's commercial organization is excited to be launching our seventh commercial product, following the August approval in Europe of VOXZOGO for the treatment of achondroplasia for children ages two years and up. I would say that the level of initial prescription demand for patients seeking VOXZOGO treatment in Europe has exceeded our expectations. VOXZOGO revenues this year will come from France and Germany, where there are a number of children already on therapy as well as a number of select early access countries in Europe, Middle East and Africa and actually also Latin America.

As the first and only approved medicine that targets the underlying cause of achondroplasia and improves bone growth in children, we are very pleased with the early indicators of product demand. In the U.S., we are in late-stage labeling and post marketing-requirement discussions with the FDA. So we remain encouraged about the potential positive FDA PDUFA action outcome in less than a month now. Adding the U.S. approval would pave the way for our largest global product launch to date and set the stage for significant revenue growth starting in 2022. Turning to 2021 financials, it is important to understand the dynamics of our global business to appreciate the underlying strength. Despite the impact from anticipated uneven ordering in the first half of the year as compared to what is expected in the second half of the year, we are pleased to be improving full year top and bottom line guidance.

And this despite Kuvan having faced generic competition since the fourth quarter of last year, we actually -- despite this, we anticipate generating full year '21 revenues, mostly in line with our 2020 revenues, which illustrates the strength of our base business. This is a result of underlying growth in net product revenues from products marketed by BioMarin, excluding Kuvan, and also continued expense management. The number of patients treated with BioMarin therapies has increased this quarter for all our products, other than the Kuvan, of course, and has reached record levels. We expect revenues to rebound in the fourth quarter as compared to the third quarter so as to end up with a strong finish in 2021.

With the addition of VOXZOGO in Europe and the anticipated U.S. approval, we expect a significant step-up in revenues beginning next year in 2022, leading to anticipated sustainable positive GAAP income for full year starting next year. We will provide full year 2022 guidance as usual during our fourth quarter quarterly call on -- next February. Suffice it to say that our strategy to layer on VOXZOGO and potentially ROCTAVIAN to our strong base business, leveraging our global infrastructure and manufacturing capabilities to drive meaningful profitability, is rolling out as planned. In support of that plan, cash flows from operating activities increased to nearly $300 million year-to-date and are driving the expansion of BioMarin's earlier-stage pipeline.

With six early stage products on the agenda for our upcoming R&D Day, we expect to initiate clinical trials for multiple new products over the coming years. Harnessing genetic technologies to speed our discovery capabilities has resulted in an exponential growth in our preclinical assets, and we are very excited to share our progress with you on November 30. So the past 18 months have been challenging for many reasons, the global pandemic, regulatory setbacks, et cetera, but we have remained focused on our mission and goals. BioMarin has never been better positioned to achieve the next level of growth, and we plan to capitalize on the many opportunities that are before us. I want to thank our BioMarin colleagues and associates for their continued commitment to developing the essential medicines that help so many. So thank you all for your continued support.

I will now turn the call over to Jeff to discuss the commercial business update. Jeff?

Jeffrey Robert Ajer -- Executive Vice President, Chief Commercial Officer

Thank you, J.J. I'm very pleased with the team's performance across all brands and all regions during the quarter. Not only are we improving top line guidance for the year, but we are at the start of launching, what, maybe our biggest brand to date, VOXZOGO. As J.J. already described, the impact of large unevenly timed orders for our enzyme replacement therapy brands in the first half of the year as well as the U.S. loss of the Kuvan market exclusivity a year ago was notable in the third quarter. Despite those dynamics, we achieved $409 million in total revenues, reflecting solid demand in the third quarter and year-over-year growth in net product revenues marketed by BioMarin, excluding Kuvan.

Q3 revenues were consistent with our expectations around order timing and the balance between first half and second half revenues communicated previously. Keep in mind, patient demand remains a key indicator to gauge product demand. For both Naglazyme and Vimizim, patient numbers increased by more than 10%, respectively, year-over-year. For Brineura, in the third quarter, children on therapy increased by more than 20% year-over-year. Moving to Palynziq, where 32% year-over-year growth translated to $61 million in net product revenues in the third quarter, reflecting a combination of revenues for more patients achieving maintenance-dosing as well as new patients initiating therapy. This growth was achieved despite continued COVID impact, resulting in many PKU clinics operating at partial capacity.

Consistent with our commentary last quarter, it is important to note that PKU clinics in the U.S. have not opened up to new patient starts at the rate we anticipated. As expected, the U.S. was the main contributor of growth in the quarter driven by U.S. patient increases of approximately 20% year-over-year. While we remain optimistic about the growth prospects for Palynziq for the balance of the year, we expect U.S. PKU clinics to increase new patient starts at a slower pace than originally anticipated. The commercial launch of Palynziq and BioMarin's Europe, Middle East and Africa region continues to progress through individual country-level pricing and reimbursement negotiations.

Continuing with the PKU franchise, Kuvan contributed $68 million in revenue in the third quarter, reflecting incremental erosion to generics in the U.S. Revenues decreased by 45% year-over-year primarily due to the U.S. loss of market exclusivity in October 2020 as anticipated. Moving on to VOXZOGO, our newest commercial opportunity and likely the largest launch to date, we have been very pleased with the level of prescription demand for patients seeking VOXZOGO treatment since receiving European approval in August. A reminder that, in Europe, price and reimbursement processes are the primary gates to being able to treat patients and generate revenue, and these processes can be lengthy.

