Replies to post #132840 on Biotech Values

[ghmm]

BMRN:

I've wondered the same thing on PEG-PAL (the pegylation they are using being suboptimal). I'm not knowledgeable enough to know if that alone could fix their issues. I do recall early on in the program when they talked about the PEG and said they didn't want a large royalty to someone when PEG was basically a commodity now. Being invested in NKTR (now not then) I think there are the old PEG's and some newer technology and I'd gladly give a ~10-15% royalty to get a weekly product without immuniginicity issues! Heck I'd give 20-25% since it would be a much bigger opportunity!

On the cash burn there are some things to keep in mind:
1-Costs of manufacturing the enzymes for the trials is considerable. I don't have a rough estimate but JJ pointed out its charged to R&D. In addition to GALNS they are scaling up to 12K for Pompe (for possible Phase 3), PEG-PAL and also for a Achondroplasia.
2-They have several (perhaps too many) post marketing studies. One could argue the usefulness of some (Aldurazyme in transplant patients, KUVAN cognitive are two that come to mind for different reasons)
3-They are fairly generous with their options though its more an accounting issue then real cash expense still hurts our EPS.

I am not as bothered by their spend as other companies though I would wish for more focus use of resources and certainly if (hopefully) GALNS is expensive they don't double their R&D overnight.

I wasn't thrilled with the PARP when the did the deal. I saw it as a distraction away from their focus. A couple of things have made me soften on it:
1-Seeing that they are getting into riskier programs (the Zystor approach using IGF2, then Achondroplasia and now the LINCL program).
2-It seems their molecule is really considerably more potent/targeted then other (current) compounds in development.


One more thing on the openness of the company. Its a far cry from the Fred Price days! The only one worse period I can recall is Lou Drapeau he wouldn't confirm the time of day when asked! Still one of the best I recall in terms of being open is TKT with Astrue.

[iwfal]

BMRN - Had time to finish listening to the audio and have some additional comments:

a) PARP Inhibitor for cancer treatment

a1) They repeatedly talked of potency (i.e. IC50) and how much more potent their drug is than the competitors. But there was very limited discussion of specificity - which is far more important once you get past a certain level of potency. I found this misplaced emphasis on potency to be disturbing.

a2) They did, in passing, mention that unlike their competitors, who are focusing on broad labels (with likely lesser efficacy), they will be focusing on specific populations known to be strong responders. I.e. orphan types of indications. My comment is that it isn't immediately apparent how much this helps them since, presumably, doctors might still use their competitors' PARP inhibs for an indication proven by Biomarin (e.g. Biomarin may choose to prove their drug in BRCA+ patients while other PARPs are trialing in a wider population BC population which includes BRCA+ patients - how likely are the docs to use Biomarin's product just because it is a BRCA+ patient?)

b) BMN-111 for achondroplasia (dwarfism):

b1) I found the discussion on the blood pressure effects worrisome. It is great that they are as open as they are - but they appeared overly dismissive of the effect (a >10% drop in Mean Arterial Pressure post infusion) seen in monkeys. In particular I found it disturbing that they noted that 'the effect on subsequent days was a smaller percent drop' - true but missing the point that on subsequent days the starting point was about 10% higher. Maybe it is just coincidence or a protocol artifact that the first day had the lowest starting MAP by far - but it looks like a real effect. I.e. it appears that the drug lowers the MAP immediately but over time creates a clinically meaningful increase in MAP.

PS In listening to the cc I did develop a better understanding of why their clinical research is so expensive per trial compared to more typical small biotech - they are much more careful with their protocols. Costs money - but saves time and money. Not yet sure, on balance, what the optimal choice is - but I do know that typical small biotech is non-optimal -g-.