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What changed in BIOMARIN PHARMACEUTICAL INC's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of BIOMARIN PHARMACEUTICAL INC's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+477 added−495 removedSource: 10-K (2024-02-26) vs 10-K (2023-02-27)

Top changes in BIOMARIN PHARMACEUTICAL INC's 2023 10-K

477 paragraphs added · 495 removed · 356 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

120 edited+31 added−51 removed205 unchanged
Biggest changeGeneral Subject Matter Patent Expiration BRINEURA U.S. 8,029,781 Method of treatment March 7, 2023 (1) 9,044,473 Method of treatment by administration into the cerebrospinal fluid February 18, 2032 10,279,015 Formulation; kit May 5, 2036 EU 1673104 Pharmaceutical composition August 30, 2024 16793229.2 (2) Formulation May 5, 2036 KUVAN EU 3138566; 3977999 (2) Use for treating with once daily dosing regimen November 17, 2024 2545939; Use for treating once daily after a meal April 11, 2028 3461503; 4029519 (2) Use for treating after a meal April 11, 2028 NAGLAZYME U.S. 7,713,709 Antibody assays July 20, 2028 EU 1565209; 2327414 Compositions; pharmaceutical compositions; use to treat an enzyme deficiency November 7, 2023 PALYNZIQ U.S. 7,534,595 Composition; method of treating August 16, 2027 / May 24, 2032 (3) 10,221,408 Purification February 3, 2031 9,557,340 Antibody detection assay July 30, 2029 11,505,790 Regimen February 3, 2031 EU 2152868 Composition; pharmaceutical composition May 23, 2028 / May 23, 2033 (4) 2531209; 3025728 Formulation; purification February 03, 2031 ROCTAVIAN US 9,504,762; 10,463,718; 11,406,690 Compositions, Methods of Treatment, Production September 10, 2034 (5) 10,512,675 Formulation, Clinical Methods of Treatment September 23, 2036 EU 3044231 Compositions, Methods of Treatment September 30, 2034 (6) VIMIZIM U.S. 8,128,925 Compositions; methods of treatment April 10, 2030 8,765,437 Purification; formulation; methods of treatment January 10, 2032 EU 2245145 Composition; use for treating April 30, 2029 (7) 2595650 Purification; composition; use for treating; formulation July 22, 2031 VOXZOGO U.S. 8,198,242 Compositions, Methods of Treatment June 11, 2030 (8) 9,907,834 Formulation August 1, 2036 10,646,550 Clinical methods of treatment August 1, 2036 EU 2432489 Compositions, Methods of Treatment May 20, 2030 (9) (1) Under a patent term extension (PTE) that has been granted (2) Patent application (3) We filed for a PTE for this patent, and if granted, the patent expiration will extend to May 24, 2032.
Biggest changeGeneral Subject Matter Patent Expiration BRINEURA U.S. 8,029,781 Method of treatment March 7, 2023 (1) 9,044,473 Method of treatment by administration into the cerebrospinal fluid February 18, 2032 10,279,015 Formulation; kit May 5, 2036 EU 1673104 Pharmaceutical composition August 30, 2024 EP3294345 Formulation May 5, 2036 PALYNZIQ U.S. 7,534,595 Composition; method of treating May 24, 2032 (2) 10,221,408 Purification February 3, 2031 9,557,340 Antibody detection assay July 30, 2029 11,505,790 Regimen February 3, 2031 EU 2152868 Composition; pharmaceutical composition May 23, 2028 / May 23, 2033 (3) 2531209; 3025728 Formulation; purification February 3, 2031 ROCTAVIAN US 9,504,762; 10,463,718; 11,406,690 Compositions, Methods of Treatment, Production September 10, 2034 (4) 10,512,675; 11,690,898 Formulation, Clinical Methods of Treatment April 10, 2037 December 19, 2038 EU 3044231 Compositions, Methods of Treatment September 10, 2034 (5) VIMIZIM U.S. 8,128,925 Compositions; methods of treatment April 10, 2030 8,765,437 Purification; formulation; methods of treatment January 10, 2032 EU 2245145 Composition; use for treating April 30, 2029 (6) 2595650 Purification; composition; use for treating; formulation July 22, 2031 VOXZOGO U.S. 8,198,242 Compositions, Methods of Treatment June 11, 2030 (7) 9,907,834 Formulation August 1, 2036 10,646,550 Clinical methods of treatment August 1, 2036 EU 2432489 Compositions, Methods of Treatment May 20, 2030 (8) (1) Date of expiry includes patent term extension (PTE).
BRINEURA BRINEURA, for the treatment of CLN2, has potential competition from preclinical product candidates from Lexeo Therapeutics, Inc., RegenxBio Inc. and the Roche Group. KUVAN and PALYNZIQ There are currently no other approved, non-generic drugs on the market in the U.S. or the EU for the treatment of PKU.
BRINEURA BRINEURA, for the treatment of CLN2, has potential competition from preclinical product candidates from Lexeo Therapeutics, Inc., RegenxBio Inc. and the Roche Group. PALYNZIQ and KUVAN There are currently no other approved, non-generic drugs on the market in the U.S. or the EU for the treatment of PKU.
The Biologics Price Competition and Innovation Act of 2009 (BPCIA), which was enacted as part of the Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act of 2010 (as amended, the PPACA), created an abbreviated approval pathway for biological products that are demonstrated to be “biosimilar” or “interchangeable” with an FDA-licensed reference biological product.
The Biologics Price Competition and Innovation Act of 2009 (BPCIA), which was enacted as part of the Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act of 2010 (as amended, the PPACA), created an abbreviated approval pathway for biological products that are demonstrated to be “biosimilar” to or “interchangeable” with an FDA-licensed reference biological product.
However, if an orphan drug later receives approval for the indication for which it has designation, the relevant regulatory authority may not approve any other applications to market the same drug for the same indication, except in very limited circumstances, for seven years in the U.S. and ten years in the EU (extendable to twelve years for medicines that have complied with an agreed Pediatric Investigation Plan (PIP) pursuant to Regulation 1901/2006) and, in addition, a range of other benefits during the development and regulatory review process are available in the EU, including scientific assistance for study protocols, authorization through the centralized marketing authorization procedure covering all member countries and a reduction or elimination of registration and marketing authorization fees.
However, if an orphan drug later receives approval for the indication for which it has designation, the relevant regulatory authority may not approve any other applications to market the same drug for the same condition, except in limited circumstances, for seven years in the U.S. and ten years in the EU (extendable to twelve years for medicines that have complied with an agreed Pediatric Investigation Plan (PIP) pursuant to Regulation 1901/2006) and, in addition, a range of other benefits during the development and regulatory review process are available in the EU, including scientific assistance for study protocols, authorization through the centralized marketing authorization procedure covering all member countries and a reduction or elimination of registration and marketing authorization fees.
Pediatric Indications In the U.S., under the Pediatric Research Equity Act of 2007 (PREA), NDAs or BLAs or supplements to NDAs or BLAs must contain data to assess the safety and effectiveness of the drug for the claimed indication(s) in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the drug is safe and effective.
Pediatric Indications In the U.S., under the Pediatric Research Equity Act of 2007 (PREA), most NDAs or BLAs or supplements to NDAs or BLAs must contain data to assess the safety and effectiveness of the drug for the claimed indication(s) in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the drug is safe and effective.
Currently, PKU can be managed by a Phe-restricted diet, which is supplemented by nutritional replacement products, like formulas and specially manufactured foods; however, it is difficult for most patients to adhere to the strict diet to the extent needed for achieving adequate control of blood Phe levels.
PKU can be managed by a Phe-restricted diet, which is supplemented by nutritional replacement products, like formulas and specially manufactured foods; however, it is difficult for most patients to adhere to the strict diet to the extent needed for achieving adequate control of blood Phe levels.
PALYNZIQ is also approved for marketing in the EU and Australia for patients ages 16 and older who have inadequate blood Phe control (blood Phe concentrations greater than 600 micromol/L) despite prior management with available treatment options.
PALYNZIQ is also approved for marketing in the EU, Australia, and Brazil for patients ages 16 and older who have inadequate blood Phe control (blood Phe concentrations greater than 600 micromol/L) despite prior management with available treatment options.
The duration and extension of the term of foreign patents varies in accordance with local law. In the EU, Supplementary Protection Certificates, or SPCs, are available to extend a patent term up to five years to compensate for patent protection lost during regulatory review.
The duration and extension of the term of foreign patents varies in accordance with local law. In the EU, Supplementary Protection Certificates (SPCs) are available to extend a patent term up to five years to compensate for patent protection lost during regulatory review.
In addition to patent protection, certain of our products are entitled to regulatory exclusivity in the U.S. and the EU through the dates set forth below: Commercial Products United States Orphan Drug Exclusivity Expiration (1) United States Biologic Exclusivity Expiration (2) European Union Orphan Drug Exclusivity Expiration (1) BRINEURA 2024 2029 2027 PALYNZIQ 2025 2030 2029 ROCTAVIAN Pending Pending 2032 VIMIZIM Expired 2026 2024 VOXZOGO 2028 Not Applicable 2031 (1) See “Government Regulation—Other Regulation—Orphan Drug Designation” in this Annual Report on Form 10-K for further discussion.
In addition to patent protection, certain of our products are entitled to regulatory exclusivity in the U.S. and the EU through the dates set forth below: Commercial Products United States Orphan Drug Exclusivity Expiration (1) United States Biologic Exclusivity Expiration (2) European Union Orphan Drug Exclusivity Expiration (1) BRINEURA 2024 2029 2027 PALYNZIQ 2025 2030 2029 ROCTAVIAN 2030 2035 2032 VIMIZIM Expired 2026 2024 VOXZOGO 2028 Not Applicable 2031 (1) See “Government Regulation—Other Regulation—Orphan Drug Designation” in this Annual Report on Form 10-K for further discussion.
An unsuccessful post-marketing study or failure to complete such a study could result in the withdrawal of the marketing approval for a product. Approved products may be marketed only for the approved indications and in accordance with the provisions of the approved labeling.
An unsuccessful post-marketing study or failure to complete such a study could result in the withdrawal of the marketing approval for a product. Commercial products may be marketed only for the approved indications and in accordance with the provisions of the approved labeling.
Such obligations may include, without limitation, the Federal Trade Commission Act, the California Consumer Privacy Act of 2018 (CCPA), the Canadian Personal Information Protection and Electronic Documents Act, the European Union’s General Data Protection Regulation 2016/679 (EU GDPR), the EU GDPR as it forms part of United Kingdom (UK) law by virtue of section 3 of the European Union (Withdrawal) Act 2018 (UK GDPR).
Such obligations may include, without limitation, the Federal Trade Commission Act, the California Consumer Privacy Act of 2018 (CCPA), the Canadian Personal Information Protection and Electronic Documents Act, the EU’s General Data Protection Regulation 2016/679 (EU GDPR), the EU GDPR as it forms part of United Kingdom (UK) law by virtue of section 3 of the European Union (Withdrawal) Act 2018 (UK GDPR).
In the European Economic Area (i.e., the EU as well as Iceland, Liechtenstein and Norway) (the EEA), there are two types of marketing authorizations (MA), namely: (i) the “Union” MA, which is issued by the EC through the so-called “centralized procedure”, based on the positive opinion of the EMA’s Committee for Medicinal Products for Human Use (CHMP), and results in a single marketing authorization that is valid across the EEA; and (ii) “National MAs,” which are issued by the competent NCAs and only cover their respective territory.
In the European Economic Area (i.e., the EU as well as Iceland, Liechtenstein and Norway) (the EEA), there are two types of marketing authorizations (MA), namely: (i) the “Union” MA, which is issued by the EC through the so-called “centralized procedure”, based on the positive opinion of the EMA’s Committee for Medicinal Products for Human Use (CHMP), and results in a single marketing authorization that is valid across the EEA; and (ii) “National MAs,” which are issued by the competent NCAs and only 13 Table of Contents cover their respective territory.
Outside of the U.S., our sales representatives and supporting staff members market our products (other than ALDURAZYME). We believe that with moderate changes in 2023, the size of our sales force will be appropriate to effectively reach our target customers in markets where our products are directly marketed.
Outside of the U.S., our sales representatives and supporting staff members market our products (other than ALDURAZYME). We believe that with moderate changes in 2024, the size of our sales force will be appropriate to effectively reach our target customers in markets where our products are directly marketed.
We continue to pursue additional patents and patent term extensions in the U.S. and other territories covering various aspects of our products that may, if issued, extend patent exclusivity beyond the expiration dates listed in the table below. 12 Table of Contents Product Territory Patent No(s).
We continue to pursue additional patents and patent term extensions in the U.S. and other territories covering various aspects of our products that may, if issued, extend patent exclusivity beyond the expiration dates listed in the table below. Product Territory Patent No(s).
Such reports and other information may be accessed through the SEC’s website at www.sec.gov. Information contained in our website is not part of this or any other report that we file with or furnish to the SEC. 26 Table of Contents
Such reports and other information may be accessed through the SEC’s website at www.sec.gov. Information contained in our website is not part of this or any other report that we file with or furnish to the SEC. 24 Table of Contents
We are also aware that manufacturers are challenging our patent portfolio related to KUVAN in several jurisdictions, and several generic versions of KUVAN have been approved either centrally by the EMA or on a country-by-country basis throughout the EU.
We are also aware that manufacturers are challenging our patent portfolio related to KUVAN in several jurisdictions, and several generic versions of KUVAN have been approved either centrally by the EC or on a country-by-country basis throughout the EU.
Furthermore we seek to protect our ownership of know-how, trade secrets and trademarks through an active program of legal mechanisms including registrations, assignments, confidentiality agreements, material transfer agreements, research collaborations and licenses. U.S. patents, as well as most foreign patents, are generally effective for 20 years from the date the earliest application was filed.
Furthermore we seek to protect our ownership of know-how, trade secrets and trademarks through an active program of legal mechanisms including registrations, assignments, confidentiality agreements, material transfer agreements, research collaborations and licenses. 10 Table of Contents U.S. patents, as well as most foreign patents, are generally effective for 20 years from the date the earliest application was filed.
These symptoms include: inhibited growth, spinal cord compression, enlarged liver and spleen, joint deformities and reduced range of motion, skeletal deformities, impaired cardiovascular function, upper airway obstruction, reduced pulmonary function, frequent ear and lung infections, impaired hearing and vision, sleep apnea, malaise and reduced endurance. NAGLAZYME is approved for marketing in the U.S., the EU and other international markets.
These symptoms include: inhibited growth, spinal cord compression, enlarged liver and spleen, joint deformities and reduced range of motion, skeletal deformities, impaired cardiovascular function, upper airway obstruction, reduced pulmonary function, frequent ear and lung infections, impaired hearing and vision, sleep apnea, malaise and reduced endurance. 5 Table of Contents NAGLAZYME is approved for marketing in the U.S., the EU and other international markets.
These symptoms include: inhibited growth, delayed and regressed mental development (in the severe form of the disease), enlarged liver and spleen, joint deformities and reduced range of motion, impaired cardiovascular function, upper airway obstruction, reduced pulmonary function, frequent ear and lung infections, impaired hearing and vision, sleep apnea, malaise and reduced endurance. We developed ALDURAZYME through collaboration with Sanofi.
These symptoms include: inhibited growth, delayed and regressed mental development (in the severe form of the disease), enlarged liver and spleen, joint deformities and reduced range of motion, impaired cardiovascular function, upper airway obstruction, reduced pulmonary function, frequent ear and lung infections, impaired hearing and vision, sleep apnea, malaise and reduced endurance. 6 Table of Contents We developed ALDURAZYME through collaboration with Sanofi.
Among the remedies available to the government for any failure to properly disclose commercial pricing and/or to extend FSS contract price reductions is recoupment of any FSS overcharges that may result from such omissions. Disclosure of Clinical Trial Information Sponsors of clinical trials of FDA-regulated products, including drugs and biologics, are required to register and disclose certain clinical trial information.
Among the remedies available to the government for any failure to properly disclose commercial pricing and/or to extend FSS contract price reductions is recoupment of any FSS overcharges that may result from such omissions. 21 Table of Contents Disclosure of Clinical Trial Information Sponsors of clinical trials of FDA-regulated products, including drugs and biologics, are required to register and disclose certain clinical trial information.
FDORA also requires the FDA to specify conditions of any required post-approval study, which may include milestones such as a target date of study completion and requires sponsors to submit progress reports for required post-approval studies and any conditions required by the FDA not later than 180 days following approval and not less frequently than every 180 days thereafter until completion or 16 Table of Contents termination of the study.
FDORA also requires the FDA to specify conditions of any required post-approval study, which may include milestones such as a target date of study completion and requires sponsors to submit progress reports for required post-approval studies and any conditions required by the FDA not later than 180 days following approval and not less frequently than every 180 days thereafter until completion or termination of the study.
In addition, quality control as well as the manufacture, packaging, and labeling procedures must continue to conform to cGMPs after approval. Drug and biological product manufacturers and certain of their subcontractors are subject to periodic unannounced inspections by the FDA, the EMA/NCAs, during which the inspectors audit manufacturing facilities to assess compliance with cGMPs.
In addition, quality control as well as the manufacture, packaging, and labeling procedures must continue to conform to cGMPs after approval. Drug and biological product manufacturers and certain of their subcontractors are subject to periodic unannounced inspections by the FDA, the EMA/NCAs, during which the inspectors audit manufacturing facilities to assess 16 Table of Contents compliance with cGMPs.
The CTR established a centralized application procedure where one of the National Competent Authorities 14 Table of Contents (NCA) of the Member States where the trial will take place takes the lead in reviewing certain aspects of the application, while the other NCAs have a lesser involvement than they had under the previous regime established by Directive 2001/20/EC (CTD).
The CTR established a centralized application procedure where one of the National Competent Authorities (NCA) of the Member States where the trial will take place takes the lead in reviewing certain aspects of the application, while the other NCAs have a lesser involvement than they had under the previous regime established by Directive 2001/20/EC (CTD).
The law also requires manufacturers to offer deeply discounted FSS contract pricing for purchases of their covered drugs by the Department of Veterans 22 Table of Contents Affairs, the Department of Defense, the Coast Guard, and the Public Health Service (including the Indian Health Service) in order for federal funding to be available for reimbursement or purchase of the manufacturer’s drugs under certain federal programs.
The law also requires manufacturers to offer deeply discounted FSS contract pricing for purchases of their covered drugs by the Department of Veterans Affairs, the Department of Defense, the Coast Guard, and the Public Health Service (including the Indian Health Service) in order for federal funding to be available for reimbursement or purchase of the manufacturer’s drugs under certain federal programs.
A manufacturer must also participate in a federal program known as the 340B drug pricing program in order for federal funds to be available to pay for the manufacturer’s drugs under Medicaid and Medicare Part B.
A manufacturer must also participate in a federal program known as the 340B drug pricing program in order for federal funds to be available to pay for the manufacturer’s drugs and biological products under Medicaid and Medicare Part B.
We continually invest in our employees’ career growth and provide them with a wide range of development opportunities, including face-to-face, virtual and self-directed learning, mentoring, mobile coaching and external development. We offer our employees career-specific training and resources and support development opportunities through company sponsored programs in addition to our tuition 25 Table of Contents reimbursement program.
