BioMarin Pharmaceutical is reeling in its gene therapy ambitions. On Monday, the company announced that it’s lowering spending plans for its hemophilia gene therapy, Roctavian, and stopping development of a preclinical gene therapy for a heart condition.
Roctavian’s launch has been closely followed as a bellwether for the gene therapy space. BioMarin fell well short of its initial forecast for $100 million to $200 million in 2023 sales for Roctavian, with the therapy generating $3.5 million last year. The California drugmaker’s struggles caught the attention of the activist investing giant Elliott Management late last year. Just after, CEO Alexander Hardy, formerly the CEO of Roche’s Genentech, succeeded longtime leader Jean-Jacques Bienaimé last December.
Alexander HardyOn Monday, Hardy laid out a scaled-back future for Roctavian, with the company focusing on commercialization in the US, Italy, and Germany. The gene therapy for the genetic bleeding disorder was given to five patients and brought in $7.4 million in the second quarter, beating Wall Street’s expectations of about $3 million. The one-time infusion faces stiff competition, however, both in regular infusions of factor, or the protein that helps blood clot, as well as some newer treatment options, like Roche’s Hemlibra.
Hardy said the revised launch plan will reduce direct Roctavian expenses to $60 million in 2025, with the drug expected to be profitable by the end of 2025. The company will stop lifecycle development activities, which often include running additional studies for indication expansions, to focus on its main indication in treating severe hemophilia A, while also reducing its manufacturing expenses, Hardy said on a Monday investor call.
“All of this allows us to operate in an envelope of $60 million for 2025 and underpins our confidence that we’re going to be able to achieve profitability for Roctavian at that time with this focused strategy,” Hardy said.
Reflecting the challenges around Roctavian’s launch, Wall Street analysts had asked BioMarin executives on previous earnings calls and conferences about the potential of divesting the gene therapy. Hardy had said he aimed to share a decision on Roctavian’s future by Sept. 4, when it will hold an investor day in New York.
BioMarin also said it is discontinuing research on BMN 293, an experimental gene therapy for hypertrophic cardiomyopathy that was previously expected to enter the clinic in 2024. It’s the latest cut to BioMarin’s gene therapy R&D plans, as the company discontinued two other gene therapy programs, respectively targeting PKP2 arrhythmogenic cardiomyopathy and hereditary angioedema.
Kostas BiliourisBMO Capital Markets analyst Kostas Biliouris said he expected the Roctavian update “to be perceived as positive by most investors.” Earlier this year, the analyst slashed his forecast for the drug to $100 million in peak sales, saying he no longer sees Roctavian as a major value driver for the company.
Instead, Biliouris said Monday’s update was encouraging, describing the company as “an attractive M&A target” given its growing revenues and profitability.
BioMarin’s stock is down 18% year-to-date, but traded up about 4% in after-hours trading Monday. BioMarin reported second-quarter revenue of $712 million, up 20% from a year ago, primarily driven by its dwarfism drug Voxzogo. The company now expects 2024 revenue to come in at $2.75 billion to $2.825 billion, a slight increase from its previous guidance.