Therefore, for revenue purposes, we are focused on the set of markets where we can quickly begin treating patients and generating revenues. These markets include France, Germany and a number of other markets in which we are pursuing named patient sales. Importantly, we are seeing robust prescription demand already and we are optimistic about the prospects of being able to convert that demand to patient treatment and revenue. The small revenue recorded for Q3 was from France and for the first patients there starting treatment. Already in Q4, additional patients have started therapy in France, and we have shipped VOXZOGO to Germany and Switzerland to begin treating patients in these markets.

Concurrent with the EMEA launch, our U.S. commercial team is planning for the potential launch at the end of the year, assuming a positive PDUFA action outcome in November. As has been our experience with prior launches in the U.S., we do have the ability to quickly respond to prescription demand following approval. While U.S. payers are numerous and diverse, we have experienced navigating the medical exception process to facilitate early prescription demand while we work through the process yielding payer coverage policies. As with the launch of previous BioMarin brands in the U.S., this experienced team is in place and prepared for a potential approval.

We look forward to providing full year VOXZOGO guidance for 2022 when we report fourth quarter results next February. We would also like to set expectations for quarterly metrics that we will report on for the next six quarters. For the quarter being reported, we will report net VOXZOGO product revenues, active markets with sales, the total number of commercial patients at the end of the quarter and other color on the progress of the launch that will help you evaluate the commercial status of VOXZOGO and inform your expectations. In conclusion, results in 2021 for our established brands are tracking to expectations for the improved top line guidance provided today, raising the low end of the total revenue guidance by $30 million as well as the low end of the ranges for Vimizim, Kuvan and Palynziq. Demand for our essential medicines in the 75 countries where we do business is robust and growing.

The commercial team is energized to be launching our newest and potentially largest product opportunity with VOXZOGO in the EMEA region, and we are eagerly preparing for the potential launch in the United States, should we receive approval in November. Thank you for your attention. And I will now turn the call over to Hank to provide an R&D update. Hank?

Henry J. Fuchs -- President of Worldwide Research & Development

Thanks, Jeff. Similarly, the research and development organization echoes your enthusiasm for the European approval of VOXZOGO. Families have been waiting for a long time for a treatment option for their children, and we believe the targeted mechanism of VOXZOGO, which promotes endochondral bone growth during the time period when growth plates are open can have a meaningful and potentially lifelong impact on children with achondroplasia. We're so pleased that this important medicine is now available in Europe. And we look forward to hearing real-world treatment experiences as families access VOXZOGO over the coming months and years.

The European approval of VOXZOGO for children ages two and up further demonstrates the importance of beginning treatment as early as possible to provide maximum clinical benefit while growth plates are amenable to treatment. We look forward to the readout of our 52-week placebo-controlled study in children, newborn through five years of age, around the middle of next year as the next potential step toward expanding access to VOXZOGO, should those data be supportive. In the United States, we look forward to the PDUFA target action date of next month. We believe the robust dossier of data under review provides clear signals of clinical benefit from VOXZOGO treatment. I also want to take the opportunity for everyone -- to thank everyone who contributed to this important milestone on behalf of families seeking a treatment option for achondroplasia.

Thank you very much. Briefly, on ROCTAVIAN. Regulatory milestones are tracking to plan. At the end of November of 2021, we'll reach the two-year mark for the Phase III study and the two-year follow-up observation period. We continue to expect the submission of the U.S. biologic application for ROCTAVIAN in the second quarter of 2022, assuming supportive tier data, followed by an expected 6-month review procedure for the United States. In Europe, with the marketing authorization application validated and under review, we continue to expect CHMP opinion in the first half of next year, assuming supportive tier data, which will be shared with the EMA when it is available. We remain confident in ROCTAVIAN's potential to be an important treatment option for those with severe hemophilia A based on the clinical evidence observed to date, demonstrating dramatic reductions in bleeding rates, Factor VIII utilization and Factor VIII infusions following treatment.

Turning to BMN 307 therapy -- gene therapy for phenylketonuria, following the clinical hold place on that Phase I/II study by the Food and Drug Administration, we have now received communication from the agency with guidance on next steps. We are in the process of addressing the agency's request for additional information. So we do not have an update on when the hold might be lifted. The hold on our PKU gene therapy study was based on recently identified safety findings from a nonclinical, non-GLP pharmacology study in immunodeficient mice. As scientists striving to serve patients' needs, we're committed to understanding these findings. As we have shared previously, and it was corroborated during the FDA panel discussion on AAV safety in September, it remains uncertain and in our view, unlikely that these specific findings with BMN 307 will translate to a safety issue with this or other AAV gene therapy treatments. We are working through the process with the FDA, and we'll keep you posted as we have relevant updates.

Turning to our R&D Day event now planned for November 30. We look forward to sharing new data and new program updates with you. The R&D organization has hit its stride in melding our own internal discovery capabilities with genetic tools to understand underlying mechanisms of disease in order to develop targeted medicines. We're excited to share these advances with you in greater detail and describe the many assets under development in the early stage pipeline. We hope you will all tune in. Thank you so much for your support. And I'll now turn the call over to Brian to update the financial results in the quarter. Brian?