We continually invest in our employees’ career growth and provide them with a wide range of development opportunities, including face-to-face, virtual and self-directed learning, mentoring, mobile coaching and external development. We offer our employees career-specific training and resources and support development opportunities through company sponsored programs in addition to our tuition reimbursement program.
The rewards for conducting studies in the pediatric population can be granted irrespective of the fact that the information generated in compliance with the agreed PIP fails to lead to the authorization of a pediatric indication. 23 Table of Contents Privacy and Security Legislation In the ordinary course of our business, we may process personal or sensitive data.
The rewards for conducting studies in the pediatric population can be granted irrespective of the fact that the information generated in compliance with the agreed PIP fails to lead to the authorization of a pediatric indication. Privacy and Security Legislation In the ordinary course of our business, we may process personal or sensitive data.
Our products and product candidates have potential competition from products under development either using similar technology to our programs or different treatment strategies. The following is a summary of some of the primary possible future competitors for our products and product candidates, but the information below may not include all potential competition.
Our products and product candidates have potential competition from products under development either using similar technology to 9 Table of Contents our programs or different treatment strategies. The following is a summary of some of the primary possible future competitors for our products and product candidates, but the information below may not include all potential competition.
For instance, the FDA and European authorities closely regulate the post-approval marketing and promotion of approved products, including standards and regulations for direct-to-consumer advertising (which is prohibited in the EU for prescription products such as our products), off-label promotion, industry-sponsored scientific and educational activities and promotional activities involving the Internet.
The FDA and European authorities closely regulate the post-approval marketing and promotion of commercial products, including standards and regulations for direct-to-consumer advertising (which is prohibited in the EU for prescription products such as our products), off-label promotion, industry-sponsored scientific and educational activities and promotional activities involving the Internet.
To date, the rebate amount for a drug has been capped at 100% of the AMP; however, effective January 1, 2024, this cap will be eliminated, which means that a manufacturer could pay a rebate amount on a unit of the drug that is greater than the average price the manufacturer receives for the drug.
To date, the rebate amount for a drug has been capped at 100% of the AMP; however, effective January 1, 2024, this cap was eliminated, which means that a manufacturer could pay a rebate amount on a unit of the drug that is greater than the average price the manufacturer receives for the drug.
In certain international markets, KUVAN is also approved for, or is only approved for, the treatment of primary BH4 deficiency, a different disorder than PKU. 6 Table of Contents Generic versions of KUVAN are available in several countries around the world, including multiple generic versions in the U.S.
In certain international markets, KUVAN is also approved for, or is only approved for, the treatment of primary BH4 deficiency, a different disorder than PKU. Generic versions of KUVAN are available in several countries around the world, including multiple generic versions in the U.S.
In 2022, we were recognized for the second year in a row as a Best Place to Work for lesbian, gay, bisexual, transgender and queer (LGBTQ+) equality by the Human Rights Campaign, scoring 100% on their Corporate Equality Index, one of the foremost benchmarking surveys and reports in the U.S. measuring corporate policies and practices related to LGBTQ+ workplace equality.
In 2023 we were recognized for the third year in a row as a Best Place to Work for lesbian, gay, bisexual, transgender and queer (LGBTQ+) equality by the Human Rights Campaign, scoring 100% on their Corporate Equality Index, one of the foremost benchmarking surveys and reports in the U.S. measuring corporate policies and practices related to LGBTQ+ workplace equality.
In clinical trials, a surrogate endpoint is a measurement of laboratory or clinical signs of a disease or condition that substitutes for a direct measurement of how a patient feels, functions, or survives. Surrogate endpoints can often be measured more easily or more rapidly than clinical endpoints.
In clinical trials, a surrogate endpoint is a measurement of laboratory or clinical signs of a disease or condition that substitutes for a direct measurement of how a patient feels, functions, or survives. Surrogate endpoints can often be measured more easily or more 14 Table of Contents rapidly than clinical endpoints.
Commercial Products ALDURAZYME, NAGLAZYME, and VIMIZIM In the mucopolysaccharidosis field, several companies are researching treatments using small molecules, gene therapy, and other novel technologies.
ALDURAZYME, NAGLAZYME, and VIMIZIM In the mucopolysaccharidosis field, several companies are researching treatments using small molecules, gene therapy, and other novel technologies.
CMS administers the Medicaid drug rebate agreements, which provide, among other things, that the drug manufacturer will pay rebates to each state Medicaid agency 21 Table of Contents on a quarterly basis and report certain price information on a monthly and quarterly basis. The rebates are based on prices reported to CMS by manufacturers for their covered outpatient drugs.
CMS administers the Medicaid drug rebate agreements, which provide, among other things, that the drug manufacturer will pay rebates to each state Medicaid agency on a quarterly basis and report certain price information on a monthly and quarterly basis. The rebates are based on prices reported to CMS by manufacturers for their covered outpatient drugs.
The FDA and the EMA initially review the applications for a threshold determination that it is sufficiently complete to permit substantive review. The regulatory agency 15 Table of Contents may request additional information rather than accepting an application for filing or validation. Once the submission is accepted, the applicable agency begins an in-depth review.
The FDA and the EMA initially review the applications for a threshold determination that it is sufficiently complete to permit substantive review. The regulatory agency may request additional information rather than accepting an application for filing or validation. Once the submission is accepted, the applicable agency begins an in-depth review.
Also, the CCPA provides for civil penalties and a private right of action for data breaches which may include an award of statutory damages. In addition, the CPRA, effective January 1, 2023, expanded the CCPA.
Also, the CCPA provides for 22 Table of Contents civil penalties and a private right of action for data breaches which may include an award of statutory damages. In addition, the CPRA, effective January 1, 2023, expanded the CCPA.
In addition, the Corporate Governance and Nominating and Compensation Committees of our Board of Directors regularly receive reports on our DEI policies and programs and offer valuable insights and recommendations to management in addition to providing appropriate oversight. As of December 31, 2022, racial and ethnic minorities represented 47% of our employees in the U.S.
In addition, the Corporate Governance and Nominating and Compensation Committees of our Board of Directors regularly receive reports on our DEI policies and programs and offer valuable insights and recommendations to management in addition to providing appropriate oversight. As of December 31, 2023, racial and ethnic minorities represented 49% of our employees in the U.S.
Beginning in 2025, the Inflation Reduction Act (IRA) eliminates the coverage gap under Medicare Part D by significantly lowering the enrollee maximum out-of-pocket cost and requiring manufacturers to subsidize, through a newly established manufacturer discount program, 10% of Part D enrollees’ prescription costs for brand drugs below the out-of-pocket maximum, and 20% once the out-of-pocket maximum has been reached.
Beginning in 2025, the IRA eliminates the coverage gap under Medicare Part D by significantly lowering the enrollee maximum out-of-pocket cost and requiring manufacturers to subsidize, through a newly established manufacturer discount program, 10% of Part D enrollees’ prescription costs for brand drugs above a deductible and below the out-of-pocket maximum, and 20% once the out-of-pocket maximum has been reached.
People living with hemophilia A are not able to form blood clots efficiently and are at risk for excessive bleeding from modest injuries, potentially endangering their lives. People with severe hemophilia often bleed spontaneously into their muscles or joints.
People living with hemophilia A are not able to form blood clots efficiently and are at risk for 7 Table of Contents excessive bleeding from modest injuries, potentially endangering their lives. People with severe hemophilia often bleed spontaneously into their muscles or joints.
The FDA and 17 Table of Contents other regulatory agencies around the world conduct regular, periodic visits to reinspect our equipment, facilities, laboratories and processes following an initial approval. Combination Products Combination products are defined by the FDA as products composed of two or more regulated components (e.g., a biologic and/or drug and a device).
The FDA and other regulatory agencies around the world conduct regular, periodic visits to reinspect our equipment, facilities, laboratories and processes following an initial approval. Combination Products and Companion Diagnostics Combination products are defined by the FDA as products composed of two or more regulated components (e.g., a biologic and/or drug and a device).
Reimbursement rates from private companies vary depending on the third-party payer, the insurance plan and other factors. One payer’s determination to provide coverage for a product does not assure that other payers will also provide coverage for the product.
Reimbursement rates from private companies vary depending on the third-party 19 Table of Contents payer, the insurance plan and other factors. One payer’s determination to provide coverage for a product does not assure that other payers will also provide coverage for the product.
In those cases where raw materials are only available through one supplier, such supplier may be either a sole source (the only recognized supply source available to us) or a single source (the only approved supply source for us among other sources).
In those cases where raw materials are only available through one supplier, such supplier may be either a sole source (the only recognized supply source available to us) or a single source (the only 8 Table of Contents approved supply source for us among other sources).
Sanofi is our sole customer for ALDURAZYME and is responsible for marketing and selling ALDURAZYME to third parties. Competition The biopharmaceutical industry is rapidly evolving and highly competitive.
Sanofi is our sole customer for ALDURAZYME and is responsible for distributing, marketing, and selling ALDURAZYME to third parties. Competition Commercial Products The biopharmaceutical industry is rapidly evolving and highly competitive.
All of our facilities and those of any third-party manufacturers will be subject to periodic inspections 9 Table of Contents confirming compliance with applicable law and must pass inspection before we can manufacture our drugs for commercial sales. Third-party manufacturers’ facilities are subject to periodic inspections to confirm compliance with applicable law and must be cGMP certified.
All of our facilities and those of any third-party manufacturers will be subject to periodic inspections confirming compliance with applicable law and must pass inspection before we can manufacture our drugs for commercial sale. Third-party manufacturers’ facilities are subject to periodic inspections to confirm compliance with applicable law and must be cGMP certified.
We plan to provide the EMA further clinical data to convert our conditional approval to a standard marketing authorization. Please see “Government Regulation – Adaptive Pathways” in this Annual Report on Form 10-K for additional information on conditional marketing authorizations.
We plan to provide the European Medicines Agency (EMA) further clinical data in an effort to convert our conditional approval to a standard marketing authorization. Please see “Government Regulation – Adaptive Pathways” in this Annual Report on Form 10-K for additional information on conditional marketing authorizations.
Still other states require the posting of information relating to clinical studies and their outcomes. In addition, states including California, Connecticut, 20 Table of Contents Nevada and Massachusetts require pharmaceutical companies to implement compliance programs or marketing codes. Currently, several additional states are considering similar proposals.
Still other states require the posting of information relating to clinical studies and their outcomes. In addition, states including California, Connecticut, Nevada and Massachusetts require pharmaceutical companies to implement compliance programs or marketing codes and additional states are considering similar proposals.
FDORA enables the FDA to initiate criminal prosecutions for the failure to conduct with due diligence a required post-approval study, including a failure to meet any required conditions specified by the FDA or to submit timely reports.
FDORA enables the FDA to initiate enforcement action for the failure to conduct with due diligence a required post-approval study, including a failure to meet any required conditions specified by the FDA or to submit timely reports.
Globally, 50% of our workforce were women and 47% of our positions at director-level and above were held by women. We are committed to continuing our ongoing efforts to ensure diversity in all positions, including leadership.
Globally, 51% of our workforce were women and 52% of our positions at director-level and above were held by women. We are committed to continuing our ongoing efforts to ensure diversity in all positions, including leadership.
BRINEURA is administered via intracerebroventricular (ICV) infusion and intended to be used in combination with a delivery device, such as an injector or other delivery system. Please see “Government Regulation – Regulation of Product Marketing and Promotion – Combination Products” in this Annual Report on Form 10-K for additional information on combination products.
BRINEURA is administered via intracerebroventricular (ICV) infusion and intended to be used in combination with a delivery device, such as an injector or other delivery system. Please see “Government Regulation – Regulation of Approved Products – Combination Products and Companion Diagnostics” in this Annual Report on Form 10-K for additional information on combination products.
The timing of these orders can be inconsistent and can create significant quarter to quarter variation in our revenue. PALYNZIQ is currently distributed in the U.S. pursuant to the REMS program through a limited number of 10 Table of Contents certified specialty pharmacies. During 2022, 37% of our net product revenue was generated by three customers.
The timing of these orders can be inconsistent and can create significant quarter to quarter variation in our revenue. PALYNZIQ is currently distributed in the U.S. pursuant to the REMS program through a limited number of certified specialty pharmacies. During 2023, 36% of our net product revenue was generated by three customers.
(6) We applied for SPCs for this patent, and we have to date received SPC to extend the patent expiration to September 10, 2037 in certain European countries, including Austria, Belgium, Bulgaria, Cyprus, Germany, Denmark, Estonia, Spain, Finland, France, United Kingdom, Croatia, Hungary, Ireland, Iceland, Italy, Lithuania, Luxembourg, Latvia, Malta, Netherlands, Norway, Poland, Portugal, Romania, Sweden and Slovakia. 13 Table of Contents (7) We applied for SPCs for this patent, and we have to date received SPC to extend the patent expiration to April 30, 2029 in certain European countries, including Austria, Bulgaria, Cypress, Czech Republic, Denmark, Estonia, Finland, France, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lithuania, Luxembourg, Netherlands, Norway, Poland, Portugal, Slovak Republic, Slovenia, Spain, Sweden, Switzerland and the United Kingdom.
(6) We applied for SPCs for this patent, and we have to date received SPC to extend the patent expiration to April 30, 2029 in certain European countries, including Austria, Belgium, Bulgaria, Cypress, Croatia, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovak Republic, Slovenia, Spain, Sweden, Switzerland and the United Kingdom.
Failure to comply with applicable U.S. and foreign requirements may subject a company to a variety of administrative or judicial sanctions, such as FDA refusal to approve pending NDAs or BLAs, warning or untitled letters, product recalls, product seizures, total or partial suspension or withdrawal of marketing, production or distribution authorizations, injunctions, fines, civil penalties, and criminal prosecution.
Failure to comply with applicable U.S. and foreign requirements may subject a company to a variety of administrative or judicial sanctions, such as FDA refusal to approve pending New Drug Applications (NDAs) or Biologics License Applications (BLAs), warning or untitled letters, 12 Table of Contents investigations, product recalls, product seizures, total or partial suspension or withdrawal of marketing, production or distribution authorizations, injunctions, fines, civil penalties, and criminal prosecution.
This statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on the one hand and prescribers, purchasers and formulary managers on the other.
This statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on the one hand and 18 Table of Contents prescribers, purchasers and formulary managers on the other.
Our total rewards compensation package includes market-competitive salary, the potential to earn bonuses or sales commissions, equity, healthcare benefits, retirement savings plans, paid time off and family leave, wellness programs, free flu vaccinations and an Employee Assistance Program and other mental health services.
Our total rewards compensation package includes market-competitive salary, the potential to earn bonuses or sales commissions, equity, healthcare benefits, retirement savings plans, paid time off and family leave, wellness programs such as subsidized access to fitness centers and onsite fitness facilities, free flu vaccinations and an Employee Assistance Program and other mental health services.
The Food and Drug Omnibus Reform Act (FDORA) was recently enacted, which included provisions related to the accelerated approval pathway. Pursuant to FDORA, the FDA is authorized to require a post-approval study to be underway prior to approval or within a specified time period following approval.
The Food and Drug Omnibus Reform Act (FDORA) added provisions related to the accelerated approval pathway. Pursuant to FDORA, the FDA is authorized to require a post-approval study to be underway prior to approval or within a specified time period following approval.
(a subsidiary of the Roche Group). Patents, Proprietary Rights and Regulatory Exclusivity Our success depends on an intellectual property portfolio that supports our future revenue streams and also erects barriers to our competitors. We are maintaining and building our patent portfolio through: filing new patent applications; prosecuting existing applications; and licensing and acquiring new patents and patent applications.
Patents, Proprietary Rights and Regulatory Exclusivity Our success depends on an intellectual property portfolio that supports our future revenue streams and also creates barriers to our competitors. We are maintaining and building our patent portfolio through: filing new patent applications; prosecuting existing applications; and licensing and acquiring new patents and patent applications.
The FDA may grant deferrals for submission of data or full or partial waivers. Unless otherwise required by statute or regulation, PREA does not apply to any drug for an indication for which orphan drug designation has been granted.
The FDA may grant deferrals for submission of data or full or partial waivers. Unless otherwise required by statute or regulation, PREA does not apply to any drug for an indication for which orphan drug designation has been granted; the orphan drug exemption, however, does not apply where the product is a molecularly-targeted oncology drug.
Please see “Risk Factors” included in Part I, Item 1A of this Annual Report on Form 10-K for a discussion of the risks posed by generic versions of KUVAN in the U.S. and international markets.
Please see “Risk Factors” included in Part I, Item 1A of this Annual Report on Form 10-K for a discussion of the risks related to ROCTAVIAN in the U.S. and international markets.
The first biologic product submitted under the abbreviated approval pathway that is determined to be interchangeable with the reference product has exclusivity against a finding of interchangeability for other biologics for the same condition of use for the lesser of (i) one year after first commercial marketing of the first interchangeable biosimilar, (ii) eighteen months after the first interchangeable biosimilar is approved if there is not patent challenge, (iii) eighteen months after resolution of a lawsuit over the patents of the reference biologic in favor of the first interchangeable biosimilar applicant, or (iv) 42 months after the first interchangeable biosimilar’s application has been approved if a patent lawsuit is ongoing within the 42-month period.
The first biologic product submitted under the abbreviated approval pathway that is determined to be interchangeable with the reference product is eligible for exclusivity precluding marketing of interchangeable biosimilars referencing the same reference product for the lesser of (i) one year after first commercial marketing of the first interchangeable biosimilar to be approved, (ii) eighteen months after the first interchangeable biosimilar is approved if there is not patent challenge, (iii) eighteen months after resolution of a lawsuit over the patents of the reference biologic in favor of the first interchangeable biosimilar applicant, or (iv) 42 months after the first interchangeable biosimilar’s application has been approved if the interchangeable applicant has been sued under the BPCIA and any related patent litigation is ongoing within the 42-month period.
Without sufficient quantity or activity of PAH, Phe accumulates to abnormally high levels in the blood, resulting in a variety of serious neurological complications, including severe mental retardation and brain damage, mental illness, seizures and other cognitive problems.
Phe is an essential amino acid found in all protein-containing foods. Without sufficient quantity or activity of PAH, Phe accumulates to abnormally high levels in the blood, resulting in a variety of serious neurological complications, including severe mental retardation and brain damage, mental illness, seizures and other cognitive problems.
Our European launch of ROCTAVIAN is underway following ROCTAVIAN'S conditional approval for marketing in the EU in August 2022 for the treatment of severe hemophilia A in adult patients without a history of factor VIII inhibitors and without detectable antibodies to AAV5.
ROCTAVIAN was conditionally approved by the EC in August 2022 and approved by the FDA in the U.S. in June 2023. Our European launch of ROCTAVIAN is underway following ROCTAVIAN'S conditional approval for marketing in the EU for the treatment of severe hemophilia A in adult patients without a history of factor VIII inhibitors and without detectable antibodies to AAV5.
The table below lists our outstanding patents and patent applications of primary importance for our products other than ALDURAZYME by territory, general subject matter (including composition, methods of treatment and approved use, methods of production and purification, pharmaceutical compositions and clinical formulations) and latest expiry date. With respect to ALDURAZYME, the last of our patents expired in November 2020.
