More than 20 years ago, research on rare diseases and the treatment of rare diseases were very rare in the medical community. The small market size of rare diseases and the huge difficulty in research and development have made pharmaceutical companies shy away from this field. In the past 25 years, BioMarin has launched eight rare disease drugs with strong R&D capabilities. Arguably, this record is unmatched by few companies in the biotech industry. However, with the failure of the commercialization of its highly-anticipated hemophilia A gene therapy, Roctavian, a strategic review began.

Since the beginning of this year, BioMarin has been in turmoil. Over the past nine months, there have been layoffs, executive restructuring, spending cuts, and research projects on hold. With the reshuffle of the business structure and the arrival of new competition, it remains to be seen when BioMarin will be able to get out of this turmoil. But in any case, compared with the crowded cancer and chronic disease market, the field and patients of rare diseases that have been cold for a long time still need more "BioMarin".

BioMarin focuses on rare diseases, and its founders and many executives are from Genentech, and its track record over the past 20 years has been quite good. BioMarin founded Aldurazyme, the drug for the treatment of mucopolysaccharidosis I (or MPS I), and promoted clinical trials of the drug in the same year, culminating in the approval of Aldurazyme in 2003, becoming the first approved enzyme replacement therapy for the treatment of mucopolysaccharidosis I.

Today, BioMarin has 8 commercialized products. Among them, the two main drugs are VOXZOGO, a specific drug for dwarfism, and Roctavian, a gene therapy for hemophilia A. Its layout in rare diseases is far more than that, from the earliest enzyme replacement therapy to today's gene therapy, as well as peptide/biological products, oligonucleotide therapies and small molecule drugs, etc., which are quite extensive, with 30 clinical pipelines alone.

BioMarin has also been evaluated by the market as the pharmaceutical company with the most far-reaching and mature pipeline layout in rare fields. This excellent R&D capability has also made it often regarded as an industry benchmark by many small pharmaceutical companies. However, with the failed launch of the Roctavian, BioMarin was thrown into turmoil.

Roctavian, the first gene therapy approved by the FDA for the treatment of patients with severe hemophilia A, was successfully launched in the United States in June 2023, and BioMarin has also spent a decade among the leaders in gene therapy. In the published clinical trial data, Roctavian demonstrated significant efficacy: all patients had an average endogenous factor VIII activity of 42.9 IU/dL after 52 weeks of dosing, and did not have the clinical phenotype of hemophilia A. With more than 1.125 million men worldwide suffering from hemophilia, including 418,000 with severe hemophilia, and the impressive pricing of gene therapy (Roctavian priced at $2.9 million per unit), the market has always had high hopes for Roctavian.

Previously, some foreign investment banks predicted that Roctavian's annual sales peak would be about 2.2 billion US dollars, while BioMarin's sales expectation for Roctavian in 2023 would be 50 million ~ 150 million US dollars. But in the end, the market response was dismal, and Roctavian's total sales in 2023 were only $3.5 million, treating only 3 patients. The typical ideal is very plump, and the reality is extremely skinny.

The reasons that affect its sales can be manifold. In addition to the medical reimbursement and market access challenges identified by BioMarin that hindered Roctavian's accessibility, Roctavian's high pricing and fierce market competition for Hemophilia A also contributed to Roctavian's poor sales. At the end of 2023, BioMarin decided to revisit the company's strategy. At the time, BioMarin hired Hardy, the former CEO of Genentech, as its helm.

And his view of Roctavian is that if sales do not improve, the asset may be divested, and he will decide to reprioritize products and business, and lay off employees and restructure. This kicked off the turmoil of BioMarin. BioMarin's past few months have been made up of two rounds of layoffs, executive reshuffles, and a repositioning of Roctavian and gene therapy. In its Q1 report, BioMarin said it identified which programs were most transformative for patients and could create potential value for shareholders as patient impact and business opportunities changed. After evaluation and combing, some projects will be given higher priority while others will be terminated.

The abandoned pipeline includes two clinical-advanced programs, BMN 331 and BMN 255, and two preclinical programs, including two AVV gene therapies. This will be accompanied by layoffs, and 170 employees associated with the project will also leave the company. Three months later, BioMarin announced a change in senior management, with the Chief R&D Officer, Chief Commercial Officer and Chief Business Officer all replaced. At the same time, the company announced a second round of layoffs involving 225 employees in its second quarter report. The layoffs are mainly due to BioMarin's reformulation of Roctavian's development strategy and the cessation of development of BMN 293, a preclinical gene therapy for the hereditary hypertrophic cardiomyopathy subtype. To help Roctavian become profitable by 2025, BioMarin decided to focus on Roctavian in three markets, United States, Germany and Italy, rather than launching it globally.

At the same time, in order to reduce costs, BioMarin has decided not to recruit participants to participate in Roctavian's clinical development program, and will only continue to obtain long-term safety and efficacy findings from study participants who have already received treatment. In addition, the company will put the production facility in an "idle state" until additional production is required. BioMarin expects Roctavian's annual spend to fall to about $60 million starting in 2025.

Judging from this series of actions, BioMarin seems to be transforming and no longer investing in the field of gene therapy. Previously, with its position in the field of enzyme replacement therapy becoming stronger, BioMarin decided to enter the emerging field of gene therapy. For example, it took 10 years to bring Roctavian to market, studying adeno-associated virus (AAV) gene therapy that delivers short strands of DNA to cells, using its natural mechanism to create the desired protein to address the root cause of inherited diseases. It is not difficult to understand that as a precision treatment method, the combination of gene therapy and rare diseases has natural advantages, and about 80% of the nearly 7,000 rare diseases in the world are genetic diseases, and gene therapy is undoubtedly the technology with the most curative potential in the future.

As a midfielder, BioMarin won the battle of R&D, but was poured cold water on the reality of commercialization. At the annual meeting of the United States Society for Gene and Cell Therapy in May, Dr. Peter Marks, director of the FDA's Center for Biologics Evaluation and Research, said, "If you want to further improve access to gene therapy, the first thing is to reduce the price." ”

But the flip side of the reality is that most gene therapies still use rare diseases as a breakthrough, which makes their business logic run counter to low pricing. This may be the core of BioMarin's decision to make a drastic reshuffle of its business structure. After all, even in the European and American markets, where the ability to pay is super-strong, the market performance of gene therapy after it is launched is so dismal.

Compared with the shattered dream of gene therapy, among the other drugs that BioMarin has brought to the market, there is a small molecule drug that unexpectedly brings hope to BioMarin - the dwarfism drug Voxzogo. In the first half of 2024, Voxzogo's sales reached $337 million, with a 73% year-over-year increase in treated children. Voxzogo is also seen as the company's core growth driver over the next 10 years.

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