Brian R. Mueller -- Executive Vice President, Chief Financial Officer

Thank you, Hank. Please refer to today's press release summarizing our financial results for full details on the third quarter of 2021. As usual, our comprehensive report on the quarter will be available in our upcoming Form 10-Q, which we're on track to file over the next few days. As J.J. and Jeff mentioned, the previously anticipated order timing in 2021 has created a meaningfully uneven revenue flow between the first and second halves of the year. To illustrate the impact of select individual country order timing on Q3 2021, last quarter, Q2 2021, there was approximately $90 million more revenue, excluding Kuvan, from Brazil, Russia and the Middle East that did not recur in the third quarter, substantially accounting for the quarter over prior quarter total revenue fluctuation. Importantly, however, as Jeff mentioned, the key underlying business driver of patient demand continues to increase for all of our products, again except Kuvan in the United States.

Based on these timing dynamics, we anticipate to emphasize our full year guidance as the best metrics to measure our top line financial performance. To that point, the strong start in the first half of the year drove a previous upward revision of full year 2021 revenue guidance back in July, including Vimizim and Palynziq as well as improved GAAP and non-GAAP bottom line guidance. And we're pleased to announce today that we are again improving total revenue guidance, including both Vimizim and Palynziq, by lowering -- by raising the lower end of our guidance for the full year 2021. As noted by J.J., despite the impact of a full year of Kuvan generic competition in the United States and a continued COVID-19 impact on our growth, total revenue for 2021 is expected to be mostly in line with total revenues in 2020, which is better than our expectations at the beginning of this year.

Moving to operating expenses. R&D expense for the third quarter was $158 million, which was $11 million higher than the R&D expense of $147 million for the third quarter of 2020, which reflects increases in our early stage research and development. Based on our R&D expense trends through Q3 '21 and expectations for the fourth quarter, we're lowering the range for R&D expense guidance by $10 million for the full year. Next, with respect to SG&A expense, Q3 2021 SG&A totaled $183 million, which was essentially flat compared to the third quarter of 2020. As we are launching VOXZOGO in the EMEA region and preparing for the launch in the United States, SG&A expenses in 2021 are weighted toward the fourth quarter of the year.

Turning to bottom line results. We reported a GAAP net loss of $37 million in the third quarter of 2021 compared to GAAP net income of $785 million in the third quarter of 2020. Please recall that GAAP net income in the third quarter of last year included a large tax benefit totaling $835 million related to the transfer of certain intellectual property rights between BioMarin entities which drove the significant level of GAAP net income last year. Non-GAAP income of $34 million in the third quarter of 2021 was lower than non-GAAP income of $99 million in Q3 2020 primarily due to the lower revenue this quarter as a result of the previously discussed timing.

We're very pleased with the company's GAAP and non-GAAP bottom line performance through the first three quarters of 2021. And based on our expectations for the fourth quarter, we have improved full year GAAP and non-GAAP bottom line guidance. We've reduced the full year 2021 GAAP net loss guidance to between $85 million and $45 million and have increased non-GAAP income guidance to between $215 million and $255 million, representing an increase of $20 million at the midpoint of the range. That substantial level of non-GAAP income helped generate a continued increase in our total cash and investment as we ended the third quarter of 2021 with $1.55 billion compared to $1.35 billion at the end of 2020. We set a goal of generating positive operating cash flow in 2021, and the business has delivered nearly $300 million of positive operating cash flow year-to-date.

One brief comment is that the previously discussed timing of revenue and expenses in 2021 also impacts our cash flows, which we observe are also weighted to the first half of the year. This solid cash position, coupled with our strong operating performance through the first three quarters of 2021 is a strong foundation from which to look forward to the continued European launch of VOXZOGO, the potential U.S. launch at the end of the year and potentially ROCTAVIAN next year. And the progress of our early stage pipeline that is leveraging the same R&D organization that developed our portfolio of now seven approved products and two large market late-stage programs is an exciting next chapter in BioMarin's potential future growth story. Thank you for your support, and we will now open up the call to your questions. Operator?

Questions and Answers:

Operator

[Operator Instructions] And speakers, our first question from Cory Kasimov of JPMorgan. You may now ask your question.

Cory William Kasimov -- JPMorgan -- Analyst

Great. Thanks. Good afternoon, guys. Thanks for taking the question. So the VOXZOGO label in Europe is obviously pretty broad, covering patients as young as two years old. I'm wondering if there's any pushback from either an early access of view or physician comfort in potentially treating patients under five. And do you have expectations for the FDA label to be equally broad if approved, of course. Thank you.

Jean-Jacques Bienaime -- Chairman and Chief Executive Officer

Jeff, do you want to answer the first part of the question, and Hank, the second part?

Jeffrey Robert Ajer -- Executive Vice President, Chief Commercial Officer

Yes, happy to. So one, we're really happy with the broad and open label, as you described it, including for patients two years and up in Europe. And we believe that, in Europe, the endorsement of CHMP on safe and effective use for ages two years and up is a powerful statement to both payers and prescribers. It's too early for us to provide specific color in Europe, but we're not anticipating a pushback from payers or prescribers on two- to five-year-old patients. And maybe I would turn it over to Hank for the second part of the question.

Henry J. Fuchs -- President of Worldwide Research & Development

Yes. Cory, as you know, there's no direct connection between the FDA and the EMA, and they tend to operate independently. We're really encouraged that the EMA understood the context of the condition and were scientifically rigorous in consideration of the label. And I would encourage you to come to R&D Day, where we're going to share some of that information. Obviously, we're hopeful that the FDA will be similarly influenced. But as you know, the FDA is a little bit more conservative. And so we'll just have to sort of muscle through the next month to see where it lands.

Cory William Kasimov -- JPMorgan -- Analyst

Okay, great. Thanks guys.

Operator

And speakers, our next question from Phil Nadeau of Cowen & Company. You may ask your question.