The table below lists our active patents and patent applications of primary importance for our products other than ALDURAZYME and NAGLAZYME by territory, general subject matter (including composition, methods of treatment and approved use, methods of production and purification, pharmaceutical compositions and clinical formulations) and latest expiry date.
Since 2020, BioMarin’s DEI Employee Advisory Committee has helped to define our DEI roadmap and ensure that perspectives from employees of different age, gender, sexual orientation, race, ethnicity, tenure, level and location are considered in how we build the most inclusive environment.
Since 2020, BioMarin’s DEI Employee Advisory Committees have helped to define our DEI roadmap and ensure that perspectives from employees of different age, gender, sexual orientation, race, ethnicity, tenure, level and location are considered in how we build the most inclusive environment. We also continue to support our employee resource groups that build community for employees from underrepresented populations.
Please see “Risk Factors” included in Part I, Item 1A of this Annual Report on Form 10-K for a discussion of the risks posed by the REMS program. KUVAN KUVAN is a proprietary synthetic oral form of 6R-BH4, a naturally occurring enzyme co-factor for phenylalanine hydroxylase (PAH), indicated for patients with PKU.
Please see “Risk Factors” included in Part I, Item 1A of this Annual Report on Form 10-K for a discussion of the risks related to VOXZOGO in the U.S. and international markets. KUVAN KUVAN is a proprietary synthetic oral form of 6R-BH4, a naturally occurring enzyme co-factor for PAH, indicated for patients with PKU.
We estimate that up to 1,200 to 1,600 cases exist worldwide. BRINEURA is the first treatment approved to slow the progression of loss of ambulation in children with CLN2 disease and was one of the first therapies to go through an accelerated review procedure in the EU.
BRINEURA is the first treatment approved to slow the progression of loss of ambulation in children with CLN2 disease and was one of the first therapies to go through an accelerated review procedure in the EU.
Once granted, product approvals may be withdrawn if compliance with regulatory standards is not maintained or problems are identified following initial marketing. Similar rules apply outside of the U.S.
Once granted, product approvals may be withdrawn if compliance with regulatory standards is not maintained or problems are identified following initial marketing.
(4) We applied for SPCs for this patent, and we have to date received SPC to extend the patent expiration to May 23, 2033 in certain European countries, including Austria, Cyprus, Czech Republic, Denmark, Estonia, Finland France, Greece, Hungary, Ireland, Iceland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Norway, Portugal, Spain, Slovenia and Sweden.
(2) Date of expiry includes the granted PTE. 11 Table of Contents (3) We applied for SPCs for this patent, and we have to date received SPC to extend the patent expiration to May 23, 2033 in certain European countries, including Austria, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland France, Greece, Hungary, Ireland, Iceland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Spain, Slovakia, Slovenia, Sweden, and United Kingdom.
Regulation of Manufacturing Standards The FDA as well as other regulatory agencies around the world, regulate and inspect the equipment, facilities, laboratories and processes used in the manufacturing and testing of products prior to granting approval to market products.
For further detail, please see "Post-Approval Regulatory Requirements" below. 15 Table of Contents Regulation of Manufacturing Standards The FDA as well as other regulatory agencies around the world, regulate and inspect the equipment, facilities, laboratories and processes used in the manufacturing and testing of products prior to granting approval to market products.
For the FDA, the review period for standard review applications is typically an additional ten months and, for priority review of drugs, that is, drugs that the FDA determines address a significant unmet need and represent a significant improvement over existing therapy, the review period is typically an additional six months in duration.
For the FDA, the review period for standard review applications for new molecular entities is typically ten months from the date the FDA files the application and, for priority review of drugs, that is, drugs that the FDA determines address a significant unmet need and represent a significant improvement over existing therapy, the review period is typically six months from the date the FDA files the application.
VOXZOGO VOXZOGO is a once daily injection analog of C-type Natriuretic Peptide (CNP) for the treatment of achondroplasia, the most common form of disproportionate short stature in humans.
ALDURAZYME is approved for marketing in the U.S., the EU and other international markets. VOXZOGO VOXZOGO is a once daily injection analog of C-type Natriuretic Peptide (CNP) for the treatment of achondroplasia, the most common form of disproportionate short stature in humans.
A reference biologic is granted 12 years of exclusivity from the time of first licensure of the reference product and no application for a biosimilar can be submitted for four years from the date of licensure of the reference product.
A reference biologic is granted 12 years of data exclusivity from the time of first licensure of the reference product during which no biosimilar referencing such biologic can be licensed by FDA, and no such biosimilar application relying on the reference product can be submitted for four years from the date of first licensure of the reference product.
MPS IVA is a disease characterized by deficient activity of N-acetylgalactosamine-6-sulfatase (GALNS) causing excessive lysosomal storage of certain complex carbohydrates known as glycosaminoglycans (GAGs), such as keratan sulfate and chondroitin sulfate.
MPS IVA is a disease characterized by deficient activity of N-acetylgalactosamine-6-sulfatase (GALNS) causing excessive lysosomal storage of certain complex carbohydrates known as glycosaminoglycans (GAGs), such as keratan sulfate and chondroitin sulfate. This excessive storage causes a systemic skeletal dysplasia, short stature, and joint abnormalities, which limit mobility and endurance.
BRINEURA BRINEURA is a recombinant human tripeptidyl peptidase 1 (TPP1) for the treatment of patients with CLN2, a form of Batten disease. CLN2 is an incurable, rapidly progressive disease that typically ends in patient death by 10-12 years of age. Patients are initially healthy but begin to decline at approximately the age of three.
CLN2 is an incurable, rapidly progressive disease that typically ends in patient death by 10-12 years of age. Patients are initially healthy but begin to decline at approximately the age of three.
Biosimilarity sufficient to reference a prior FDA-licensed product requires that there be no differences in conditions of use, route of administration, dosage form, and strength, and no clinically meaningful differences between the biological product and the reference product in terms of safety, purity, and potency.
There must be no differences in conditions of use, route of administration, dosage form, and strength to rely on a given reference product, and there can be no clinically meaningful differences between the biological product and the reference product in terms of safety, purity, and potency.
Recent Developments In 2022, we achieved nearly $2.1 billion in total revenues, including a significant contribution from our ongoing launch of VOXZOGO, and we continued making important advancements in our product development pipeline.
Recent Developments In 2023, we achieved $2.4 billion in total revenues, including a significant contribution from our ongoing expansion of VOXZOGO, and we continued making important advancements in our product development pipeline. Our key business developments in 2023 include U.S.
In order to meet the higher hurdle of interchangeability, a sponsor must demonstrate that the biosimilar product can be expected to produce the same clinical result as the reference product, and for a product that is administered more than once, that the risk of switching between the reference product and biosimilar product is not greater than the risk of maintaining the patient on the reference product.
For licensure as an interchangeable biosimilar, a sponsor must demonstrate that the biosimilar product can be expected to produce the same clinical result as the reference product in any given patient, and for a product that is administered more than once to an individual, that the risk of switching in terms of safety or diminished efficacy of alternating or switching between the reference product and biosimilar product is not greater than the risk of maintaining the patient on the reference product.
One or more patents with the same or earlier expiry dates may fall under the same general subject matter and are not listed separately in the table below.
With respect to ALDURAZYME and NAGLAZYME, the last of our patents expired in November 2020 and November 2023, respectively. One or more patents with the same or earlier expiry dates may fall under the same general subject matter and are not listed separately in the table below.
Patients with MPS I typically become progressively worse and experience multiple severe and debilitating symptoms resulting from the build-up of carbohydrate residues in all tissues in the body.
MPS I is a progressive and debilitating life-threatening genetic disease that is caused by the deficiency of alpha-L-iduronidase. Patients with MPS I typically become progressively worse and experience multiple severe and debilitating symptoms resulting from the build-up of carbohydrate residues in all tissues in the body.
Please see “Risk Factors” included in Part I, Item 1A of this Annual Report on Form 10-K for a discussion of the risks posed by generic versions of KUVAN in the U.S. and international markets.
Please see “Risk Factors” included in Part I, Item 1A of this Annual Report on Form 10-K for a discussion of the risks posed by generic versions of KUVAN in the U.S. and international markets. PALYNZIQ and KUVAN also have potential competition from clinical stage product candidates from Jnana Therapeutics Inc., Nestle Health Science, S.A., Sanofi, S.A., PTC Therapeutics, Inc.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWith respect to our product candidates, production of product is necessary to perform clinical trials and successful registration batches are necessary to file for approval to commercially market and sell product candidates. Delays in obtaining clinical material or registration batches could adversely impact our clinical trials and delay regulatory approval for our product candidates.
Biggest changeAny interruption in the supply of finished products could hinder our ability to distribute finished products to meet commercial demand and adversely affect our financial results and financial condition. 39 Table of Contents With respect to our product candidates, production of product is necessary to perform clinical trials and successful registration batches are necessary to file for approval to commercially market and sell product candidates.
As a result, it is difficult to determine how long it will take or how much it will cost to obtain regulatory approvals for our gene therapy product candidates in any jurisdiction. Regulatory requirements governing gene and cell therapy products are still evolving and may continue to change in the future.
As a result, it is difficult to determine how long it will take or how much it will cost to obtain regulatory approvals for our future gene therapy product candidates in any jurisdiction. Regulatory requirements governing gene and cell therapy products are still evolving and may continue to change in the future.
Any product for which we have obtained regulatory approval, or for which we obtain approval in the future, is subject to, or will be subject to, extensive ongoing regulatory requirements by the FDA, the EMA and other comparable international regulatory authorities, and if we fail to comply with regulatory requirements or if we experience unanticipated problems with our products, we may be subject to penalties, we will be unable to generate revenues from the sale of such products, our potential for generating positive cash flow will be diminished, and the capital necessary to fund our operations will be increased.
Any product for which we have obtained regulatory approval, or for which we obtain approval in the future, is subject to, or will be subject to, extensive ongoing regulatory requirements by the FDA, the EC, the EMA and other comparable international regulatory authorities, and if we fail to comply with regulatory requirements or if we experience unanticipated problems with our products, we may be subject to penalties, we will be unable to generate revenues from the sale of such products, our potential for generating positive cash flow will be diminished, and the capital necessary to fund our operations will be increased.
Even though we have obtained orphan drug designation for certain of our product candidates and even if we obtain orphan drug designation for our future product candidates, due to the uncertainties associated with developing biopharmaceutical products, we may not be the first to obtain marketing approval for any particular orphan indication, which means that we may not obtain orphan drug exclusivity and could also potentially be blocked from approval of certain product candidates until the competitor product’s orphan drug exclusivity period expires.
Even though we have obtained orphan drug designation for certain of our product candidates and even if we obtain orphan drug designation for our future product candidates, due to the uncertainties associated with developing biopharmaceutical products, we may not be the first to obtain marketing approval for any particular orphan indication, which means that we may not obtain orphan drug regulatory exclusivity and could also potentially be blocked from approval of certain product candidates until the competitor product’s orphan drug exclusivity period expires.
The amount of capital we will need depends on many factors, including: • our ability to successfully market and sell our products; • the time and cost necessary to develop commercial manufacturing processes, including quality systems, and to build or acquire manufacturing capabilities; • the progress and success of our preclinical studies and clinical trials (including studies and the manufacture of materials); • the timing, number, size and scope of our preclinical studies and clinical trials; 38 Table of Contents • the time and cost necessary to obtain regulatory approvals and the costs of post-marketing studies which may be required by regulatory authorities; • the progress of research programs carried out by us; • any changes made to, or new developments in, our existing collaborative, licensing and other commercial relationships or any new collaborative, licensing and other commercial relationships that we may establish; • Sanofi’s ability to continue to successfully commercialize ALDURAZYME; and • whether our convertible debt is converted to common stock in the future.
The amount of capital we will need depends on many factors, including: • our ability to successfully market and sell our products; 36 Table of Contents • the time and cost necessary to develop commercial manufacturing processes, including quality systems, and to build or acquire manufacturing capabilities the progress and success of our preclinical studies and clinical trials (including studies and the manufacture of materials); • the timing, number, size and scope of our preclinical studies and clinical trials; • the time and cost necessary to obtain regulatory approvals and the costs of post-marketing studies which may be required by regulatory authorities; • the progress of research programs carried out by us; • any changes made to, or new developments in, our existing collaborative, licensing and other commercial relationships or any new collaborative, licensing and other commercial relationships that we may establish; • Sanofi’s ability to continue to successfully commercialize ALDURAZYME; and • whether our convertible debt is converted to common stock in the future.
Any product for which we have obtained regulatory approval, or for which we obtain regulatory approval in the future, along with the manufacturing processes and practices, post-approval clinical research, product labeling, advertising and promotional activities for such product, are subject to continual requirements of, and review by, the FDA, the EMA and/or other comparable international and national regulatory authorities.
Any product for which we have obtained regulatory approval, or for which we obtain regulatory approval in the future, along with the manufacturing processes and practices, post-approval clinical research, product labeling, advertising and promotional activities for such product, are subject to continual requirements of, and review by, the FDA, the EC, the EMA and/or other comparable international and national regulatory authorities.
Changes in funding for the FDA, the EMA, other comparable international regulatory authorities and other government agencies or government shutdowns could hinder the ability of such agencies to hire and retain key leadership and other personnel or otherwise prevent those agencies from performing normal functions on which the operation of our business may rely, which could negatively impact our business.
Changes in funding for the FDA, the EMA, other comparable regulatory authorities and other government agencies or government shutdowns could hinder the ability of such authorities and agencies to hire and retain key leadership and other personnel or otherwise prevent those authorities and agencies from performing normal functions on which the operation of our business may rely, which could negatively impact our business.
For example, the U.S. federal government has shut down repeatedly since 1980, including for a period of 35 days beginning on December 22, 2018. During a shutdown, certain regulatory agencies, such as the FDA, have had to furlough key personnel and stop critical activities.
For example, the U.S. federal government has shut down repeatedly since 1980, including for a period of 35 days beginning on December 22, 2018. During a shutdown, certain regulatory authorities and agencies, such as the FDA, have had to furlough key personnel and stop critical activities.
Additionally, the increased complexity of reimbursement with outcomes-based arrangements heightens the risk that our price reporting may be inaccurate or delayed, which may result in fines and liability. We also face uncertainty as to whether gene therapy will gain the acceptance of the public or the medical community.
Additionally, the novelty and increased complexity of reimbursement with outcomes-based arrangements heightens the risk that our price reporting may be inaccurate or delayed, which may result in fines and liability. We also face uncertainty as to whether gene therapy will gain the acceptance of the public or the medical community.
For example, the OECD, which represents a coalition of member countries including the U.S. and other countries in which we have operations, is working on proposals, commonly referred to as “BEPS 2.0”, which, if implemented, would make important changes to the international tax system.
For example, the OECD, which represents a coalition of member countries including the U.S. and other countries in which we have operations, is working on proposals, commonly referred to as “BEPS 2.0”, which, if and to the extent implemented, would make important changes to the international tax system.
The FDA and other national competent authorities or international regulatory agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant civil, criminal and administrative penalties.
The FDA and other national competent authorities or international regulatory authorities actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant civil, criminal and administrative penalties.
Similar to us, competitors continually seek intellectual property protection for their technology. Several of our development programs, such as ROCTAVIAN, focus on therapeutic areas that have been the subject of extensive research and development by third parties for many years.
Similar to us, competitors continually seek intellectual property protection for their technology. Several of our products, such as ROCTAVIAN, and development programs, focus on therapeutic areas that have been the subject of extensive research and development by third parties for many years.
Our amended and restated bylaws provide that the Court of Chancery of the State of Delaware is the sole and exclusive forum for the following types of actions or proceedings under Delaware statutory or common law: • any derivative claim or cause of action brought on our behalf; • any claim or cause of action for breach of a fiduciary duty owed by any director, officer or other employee of BioMarin to us or our stockholders; • any claim or cause of action against us or any of our directors, officers or other employees arising pursuant to any provision of the General Corporation Law of the State of Delaware, our restated certificate of incorporation or our amended and restated bylaws; any claim or cause of action seeking to interpret, apply, enforce or determine the validity of our restated certificate of incorporation or our amended and restated bylaws; • any claim or cause of action as to which the General Corporation Law of the State of Delaware confers jurisdiction to the Court of Chancery of the State of Delaware; and • any claim or cause of action against us or any of our directors, officers or other employees that is governed by the internal affairs doctrine.
Our amended and restated bylaws provide that the Court of Chancery of the State of Delaware is the sole and exclusive forum for the following types of actions or proceedings under Delaware statutory or common law: • any derivative claim or cause of action brought on our behalf; • any claim or cause of action for breach of a fiduciary duty owed by any current or former director, officer or other employee of BioMarin to us or our stockholders; • any claim or cause of action against us or any of our current or former directors, officers or other employees arising pursuant to any provision of the General Corporation Law of the State of Delaware, our restated certificate of incorporation or our amended and restated bylaws; any claim or cause of action seeking to interpret, apply, enforce or determine the validity of our restated certificate of incorporation or our amended and restated bylaws; • any claim or cause of action as to which the General Corporation Law of the State of Delaware confers jurisdiction to the Court of Chancery of the State of Delaware; and • any claim or cause of action against us or any of our current or former directors, officers or other employees that is governed by the internal affairs doctrine.
For the same reason, any potential third-party manufacturer of our products or our product candidates may be unable to comply with cGMP regulations in a cost-effective manner and may be unable to initially or continue to pass a federal or international regulatory inspection.
For the same reason, any potential third-party manufacturer of our products or our product candidates may be unable to comply with cGMP regulations in a cost-effective manner and may be unable to initially or continue to pass a federal, national or international regulatory inspection.
The move toward public disclosure of such development 45 Table of Contents information could adversely affect our business in many ways, including, for example, resulting in the disclosure of our confidential methodologies for development of our products, preventing us from obtaining intellectual property right protection for innovations, requiring us to allocate significant resources to prevent other companies from violating our intellectual property rights, adding even more complexity to processing health data from clinical trials consistent with applicable data privacy regulations, increasing scrutiny of our product candidates and products, and enabling competitors to use our clinical trial information and data to gain approvals for their own products.
The move toward public disclosure of such development 43 Table of Contents information could adversely affect our business in many ways, including, for example, resulting in the disclosure of our confidential methodologies for development of our products, preventing us from obtaining intellectual property right protection for innovations, requiring us to allocate significant resources to prevent other companies from violating our intellectual property rights, adding even more complexity to processing health data from clinical trials consistent with applicable data privacy regulations, increasing scrutiny of our product candidates and products, and enabling competitors to use our clinical trial information and data to gain approvals for their own products.
Moreover, with respect to certain biologics and gene therapies, there may be some uncertainty regarding how similarity between product candidates designed to treat the same rare disease or condition may affect such product candidates’ orphan drug exclusivities.
Moreover, with respect to certain biologics and gene therapies, there may be some uncertainty regarding how similarity between product candidates designed to treat the same rare disease or condition may affect such product candidates’ orphan drug regulatory exclusivities.
