To BioMarin CEO Alexander Hardy, hemophilia A gene therapy Roctavian needs 3 stars to align

Even Alexander Hardy, the former Genentech leader who managed the blockbuster hemophilia drug Hemlibra, can’t immediately bend the laggard launch trajectory of BioMarin’s gene therapy Roctavian.

Following a European approval in August 2022 and a U.S. nod in June 2023, Roctavian only treated three hemophilia A patients last year, including two in Germany and one in the U.S., BioMarin reported Thursday. That translated into $3.5 million in sales in 2023, including $2.7 million in the fourth quarter.

The $2.7 million came in much lower than Wall Street’s already conservative consensus estimate of $5.1 million. The 2023 full-year tally also fell on the low end of BioMarin’s significantly toned-down projection of less than $10 million. The company reduced the Roctavian estimate twice last year, which was a year ago originally pegged at between $100 million and $200 million.

Three things need to come together for Roctavian’s launch to pick up speed: “a motivated patient, a supportive payer and a treatment site with a physician who is willing and able to use the product,” Hardy said on BioMarin’s fourth-quarter earnings call on Thursday.

Hardy left his role as the CEO of Roche’s Genentech and took BioMarin’s top job in December, replacing the rare disease firm’s long-time leader Jean-Jacques Bienaimé. Before Hardy left Genentech, Hemlibra’s sales had climbed to 3.1 billion Swiss francs ($3.5 billion) in the first nine months of 2023, with nearly 1.9 billion Swiss francs from the U.S.

Analysts knew Roctavian’s launch would be difficult. It was the first one-time gene therapy approved for a not-so-rare indication, in which other treatment options exist. But they clearly still underestimated the challenge.

In the U.S., Roctavian bears a list price of $2.9 million per patient. The high-price, one-time nature of the therapy complicates payer discussions in a competitive market that has clear standard-of-care treatments, BioMarin has said.

The company has been able to clear some of the payer hurdles, including reaching a reimbursement deal in Germany in late November. But as Hardy pointed out, “the complexity of aligning the required pre-infusion checklist will take time.” Because Roctavian uses the viral vector AAV5 to deliver the therapeutic gene, patients need to first undergo a test to ensure they don’t have preexisting antibodies against the adeno-associated virus.

Patient demand is there, but the demand metrics don’t appear to be predictive indicators of uptake, according to BioMarin. Rather than trying to fine-tune its model, BioMarin in the future will “let the actual Roctavian results speak to the performance,” Hardy said.

“We are seeing progress in terms of market access, market activation,” Hardy said. “So we wanted to see that run through 2024. We also think probably into 2025 is when we’ll be able to really determine [Roctavian’s opportunity].”

Responding to an analyst’s question that BioMarin is spending a similar amount of money between Roctavian and its growth driver Voxzogo, Hardy said the firm is “spending wisely and cautiously” on Roctavian’s launch and is “very mindful of the return on investment.”

As part of the fourth-quarter report, BioMarin said it has started a strategic review of all R&D programs to determine which assets to move forward. The result from the review will be announced at the company’s investor day later this year.

Meanwhile, the dwarfism drug Voxzogo has become Hardy’s top priority. In 2023, Voxzogo sales jumped 178% to $470 million, as $146 million from the fourth quarter beat analysts’ expectations of $128 million. The drug helped push BioMarin’s total fourth-quarter revenue to $646 million, which marked 20% growth year over year.

In the last three months of 2023, about 70% of Voxzogo’s new U.S. patient starts were from children younger than 5 years old, for which Voxzogo just got FDA approval in October.

Beyond the currently approved indication of achondroplasis, BioMarin recently started a pivotal trial for Voxzogo in children with hypochondroplasia, with the treatment phase expected to begin mid-2024 following a run-in phase. The company is also talking to regulators to iron out potential pivotal study plans in idiopathic short stature and multiple genetic dwarfism conditions.