Phil Nadeau -- Cowen & Company -- Analyst

Good afternoon. Thanks for taking m question. Another one on VOXZOGO. Perhaps one of the more controversial aspects of VOXZOGO was the language that was in the FDA acceptance letter discussing the need for 2-year placebo-controlled data.

Now that you're in late-stage living negotiations. Could you give us some information or some idea of how the FDA reviewers have dealt with the advisory committees commentary around two-year placebo-controlled data and whether it's safe for us to assume that since your labeling discussions that won't be necessary for approval of VOXZOGO this time around?

Henry J. Fuchs -- President of Worldwide Research & Development

Yes. Thanks, Phil, for the question. We're really in the throes of it. So I can't really give you too much of the exact sausage-making of discussion. But what I would say is that we've been fairly transparent from the get-go, as you just reminded, about where the FDA was. And at the time, and I would continue to say, that the agencies -- the U.S. agency's focus is on -- or interest, I should say, is on durability. And we've provided them what amounts to a two-year placebo-controlled study. It's a little bit unorthodox in its design, but it's essentially two years' worth of data.

And we supplemented that with fibers of open-label treatment data in comparison to some pretty good natural history sources of data. So we feel pretty good about the durability of the effect on linear growth. I think a related question is going to be is, in a sort of a one- or a two-year growth, does that constitute substantial evidence of a clinical benefit? Or is that a benefit that's reasonably likely to predict a clinical benefit? And there, I would just say that you should be aware that in the growth field, that in the case of growth hormone administration to nongrowth hormone-deficient disorders, a lot of the language has been around final adult height. And this suggests to us that the FDA is also very concerned about final adult height. So I think their decision-making about durability is going to be related to ultimately not the two-year sort of story, but what does this say about what can be expected from final adult height. All of this, I think, will come to some form of resolution in the next few weeks. So stay tuned.

Phil Nadeau -- Cowen & Company -- Analyst

Perfect. That's very helpful. Thanks again for taking our question.

Operator

And our next question speakers from Chris Raymond of Piper Sandler.

Christopher Joseph Raymond -- Piper Sandler -- Analyst

I wonder if I could ask maybe a pipeline question on specifically 307. So, Hank, I'm wondering if you can comment on what kind -- I know you said it sounds like you've met with FDA and you don't have a sense as to when the clinical hold will be lifted. But can you comment on what additional experiments or analysis, maybe the agencies requested? And is this something that could be addressed in the near-term? Or is this maybe longer-term experiments. And maybe can you share what you did provide to the FDA when you met with them. I think you were going to meet with them this month to give -- you felt might give comfort on the -- this was an issue related only to mice. And then if I could just add maybe a quick VOXZOGO question. I'm not sure if you're willing to answer this, but patients that have started in Europe, what's the average age? Thanks.

Henry J. Fuchs -- President of Worldwide Research & Development

I will take the first part of your question, Chris, while Jeff plots the second part of your question. Chris, it's just meeting with the FDA, we've had correspondence with them, they're busy. It's hard to get meetings with the agency nowadays. And it was a pretty sort of tactical correspondence because what happened was we observed the finding and felt duty-bound to report it. It turned out that we were in a dose evaluation period from the second cohort of patients. We've discussed that. And so we were not enrolling patients at that moment anyway.

So we were transparent with the agency about this preclinical finding as soon as we found it. And as a consequence, they've not really seen all that much yet, but what they asked for of us is relatively straightforward and can be wrapped up in a package. And they were pretty comprehensive in the kinds of things that they ask for, including how is this going to reflect an informed consent and protocol minutes and things like that. So they -- it's obvious that they've seen these sorts of things before and they have a pretty prescribed list of the types of questions and considerations. I think to put this in a bigger perspective, and it goes back to your -- I think it's your question about the FDA's Advisory Committee meeting. The thing that struck a lot of us about that was when the presentation came to insertional oncogenesis, the presentation was divided into what did we know after 2016 and what do we know from 2017 and beyond. And I think the relevance of that is that the agency subsequently approved, subsequent to 2016, they approved LUXTURNA and they approved Zolgensma, Zolgensma importantly for IV administration, and importantly, a lot of the vector goes to the liver.

And in spite of the fact that insertional oncogenesis was -- or insertions were described in mice, the agency has approved a drug, Zolgensma, and in fact, over 3,000 patients have been treated with gene therapy in clinical trials, 1,400 patients have been treated with Zolgensma. And so the agency -- I think what that says is the agency is, on the one hand, aware of the preclinical experiments, but on the other hand, is thinking about that as a sort of not as a risk benefit issue because there's not -- a risk has not appeared yet, but it's a risk information for patients kind of an issue. In that discussion, I don't think that there was any real breakthrough in terms of what additional information to be providing. I think rather there was maybe a little more of a challenge in the scientific community to aspire to understand what's going on in mice.

And to ask the question is there any vulnerability for that to go on in humans given that we haven't seen insertional oncogenesis in humans to date. We fully expect to see insertion of the --, but whether that's within cancers, that is a speculation at this point. So I think the field has been dealing with this issue for quite a while. I do think that there are more experiments to do. And that won't directly answer the question of how does this translate to humans in terms of predicting a risk of oncogenicity in humans. But rather, I would see more delineating technical details about how these experiments should be done and interpreted and give us comfort. And to that point, I just want to highlight one specific aspect of findings.