If we are found in violation of one of these laws, we may be subject to significant criminal, civil or administrative sanctions, including damages, fines, disgorgement, imprisonment, contractual damages, reputational harm, diminished profits and future earnings, additional reporting requirements and oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws, curtailment of our operations, and debarment, suspension or exclusion from participation in government healthcare programs, any of which could adversely affect our business, financial condition and results of operations.
If we are found in violation of one of these laws, we may be subject to significant criminal, civil or administrative sanctions, including damages, fines, disgorgement, imprisonment, contractual damages, reputational harm, public reprimands, diminished profits and future earnings, additional reporting requirements and oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws, curtailment of our operations, and debarment, suspension or exclusion from participation in government healthcare programs, any of which could adversely affect our business, financial condition and results of operations.
If we are unable to effectively and efficiently resolve and comply with the inquiries and requests of the FDA, the EMA and other comparable international regulatory authorities, the approval of our product candidates may be delayed and their value may be reduced.
If we are unable to effectively and efficiently resolve and comply with the inquiries and requests of the FDA, the EC, the EMA and other comparable international regulatory authorities, the approval of our product candidates may be delayed and their value may be reduced.
From time to time during the development and regulatory approval process for our products and product candidates, we engage in discussions with the FDA, the EMA and other comparable international regulatory authorities regarding our development programs, including discussions about the regulatory requirements for approval.
From time to time during the development and regulatory approval process for our products and product candidates, we engage in discussions with the FDA, the EC, the EMA and other comparable international regulatory authorities regarding our development programs, including discussions about the regulatory requirements for approval.
International operations inherently subject us to a number of risks and uncertainties, including: • the increased complexity and costs inherent in managing international operations; • diverse regulatory and compliance requirements, and changes in those requirements that could restrict our ability to manufacture, market and sell our products; • political and economic instability, such as the instability caused by Russia’s invasion of Ukraine; • diminished protection of intellectual property in some countries outside of the U.S.; • trade protection measures and import or export licensing requirements; • difficulty in staffing and managing international operations; • differing labor regulations and business practices; • potentially negative consequences from changes in or interpretations of tax laws; • changes in international medical reimbursement policies and programs; 42 Table of Contents • financial risks such as longer payment cycles, difficulty collecting accounts receivable, exposure to fluctuations in foreign currency exchange rates and potential currency controls imposed by non-U.S. governments; • regulatory and compliance risks that relate to maintaining accurate information and control over sales and distributors’ and service providers’ activities that may fall within the purview of the Foreign Corrupt Practices Act (the FCPA); and • rapidly evolving global laws and regulations relating to data protection and the privacy and security of commercial and personal information.
International operations inherently subject us to a number of risks and uncertainties, including: • the increased complexity and costs inherent in managing international operations; • diverse regulatory and compliance requirements, and changes in those requirements that could restrict our ability to manufacture, market and sell our products; • geopolitical and economic instability, such as the instability caused by Russia’s invasion of Ukraine; • diminished protection of intellectual property in some countries outside of the U.S.; • trade protection measures and import or export licensing requirements; • difficulty in staffing and managing international operations; 40 Table of Contents • differing labor regulations and business practices; • potentially negative consequences from changes in or interpretations of tax laws; • changes in international medical reimbursement policies and programs; • financial risks such as longer payment cycles, difficulty collecting accounts receivable, exposure to fluctuations in foreign currency exchange rates and potential currency controls imposed by non-U.S. governments; • regulatory and compliance risks that relate to maintaining accurate information and control over sales and distributors’ and service providers’ activities that may fall within the purview of the Foreign Corrupt Practices Act (the FCPA); and • rapidly evolving global laws and regulations relating to data protection and the privacy and security of commercial and personal information.
Our future growth and development depend in part on our ability to successfully develop new products from our research and development activities. The development of biopharmaceutical products is very expensive and time intensive and involves a great degree of risk.
Our future growth and development depend in part on our ability to successfully develop new products from our development activities. The development of biopharmaceutical products is very expensive and time intensive and involves a great degree of risk.
Due to the complexity of the processes used to manufacture our products and product candidates, we may be unable to continue to pass or initially pass federal or international regulatory inspections in a cost-effective manner.
Due to the complexity of the processes used to manufacture our products and product candidates, we may be unable to continue to pass or initially pass federal, national or international regulatory inspections in a cost-effective manner.
To the extent macroeconomic conditions continue to adversely affect our business and financial results, they may also have the effect of heightening many of the other risks described in this Risk Factors section, such as those relating to our conducting a significant amount of our sales and operations outside of the U.S., exposure to changes in foreign exchange rates, our need to generate sufficient cash flows to service our indebtedness and finance our operations and the volatility of our stock price. 54 Item 1B.
To the extent macroeconomic conditions continue to adversely affect our business and financial results, they may also have the effect of heightening many of the other risks described in this Risk Factors section, such as those relating to our conducting a significant amount of our sales and operations outside of the U.S., exposure to changes in foreign exchange rates, our need to generate sufficient cash flows to service our indebtedness and finance our operations and the volatility of our stock price. 52 Item 1B.
Although the FDA and the EMA have programs to facilitate expedited development and accelerated approval processes, the timelines agreed under legislative goals or mandated by regulations are subject to the possibility of substantial delays.
Although the FDA, the EC and the EMA have programs to facilitate expedited development and accelerated approval processes, the timelines agreed under legislative goals or mandated by regulations are subject to the possibility of substantial delays.
Additional factors that can cause delay or termination of our clinical trials include: • slow or insufficient patient enrollment; • slow recruitment of, and completion of necessary institutional approvals at, clinical sites; • budgetary constraints or prohibitively high clinical trial costs; • longer treatment time required to demonstrate efficacy; • lack of sufficient supplies of the product candidate; • adverse medical events or side effects in treated patients, including immune reactions; • lack of effectiveness of the product candidate being tested; • availability of competitive therapies to treat the same indication as our product candidates; • regulatory requests for additional clinical trials or preclinical studies; • deviations in standards for Good Clinical Practice (GCP); and • disputes with or disruptions in our relationships with clinical trial partners, including CROs, clinical laboratories, clinical sites, and principal investigators.
Additional factors that can cause delay or termination of our clinical trials include: • slow or insufficient patient enrollment; • slow recruitment of, and completion of necessary institutional approvals at, clinical sites; • budgetary constraints or prohibitively high clinical trial costs; • longer treatment time required to demonstrate efficacy; • lack of sufficient supplies of the product candidate; 32 Table of Contents • adverse medical events or side effects in treated patients, including immune reactions; • lack of effectiveness of the product candidate being tested; • availability of competitive therapies to treat the same indication as our product candidates; • regulatory requests for additional clinical trials or preclinical studies; • deviations in standards for Good Clinical Practice (GCP); and • disputes with or disruptions in our relationships with clinical trial partners, including CROs, clinical laboratories, clinical sites, and principal investigators.
In the U.S., the company that first obtains FDA approval for a designated orphan drug for a given rare disease receives marketing exclusivity for use of that drug for the stated condition for a period of seven years.
In the U.S., the company that first obtains FDA approval for a designated orphan drug for a given rare disease receives marketing exclusivity for use of that drug for the designated condition for a period of seven years.
Certain of these changes could impose limitations on the prices we will be able to charge for our products and any approved product candidates or the amounts of reimbursement available for these products from governmental and private third-party payers, may increase the tax obligations on pharmaceutical companies or may facilitate the introduction of generic competition with respect to our products.
Certain of these changes could impose limitations on the prices we will be able to charge for our commercial products and any product candidates or the amounts of reimbursement available for these products from governmental and private third-party payers, may increase the tax obligations on pharmaceutical companies or may facilitate the introduction of generic competition with respect to our products.
Additionally, if the FDA, the EMA or any other comparable international regulatory authorities withdraws its approval of a product, we will be unable to generate revenues from the sale of that product in the relevant jurisdiction, our potential for generating positive cash flow will be diminished and the capital necessary to fund our operations will be increased.
Additionally, if the FDA, the EC or any other comparable international regulatory authorities withdraws its approval of a product, we will be unable to generate revenues from the sale of that product in the relevant jurisdiction, our potential for generating positive cash flow will be diminished and the capital necessary to fund our operations will be increased.
Further, the availability of suitable contract manufacturing capacity at scheduled or optimum times is not certain. In addition, our manufacturing processes subject us to a variety of federal, state and local laws and regulations governing the use, generation, manufacture, storage, handling and disposal of hazardous materials and wastes resulting from their use.
Further, the availability of suitable contract manufacturing capacity at scheduled or optimum times is not certain. In addition, our manufacturing processes subject us to a variety of federal, state, supranational, national, and local laws and regulations governing the use, generation, manufacture, storage, handling and disposal of hazardous materials and wastes resulting from their use.
After we have conducted preclinical studies, we must demonstrate that our product candidates are safe and efficacious for use in the targeted human patients in order to receive regulatory approval for commercial sale. Clinical testing is expensive and can take many years to complete, and its outcome is inherently uncertain.
After we have conducted preclinical studies, we must demonstrate that our product candidates are safe and efficacious for the intended indication and for use in the targeted human patients in order to receive regulatory approval for commercial sale. Clinical testing is expensive and can take many years to complete, and its outcome is inherently uncertain.
For example, in the U.S., the PPACA, through the Physician Payments Sunshine Act, requires certain drug, biologicals and medical supply manufacturers to collect and report to CMS information on payments or transfers of value to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), other health care professionals (such as physicians assistants and nurse practitioners), and teaching hospitals, as well as investment and ownership interests held by such physicians and their immediate family members during the preceding calendar year.
For example, in the U.S., the 49 Table of Contents PPACA, through the Physician Payments Sunshine Act, requires certain drug, biologicals and medical supply manufacturers to collect and report to CMS information on payments or transfers of value to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), other health care professionals (such as physicians assistants and nurse practitioners), and teaching hospitals, as well as investment and ownership interests held by such physicians and their immediate family members during the preceding calendar year.
In addition, funding of other government agencies on which our operations rely, including those that fund research and development activities, is subject to the political budget process, which is inherently fluid and unpredictable. Government shutdowns could also impact the ability of government agencies to function normally and support our operations.
In addition, funding of other regulatory authorities and government agencies on which our operations rely, including those that fund research and development activities, is subject to the political budget process, which is inherently fluid and unpredictable. Government shutdowns could also impact the ability of regulatory authorities and government agencies to function normally and support our operations.
In addition to the U.S. and European countries, other countries in which we operate have also enacted data privacy laws or may do so in the future. For example, Brazil’s General Data Protection Law (LGPD), which is modeled on the GDPR, took effect on August 16, 2020.
In addition to the U.S. and European countries, other countries in which we operate have also enacted data privacy laws or may do so in the future. For example, Brazil’s General Data Protection Law (LGPD), which is modeled on the GDPR, took effect in 2020.
Notable requirements of our REMS program include the following: • prescribers must be certified by enrolling in the REMS program and completing training; • prescribers must prescribe auto-injectable epinephrine with PALYNZIQ; • pharmacies must be certified with the REMS program and must dispense PALYNZIQ only to patients who are authorized to receive it; • patients must enroll in the REMS program and be educated about the risk of anaphylaxis by a certified prescriber to ensure they understand the risks and benefits of treatment with PALYNZIQ; and • patients must have auto-injectable epinephrine available at all times while taking PALYNZIQ.
Notable requirements of our REMS program include the following: • prescribers must be certified by enrolling in the REMS program and completing training; • prescribers must prescribe auto-injectable epinephrine with PALYNZIQ; • pharmacies must be certified with the REMS program and must dispense PALYNZIQ only to patients who are authorized to receive it; 30 Table of Contents • patients must enroll in the REMS program and be educated about the risk of anaphylaxis by a certified prescriber to ensure they understand the risks and benefits of treatment with PALYNZIQ; and • patients must have auto-injectable epinephrine available at all times while taking PALYNZIQ.
Data security breaches may be the result of unauthorized or unintended activity (or lack of activity) by our employees, contractors, or others with authorized access to our network or malware, hacking, business email compromise, phishing, ransomware or other cyberattacks directed by third parties.
Data security incidents may be the result of unauthorized or unintended activity (or lack of activity) by our employees, contractors, or others with authorized access to our network or malware, hacking, business email compromise, phishing, ransomware or other cyberattacks directed by third parties.
In addition, our pharmaceutical manufacturing facilities are continuously subject to scheduled and unannounced inspection by the FDA, and other comparable EU and other national and international regulatory authorities, before and after product approval, to monitor and ensure compliance with cGMP and other regulations.
In addition, our pharmaceutical manufacturing facilities are continuously subject to scheduled and unannounced regulatory inspections by the FDA, and other comparable EU and other national and international regulatory authorities, before and after product approval, to monitor and ensure compliance with cGMP and other regulations.
There has also been enhanced scrutiny by governments on reimbursement support offerings, clinical education programs and promotional speaker programs. If we, our third-party agents or donation recipients are deemed to have failed to comply with laws, regulations or government guidance in any of these areas, we could be subject to criminal or civil sanctions.
There has also been enhanced scrutiny by governments on reimbursement support offerings, clinical education programs and promotional speaker programs. If we, our third-party agents or donation recipients are deemed to have failed to comply with laws, 42 Table of Contents regulations or government guidance in any of these areas, we could be subject to criminal or civil sanctions.
In the EU, if a device intended to administer a medicinal product is sold together with such medicinal product in such a way that they form a single integral product which is intended exclusively for use in the given combination and which is not reusable, that single integral product is regulated as a medicinal product.
If, for example, a device intended to administer a medicinal product is sold together with such medicinal product in such a way that they form a single integral product which is intended exclusively for use in the given combination and which is not reusable, that single integral product is regulated as a medicinal product.
Additionally, because 36 Table of Contents the new gene copies are designed to reside permanently in a patient, there is a risk that they will disrupt other normal biological molecules and processes, including other healthy genes, and we may not learn the nature and magnitude of these side effects until long after clinical trials have been completed.
Additionally, because the new gene copies are designed to reside permanently in a patient, there is a risk that they will disrupt other normal biological molecules and processes, including other healthy genes, and we may not learn the nature and magnitude of these side effects until long after clinical trials have been completed.
Although administration of a gene therapy product like ROCTAVIAN is intended to correct an inborn genetic defect for at least several years, there is a risk that the therapeutic effect will not be durable and production of the desired protein or RNA will decrease more quickly or cease entirely earlier than expected.
Although administration of a gene therapy product like ROCTAVIAN is intended to correct an inborn genetic defect for at least several years, there is a risk that the therapeutic effect will not be durable and production of the desired protein or ribonucleic acid will decrease more quickly or cease entirely earlier than expected.
Dollar (USD) will impact our revenues and expenses. If the USD were to weaken against another currency, assuming all other variables remained constant, our revenues would increase, having a positive impact on earnings, and our overall expenses would increase, having a negative impact on earnings.
If the USD were to weaken against another currency, assuming all other variables remained constant, our revenues would increase, having a positive impact on earnings, and our overall expenses would increase, having a negative impact on earnings.
If we do not compete successfully, our revenues would be adversely affected, and we may be unable to generate sufficient sales to recover our expenses related to the development of a product program or to justify continued marketing of a product. Changes in methods of treatment of disease could reduce demand for our products and adversely affect revenues.
If we do not compete successfully, our revenues would be adversely affected, and we may be unable to generate sufficient sales to recover our expenses related to the development of a product program or to justify continued marketing of a product. 26 Table of Contents Changes in methods of treatment of disease could reduce demand for our products and adversely affect revenues.
We make a significant portion of our initial international sales of newly launched products through early access, special access or “named patient sales” programs in markets where we are not required to obtain regulatory approval. For example, a significant portion of our international sales of VOXZOGO since the product’s launch have been made through such programs.
We make a significant portion of our initial international sales of newly launched products through early access, special access or “named patient sales” programs in markets where we are not required to obtain regulatory approval before establishing these programs. For example, a significant portion of our international sales of VOXZOGO since the product’s launch have been made through such programs.
Our amended and restated bylaws further provide that any person or entity that acquires any interest in shares of our capital stock will be deemed to have notice of and consented to the provisions of such provisions. General Risk Factors We depend upon our key personnel and our ability to attract and retain qualified employees.
Our amended and restated bylaws further provide that any person or entity that acquires any interest in shares of our capital stock will be deemed to have notice of and consented to the provisions of such provisions. 46 Table of Contents General Risk Factors We depend upon our key personnel and our ability to attract and retain qualified employees.
Moreover, changes in the tax laws of jurisdictions in which we conduct business could arise, including as a result of the base erosion and profit shifting (BEPS) project that is being led by the Organization for Economic Co-operation and Development (OECD), and other initiatives led by the OECD or the EC.
Moreover, changes in the tax laws of jurisdictions in which we conduct business could arise, including as a result of the base erosion and profit shifting (BEPS) project that is being led by the Organization for Economic Co-operation and Development 47 Table of Contents (OECD), and other initiatives led by the OECD or the EC.
These companies have already begun many drug development programs, some of which may target diseases that we are also targeting, and have already entered into partnering and licensing arrangements with academic research institutions, reducing the pool of available opportunities. Universities and public and private research institutions also compete with us.
These companies have already begun many drug development programs, some of which target diseases that we are also targeting or may target in the future, and have already entered into partnering and licensing arrangements with academic research institutions, reducing the pool of available opportunities. Universities and public and private research institutions also compete with us.
Any similar violations by our competitors could also negatively impact our industry reputation and increase scrutiny over our business and our products. 44 Table of Contents We face credit risks from government-owned or sponsored customers outside of the U.S. that may adversely affect our results of operations.
Any similar violations by our competitors could also negatively impact our industry reputation and increase scrutiny over our business and our products. We face credit risks from government-owned or sponsored customers outside of the U.S. that may adversely affect our results of operations.
However, a failure or delay in obtaining regulatory approval in one country may have a negative effect on the regulatory process in others. The non-U.S. regulatory approval process may include all of the risks associated with obtaining FDA or EC approval. We may not obtain non-U.S. regulatory approvals on a timely basis, if at all.
However, a failure or delay in obtaining regulatory approval in one country may have a negative effect on the regulatory process in others. The non-U.S. regulatory approval process may include all of the risks associated with obtaining FDA or EC approval. We may not obtain non-U.S. 28 Table of Contents regulatory approvals on a timely basis, if at all.
We also rely on independent third-party CROs to file some of our non-U.S. marketing applications, and while we keep a close oversight on the activities we delegate to CROs, important aspects of the services performed for us by the CROs are out of our direct control.
We also rely on independent third-party Contract Research Organizations (CROs) to file some of our non-U.S. marketing applications, and while we keep a close oversight on the activities we delegate to CROs, important aspects of the services performed for us by the CROs are out of our direct control.
The outcomes of research and development programs, especially for innovative biopharmaceuticals, are inherently uncertain and may not result in the commercialization of any products. Our competitors compete with us to attract organizations for acquisitions, joint ventures, licensing arrangements or other collaborations.
The outcomes of research and development programs, especially for innovative biopharmaceuticals like gene therapy products, are inherently uncertain and may not result in the commercialization of any products. Our competitors compete with us to attract organizations for acquisitions, joint ventures, licensing arrangements or other collaborations.
