After previously floating the possibility of divesting Roctavian, BioMarin has decided to keep the hemophilia A gene therapy—but with a narrowed focus and cost cuts planned across the drug’s R&D, manufacturing and commercialization support functions.
BioMarin won’t expand Roctavian’s geographic reach or label—for now—and will instead focus on the med’s current indication in the U.S., Germany and Italy, where the drug has secured reimbursement policies, the company said Monday alongside its second-quarter earnings report.
No further life cycle development activities are planned, except for generating long-term data from existing patients, according to BioMarin’s press release. The company’s gene therapy manufacturing facility has been placed in “an idle state” until production of additional doses is needed. And the company is making no further investments to reach additional markets at this time.
The company’s goal is to cut Roctavian’s direct annual expenses to $60 million starting in 2025 and to make the product profitable by the end of next year. Roctavian’s current cost demands are unclear, but this target suggests BioMarin expects at least $60 million in annual sales from Roctavian to reach profitability.
The changes suggest layoffs are likely. As part of the refocus, BioMarin will carve out Roctavian support teams as separate from the rest of the California biotech’s portfolio, BioMarin CEO Alexander Hardy told investors during a conference call Monday.
A BioMarin spokesperson didn’t directly respond to Fierce Pharma’s question about potential personnel changes tied to the moves.
“Expansion into other markets including reimbursement will be dependent on progress in the U.S., Germany and Italy,” the spokesperson said.
Roctavian has a ways to go to reach the $60 million revenue benchmark for long-term profitability. In the second quarter, Roctavian only reached three patients in the U.S. and two in Italy, generating $7.4 million in revenue.
Still, BioMarin’s recent strategic evaluation showed reasons to be optimistic, Hardy said on the call. The CEO laid out four reasons he thinks Roctavian can be a long-term contributor for the rare disease drug maker.
“One, our belief in the therapeutic profile of Roctavian and its role in hemophilia A; second, our understanding that a launch like this takes time; third, signs of progress in the United States, Germany and Italy; and lastly, a revised expense profile that gives us confidence Roctavian will contribute to profitability,” the CEO said.
Roctavian’s launch has faced early reimbursement hurdles and patients’ hesitance to go through the gene therapy treatment process when other effective therapies are available. In addition, there’s the need to establish complex infrastructure to administer the drug, a challenge confronting many developers of advanced therapies.
During the second quarter, BioMarin logged a fourfold increase in the number of U.S. sites that are operationally ready to infuse the product, Chief Commercial Officer Cristin Hubbard said on the call.
“We believe as more and more centers gain patient treatment experience in the U.S., patient flow will become more straightforward,” she said.
In Germany, the company is still in the process of securing reimbursement agreements despite “an improved government price,” Hubbard added. And, in Italy, the launch is just getting started after BioMarin received a favorable reimbursement policy in January.
While BioMarin works to make Roctavian profitable, the dwarfism drug Voxzogo remains the company’s top growth driver. Its second-quarter revenues of $184 million beat analysts' consensus estimate by 12%.
Besides the Roctavian changes, the company recently launched a restructuring following the discontinuation of four R&D programs. As part of that initiative, the drugmaker plans to reduce its workforce by about 170 employees by the end of 2024.