And you're probably all aware of a study in dogs that found clonal abundance of a specific set of mutations. And they postulated that there is a cause and effect relationship between the fact that a lot of cells had the indicated insertion, and that there's this insertion and a lot of cells had this indicated insertion. However, the thing I think to keep in mind, and we see this in our 307 study, is not every cell in the sample has that characteristic. And so it raises the question of whether these findings are, in fact, causal in mice or passengers in mice.

And I think that we have a better idea about the answer to that question. We're not even going to get on first base in terms of understanding the relevance to humans. So we are in the front row of all of this because we have a lot going on in gene therapy, and our scientists are awesome at teasing. And we look forward to providing the agency could get us restarted on the 307 trial shortly. And now, let me pass it to Jeff to see if Jeff can handle your question about VOXZOGO.

Jeffrey Robert Ajer -- Executive Vice President, Chief Commercial Officer

Thanks, Hank. I'm still digesting all that you had to say. But with respect to VOXZOGO, and Chris, with the implementation of GDPR privacy regulations in the EU, we don't have the same very specific data about our individual patients that we might historically have had. So I'm kind of rounding around to your question. As we get some data about product usage by vial strength, we'll be able to make estimates of the size and thus the age of the mix of patients that we've got on treatment. We don't have enough data yet to work through that. What I might say is the early patient -- earliest patients treated are coming from France under an ATU early access program there.

That ATU was approved separately or in parallel with the EMA negotiations that led to the label of two years and up. So interesting enough, the ATU label indication is for patients five years and up. And so, in France, the early experience is with patients in the range of, let's say, five to nine or 10 years old. And we'll keep you posted with that kind of color going forward as we get more data to evaluate.

Christopher Joseph Raymond -- Piper Sandler -- Analyst

Thanks, guys.

Operator

And Speakers, our next question from Salveen Richter of Goldman Sachs. You may ask your question.

Salveen Jaswal Richter -- Goldman Sachs Group -- Analyst

Good afternoon. Thanks for taking my question. On VOXZOGO, again, you talked about the strong demand. Can you just give us some color there how we should think about not just France, but Germany and the select early access countries in 4Q? And how the launch so far has exceeded expectations?

Jeffrey Robert Ajer -- Executive Vice President, Chief Commercial Officer

Hi, Salveen. Thanks for the question. It's really a pleasure to answer this one. And some of the color that I would add here, it's specifically from France and Germany, I would characterize as this. In previous launches, we've had patients come in generally one patient at a time, one patient from clinic A, one patient from clinic B, a little while later, another patient from clinic C, maybe sometime later, a second patient from clinic A. What we're seeing this time around is we're still seeing some prescriptions emerge from individual clinics with a patient, N-of-one, but we're also seeing Ns-of-four, Ns-of-five, coming straight through at once.

And we've never really experienced that, and that gives us -- that drives our comment about the strength of prescription demand in part, so those patients coming through in clusters. In addition, there's been a lot of prescription demand that has emerged from named patient sales markets. I mentioned that we have sales to Switzerland, which, by the way, is not an EMA market. So Switzerland is not covered by an EMA approval, and it is thus a named patient outside of registration market. We've seen initial prescription demand from markets in the Middle East, as J.J. mentioned, and also in Latin America. And we've seen Ns larger than one in that experience. So the combination of quick named patient sales, prescription demand from markets and the clusters of groups of patients, not one or two, that's really driving our comment about prescription demand.

Jean-Jacques Bienaime -- Chairman and Chief Executive Officer

However, Salveen, the -- I mean, obviously, the dollar sales in Q4 are going to be relatively limited compared to the demand that's needed out there because the patients treated would only have been treated for like one or two months. So -- but this is really -- it bodes well for 2022 and the significant growth in revenues in 2022. There is definitely a lot of interest. An interesting anecdote is that we got a notice from the Russian Federation government that we got on the -- the federal reimbursement for VOXZOGO in Russia when we have not even filed. It's kind of an interesting anecdote. Okay. Next question?

Operator

And speakers, our next question from Akash Tewari of Jeffries. You may now ask your question.

Akash Tewari -- Jefferies -- Analyst

Hey. Thanks so much. So one on vosoritide, can you talk a bit about the use of sentinels for vosoritide in the 206 study. How are they being used to kind of adjust the dosing for the younger patients? And what have you seen from a safety perspective so far in that population? And this one is a bit more high level. The stock has been range bound for the last few years despite the fact that you guys are approaching your largest, most important commercial launches, is there a point in time where you would more seriously explore strategic venues to unlock value, particularly if either ROCTAVIAN or vosoritide don't get FDA approval as planned? Thanks so much.

Henry J. Fuchs -- President of Worldwide Research & Development

Hi, Akash. I'll start with the first part of your question. The study was put in the field before the Phase III trial read out. So the comprehensive evidence on safety and efficacy in older children wasn't available at the time of the study. So in consultation with health authorities, the study was designed to enroll patients in three cohorts, ages two to five, or let's say, there was two to five -- or three cohorts by age, I think, off the top of my head. I'm having a brain melt in terms of ages, six to two months and 0 to six months. And the underlying reason for that was that there are hypotheses about differences in the dose exposure and exposure response relationships. And so the concept was to enroll sentinels to evaluate PK/PD and safety response to that 15-microgram per-kilo dose that we've been using in older children before then opening the rest of that cohort up to randomization, to active medication or placebo.