Failure can occur at any time during the clinical trial process. The results of preclinical studies and early clinical trials of our product candidates may not be 32 Table of Contents predictive of the results of later-stage clinical trials, and favorable data from interim analyses do not ensure the final results of a trial will be favorable.
Failure can occur at any time during the clinical trial process. The results of preclinical studies and early clinical trials of our product candidates may not be predictive of the results of later-stage clinical trials, and favorable data from interim analyses do not ensure the final results of a trial will be favorable.
Our ALDURAZYME, BRINEURA, NAGLAZYME, PALYNZIQ and VIMIZIM products are regulated by the FDA as biologics under the Federal Food, Drug, and Cosmetic Act and the Public Health Service Act (the PHS Act). Biologics require the submission of a BLA and approval by the FDA prior to being marketed in the U.S.
Our ALDURAZYME, BRINEURA, NAGLAZYME, PALYNZIQ, ROCTAVIAN and VIMIZIM products are regulated by the FDA as biologics under the Federal Food, Drug, and Cosmetic Act and the Public Health Service Act (the PHS Act). Biologics require the submission of a BLA and licensure by the FDA prior to being marketed in the U.S.
In addition, individual states in the U.S. have also increasingly passed legislation and implemented regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, price disclosure and reporting requirements, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.
In addition, individual states in the U.S. have also increasingly enacted laws and implemented regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, price disclosure and reporting requirements, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.
As of December 31, 2022, we had $1.1 billion (undiscounted) principal amount of indebtedness, including $495.0 million (undiscounted) principal amount of indebtedness under the 2024 Notes and $600.0 million (undiscounted) principal amount of indebtedness under the 2027 Notes.
As of December 31, 2023, we had $1.1 billion (undiscounted) principal amount of indebtedness, including $495.0 million (undiscounted) principal amount of indebtedness under the 2024 Notes and $600.0 million (undiscounted) principal amount of indebtedness under the 2027 Notes.
For example, in the U.S., we must obtain FDA approval for each product candidate that we intend to commercialize, and in the EU, we must obtain approval from the European Commission (EC), based on the opinion of the Committee for Medicinal Products for Human Use (CHMP) of the EMA.
For example, in the U.S., we must obtain FDA approval for each product candidate that we intend to commercialize, and in the EU, we must obtain approval from the EC, based on the opinion of the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA).
Moreover, other unforeseen events, such as power outages, could significantly disrupt our operations or those of our third-party manufacturers and suppliers, which could result in significant delays in the manufacture of our products and adversely impact our commercial operations and revenues.
Moreover, other unforeseen events, such as power outages, could significantly disrupt our operations or those of our third-party manufacturers and suppliers, which could result in damage to our facilities and significant delays in the manufacture of our products and adversely impact our commercial operations and revenues.
Interest rates and the ability to access credit markets could also adversely affect the ability of our customers/distributors to purchase, pay for and effectively distribute our products, which could limit our ability to obtain sufficient materials and supplies 53 Table of Contents necessary for production of our therapies.
Interest rates and the ability to access credit markets could also adversely affect the ability of our customers/distributors to purchase, pay for and effectively distribute our products, which could limit our ability to obtain sufficient materials and supplies necessary for production of our therapies.
As we develop, seek to optimize and operate the gene therapy manufacturing process, we will likely face technical and scientific challenges, considerable capital costs, and potential difficulty in recruiting and hiring experienced, qualified personnel. There may also be unexpected technical or operational issues during clinical or commercial manufacturing campaigns.
As we develop, seek to optimize and operate the gene therapy manufacturing process, we will likely face technical and scientific 38 Table of Contents challenges, considerable capital costs, and potential difficulty in recruiting and hiring experienced, qualified personnel. There may also be unexpected technical or operational issues during clinical or commercial manufacturing campaigns.
If we do not meet development milestones as publicly announced, the commercialization of our products may be delayed or never occur and the credibility of our management may be adversely affected and, as a result, our stock price may decline.
If we do not meet development milestones as publicly announced, the commercialization of our 27 Table of Contents products may be delayed or never occur and the credibility of our management may be adversely affected and, as a result, our stock price may decline.
The Biologics Price Competition and Innovation Act of 2009 (BPCIA) created a regulatory pathway under the PHS Act for the abbreviated approval of biological products that are demonstrated to be “biosimilar” or “interchangeable” with an FDA-approved biological product. A similar abridged MA process is available to biosimilar products in the EU.
The Biologics Price Competition and Innovation Act of 2009 (BPCIA) created a regulatory pathway under the PHS Act for the abbreviated licensure of biological products that are demonstrated to be “biosimilar” to or “interchangeable” with an FDA-licensed biological product. A similar abridged MA process is available to biosimilar products in the EU.
The market price of our common stock will fluctuate due to factors including: 46 Table of Contents • product sales and profitability of our products; • manufacturing, supply or distribution of our product candidates and products; • progress of our product candidates through the regulatory process and our ability to successfully commercialize any such products that receive regulatory approval; • results of clinical trials, announcements of technological innovations or new products by us or our competitors; • generic competition to KUVAN tablets and powder described above in this Risk Factors section or potential generic competition from future competitors; • government regulatory action affecting our product candidates, our products or our competitors’ product candidates and products in both the U.S. and non-U.S. countries; • developments or disputes concerning patent or proprietary rights; • general market conditions and fluctuations for the emerging growth and pharmaceutical market sectors; • economic conditions in the U.S. or abroad; • negative publicity about us or the pharmaceutical industry; • changes in the structure of healthcare payment systems; • cybersecurity incidents experienced by us or others in our industry; • broad market fluctuations in the U.S., the EU or in other parts of the world; • actual or anticipated fluctuations in our operating results, including due to timing of large periodic orders for our products by governments in certain countries; • changes in company assessments or financial estimates by securities analysts; • acquisitions of products, businesses, or other assets; and • sales of our shares of stock by us, our significant stockholders, or members of our management or Board of Directors.
The market price of our common stock have, and in the future could, fluctuate due to factors including: 44 Table of Contents • product sales and profitability of our products; • manufacturing, supply or distribution of our product candidates and products • progress of our product candidates through the regulatory process and our ability to successfully commercialize any such products that receive regulatory approval; • results of clinical trials, announcements of technological innovations or new products by us or our competitors; • generic competition to KUVAN tablets and powder described above in this Risk Factors section or potential generic competition from future competitors; • government regulatory action affecting our product candidates, our products or our competitors’ product candidates and products in both the U.S. and non-U.S. countries; • developments or disputes concerning patent or proprietary rights; • general market conditions and fluctuations for the emerging growth and pharmaceutical market sectors; • economic conditions in the U.S. or abroad; • negative publicity about us or the pharmaceutical industry; • changes in the structure of healthcare payment systems; • cybersecurity incidents experienced by us or others in our industry; • broad market fluctuations in the U.S., the EU or in other parts of the world; • actual or anticipated fluctuations in our operating results, including due to timing of large periodic orders for our products by governments in certain countries; • changes in company assessments or financial estimates by securities analysts; • certain actions by activist investors that may be threatened or commenced against us; • acquisitions of products, businesses, or other assets; and • sales of our shares of stock by us, our significant stockholders, or members of our management or Board of Directors.
In addition, the FDA, the EMA and other comparable international regulatory authorities have substantial discretion over the approval process for pharmaceutical products. These regulatory agencies may not agree that we have demonstrated the requisite level of product safety and efficacy to grant approval and may require, and in the past have required, additional data.
In addition, the FDA, the EC, the EMA and other comparable international regulatory authorities have substantial discretion over the approval process for pharmaceutical products. These regulatory authorities may not agree that we have demonstrated the requisite level of product safety and efficacy to warrant approval and may require, and in the past have required, additional data.
Due to the relative novelty of gene therapy and the potential to provide extended duration therapeutic treatment with a one-time administration, we face uncertainty with respect to the pricing, coverage and reimbursement of these products.
Due to the relative novelty of gene therapy and the potential to provide extended duration therapeutic treatment with a one-time 25 Table of Contents administration, we face uncertainty with respect to the pricing, coverage and reimbursement of these products.
These proposals are based on two “pillars”, Pillar One focuses on the allocation of taxing rights in respect of certain profits of multinational enterprises with annual global revenue above 20 billion euros and profitability above 10% to the jurisdictions within which they carry on business (based on the thresholds, we currently expect to be outside the scope of the Pillar One proposals) and Pillar Two imposes a minimum effective tax rate of 15% on certain multinational enterprises that have consolidated revenues of at least 750 million euros in at least two out of the last four years (based on the thresholds, we currently expect that we could fall within the scope of the Pillar Two 49 Table of Contents proposals).
These proposals are based on two “pillars”, Pillar One focuses on the allocation of taxing rights in respect of certain profits of multinational enterprises with annual global revenue above 20 billion euros and profitability above 10% to the jurisdictions within which they carry on business (based on the thresholds, we currently expect to be outside the scope of the Pillar One proposals, but could fall within their scope in the future) and Pillar Two imposes a minimum effective tax rate of 15% on certain multinational enterprises that have consolidated revenues of at least 750 million euros in at least two out of the last four years (based on the thresholds, we currently expect that we are likely to fall within the scope of the Pillar Two proposals).
Because the target patient populations for our products are relatively small, we must achieve significant market share and maintain high per-patient prices for our products to achieve and maintain profitability. 27 Table of Contents All of our products target diseases with relatively small patient populations.
Because the target patient populations for our products are relatively small, we must achieve significant market share and maintain high per-patient prices for our products to achieve and maintain profitability. All of our products target diseases with relatively small patient populations.
If we contract for manufacturing services with an unproven process, our contractor is subject to the same uncertainties, high standards and regulatory controls, and may therefore experience difficulty if further process development is necessary. 40 Table of Contents Even a developed manufacturing process can encounter difficulties.
If we contract for manufacturing services with an unproven process, our contractor is subject to the same uncertainties, high standards and regulatory controls, and may therefore experience difficulty if further process development is necessary. Even a developed manufacturing process can encounter difficulties.
The FDA, the EMA and other comparable international regulatory agencies may condition approval of our product candidates on the completion of such post-marketing clinical studies. These post-marketing studies may suggest that a product causes undesirable side effects or may present a risk to the patient.
The FDA, the EC and other comparable international regulatory authorities may condition approval of our product candidates on the completion of such post-marketing clinical studies. These post-marketing studies may suggest that a product causes undesirable side effects or may present a risk to the patient.
The extent of our future losses and the timing of profitability and positive cash flows are highly uncertain. If we fail to become profitable or are unable to sustain profitability and positive cash flows on a continuing basis, then we may be unable to continue our operations at planned levels and be forced to reduce our operations.
The extent of our future losses and the timing of profitability and positive cash flows are highly uncertain. If we are unable to sustain profitability and positive cash flows on a continuing basis, then we may be unable to continue our operations at planned levels and be forced to reduce our operations.
Even after an orphan drug is approved and granted orphan drug exclusivity, the FDA can subsequently approve the same drug for the same condition if the FDA concludes that the later drug is safer or more effective or 35 Table of Contents makes a major contribution to patient care.
Even after an orphan drug is approved and granted orphan drug exclusivity, the FDA can subsequently approve the same drug for the same condition if the FDA concludes that the later drug is safer or more effective or makes a major contribution to patient care.
As of December 31, 2022, we had cash, cash equivalents and investments totaling $1.6 billion and debt obligations of $1.1 billion (undiscounted), which consisted of our 0.599% senior subordinated convertible notes due in 2024 (the 2024 Notes) and our 1.25% senior subordinated convertible notes due in 2027 (the 2027 Notes).
As of December 31, 2023, we had cash, cash equivalents and investments totaling $1.7 billion and debt obligations of $1.1 billion (undiscounted), which consisted of our 0.599% senior subordinated convertible notes due in 2024 (the 2024 Notes) and our 1.25% senior subordinated convertible notes due in 2027 (the 2027 Notes).
In the U.S., California enacted the California Consumer Privacy Act (CCPA), which took effect on January 1, 2020. The CCPA gives California consumers expanded rights to access and delete their personal information, opt out of certain personal information sales, and receive detailed information about how their personal information is used.
For example, California enacted the California Consumer Privacy Act (CCPA), which took effect on January 1, 2020. The CCPA gives California consumers expanded rights to access and delete their personal information, opt out of certain personal information sales, and receive detailed information about how their personal information is used.
We are also aware that manufacturers are challenging our patent portfolio related to KUVAN in several jurisdictions, and several generic versions of KUVAN have been approved either centrally by the European Medicines Agency (EMA) or on a country-by-country basis throughout the EU.
We are also aware that manufacturers are challenging our patent portfolio related to KUVAN in several jurisdictions, and several generic versions of KUVAN have been approved either centrally by the European Commission (EC) or on a country-by-country basis throughout the EU.
Moreover, sometimes different regulatory agencies provide different or conflicting advice. While we attempt to harmonize the advice we receive from multiple regulatory authorities, it is not always practical to do so. Also, we may choose not to harmonize conflicting advice when harmonization would significantly delay clinical trial data or is otherwise inappropriate.
While we attempt to harmonize the advice we receive from multiple regulatory authorities, it is not always practical to do so. Also, we may choose not to harmonize conflicting advice when harmonization would significantly delay clinical trial data or is otherwise inappropriate.
If a court agrees, we would not be able to enforce that patent. Moreover, generic manufacturers may use litigation and regulatory means to obtain approval for generic versions of our products notwithstanding our filed patents or patent applications.
If a court agrees, we would not be able to enforce that patent. Moreover, follow-on manufacturers, including generic and biosimilar manufacturers, may use litigation and regulatory means to obtain approval for generic, biosimilar, or other follow-on versions of our products notwithstanding our filed patents or patent applications.
Regulatory agencies and the new requirements and guidelines they promulgate may lengthen the regulatory review process, require us to perform additional or larger studies, increase our development costs, lead to changes in regulatory positions and interpretations, delay or prevent approval and commercialization of our treatment candidate or lead to significant post-approval studies, limitations or restrictions.
Regulatory authorities and the new requirements and guidelines they promulgate may lengthen the regulatory review process, require us to perform additional or larger studies, increase our development costs, lead to changes in regulatory positions and interpretations, delay or prevent approval and commercialization of our product candidates or lead to significant post-approval studies, limitations or restrictions.
In the EU, a medicinal product containing a new active substance benefits from eight years of data exclusivity, during which biosimilar applications referring to the data of that product may not be accepted by the regulatory authorities, and a further two years of market exclusivity, during which such biosimilar products may not be placed on the market.
In the EU, a medicinal product containing a new active substance benefits from eight years of data exclusivity, during which biosimilar applications referring to the data of that product may not be accepted by the regulatory authorities, and a further two years of market exclusivity, during which biosimilar applications may be submitted and the reference product's data may be referenced but biosimilar products may not be placed on the market.
If we default under any series of the Notes, such series of Notes could become immediately due and payable and it could lead to defaults under the other series of Notes and/or the 2018 Credit Facility. 39 Table of Contents In addition, our ability to refinance our indebtedness will depend on the capital markets and our financial condition at such time.
If we default under any series of the Notes, such series of Notes could become immediately due and payable and it could lead to defaults under the other series of Notes. 37 Table of Contents In addition, our ability to refinance our indebtedness will depend on the capital markets and our financial condition at such time.
In the EU, pursuant to the Orphan Regulation, orphan drug designation is available if a sponsor can establish that: (1) the medicine is intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition affecting no more than five in 10,000 people in the EU at the time the application is made, or, (2) that it is intended for the diagnosis, prevention or treatment of a life-threatening, seriously debilitating or serious and chronic condition in the EU and that without incentives derived from the orphan status, it is unlikely that the marketing of the medicine in the EU would generate sufficient return to justify the necessary investment.
In the EU, pursuant to the Regulation (EC) No. 141/2000 (the Orphan Regulation), as implemented by Regulation (EC) No. 847/2000, orphan drug designation is available if a sponsor can establish that: (1) the medicine is intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition affecting no more than five in 10,000 people in the EU at the time the application is made, or, (2) that it is intended for the diagnosis, prevention or treatment of a life-threatening, seriously debilitating or serious and chronic condition in the EU and that 34 Table of Contents without incentives derived from the orphan status, it is unlikely that the marketing of the medicine in the EU would generate sufficient return to justify the necessary investment.
In addition, a recession, further market correction or depression resulting from the COVID-19 pandemic or other global public health threat could materially adversely affect our business and the value of our common stock and Notes.
In addition, a recession, further market correction or depression resulting from a future global public health threat could materially adversely affect our business and the value of our common stock and Notes.
Ongoing and future effects of the COVID-19 pandemic (or any future pandemic or other global public health threat) on all aspects of our business and operations and the duration of such effects are highly uncertain and difficult to predict.
Additionally, effects of any pandemic or other global public health threat on all aspects of our business and operations and the duration of such effects are highly uncertain and difficult to predict.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeProperties The following table contains information about our significant owned and leased properties as of December 31, 2022: Location Approximate Square Feet Use Lease Expiration Date San Rafael facility, San Rafael, California 407,300 Corporate headquarters, laboratory and office Owned property Several facilities in Novato, California 293,300 Clinical and commercial manufacturing, laboratory and office Owned property Several leased facilities in Novato, California 164,000 Office and warehouse 2023 Shanbally facility, Cork, Ireland 260,700 Manufacturing, laboratory and office Owned property We expect that these properties, together with our other smaller leased office facilities in various countries, will be adequate for our operations for the foreseeable future.
Biggest changeProperties The following table contains information about our significant owned and leased properties as of December 31, 2023: Location Approximate Square Feet Use Lease Expiration Date San Rafael facility, San Rafael, California 407,300 Corporate headquarters, laboratory and office Owned property Several facilities in Novato, California 293,300 Clinical and commercial manufacturing, laboratory and office Owned property Several leased facilities in Novato, California 158,600 Office and warehouse 2027 Shanbally facility, Cork, Ireland 260,700 Manufacturing, laboratory and office Owned property We expect that these properties, together with our other smaller leased office facilities in various countries, will be adequate for our operations for the foreseeable future.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeOn January 19, 2023, certain of our officers and directors were named as defendants in a shareholder derivative action filed in the Delaware Court of Chancery. The complaint asserts, inter alia, breach of fiduciary duty claims arising from the facts underlying the securities class action related to ROCTAVIAN.
Biggest changeOn February 15, 2024, the United States Court of Appeals for the Ninth Circuit affirmed the district court's dismissal. On January 19, 2023 and May 30, 2023, certain of our officers and directors were named as defendants in two shareholder derivative actions filed in the Delaware Court of Chancery.
The Court appointed lead plaintiffs and lead counsel on January 10, 2022. Lead plaintiffs filed an amended complaint on March 25, 2022. We filed a motion to dismiss the amended complaint on May 25, 2022. On January 19, 2023, the Court granted our motion to dismiss the complaint without prejud ice.
The Court appointed lead plaintiffs and lead counsel on January 10, 2022. Lead plaintiffs filed an amended complaint on March 25, 2022. We filed a motion to dismiss the amended complaint on May 25, 2022. On January 19, 2023, the Court granted our motion to dismiss the complaint without prejudice.
