Biotech Values

[ghmm]

BMRN:

Very Bullish article in WSJ about Kuvan. In it they mention a possible price, I had thought there was a chance it may be around this range but I believe analysts were looking at the 10-20K range. Some of my notes/comments precede clarifications given in the article but I left my comments as is. Here is the link curtsy of Google (I have a paper not on-line subscription)

http://online.wsj.com/article/SB117926372608703940.html?mod=googlenews_wsj

BioMarin Seeks
Approval for PKU Drug
By PETER LOFTUS
May 15, 2007 5:56 p.m.

For decades, people born with a rare genetic disorder have had to stick to restricted diets in order to avoid severe mental retardation and other problems.

But it's not easy to adhere to such diets, and some drug companies think a medical approach could help treat the condition, known as phenylketonuria, or PKU. One company, BioMarin Pharmaceutical Inc., is close to filing for U.S. regulatory approval to market a new drug, Kuvan, for PKU. BioMarin says the drug could help liberalize diets for some people with PKU, though it wouldn't be a cure.

If Kuvan is approved by early 2008 and its sales meet analysts' expectations, BioMarin's revenue could rise nearly 80% next year and the tiny, 10-year-old company might become profitable. BioMarin, Novato, Calif., has partnered with Merck Serono SA of Switzerland to comarket the drug. BioMarin would market the drug in the U.S., while Merck Serono would sell it in most countries outside the U.S. Daiichi Suntory Pharma Co. has rights to the drug in Japan.

But Kuvan could come at a high price for patients: potentially more than $30,000 a year, according to Emil Kakkis, BioMarin's chief medical officer. He emphasized that a final price hasn't been set. And it may not work for people with severe PKU, who account for up to half of all people with the disorder. [Actually BioMarin has said it may work for between 30 and 50% of patients to varying degrees

For some patients, however, Kuvan could "allow them to eat restricted diet of normal foods," Mr. Kakkis said. "We'd expect some patients to be near a normal diet."

PKU is a genetic disorder in which the body can't process part of a protein called phenylalanine, also known as Phe, according to the National Institutes of Health. The protein is found in nearly all foods. High levels of Phe can damage the brain and cause retardation, seizures and other conditions. About one in every 10,000 infants in the U.S. is born with PKU. BioMarin estimates there are at least 50,000 people in developed countries who have PKU.

Since the 1960s, nearly all newborns in the U.S. have undergone screening for PKU. Those with PKU are placed on a Phe-restricted diet, which has been successful in sparing many children the worst effects of the complications of PKU. Infants take special formulas, while older children and adults are supposed to stick to a diet heavy in fruits and vegetables and low-protein breads and cereals. Adults also can take special formulas. The restricted diets are meant to last for life.

But the diets can be difficult. Children with PKU may be tempted to try foods their friends or classmates are eating. Buying specialized, low-Phe foods can be costly, and the foods often have poor taste. Poor adherence to a restricted diet -- or abandonment altogether -- can cause declines in mental and behavioral performance, including attention-deficit hyperactivity disorder.[JJ Bienaime had a comment on the R&R Conference yesterday about parents spending 40K a year to send children to Ivy league and it not improving intelligence]

Over the years, scientists have found that a chemical compound called tetrahydrobiopterin, or BH4, could help treat PKU in some patients. A Swiss company called Schircks Laboratories sells tablet versions of BH4, but they aren't approved for sale as a PKU treatment by any national health regulators. In the U.S., doctors must apply for FDA clearance to order them, according to Schircks' Web site. A Schircks representative couldn't immediately be reached.

Kuvan is a purified, oral formulation of BH4. In a late-stage study of about 90 children between the ages of four and 12 years old, those on Kuvan were able to double their dietary intake of Phe, on average, over about 10 weeks, while maintaining controlled Phe levels in the blood. Those on a fake treatment were only able to increase their Phe dietary intake marginally.

But only about 30% to 50% of all PKU patients are believed to be responsive to BH4, the active ingredient of Kuvan. The rest have a more severe form of the disease and don't respond. BioMarin has said severe PKU may not respond to BH4 because their specific Phe mutations might prevent the compound's mechanism of action. BioMarin has another drug in development that might treat severe PKU, but it hasn't yet entered human testing and is likely several years away from reaching the market.[Altus has a preclinical compound also and it got me curious enough to start looking at the company]

Some side effects in the Kuvan study were reported, including headaches, abdominal pain, fatigue and diarrhea. The incidence and types of adverse events were similar in both the Kuvan and placebo groups, BioMarin said.

The Kuvan studies haven't directly shown that the drug can alleviate neurocognitive symptoms of PKU. Mr. Kakkis said it would take multiyear studies to show whether Kuvan could, for instance, have a benefit on patient IQ. But he said the relationship between Phe levels and IQ was "very strong," and BioMarin might study the relationship after receiving regulatory approval.

BioMarin expects to file for FDA approval of Kuvan by midyear,[JJ said in about 4 weeks at yesterdays conference] Mr. Kakkis said, with Merck Serono filing for European approval later in the year.[Merck is expected to file in Q3, I believe Biomarins milestone is 15 million] If the FDA application is granted priority review, FDA could take action as early as November.

Kuvan has received "orphan-drug designation" from both U.S. and European regulators, which means it would receive seven years of market exclusivity in the U.S. and 10 years in Europe, if it's the first drug approved to treat PKU.

BioMarin, which currently markets two other drugs for rare genetic disorders, hasn't set a price for Kuvan, but Mr. Kakkis noted that Wall Street analysts have predicted an annual price of $25,000 to $30,000. Mr. Kakkis said it could be higher than that.[Could be but I had not previously seen any estimates above 20K/yr prior to this article. My guess is they price the low dose on the low side but analysts (and I) expect docs to dose high since it has very mild side-effects in studies.] He said he expects insurers to cover the drug, and BioMarin would assist patients with no insurance.

Baird analyst Christopher Raymond estimates Kuvan could sell for $30,000 to $35,000 a year. He estimates BioMarin revenue from the drug will be $68 million next year, rising to $200 million in 2010. In addition to U.S. sales, BioMarin also would collect royalties from Merck Serono on non-U.S. sales of the drug.

Several analysts are optimistic the drug will be approved by the FDA. Some note that the agency recently allowed BioMarin to widen access to the drug beyond those who participated in the clinical trials, which analysts say implies there were no major safety issues.[BioMarin reportedly is allowing up to 500 patients early access and said heavy demand could support much higher figure, I believe they said 1000]

Another company, Altus Pharmaceuticals Inc., is in the early stages of developing its own treatment for PKU. The company is testing its compound, ALTU-236, in animal models, so it's several years behind BioMarin in development.In listening to their calls they are at least a year or so away from IND enabling studies if they decide to go ahead with the program which they'll decide later this year]

Write to Peter Loftus at [e-mail]