And in the two- to five-year-old cohort, we found that the 15-microgram dose was an appropriate -- a dose that gave an appropriate exposure and an appropriate PD response. And we'll actually review those data in our R&D Day because that was the information that informed the European health authorities to move forward with the application. We only have a limited amount of efficacy data in those small number of patients because there was no contemporaneous control. And I think that what that tells us is that the two- to five-year-olds can be safely dosed with the same dose as children who are older than five. Now turning for the children who are under 2, we did find a dose exposure relationship such that we had to increase the dose. And off the top of my head, I think that we had to do that also for the infants that were enrolled in the study, from 0 to six months of age.

And I think what that means is, is that we're actually benefited by having relatively a short-acting drug in the sense that short-acting drugs are easier to adjust and accommodate those with an exposure on the basis of response than very long-acting drugs, especially since -- although we did the trial from five to two to six months, humans age in the other normal direction, from six months to two years to five years. And so it's going to be important to have all this dose exposure safety information. From a safety perspective, with the relatively now well-described safety profile of VOXZOGO, we haven't really seen much additionally in terms of significant clinical adverse responses. And so I feel like we're in pretty good shape, understanding the relationship of dose and therapeutic and safety response, and you'll get a dose of -- you'll get your own dose of that in just under a month, or just over a month, I should say. Let me pause there.

Jean-Jacques Bienaime -- Chairman and Chief Executive Officer

So I think you had a second part of your question. Akash that was totally different. It looks like you forgot about it. No, I mean, obviously, I mean, I think there was a recent survey. I don't know if it was you or another analyst, that like in the past few weeks, this last week or so, that 60% of investors apparently don't believe that VOXZOGO will be approved in the U.S. So I think that's good news, that if it's approved, that it should result in a significant move in the stock. And that event is only about three weeks away, so let's have that conversation again after the PDUFA date on VOXZOGO and then also potentially the European -- CHMP European in Q2 of next year.

Akash Tewari -- Jefferies -- Analyst

Thank you so much.

Operator

Our next question is from Gena Wang from Barclays. You may ask your question.

Huidong Wang -- Barclays Bank -- Analyst

Thank you for taking my questions. So the first is regarding Roctavian. Just wondering what is the latest FDA interaction regarding Roctavian filing, specifically on durability. And then related question is for the type of animal data or preclinical data that FDA is asking for the PKU program, do you expect FDA also will ask for similar type of data for ROCTAVIAN.

Henry J. Fuchs -- President of Worldwide Research & Development

Well, it's a little bit complicated, but let's see if I can cut to the chase of it. The -- in terms of FDA interaction, there really is no news there in terms of resetting or differing expectations. We said at the time of the CRL, they want two years' worth of data. And by gum and by golly, in spite of our trying really hard, they want two years' worth of data. We've had some lower-level communications and correspondence about things like statistical analyses, which reveal really nothing new other than that they want the two-year data. So we are interacting with the division. And the review division is very collegial and very much to the process of discussion. And based on what we've seen so far, we believe and we've had experts in to tell us what they think the FDA might not be telling us but might be conveying. And the experts have advised that this reads like a situation in which they ask for the two -year data, and they're going to make their decision on the basis of the two -year data. And that's good for us and for patients because we're optimistic that hemostatic efficacy will be maintained out through two years.

So it was demonstrated in the first 17 patients that were treated in the Phase III clinical trials and have been followed for an additional second year, as we reported earlier this year. So we're confident that the remaining 100 or so patients will be adequately controlled from Factor VIII expression through the second year. The issue of durability in PKU is a little bit more difficult for the simple reason that in Factor VIII expression, you measure the actual transgene product itself, whereas within -- with PKU, you measure indirectly the gene therapy product. And we will want to see what the pattern of the control looks like before committing to a specific answer to that question. But based on preclinical data, where we have seen maintenance of gene expression, we believe that there's a stronger argument to be made around PKU and durability and one year supporting that than there was for ROCTAVIAN. Just recall, for ROCTAVIAN, because of the nature of the immune response in nonhuman primates, people don't typically do long-term studies.

And when we surfaced the long-term studies that we did do and others have done, and not a lot of them, you can see the effect of the immune response in the lower species to the human protein. In PKU, we've been able to demonstrate sustained durability in preclinical species. So we hope that argument prevails upon the agency, but that discussion is yet to be had in sufficient detail with actual data from patients to inform. The good news of all of this is that unlike with ROCTAVIAN, where we change the material from Phase I to Phase III and we made a tweak to the trial in the steroid regimen, none of those things are happening in the 307 trial. So these earliest patients will provide relevant information for long-term exposure.

Huidong Wang -- Barclays Bank -- Analyst

Sorry, Hank, I wasn't clear. I was referring, for the PKU program, was more the safety data that FDA was asking, for additional preclinical data or anymore -- like whatever data the FDA is asking. Do you expect they also will ask a similar type of data set to support safety for the ROCTAVIAN program?

Henry J. Fuchs -- President of Worldwide Research & Development

So far, they have not been requiring preclinical carcinogenicity studies. I mean if you look at the Zolgensma label, there are no oncogenicity studies either in the -- prior to submission studies or post-approval studies. So don't expect additional studies to be required from a safety perspective prior to submissions and approvals. But again, those are discussions to be had as well.

Huidong Wang -- Barclays Bank -- Analyst

Thank you very much.

Operator

And our next question is from the line of Paul Matteis of Stifel. You may ask your question.

Paul Andrew Matteis -- Stifel -- Analyst

Okay. Thanks for taking the questions. Hank, if I heard you correctly, when you talked about the issue of the two-year placebo-controlled study earlier, it sounded as though you feel like at this point in the review, this is a matter of either full approval or potentially accelerated approval. I guess, did I understand that right? And if it is ultimately deemed that this is an accelerated approval, how do you think benefit would be confirmed? Do you think you'd need to do a two-year placebo-controlled study as a post-marketing requirement? Thanks so much.