The complaint seeks unspecified monetary damages, internal governance reforms by the Company, attorneys fees and costs, and any other relief the court may deem just and proper.
The complaints assert, inter alia, breach of fiduciary duty claims arising from the facts underlying the securities class action related to ROCTAVIAN. The complaints seek unspecified monetary damages, internal governance reforms by the Company, attorneys fees and costs, and any other relief the court may deem just and proper.
On February 21, 2023, the court dismissed the complaint with prejudice at plaintiffs’ request. Plaintiffs filed a notice indicating that they plan to appeal the court’s January 19, 2023 order. We believe that the claims have no merit and we intend to vigorously defend this action.
On February 21, 2023, the court dismissed the complaint with prejudice at plaintiffs’ request. Plaintiffs appealed the court’s January 19, 2023 order to the United State Court of Appeals for the Ninth Circuit and filed their opening brief on June 23, 2023. We filed our answering brief on August 23, 2023. Plaintiffs filed their reply brief on October 13, 2023.
Removed
Trial is scheduled to begin on May 20, 2024. We believe that the claims have no merit and we intend to vigorously defend this action.
Added
On March 21, 2023, the Court entered an order staying all proceedings and vacating all deadlines because the parties 54 agreed to settle the case through a binding term sheet. The Court preliminarily approved the settlement on June 8, 2023. On November 14, 2023, the court granted final approval of the settlement and entered final judgment.
Removed
W e believe that the claims have no merit and we intend to vigorously defend this action. 55 On February 23, 2023, purported shareholders filed a lawsuit against us, our Chief Executive Officer, and our President of Worldwide Research and Development in the United States District Court in the Northern District of California, alleging violations under Sections 10(b) and 20(a) of the Exchange Act and a common law fraud claim.
Added
The parties in the derivative lawsuits have entered into a stipulation of settlement, that, subject to final approval by the Court of Chancery, will resolve the derivative lawsuits. Item 4. Mine Safety Disclosures Not applicable. 55 Table of Contents Part II
Removed
The complaint is similar to the ROCTAVIAN putative class action and largely premised on the same underlying facts. The complaint seeks an unspecified amount of compensatory damages, punitive damages, prejudgment and post-judgment interest, attorneys’ fees and other costs, and any further relief the court may deem just and proper.
Removed
We believe that the claims have no merit and we intend to vigorously defend this action. Item 4. Mine Safety Disclosures Not applicable. 56 Table of Contents Part II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe comparisons shown in the graph are based upon historical data and we caution that the stock price performance shown in the graph is not indicative of, nor intended to forecast, the potential future performance of our stock. * $100 invested on December 31, 2017 in stock or index, including reinvestment of dividends 2017 2018 2019 2020 2021 2022 BioMarin Pharmaceutical Inc. $ 100.00 $ 95.49 $ 94.82 $ 98.34 $ 99.08 $ 116.06 Nasdaq Composite Index $ 100.00 $ 97.16 $ 132.81 $ 192.47 $ 235.15 $ 158.65 Nasdaq Biotechnology $ 100.00 $ 91.14 $ 114.02 $ 144.15 $ 144.18 $ 129.59 SPDR S&P Biotech ETF $ 100.00 $ 84.72 $ 112.31 $ 166.59 $ 132.53 $ 98.25 Item 6. [Reserved] 58
Biggest changeThe comparisons shown in the graph are based upon historical data and we caution that the stock price performance shown in the graph is not indicative of, nor intended to forecast, the potential future performance of our stock. * $100 invested on December 31, 2018 in stock or index, including reinvestment of dividends 2018 2019 2020 2021 2022 2023 BioMarin Pharmaceutical Inc. $ 100.00 $ 99.30 $ 102.98 $ 103.76 $ 121.54 $ 113.24 Nasdaq Composite Index $ 100.00 $ 136.69 $ 198.10 $ 242.03 $ 163.28 $ 236.17 Nasdaq Biotechnology $ 100.00 $ 125.11 $ 158.17 $ 158.20 $ 142.19 $ 148.72 SPDR S&P Biotech ETF $ 100.00 $ 132.56 $ 196.63 $ 156.42 $ 115.96 $ 124.77 Item 6. [Reserved] 57
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is listed under the symbol “BMRN” on the Nasdaq Global Select Market. We have never paid any cash dividends on our common stock and we do not anticipate paying cash dividends in the foreseeable future.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is listed under the symbol “BMRN” on the Nasdaq Global Select Market. We have never paid any cash dividends on our common stock and we do not anticipate paying cash dividends in the foreseeable future. Recent Sales of Unregistered Securities None.
Holders As of February 16, 2023, there were 35 holders of record of 186,528,784 outstanding shares of our common stock. 57 Table of Contents Performance Graph The following is not deemed “filed” with the Securities and Exchange Commission and is not to be incorporated by reference into any filing we make under the Securities Act of 1933, as amended, whether made before or after the date hereof and irrespective of any general incorporation by reference language in such filing.
Holders As of February 16, 2024, there were 34 holders of record of 188,675,622 outstanding shares of our common stock. 56 Table of Contents Performance Graph The following is not deemed “filed” with the Securities and Exchange Commission and is not to be incorporated by reference into any filing we make under the Securities Act of 1933, as amended, whether made before or after the date hereof and irrespective of any general incorporation by reference language in such filing.
Removed
Recent Sales of Unregistered Securities We did not sell any unregistered securities during the year ended December 31, 2022. Issuer Purchases of Equity Securities None.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeDollars, except as otherwise disclosed) Results of Operations Net Product Revenues Net Product Revenues consisted of the following: Years Ended December 31, 2022 2021 2020 2022 vs. 2021 2021 vs. 2020 Net product revenues by product: VIMIZIM $ 663.8 $ 623.1 $ 544.4 $ 40.7 $ 78.7 NAGLAZYME 443.8 380.4 391.3 63.4 (10.9) PALYNZIQ 255.0 237.5 171.0 17.5 66.5 KUVAN 227.6 285.8 457.7 (58.2) (171.9) VOXZOGO 169.1 5.9 — 163.2 5.9 BRINEURA 154.3 128.0 110.2 26.3 17.8 FIRDAPSE — — 1.2 — (1.2) Total net product revenues marketed by us $ 1,913.6 $ 1,660.7 $ 1,675.8 $ 252.9 $ (15.1) ALDURAZYME net product revenues marketed by Sanofi 128.4 122.8 130.1 5.6 (7.3) Total net product revenues $ 2,042.0 $ 1,783.5 $ 1,805.9 $ 258.5 $ (22.4) The increase in Net Product Revenues in 2022 as compared to 2021 was primarily attributed to the following: • VOXZOGO: ramp up of commercial sales due to new patients initiating therapy globally following regulatory approvals in late 2021 and 2022; • NAGLAZYME and VIMIZIM: new patients initiating therapy and the timing of orders in countries that place large government orders, particularly in Latin America, the Middle East and Europe; and • BRINEURA: higher sales primarily due to new patients initiating therapy globally; partially offset by • KUVAN: lower sales primarily attributed to increasing generic competition over time as a result of the loss of exclusivity in the U.S. that occurred in October 2020.
Biggest changeDollars, except as otherwise disclosed) Results of Operations Net Product Revenues Net Product Revenues consisted of the following: Twelve Months Ended December 31, 2023 2022 2021 2023 vs. 2022 2022 vs. 2021 Enzyme products: VIMIZIM $ 701.0 $ 663.8 $ 623.1 $ 37.2 $ 40.7 NAGLAZYME 420.3 443.8 380.4 (23.5) 63.4 PALYNZIQ 303.9 255.0 237.5 48.9 17.5 BRINEURA 161.9 154.3 128.0 7.6 26.3 ALDURAZYME 131.2 128.4 122.8 2.8 5.6 Total enzyme product revenues $ 1,718.3 $ 1,645.3 $ 1,491.8 $ 73.0 $ 153.5 Other products: VOXZOGO 469.9 169.1 5.9 300.8 163.2 KUVAN 180.8 227.6 285.8 (46.8) (58.2) ROCTAVIAN 3.5 — — 3.5 — Total net product revenues $ 2,372.5 $ 2,042.0 $ 1,783.5 $ 330.5 $ 258.5 The increase in Net Product Revenues in 2023 as compared to 2022 was primarily attributed to the following: • VOXZOGO: higher sales volume due to new patients initiating therapy across all regions; • PALYNZIQ: higher sales volume from new patients initiating therapy, particularly in the U.S.; and • VIMIZIM: higher sales volume primarily due to new patients initiating therapy, particularly in the U.S. and Europe, timing of orders in countries that place large government orders, particularly in the Middle East and Latin America; partially offset by • KUVAN: lower sales primarily attributed to increasing generic competition as a result of the loss of exclusivity in the U.S. that occurred in October 2020 and • NAGLAZYME: lower sales volume primarily due to timing of orders in countries that place large government orders, particularly in the Middle East.
We evaluate our customer mix to estimate which sales will be subject to these revenue dilutive items and consider changes to government program guidelines or contractual obligations that would impact the actual rebates and/or our estimates of which sales qualify for such rebates. Any necessary adjustments to our reserves are made each quarter to reflect current information.
We evaluate our customer and payer mix to estimate which sales will be subject to these revenue dilutive items and consider changes to government program guidelines or contractual obligations that would impact the actual rebates and/or our estimates of which sales qualify for such rebates. Any necessary adjustments to our reserves are made each quarter to reflect current information.
We continuously evaluate the recoverability of costs associated with pre-launch or pre-qualification manufacturing activities, and capitalize the costs incurred related to those activities if we determine that recoverability is highly likely and therefore future revenues are expected.
We continuously evaluate the recoverability of costs associated with pre-launch or pre-qualification manufacturing activities, if any, and capitalize the costs incurred related to those activities if we determine that recoverability is highly likely and therefore future revenues are expected.
We believe that the combination of our internal research programs, acquisitions and partnerships will allow us to continue to develop and commercialize innovative therapies for people with serious and life-threatening rare diseases and medical conditions.
We believe that the combination of our internal research programs and partnerships will allow us to continue to develop and commercialize innovative therapies for people with serious and life-threatening rare diseases and medical conditions.
Estimation requires evaluation of our actual historical experience, customer mix, current contractual and statutory obligations, patient outcomes, specific known market events and trends and industry data.
Estimation requires evaluation of our actual historical experience, customer and payer mix, current contractual and statutory obligations, patient outcomes, specific known market events and trends and industry data.
See the risk factor, “Our business is affected by macroeconomic conditions.” described in “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K. Business Developments We continued to grow our commercial business and advance our product candidate pipeline during 2022.
See the risk factor, “Our business is affected by macroeconomic conditions.” described in “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K. Business Developments We continued to grow our commercial business and advance our product candidate pipeline during 2023.
We believe we will meet longer-term expected future cash requirements and obligations through a combination of cash flows from operating activities, available cash and investments balances and available revolving loan balances. We will need to raise additional funds from equity or debt securities, loans or collaborative agreements if we are unable to satisfy our liquidity requirements.
We believe we will meet longer-term expected future cash requirements and obligations through a combination of cash flows from operating activities and available cash and investments balances. We will need to raise additional funds from equity or debt securities, loans or collaborative agreements if we are unable to satisfy our liquidity requirements.
We believe the critical accounting policies below reflect the most critical judgments and estimates used in the preparation of our Consolidated Financial Statements.
We believe the critical accounting estimates below reflect the most critical judgments and estimates used in the preparation of our Consolidated Financial Statements.
As of December 31, 2022, our indebtedness consisted of our 1.250% senior subordinated convertible notes due in 2027 (the 2027 Notes) and our 0.599% senior subordinated convertible notes due in 2024 (the 2024 Notes and together with the 2027 Notes, the Notes), which, if not converted, will be required to be repaid in cash at maturity in May 2027 and August 2024, respectively.
As of December 31, 2023, our indebtedness consisted of our 1.250% senior subordinated convertible notes due in 2027 (the 2027 Notes) and our 0.599% senior subordinated convertible notes due in 2024 (the 2024 Notes and together with the 2027 Notes, the Notes), which, if not converted, will be required to be repaid in cash at maturity in May 2027 and August 2024, respectively.
Financing and Credit Facilities Our $1.1 billion (undiscounted) of total convertible debt as of December 31, 2022 will impact our liquidity due to the semi-annual cash interest payments as well as the repayment of the principal amount, if not converted.
Financing and Credit Facilities Our $1.1 billion (undiscounted) of total convertible debt as of December 31, 2023 will impact our liquidity due to the semi-annual cash interest payments as well as the repayment of the principal amount, if not converted.
Our Provision for (Benefit from) Income Taxes in 2022 and 2021 consisted of state, federal and foreign current tax expense which was offset by tax benefits related to stock option exercises, foreign tax credits, and deferred tax benefits from federal orphan drug credits and federal R&D credits. See Note 15 to our accompanying Consolidated Financial Statements for additional information.
Our Provision for income taxes in 2023 and 2022 consisted of state, federal and foreign current tax expense which was offset by tax benefits related to stock option exercises, foreign tax credits, and deferred tax benefits from federal orphan drug credits and federal R&D credits. See Note 15 to our accompanying Consolidated Financial Statements for additional information.
GAAP and pursuant to the rules and regulations promulgated by the Securities and Exchange Commission (the SEC), we make assumptions, judgments and estimates that can have a significant impact on our net income/loss and affect the reported amounts of certain assets, liabilities, revenue and expenses, and related disclosures.
GAAP and pursuant to the rules and regulations promulgated by the SEC, we make assumptions, judgments and estimates that can have a significant impact on our net income/loss and affect the reported amounts of certain assets, liabilities, revenue and expenses, and related disclosures.
Uncertainty Relating to Macroeconomic Environment Conditions in the current macroeconomic environment, such as inflation, changes in interest and foreign currency exchange rates, natural disasters, the continuing effects of the COVID-19 pandemic, and supply chain disruptions, could impact our global revenue sources and our overall business operations. The extent and duration of such effects remain uncertain and difficult to predict.
Uncertainty Relating to Macroeconomic Environment Conditions in the current macroeconomic environment, such as inflation, changes in interest and foreign currency exchange rates, natural disasters, and supply chain disruptions, could impact our global revenue sources and our overall business operations. The extent and duration of such effects remain uncertain and difficult to predict.
Intangible Asset Amortization and Contingent Consideration and Gain on Sale of Nonfinancial Assets Changes during the periods presented for Intangible Asset Amortization and Contingent Consideration and Gain on Sale of Nonfinancial Assets were as follows: Years Ended December 31, 2022 2021 2020 2022 vs. 2021 2021 vs. 2020 Amortization of intangible assets $ 62.8 $ 61.9 $ 62.2 $ 0.9 $ (0.3) Changes in the fair value of contingent consideration 4.4 8.0 4.5 (3.6) 3.5 Total intangible asset amortization and contingent consideration $ 67.2 $ 69.9 $ 66.7 $ (2.7) $ 3.2 Gain on sale of nonfinancial assets $ 108.0 $ — $ 52.8 $ 108.0 $ (52.8) Amortization of intangible assets : the expense in 2022 as compared to 2021 was relatively flat.
Intangible Asset Amortization and Contingent Consideration and Gain on Sale of Nonfinancial Assets Changes during the periods presented for Intangible Asset Amortization and Contingent Consideration and Gain on Sale of Nonfinancial Assets were as follows: Twelve Months Ended December 31, 2023 2023 2022 2021 2023 vs. 2022 2022 vs. 2021 Amortization of intangible assets $ 62.2 $ 62.8 $ 61.9 $ (0.6) $ 0.9 Changes in the fair value of contingent consideration — 4.4 8.0 (4.4) (3.6) Total intangible asset amortization and contingent consideration $ 62.2 $ 67.2 $ 69.9 $ (5.0) $ (2.7) Gain on sale of nonfinancial assets $ — $ 108.0 $ — $ (108.0) $ 108.0 Amortization of intangible assets : the expense in 2023 as compared to 2022 was relatively flat.
Gross-to-Net Sales Adjustments – We record product sales net of estimated mandatory and supplemental discounts to government payers, discounts to private payers and other related charges. Rebates, cash discounts and distributor fees represent the majority of our gross-to-net deductions and are recorded in the same period the related sales occur.
Dollars, except as otherwise disclosed) Gross-to-Net Sales Adjustments – We record product sales net of estimated mandatory and supplemental discounts to government payers, discounts to private payers and other related charges. Rebates, cash discounts and distributor fees represent the majority of our gross-to-net deductions and are recorded in the same period the related sales occur.
We are mindful that conditions in the current macroeconomic environment, such as inflation, changes in interest and foreign currency exchange rates, natural disasters, the continuing effects of the COVID-19 pandemic, and supply chain disruptions, could affect our ability to achieve our goals. In addition, we sell our products in certain countries that face economic volatility and weakness.
We are mindful that conditions in the current macroeconomic environment, such as inflation, changes in interest and foreign currency exchange rates, natural disasters, and supply chain disruptions, could affect our ability to achieve our goals. In addition, we sell our products in certain countries that face economic volatility and weakness.
We face exposure to movements in foreign currency exchange rates, primarily the Euro, which we expect to continue in future periods. We use foreign currency exchange forward contracts to hedge a percentage of our foreign currency exposure.
Dollars, except as otherwise disclosed) We face exposure to movements in foreign currency exchange rates, which we expect to continue in future periods. We use foreign currency exchange forward contracts to hedge a percentage of our foreign currency exposure, primarily the Euro.
We expect Interest Income to be higher over the next 12 months due to anticipated higher interest rates and yields on our cash equivalents and investments. Interest Expense We incur interest expense primarily on our convertible debt.
We do not expect Interest Income to fluctuate significantly over the next 12 months due to anticipated interest rates and yields on our cash equivalents and investments. Interest Expense We incur interest expense primarily on our convertible debt.
Dollars, except as otherwise disclosed) Financial Condition, Liquidity and Capital Resources Our cash, cash equivalents, and investments were as follows: December 31, 2022 December 31, 2021 Change Cash and cash equivalents $ 724.5 $ 587.3 $ 137.2 Short-term investments 567.0 426.6 140.4 Long-term investments 333.9 507.8 (173.9) Total cash, cash equivalents and investments $ 1,625.4 $ 1,521.7 $ 103.7 We believe our cash generated from sales of our commercial products, in addition to our cash, cash equivalents and investments, will be sufficient to satisfy our liquidity requirements for at least the next 12 months.
Dollars, except as otherwise disclosed) Financial Condition, Liquidity and Capital Resources Our cash, cash equivalents, and investments were as follows: December 31, 2023 December 31, 2022 Change Cash and cash equivalents $ 755.1 $ 724.5 $ 30.6 Short-term investments 318.7 567.0 (248.3) Long-term investments 611.1 333.9 277.2 Total cash, cash equivalents and investments $ 1,684.9 $ 1,625.4 $ 59.5 We believe our cash generated from sales of our commercial products, in addition to our cash, cash equivalents and investments, will be sufficient to satisfy our liquidity requirements for at least the next 12 months.
See the risk factor “The sale of generic versions of KUVAN by generic manufacturers has adversely affected and will continue to adversely affect our revenues and may cause a decline in KUVAN revenues faster than expected” in “Risk Factors” included in Part I, Item 1A of this Annual Report for additional information on risks we face.
See also the risk factor “The sale of generic versions of KUVAN by generic manufacturers has adversely affected and will continue to adversely affect our revenues and may cause a decline in KUVAN revenues faster than expected” in “Risk Factors” included in Part I, Item 1A of this Annual Report for additional information on risks we face. 60 Table of Contents Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued) (In millions of U.S.
Results of Operations 2021 Compared to 2020 For a discussion of our results of operations pertaining to 2021 as compared to 2020 see Item 7 , "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2021. 68 Table of Contents Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued) (In millions of U.S.
Results of Operations 2022 Compared to 2021 For a discussion of our results of operations pertaining to 2022 as compared to 2021 see Item 7 , "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2022 (filed with the Securities and Exchange Commission (SEC) on February 27, 2023). 65 Table of Contents Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued) (In millions of U.S.
Interest Expense for the periods presented was as follows: Years Ended December 31, 2022 2021 2020 2022 vs. 2021 2021 vs. 2020 Interest expense $ 16.0 $ 15.3 $ 29.3 $ 0.7 $ (14.0) Interest Expense in 2022 was relatively flat compared to 2021.
Interest Expense for the periods presented was as follows: Twelve Months Ended December 31, 2023 2022 2021 2023 vs. 2022 2022 vs. 2021 Interest expense $ 17.3 $ 16.0 $ 15.3 $ 1.3 $ 0.7 Interest Expense in 2023 as compared to 2022 was relatively flat.
The following table summarizes our Cost of Sales and gross margin : Years Ended December 31, 2022 2021 2020 2022 vs. 2021 2021 vs. 2020 Total revenues $ 2,096.0 $ 1,846.3 $ 1,860.5 $ 249.7 $ (14.2) Cost of sales $ 483.7 $ 470.5 $ 524.3 $ 13.2 $ (53.8) Gross margin 76.9 % 74.5 % 71.8 % 2.4 % 2.7 % Cost of Sales increased for 2022 compared to 2021 primarily due to increased sales volumes.
The following table summarizes our Cost of Sales and gross margin : Twelve Months Ended December 31, 2023 2022 2021 2023 vs. 2022 2022 vs. 2021 Total revenues $ 2,419.2 $ 2,096.0 $ 1,846.3 $ 323.2 $ 249.7 Cost of sales $ 514.9 $ 483.7 $ 470.5 $ 31.2 $ 13.2 Gross margin 78.7 % 76.9 % 74.5 % 1.8 % 2.4 % Cost of Sales increased for 2023 compared to 2022 primarily due to higher sales volumes as noted above.
Recent Accounting Pronouncements See Note 1 to our accompanying Consolidated Financial Statements for a full description of recent accounting pronouncements and our expectation of their impact, if any, on our results of operations and financial condition. 63 Table of Contents Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued) (In millions of U.S.
Recent Accounting Pronouncements See Note 1 to our accompanying Consolidated Financial Statements for a full description of recent accounting pronouncements and our expectation of their impact on our results of operations and financial condition. 68 69 Table of Contents
Unrecognized Tax Benefits As of December 31, 2022, our liability for unrecognized tax benefits was $232.9 million. Due to their nature, we cannot reasonably estimate the timing of future payments. See Note 15 to our accompanying Consolidated Financial Statements for a full discussion on our income taxes. 70 Table of Contents
Unrecognized Tax Benefits As of December 31, 2023, our liability for unrecognized tax benefits was $277.5 million. Due to their nature, we cannot reasonably estimate the timing of future payments. See Note 15 to our accompanying Consolidated Financial Statements for a full discussion on our income taxes. Critical Accounting Estimates In preparing our Consolidated Financial Statements in accordance with U.S.
Interest Income We invest our cash equivalents and investments in U.S. government securities and other high credit quality debt securities in order to limit default and market risk. 67 Table of Contents Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued) (In millions of U.S.
Interest Income We invest our cash equivalents and investments in U.S. government securities and other high credit quality debt securities in order to limit default and market risk.
The net deferred tax assets primarily represent the tax benefit of tax credits and timing differences between book and tax recognition of certain revenue and expense items, net of a valuation allowance.
Our Consolidated Balance Sheets reflect net deferred tax assets and liabilities, which are measured using enacted tax rates. The net deferred tax assets primarily represent the tax benefit of tax credits and timing differences between book and tax recognition of certain revenue and expense items, net of a valuation allowance.
Changes in the fair value of contingent consideration : the 2022 decrease in expense as compared to 2021 was attributable to the attainment of milestones during the year equal to €45.0 million.
Changes in the fair value of contingent consideration : the 2023 decrease in expense as compared to 2022 was attributable to the attainment of final commercial milestones in 2022.
A summary of our commercial products, as of December 31, 2022, is provided below: Commercial Products Indication Products marketed by BioMarin: VIMIZIM (elosulfase alpha) MPS (1) IVA NAGLAZYME (galsulfase) MPS VI PALYNZIQ (pegvaliase-pqpz) (2) PKU KUVAN (sapropterin dihydrochloride) PKU VOXZOGO (vosoritide) Achondroplasia (3) BRINEURA (cerliponase alfa) CLN2 (4) ROCTAVIAN (valoctocogene roxaparvovec) Severe Hemophilia A (5) Products not marketed by BioMarin: ALDURAZYME (laronidase) MPS I (1) Mucopolysaccharidosis (2) For the treatment of adult patients with phenylketonuria (PKU) (3) For the treatment of achondroplasia in children aged five years and older for the U.S., aged two years and older for the European Union (EU) and for various age ranges for other markets (4) For the treatment of neuronal ceroid lipofuscinosis type 2 (5) ROCTAVIAN (formerly known as valoctocogene roxaparvovec) for the treatment of adults with severe hemophilia A was conditionally approved by the European Commission (EC) in August 2022 59 Table of Contents Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued) (In millions of U.S.
A summary of our commercial products, as of December 31, 2023, is provided below: Commercial Products Indication Enzyme products: VIMIZIM (elosulfase alpha) Mucopolysaccharidosis (MPS) IVA NAGLAZYME (galsulfase) MPS VI PALYNZIQ (pegvaliase-pqpz) Phenylketonuria (PKU) BRINEURA (cerliponase alfa) Neuronal ceroid lipofuscinosis type 2 (CLN2) ALDURAZYME (laronidase) MPS I Other products: VOXZOGO (vosoritide) Achondroplasia KUVAN (sapropterin dihydrochloride) PKU ROCTAVIAN (valoctocogene roxaparvovec) Severe Hemophilia A 58 Table of Contents Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued) (In millions of U.S.
The decrease in net cash used in investing activities in 2022 compared to 2021 was primarily attributable to lower net purchases of investments and the $110.0 million gross proceeds from the sale of PRV in the first quarter of 2022.
The increase in net cash used in investing activities in 2023 compared to 2022 was primarily attributable to the absence of $110.0 million gross proceeds from the sale of PRV in 2022, partially offset by a decrease in purchases of fixed assets.
Food and Drug Administration 2022 Financial Highlights Key components of our results of operations include the following: Years Ended December 31, 2022 2021 2020 (1) Total revenues $ 2,096.0 $ 1,846.3 $ 1,860.5 Cost of sales $ 483.7 $ 470.5 $ 524.3 Research and development (R&D) expense $ 649.6 $ 628.8 $ 628.1 Selling, general and administrative (SG&A) expense $ 854.0 $ 759.4 $ 737.7 Gain on sale of nonfinancial assets, net $ (108.0) $ — $ (52.8) Provision for (benefit from) income taxes $ 8.0 $ (11.3) $ (903.0) Net income (loss) $ 141.6 $ (64.1) $ 854.0 (1) Certain December 31, 2020 amounts have been corrected for an immaterial error identified in the third quarter of 2022.
Dollars, except as otherwise disclosed) 2023 Financial Highlights Key components of our results of operations include the following: Twelve Months Ended December 31, 2023 2022 2021 Total revenues $ 2,419.2 $ 2,096.0 $ 1,846.3 Cost of sales $ 514.9 $ 483.7 $ 470.5 Research and development (R&D) expense $ 746.8 $ 649.6 $ 628.8 Selling, general and administrative (SG&A) expense $ 937.3 $ 854.0 $ 759.4 Gain on sale of nonfinancial assets, net $ — $ 108.0 $ — Provision for (benefit from) income taxes $ 20.9 $ 8.0 $ (11.3) Net income (loss) $ 167.6 $ 141.6 $ (64.1) See “Results of Operations” below for discussion of our results for the periods presented.
Our cash flows for each of the years ended December 31, 2022 and 2021 were as follows: 2022 2021 2022 vs. 2021 Net cash provided by operating activities $ 175.9 $ 304.5 $ (128.6) Net cash used in investing activities $ (20.0) $ (366.3) $ 346.3 Net cash used in financing activities $ (18.7) $ — $ (18.7) The decrease in net cash provided by operating activities in 2022 compared to 2021 was primarily attributed to the timing of cash receipts from our customers and the absence of a tax refund received in 2021.
Our cash flows for each of the years ended December 31, 2023 and 2022 were as follows: 2023 2022 2023 vs. 2022 Net cash provided by operating activities $ 159.3 $ 175.9 $ (16.6) Net cash used in investing activities $ (111.2) $ (20.0) $ (91.2) Net cash used in financing activities $ (18.7) $ (18.7) $ — The decrease in net cash provided by operating activities in 2023 compared to 2022 was primarily attributed to the timing of cash receipts from our customers and increased payments for inventory purchases, income taxes and increased payments related to implementation of our ERP system, partially offset by timing of cash payments to other vendors.
In October 2018, we entered into an unsecured revolving credit facility of up to $200.0 million that included a letter of credit subfacility and a swingline loan subfacility.
Dollars, except as otherwise disclosed) In October 2018, we entered into an unsecured revolving credit facility of up to $200.0 million that included a letter of credit subfacility and a swingline loan subfacility. The credit facility was intended to finance ongoing working capital needs and for other general corporate purposes.
We expect SG&A expense to increase in future periods as we prepare to launch new products and support the expansion of our global brands.
Dollars, except as otherwise disclosed) We expect SG&A expense to increase in future periods as a result of the continued market expansion of our commercial products and support of our global business as it grows.
Our purchase obligations are primarily related to firm purchase commitments entered into in the normal course of business to procure active pharmaceutical ingredients, certain inventory-related items, certain third-party R&D services, production services and facility construction services. As of December 31, 2022, we had lease payment obligations of $42.3 million, of which $12.0 million is payable within the next 12 months.
Our purchase obligations are primarily related to firm purchase commitments entered into in the normal course of business to procure active pharmaceutical ingredients, certain inventory-related items, certain third-party R&D services, production services and facility construction services. The amount also includes hosting fees and other ERP system implementation costs for which we are committed.
Years Ended December 31, 2022 2021 2020 2022 vs. 2021 2021 vs. 2020 Royalty and other revenues $ 54.0 $ 62.8 $ 54.6 $ (8.8) $ 8.2 The decrease in Royalty and Other Revenues in 2022 as compared to 2021 was primarily due to the absence of license revenues earned from a third party due to their achievement of a regulatory milestone in the first quarter of 2021.
Twelve Months Ended December 31, 2023 2022 2021 2023 vs. 2022 2022 vs. 2021 Royalty and other revenues $ 46.7 $ 54.0 $ 62.8 $ (7.3) $ (8.8) The decrease in Royalty and Other Revenues in 2023 as compared to 2022 was primarily due to lower royalty revenues earned from third parties.
The increase in net cash used by financing activities in 2022 compared to 2021 was primarily attributed to payments to a third party related to PKU sales milestones that were achieved in 2022, partially offset by higher exercises of awards under our equity incentive plans.
Net cash used by financing activities in 2023 compared to 2022 was flat but was driven by higher taxes paid for net settlement of shares under our equity incentive plans offset by a decrease in milestone payments to a third party that had been contingent upon PKU sales milestones achieved in 2022.
These costs include production materials, production costs at our manufacturing facilities, third-party manufacturing costs, amortization of technology transfer intangible assets and internal and external final formulation and packaging costs. Cost of Sales also includes royalties payable to third parties based on sales of our products and charges for inventory valuation reserves.
Cost of Sales also includes royalties payable to third parties based on sales of our products and charges for inventory valuation reserves.
Gross margin for 2022 increased compared to 2021 primarily due to lower per unit manufacturing costs, lower inventory reserves and higher sales volume of products with higher margins. We expect gross margin to range between 77.5% and 79% over the next twelve months.
Gross margin for 2023 increased compared to 2022 primarily due to higher sales volume of products with higher margins, predominately related to VOXZOGO, and lower per unit manufacturing costs for our enzyme products.
We expect R&D expense to increase in future periods compared to 2022, primarily due to higher spend on early research and clinical programs. Selling, General and Administrative Sales and marketing (S&M) expense primarily consisted of employee-related expenses for our sales group, brand marketing, patient support groups and pre-commercialization expenses related to our product candidates.
Selling, General and Administrative Sales and marketing (S&M) expense primarily consists of employee-related expenses for our sales group, brand marketing, patient support groups and pre-commercialization expenses related to our product candidates. General and administrative (G&A) expense primarily consists of corporate support and other administrative expenses, including employee-related expenses.
If the related product candidate's marketing application is rejected by the applicable regulators and the likelihood of future revenues for a product candidate become uncertain, the related manufacturing costs are expensed as R&D expenses. We did not have any pre-launch or pre-qualification manufacturing activities capitalized in inventory as of December 31, 2022 and 2021.
If the related product candidate's marketing application is rejected by the applicable regulators and the likelihood of future revenues for a product candidate become uncertain, the related manufacturing costs are expensed as R&D expenses. 62 Table of Contents Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued) (In millions of U.S.
Dollars, except as otherwise disclosed) S&M expenses by product were as follows: Years Ended December 31, 2022 2021 2020 2022 vs. 2021 2021 vs. 2020 PKU Products (Kuvan and Palynziq) $ 122.7 $ 124.6 $ 127.5 $ (1.9) $ (2.9) MPS Products (Aldurazyme, Naglazyme and Vimizim) 104.3 102.9 108.1 1.4 (5.2) VOXZOGO 102.3 75.1 34.5 27.2 40.6 ROCTAVIAN 73.6 54.0 87.3 19.6 (33.3) BRINEURA 31.4 36.2 37.8 (4.8) (1.6) Other 16.0 12.3 8.2 3.7 4.1 Total S&M expense $ 450.3 $ 405.1 $ 403.4 $ 45.2 $ 1.7 The increase in S&M expense for 2022 compared to 2021 was primarily a result of increased activities in 2022 in support of the VOXZOGO commercial launch following EU and U.S. regulatory approvals in the latter half of 2021 and an increase in ROCTAVIAN commercial launch preparation activities in connection with its conditional approval in the EU in August 2022.
SG&A expenses consisted of the following: Twelve Months Ended December 31, 2023 2022 2021 2023 vs. 2022 2022 vs. 2021 S&M expense $ 488.4 $ 450.3 $ 405.1 $ 38.1 $ 45.2 G&A expense 448.9 403.7 354.3 45.2 49.4 Total SG&A expense $ 937.3 $ 854.0 $ 759.4 $ 83.3 $ 94.6 S&M expenses by product were as follows: Twelve Months Ended December 31, 2023 2022 2021 2023 vs. 2022 2022 vs. 2021 Enzyme Products $ 225.3 $ 225.7 $ 222.1 $ (0.4) $ 3.6 VOXZOGO 108.9 102.3 75.1 6.6 27.2 ROCTAVIAN 104.5 73.6 54.0 30.9 19.6 Other 49.7 48.7 53.9 1.0 (5.2) Total S&M expense $ 488.4 $ 450.3 $ 405.1 $ 38.1 $ 45.2 The increase in S&M expense for 2023 compared to 2022 was primarily a result of increased activities in support of the European and U.S. commercial launch of ROCTAVIAN.
Differences between the estimated variable consideration to be received from Sanofi and actual payments received are not expected to be material. If actual results vary from our estimates, we will make adjustments, which would affect Net Product Revenues and earnings in the period such variances become known.
If actual results vary from our estimates, we will make adjustments, which would affect Net Product Revenues and earnings in the period such variances become known. 67 Table of Contents Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued) (In millions of U.S.
The following table summarizes the consolidated activities and ending balances of all our gross-to-net sales adjustments: Balance at Beginning of Year Provision for Current Period Sales Payments Balance at End of Year Year ended December 31, 2022 $ 85.6 $ 282.5 $ (253.1) $ 115.0 Year ended December 31, 2021 $ 104.4 $ 252.9 $ (271.7) $ 85.6 Year ended December 31, 2020 $ 114.4 $ 239.9 $ (249.9) $ 104.4 Inventory Produced Prior to Regulatory Approval When future commercialization for a product candidate is considered probable and management believes that material uncertainties related to the ultimate regulatory approval have been significantly reduced and we expect to realize economic benefit in the future, we capitalize pre-launch or pre-qualification manufacturing costs prior to regulatory approval.
The following table summarizes the consolidated activities and ending balances of all our gross-to-net sales adjustments: Balance at Beginning of Year Provision for Current Period Sales Payments Balance at End of Year Year ended December 31, 2023 $ 115.0 $ 370.7 $ (333.6) $ 152.1 Year ended December 31, 2022 $ 85.6 $ 282.5 $ (253.1) $ 115.0 Year ended December 31, 2021 $ 104.4 $ 252.9 $ (271.7) $ 85.6 Income Taxes We calculate and provide for income taxes in each of the tax jurisdictions in which we operate.
Other Income (Expense), Net Other Income (Expense), Net for the periods presented was as follows: Years Ended December 31, 2022 2021 2020 2022 vs. 2021 2021 vs. 2020 Other Income (Expense), net $ (2.1) $ 11.8 $ 7.1 $ (13.9) $ 4.7 The decrease in Other Income (Expense), Net in 2022 compared to 2021 was primarily due to the absence of insurance proceeds received in 2021 that were in excess of direct costs incurred as well as attributed to the loss on the fair value of assets held in our nonqualified deferred compensation (NQDC) plan.
Dollars, except as otherwise disclosed) Other Income (Expense), Net Other Income (Expense), Net for the periods presented was as follows: Twelve Months Ended December 31, 2023 2022 2021 2023 vs. 2022 2022 vs. 2021 Other income (expense), net $ (10.5) $ (2.1) $ 11.8 $ (8.4) $ (13.9) The change in Other Income (Expense), Net, in 2023 compared to 2022 was primarily due to impairment losses on an equity investment and a convertible note, partially offset by the gain on the fair value of assets held in our nonqualified deferred compensation plan and gains related to refundable tax credits recorded in 2023.
Dollars, except as otherwise disclosed) Years Ended December 31, 2022 2021 2020 2022 vs. 2021 2021 vs. 2020 Interest income $ 18.0 $ 10.5 $ 16.6 $ 7.5 $ (6.1) The increase in Interest Income during 2022 compared to 2021 was primarily due to higher interest rates and total portfolio returns.
Twelve Months Ended December 31, 2023 2022 2021 2023 vs. 2022 2022 vs. 2021 Interest income $ 58.3 $ 18.0 $ 10.5 $ 40.3 $ 7.5 The increase in Interest Income during 2023 compared to 2022 was primarily due to higher money market and available-for-sale debt securities balances and higher yields on our investment portfolio.