Henry J. Fuchs -- President of Worldwide Research & Development

Well, the approval pathway is specifically the agency's decision, specifically is a tail end of the consideration decision. So I don't want to read too much into anything other than, just what I was characterizing with the landscape issue, was that in the landscape of growth-promoting products, from an FDA perspective, final adult height is more of a question than interval growth velocities have been a question. If it were to come to pass that a confirmatory study would be required, we would hope that longer-term follow-up of the patients that we have studied already could constitute the nexus or the main, as I should say, the main group for evaluation.

We have provided the agency -- as you know, we had, I think, five-plus years of treatment data on the first patients treated in open-label. Several of them are close to final adult height. And the agency seems interested in those patterns, but for patients, there's not a lot of patients for them. So we're hopeful that whether it's a post-approval commitment, to a conditional, to an accelerated approval, or whether it's a post-marketing requirement for even a full approval, that final adult height characterizations will come in when they come in and will be powerful to document the accumulated benefit of VOXZOGO. So on some level, Paul, we're indifferent because we can have them anyway.

Paul Andrew Matteis -- Stifel -- Analyst

Got it. Thanks a lot.

Operator

And speakers, our next question from the line of Geoff Meacham of Bank of America. You may ask your question.

Geoffrey Christopher Meacham -- BofA Securities -- Analyst

Hey, guys. Thanks for the question. I just had a couple of the main one. You guys have talked in the past about PKU clinics still not fully reopened just on the commercial business. Just wanted to maybe get an update on that? Have you started to see a recovery in PALYNZIQ new starts that would be kind of helpful and maybe how you think that's going to play out in 2022. And then bigger picture for J.J., I mean, on the BD side of things, how are you thinking about new opportunities in light of what could potentially be a little bit more scrutiny on AAV technology. Is it is there something that you're looking for in terms of asset diversity by indication or technology diversity? Or how are you thinking about that going forward? Thank you.

Jean-Jacques Bienaime -- Chairman and Chief Executive Officer

Jeff, you want to go over the PKU clinic and the Palynziq new start question?

Jeffrey Robert Ajer -- Executive Vice President, Chief Commercial Officer

Sure. I would be happy to. So as I noted in our remarks, both this quarter and the previous quarter, what we're seeing is, in Europe, but more importantly, in the U.S., PKU clinics are continuing to operate at less than full capacity. Of course, in the U.S., there's 125 PKU clinics. So there's some variability across there, but there's a lot of clinics that are operating virtually, not live.

There are staffing issues in PKU clinics as certain supporting staff, in particular, have been reassigned during the pandemic. And frankly, for the genetics clinics, while PKU usually is the largest group of patients that they're treating, there are acute needs for patients in those genetics clinics. And we've seen those acute needs for really terrible conditions for children, our first in line for priority for their capacity. Having said that, we are getting new patient referrals on a steady basis. I would say, steady through the pandemic, and we're drawing the conclusion that if we've been optimistic about PKU clinics getting back to their previous pre-pandemic capacity, it hasn't happened, and we've been working on other tactical solutions that facilitate PKU patients to continue access to therapy and for new patients to start.

And I think what we're trying to do is reset a little bit of expectations here that while we were optimistic at the beginning of the year, we're less optimistic about that capacity for the balance of the year now, but we're continuing to see overall growth. And then I might just comment as kind of a read-through to what do we think about that for VOXZOGO. In fact, other healthcare providers that we call on, such as pediatric orthopedists and pediatric endocrinologists, both of which are really relevant to VOXZOGO, for the most part, and with restrictions and protocols in place, those specialties are -- they're back in business. So the kind of capacity constraints we're seeing in the PKU clinics, I would say, don't let that read through to your expectations about VOXZOGO. And J.J., maybe you can...

Jean-Jacques Bienaime -- Chairman and Chief Executive Officer

So -- sorry, regarding your BD question. So I mean, that's a good question. I just want to -- a few comments. As you know, we have several, what we call, modalities within BioMarin. We started as a company mainly based on protein therapeutics. Kuvan, being a small molecule, was an exception. So -- and if you look at our pipeline today, we have additional protein therapeutics. We have small molecules.

We are moving into oligo or we are about to get back in the clinic with a second-generation oligonucleotide, and we have some options there beyond DMD. And so we are always going to go beyond one modality. So I would say, gene therapy is very important for us and will continue to be in the future. But we have no intent on being a pure gene therapy company. And if you will see at R&D Day, when we're going to disclose some new programs and talk about all the programs we have in development, besides ROCTAVIAN and PKU gene therapy and -- therapy, which is about to start, the only new program in terms of gene therapy is potentially in the preclinical right now, but will be in the clinic in about 1.5 years, two years, is hypertrophic cardiomyopathy.

So -- but we have many, many other programs that are not gene therapy programs. So -- and that will continue to be the case. At the same time, we are not -- we are far from giving up on gene therapy. And I guess, we're not the only company doing so. We still believe it's got major potential. And I mean, this kind of reminds me, I don't know, I am losing track of time, maybe 20, 25 or 30 years ago, when some of the first patients treated with monoclonal antibodies died. And I would say, somewhat based on that, I would say, that's the end of monoclonal antibodies, we shouldn't go forward with this. That would have been a huge mistake, considering that, I don't know, the aggregate sales of monoclonal antibodies today is over $100 billion a year. So here we are at the beginning of the adventure with gene therapy. We're learning a lot.