Gain on Sale of Nonfinancial Assets : the increase in 2022 as compared to 2021 was due to the sale in the first quarter of 2022 of the Priority Review Voucher (PRV) that we received in connection with the FDA approval of VOXZOGO in 2021. In exchange for the PRV, we received a gross lump sum payment of $110.0 million.
Gain on Sale of Nonfinancial Assets : the decrease in 2023 as compared to 2022 was due to the sale in 2022 of a Priority Review Voucher (PRV) with no similar transaction in 2023.
As of December 31, 2022, we were subject to contingent payments considered reasonably possible of $762.5 million, including $381.5 million and $210.0 million for two early-stage development programs licensed from third parties. See Note 18 to our accompanying Consolidated Financial Statements for additional discussion on our contingent obligations.
Contingent Obligations As of December 31, 2023, we were subject to contingent payments considered reasonably possible of $763.3 million, of this amount we may pay up to $30.1 million in 2024 if certain contingencies are met. See Note 18 to our accompanying Consolidated Financial Statements for additional discussion on our contingent obligations.
See Note 9 to our accompanying Consolidated Financial Statements for details on our lease liabilities. Contingent Obligations As of December 31, 2022, we had $15.9 million of acquisition-related contingent consideration on our Consolidated Balance Sheets related to our achievement of a PKU sales milestone during the fourth quarter of 2022.
As of December 31, 2023, we had lease payment obligations of $58.7 million, of which $11.4 million is payable in 2024. See Note 9 to our accompanying Consolidated Financial Statements for details on our lease liabilities.
Provision for (Benefit from) Income Taxes Provision for (Benefit from) Income Taxes for the periods presented was as follows: Years Ended December 31, 2022 2021 2020 2022 vs. 2021 2021 vs. 2020 Provision for (benefit from) income taxes $ 8.0 $ (11.3) $ (903.0) $ 19.3 $ 891.7 Provision for (Benefit from) Income Taxes in 2022 increased compared to 2021, primarily due to taxes on higher income recognized, which includes income recognized in the first quarter of 2022 from the sale of the PRV.
Provision for (Benefit from) Income Taxes Provision for (Benefit from) Income Taxes for the periods presented was as follows: Twelve Months Ended December 31, 2023 2022 2021 2023 vs. 2022 2022 vs. 2021 Provision for (benefit from) income taxes $ 20.9 $ 8.0 $ (11.3) $ 12.9 $ 19.3 Provision for income taxes in 2023 increased compared to 2022, primarily due to taxes on higher earnings and foreign-source income taxed in the U.S. partially offset by an additional benefit from an increase in R&D credits and the release of a valuation allowance related to future royalty earnings.
We do not expect Interest Expense to fluctuate significantly over the next 12 months as the rates on our convertible debt are fixed. See Note 10 to our accompanying Consolidated Financial Statements for additional information regarding our convertible debt.
We expect Interest Expense to decrease over the next 12 months due to the settlement of our convertible debt that matures in August 2024. See Note 10 to our accompanying Consolidated Financial Statements for additional information regarding our convertible debt. 64 Table of Contents Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued) (In millions of U.S.
The following table shows our Net Product Revenues denominated in USD and foreign currencies: Years Ended December 31, 2022 2021 2020 2022 vs. 2021 2021 vs. 2020 Sales denominated in USD $ 1,008.8 $ 961.1 $ 1,063.2 $ 47.7 $ (102.1) Sales denominated in foreign currencies 1,033.2 822.4 742.7 210.8 79.7 Total net product revenues $ 2,042.0 $ 1,783.5 $ 1,805.9 $ 258.5 $ (22.4) 64 Table of Contents Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued) (In millions of U.S.
The following table shows our Net Product Revenues denominated in USD and foreign currencies: Twelve Months Ended December 31, 2023 2022 2021 2023 vs. 2022 2022 vs. 2021 Sales denominated in USD $ 1,137.8 $ 1,008.8 $ 961.1 $ 129.0 $ 47.7 Sales denominated in foreign currencies 1,234.7 1,033.2 822.4 201.5 210.8 Total net product revenues $ 2,372.5 $ 2,042.0 $ 1,783.5 $ 330.5 $ 258.5 Twelve Months Ended December 31, 2023 2022 2021 2023 vs. 2022 2022 vs. 2021 Favorable (unfavorable) impact of foreign currency exchange rates on product sales denominated in currencies other than USD $ (100.0) $ (59.0) $ 2.3 $ (41.0) $ (61.3) The unfavorable impact of foreign currency exchange rates on USD reported results in 2023 was primarily driven by the Argentine Peso, Euro, Japanese Yen and Russian Ruble.
As of December 31, 2022, there were no outstanding amounts due on nor any usage of the credit facility and we were in compliance with all covenants. See Note 10 to our accompanying Consolidated Financial Statements for additional discussion on our convertible debt and credit facility.
See Note 10 to our accompanying Consolidated Financial Statements for additional discussion on our convertible debt and credit facility. Material Cash Requirements Purchase and Lease Obligations As of December 31, 2023, we had purchase obligations of approximately $354.1 million, of which $325.9 million is expected to be paid in 2024.
The credit facility is intended to finance ongoing working capital needs and for 69 Table of Contents Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued) (In millions of U.S. Dollars, except as otherwise disclosed) other general corporate purposes.
See Note 4 to our accompanying Consolidated Financial Statements for additional details. 63 Table of Contents Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued) (In millions of U.S.
R&D expense consisted of the following: Years Ended December 31, 2022 2021 2020 2022 vs. 2021 2021 vs. 2020 Research and early development $ 264.3 $ 213.8 $ 186.8 $ 50.5 $ 27.0 ROCTAVIAN 119.0 115.1 116.2 3.9 (1.1) Other approved products 115.8 108.5 133.7 7.3 (25.2) VOXZOGO 101.0 129.3 130.8 (28.3) (1.5) BMN 331 29.9 38.0 42.2 (8.1) (4.2) BMN 255 9.0 8.7 8.6 0.3 0.1 Other 10.6 15.4 9.8 (4.8) 5.6 Total R&D expense $ 649.6 $ 628.8 $ 628.1 $ 20.8 $ 0.7 R&D expense increased for 2022 compared to 2021 primarily due to the following: • higher spend in research and early development programs due to increased costs associated with manufacturing clinical product, Investigational New Drug (IND)-enabling studies for planned IND filings and pre-clinical activities; partially offset by • a decrease in VOXZOGO related expenses due to capitalization of manufacturing costs and lower regulatory activity costs following the regulatory approvals in the third and fourth quarters of 2021.
Dollars, except as otherwise disclosed) R&D expense consisted of the following: Twelve Months Ended December 31, 2023 2022 2021 2023 vs. 2022 2022 vs. 2021 Research and early pipeline $ 393.1 $ 313.9 $ 275.9 $ 79.2 $ 38.0 Later-stage clinical programs 62.6 119.0 244.4 (56.4) (125.4) Marketed Products 291.1 216.7 108.5 74.4 108.2 Total R&D expense $ 746.8 $ 649.6 $ 628.8 $ 97.2 $ 20.8 R&D expense increased for 2023 compared to 2022 primarily due to higher spend in research and early pipeline attributable to increased pre-clinical activities, including studies for planned clinical trial application submissions in the U.S. and EU.
Removed
Dollars, except as otherwise disclosed) A summary of our clinical development programs as of December 31, 2022, is provided below: Clinical Development Programs Target Indication Stage ROCTAVIAN Severe Hemophilia A FDA (1) regulatory review BMN 255 Hyperoxaluria Clinical Phase 1/2 BMN 331 Hereditary Angioedema (HAE) Clinical Phase 1/2 (1) U.S.
Added
In 2023, we achieved $2.4 billion in total revenues, including a significant contribution from our ongoing expansion of VOXZOGO, and we continued making important advancements in our product development pipeline. Our key business developments since the beginning of 2023 include U.S.
Removed
See Note 1 to these Consolidated Financial Statements for details. See “Results of Operations” below for discussion of our results for the periods presented.
Added
Food and Drug Administration (FDA) approval of VOXZOGO for children with achondroplasia of all ages with open growth plates in the U.S., European Commission approval to expand the indication for VOXZOGO to treat children with achondroplasia aged four months and older with open growth plates in the European Union (EU), and FDA approval of ROCTAVIAN in the U.S.
Removed
Below is a summary of key business developments: Continued Emphasis on Research and Development New Product Launches, Approvals and Mid-stage Product Life Cycle Expansion Opportunities • VOXZOGO: The global expansion of VOXZOGO continues, with market access and reimbursement activities progressing as anticipated.
Added
We also continued progress in our earlier stage clinical programs. Please see the disclosures in Part I Item I in this Annual Report on Form 10-K for further discussion of these recent developments. 59 Table of Contents Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued) (In millions of U.S.
Removed
As of December 31, 2022, we have seen worldwide increases in the number of children being treated with commercial VOXZOGO and in the number of active markets contributing to VOXZOGO sales.
Added
Strong demand for VOXZOGO in certain markets has outpaced our projections in recent quarters, and we expect to face challenges meeting our current estimates of VOXZOGO demand through the first half of 2024. These demand challenges will result in modest reduction of our revenue growth for VOXZOGO during the supply-constrained period.
Removed
During the fourth quarter, we submitted supplemental marketing applications in the U.S. and EU to expand VOXZOGO access to younger age groups, based on favorable results from a Phase 2 study in infants and young 60 Table of Contents Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued) (In millions of U.S.
Added
The projected temporary supply constraint could result in postponement of planned entry into additional markets or delayed clinical development activities until VOXZOGO inventory levels increase. When the expected increases in supply become available during 2024, while overall inventory and ability to supply the market will increase, if actual demand continues to exceed our estimates, the supply constraint could be prolonged.
Removed
Dollars, except as otherwise disclosed) children. In January 2023, the European Medicines Agency (EMA) validated our application for extension of indications for VOXZOGO for the treatment of children under the age of two.
Added
We are working to increase fill-finish capacity to meet this increased demand while also implementing actions to manage growth and minimize patient impact. For example, in 2023 we secured increased supply commitments beginning in mid-2024. We do not expect a material impact on our revenues if we successfully execute our manufacturing plans.
Removed
We expect action by U.S. and EU health authorities on the applications in the second half of 2023, and if accepted, this will increase the number of children eligible for VOXZOGO treatment in the U.S. and Europe. • ROCTAVIAN: Following conditional EMA approval in the third quarter of 2022, the European launch of ROCTAVIAN is underway.
Added
See "Risk Factors" in Part I, Item 1A of this Annual Report for additional information on risk factors that could impact our business and operations.
Removed
Since approval, we continue to collaborate with German health insurers to secure novel Outcomes Based Agreements (OBAs) to enable access to ROCTAVIAN treatment. The first OBA has been completed, allowing for a significant percentage of people in Germany affected by severe hemophilia A to pursue treatment with ROCTAVIAN. Patient testing to determine eligibility for ROCTAVIAN treatment is ongoing throughout Germany.
Added
These costs include production materials, production costs at our manufacturing facilities, third-party manufacturing 61 Table of Contents Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued) (In millions of U.S. Dollars, except as otherwise disclosed) costs, amortization of technology transfer intangible assets and internal and external final formulation and packaging costs.
Removed
Our Biologics License Application (BLA) for ROCTAVIAN is currently under review by the FDA with a current Prescription Drug User Fee Act (PDUFA) target action date of March 31, 2023, subject to a potential three-month extension, if deemed necessary during the review procedure.
Added
We expect gross margin to increase modestly in future periods as the product mix is expected to shift to reflect an increase of sales volumes for higher margin commercial products.
Removed
We recently submitted to the FDA results from three or more years of follow up from our ongoing global Phase 3 GENEr8-1 study of ROCTAVIAN, the largest and longest global Phase 3 study to date for any gene therapy in hemophilia with 134 participants.
Added
Research and Development We group all of our R&D activities and related expense into three categories: (i) research and early pipeline, (ii) later-stage clinical programs and (iii) marketed products as follows: Category Description Research and early pipeline R&D expense incurred in activities substantially in support of early research through the completion of phase 2 clinical trials, including drug discovery, toxicology, pharmacokinetics and drug metabolism and process development.
Removed
As part of the ongoing review, the FDA completed the Pre-License Inspection of our dedicated gene therapy facility in December 2022. We have provided responses to the comments and observations received at the close of the FDA inspection, and believe all are addressable.
Added
Later-stage clinical programs R&D expense incurred in or related to phase 3 clinical programs intended to result in registration of a new product or a new indication for an existing product primarily in the U.S. or the EU.
Removed
Also in the U.S., the Premarket Approval application is under review at the Center for Devices and Radiological Health to support contemporaneous approval of a companion diagnostic (CDx) along with the ROCTAVIAN BLA. Product expansion opportunities with ROCTAVIAN are supported by a number of clinical studies currently underway.
Added
Marketed products R&D expense incurred in support of our marketed products that are authorized to be sold primarily in the U.S. or the EU.
Removed
Two additional studies are ongoing, one investigating ROCTAVIAN treatment in those with active or prior inhibitors, as well as one study investigating ROCTAVIAN in people with pre-existing antibodies against AAV5. Select Earlier-stage Development Portfolio • BMN 255 for hyperoxaluria in chronic liver disease: We have concluded the multi-ascending dose phase of the First-in-Human study with BMN 255.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

12 edited+0 added−1 removed14 unchanged
Biggest changeDollars): Expected Maturity 2023 2024 2025 2026 2027 Total Available-for-sale debt securities $ 579.4 $ 230.7 $ 81.4 $ 13.5 $ 8.2 $ 913.2 Average interest rate 4.2 % 5.1 % 5.1 % 4.9 % 4.3 % 4.5 % Counterparty Credit Risks Our financial instruments, including derivatives, are subject to counterparty credit risk that we consider as part of the overall fair value measurement.
Biggest changeDollars): Expected Maturity 2024 2025 2026 2027 2028 Total Available-for-sale debt securities $ 344.7 $ 291.4 $ 269.8 $ 45.5 $ 4.4 $ 955.8 Average interest rate 5.0 % 5.0 % 4.7 % 4.8 % 5.4 % 4.9 % Counterparty Credit Risks Our financial instruments, including derivatives, are subject to counterparty credit risk that we consider as part of the overall fair value measurement.
To partially mitigate the impact of changes in currency exchange rates on net cash flows from our foreign currency denominated sales and operating expenses, we may enter into foreign currency exchange forward contracts (forward contracts).
To partially mitigate the impact of changes in currency exchange rates on net cash flows from our foreign currency denominated sales and operating expenses, we enter into foreign currency exchange forward contracts (forward contracts).
In addition, we have an investment policy that limits investments to certain types of debt and money market instruments issued by institutions primarily with investment grade credit ratings and places restriction on maturities and concentrations by asset class and issuer. Item 8.
In addition, we have an investment policy that limits investments to certain types of debt and money market instruments issued by institutions primarily with investment grade credit ratings and places restriction on maturities and concentrations by asset class and issuer.
We have outstanding $495.0 million (undiscounted) of the 2024 Notes and $600.0 million (undiscounted) of the 2027 Notes. The interest rates on these notes are fixed and therefore they do not expose us to risk related to rising interest rates. As of December 31, 2022, the fair value of our convertible debt was $1.2 billion.
We have outstanding $495.0 million (undiscounted) of the 2024 Notes and $600.0 million (undiscounted) of the 2027 Notes. The interest rates on these notes are fixed and therefore they do not expose us to risk related to rising interest rates. As of December 31, 2023, the fair value of our convertible debt was $1.1 billion.
Foreign Currency Exchange Rate Risk Our operations include manufacturing activities in the U.S. and Ireland and sales activities in the U.S. as well as in regions outside the U.S, including Europe, Latin America and Asia Pacific.
Foreign Currency Exchange Rate Risk Our operations include manufacturing activities in the U.S. and Ireland and sales activities in the U.S. as well as in regions outside the U.S, including Europe, Latin America, the Middle East and Asia Pacific.
As of December 31, 2022, our investment portfolio did not include any investments with significant exposure to countries that face economic volatility and weakness.
As of December 31, 2023, our investment portfolio did not include any investments with significant exposure to countries that face economic volatility and weakness.
The table below summarizes the expected maturities and average interest rates of our interest-generating investments as of December 31, 2022 (in millions of U.S.
The table below summarizes the expected maturities and average interest rates of our interest-generating investments as of December 31, 2023 (in millions of U.S.
A hypothetical 10% adverse movement in foreign currency exchange rates compared with the USD relative to exchange rates as of December 31, 2022 would have resulted in a reduction in the value received over the remaining life of these contracts by approximately $83.2 million on this date and, if realized, would negatively affect earnings during the remaining life of the contracts.
A hypothetical 10% adverse movement in foreign currency exchange rates compared with the USD relative to exchange rates as of December 31, 2023 would have resulted in a reduction in the value received over the remaining life of these contracts by approximately $134.4 million on this date and, if realized, would negatively affect earnings during the remaining life of the contracts.
Based on our overall foreign currency denominated exposures as of December 31, 2022, we believe that a near-term 10% fluctuation of the USD exchange rate could result in a potential change in the fair value of our net foreign currency denominated assets and liabilities, excluding our investments and open forward contracts, by approximately $20.6 million.
Based on our overall foreign currency denominated exposures as of December 31, 2023, we believe that a near-term 10% fluctuation of the USD exchange rate could result in a potential change in the fair value of our net foreign currency denominated assets and liabilities, excluding our investments and open forward contracts, by approximately $27.4 million.
The counterparties to these forward contracts are creditworthy multinational commercial banks, which minimizes the risk of counterparty nonperformance. We regularly review our hedging program and may, as part of this review, make changes to the program. As of December 31, 2022, we had open forward contracts with net notional amounts of $843.4 million.
The counterparties to these forward contracts are creditworthy multinational commercial banks, which minimizes the risk of counterparty nonperformance. We regularly review our hedging program and may, as part of this review, make changes to the program. As of December 31, 2023, we had open forward contracts with net notional amounts of $1.3 billion.
Although not predictive in nature, based on our investment portfolio and interest rates for the period ending December 31, 2022, we believe a 100 basis point increase in interest rates could result in a potential loss in 71 Table of Contents fair value of our investment portfolio of approximately $6.3 million.
Although not predictive in nature, based on our investment portfolio and interest rates 70 Table of Contents for the period ending December 31, 2023, we believe a 100 basis point increase in interest rates could result in a potential loss in fair value of our investment portfolio of approximately $10.8 million.
During 2022, approximately 51% of our net product sales were denominated in foreign currencies and 19% of our operating expenses, excluding Cost of Sales, were denominated in foreign currencies.
During 2023, approximately 52% of our net product sales were denominated in foreign currencies and 24% of our operating expenses, excluding Cost of Sales, were denominated in foreign currencies.
Removed
Financial Statements and Supplementary Data The information required to be filed in this item appears under “Exhibits, Financial Statement Schedules” in Part IV, Item 15 of this Annual Report on Form 10-K . Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.

Other BMRN 10-K year-over-year comparisons