I think we -- as Hank was illustrating, we continue to learn a lot. We believe we are ahead of most other gene therapy companies in this respect, in our understanding of what happens in the cells after the gene insertion and what leads to expression durability, inflammatory response or immune response. So we believe we can design better and better gene constructs. We're also going to look at retreatment. You'll hear about it a little bit at R&D Day. We're going to look at nonviral gene therapy opportunities. So this is basically the framework of what drives our internal research and what drives the kind of stuff we're looking at outside in terms of BD. I hope that answers your question. And maybe Hank can give his perspective here too, in the middle of this.

Henry J. Fuchs -- President of Worldwide Research & Development

Well, I think -- I just think that the genetic and genomic revolution is unearthing so many opportunities, and it just really creates a target-rich environment. I mean I'm always stunned. We have this Behind the Seizure program for screening children who have essentially unexplained epilepsy. And so we find CLN2 patients who are indicated for Brineura treatment. But we also find increasingly numbers of mutations that then get associated with pedigrees because we're starting -- because Invitae is starting to accumulate large-enough family trees, that they can start to identify things that have genetic etiologies, where it used to be like, well, this sort of runs in families, but now there's actually concrete evidence and it's actually concretely linked to specific genes with specific annotation of medical history.

So it's really an amazing time to be where we are and to be able to leverage the diverse technology base that we've invested in. We can do small molecules, proteins, peptides, nucleic acids, complex nucleic acid mixtures. So it's really a nice coming together of the fundamental thing about BioMarin in terms of our orientation of research and science and the therapeutic opportunities that are presenting itself. So that also is a way of saying that we've been successful in academic and early partnerships, and for the time being, I think that that's where we are.

Jean-Jacques Bienaime -- Chairman and Chief Executive Officer

So one more comment then -- sorry, one more comment indirectly related to this. As you know, and I'm not going to disclose any data here, but we -- but R&D Day, we're going to give you our first update on the clinical trial going on with VOXZOGO or vosoritide in indications beyond achondroplasia, which could open up a major additional opportunity for VOXZOGO. So I would only recommend you attend that part of the R&D Day presentations.

Geoffrey Christopher Meacham -- BofA Securities -- Analyst

Thanks.

Operator

And our next question from Kennen MacKay from RBC Capital Markets. You may ask your question.

Kennen B. MacKay -- RBC Capital Markets -- Analyst

Squeezing me in. Hank, maybe going back to some of the prior questions with concern that the safety concerns on BMN 307 might read through to Roctavian. Maybe can you address the levels of adenoviral adeno-associated viral integration that's seen in the vector used in Roctavian versus that of what we see in BMN-307? Thank you.

Henry J. Fuchs -- President of Worldwide Research & Development

It's not really facile to do head-to-head kinds of things. But in general, the levels of integration that can be found across species are relatively low. And so I don't think that there's really a meaningful likelihood that ROCTAVIAN is necessarily any more or any less integrating than anything else. You know that the agency in their 2020 -- early 2020 guidance on gene therapy referred to AAVs as vectors that have a low propensity to integration unless they are designed otherwise to integrate. And quite to the contrary, we designed our -- we did not add any in design to integrate.

Matter of fact, we moved things that could be suspected of facilitating integration. So we've been fairly deliberate to stay on the low propensity integration side and believe that that's likely to be true for all our vectors. And as you know, we've done longer-term studies for both the HAE vector already and for a vector that is otherwise identical to ROCTAVIAN other than its coding sequence. So we feel pretty good about the lack of read-through from one vector to another. In fact, we feel pretty good about the lack of read-through from mice to other species.

Kennen B. MacKay -- RBC Capital Markets -- Analyst

Yeah. Thank you.

Operator

And speakers, there are no further questions at this time. You may now continue JJ Bienaime for the closing comments.

Jean-Jacques Bienaime -- Chairman and Chief Executive Officer

Yes. So thank you again for joining us today. So we are -- I hope we convinced you we are poised for significant growth next year, as I just described. That's based on our foundational base business on the VOXZOGO launch in the EMEA region and anticipated in the U.S. next month, also the ROCTAVIAN gene therapy potential -- potentially layered on top of that in mid- to late 2022 as well as deep early stage pipeline that we look forward to sharing with you in -- on November 30 during our virtual R&D Day. So we are focused on continuing this strong momentum as we achieve our next important catalysts, including the potential approval of VOXZOGO in the U.S. by the end of next month. So thank you for your attention today, and we look forward to speaking with you again soon.

Duration: 62 minutes

Call participants:

Traci McCarty -- Vice President of Investor Relations

Jean-Jacques Bienaime -- Chairman and Chief Executive Officer

Jeffrey Robert Ajer -- Executive Vice President, Chief Commercial Officer

Henry J. Fuchs -- President of Worldwide Research & Development

Brian R. Mueller -- Executive Vice President, Chief Financial Officer

Cory William Kasimov -- JPMorgan -- Analyst

Phil Nadeau -- Cowen & Company -- Analyst

Christopher Joseph Raymond -- Piper Sandler -- Analyst

Salveen Jaswal Richter -- Goldman Sachs Group -- Analyst

Akash Tewari -- Jefferies -- Analyst

Huidong Wang -- Barclays Bank -- Analyst

Paul Andrew Matteis -- Stifel -- Analyst

Geoffrey Christopher Meacham -- BofA Securities -- Analyst

Kennen B. MacKay -- RBC Capital Markets -- Analyst

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