As Biomarin Pharmaceutical Inc. preps for U.S. commercial launch of recently approved mucopolysaccharidosis Type IVA drug Vimizim (elosulfase alfa) and awaits a decision expected Friday from the European Committee for Medicinal Products for Human Use (CHMP), investors have focused largely on the high pricing for Vimizim – about $380,000 per year – and the expected hike in R&D expenses for 2014. But the conference call on Vimizim’s approval was noteworthy for another reason: Company executives disclosed that the FDA awarded Biomarin the first ever rare pediatric disease priority review voucher (PRV).

Among the provisions included in 2012’s FDASIA, that PRV program is designed to provide an additional incentive for companies to develop therapies for rare pediatric diseases. Modeled after the 2007 program to promote work in the area of neglected tropical diseases, firms that gain approval of a rare disease drug for pediatric patients receive a transferable voucher that can be used to gain priority review for any product, even products that would normally not be eligible for priority review.

Priority status shaves off four months of the standard review process. While that seems a minor advantage in the grand scheme of drug development, it could translate into millions of dollars for a potential blockbuster drug. It could also give a drug in a crowded market an edge over impending rivals by hitting the market first. (See BioWorld Insight, Oct. 17, 2011.)

Executives of Novato, Calif.-based Biomarin disclosed no plans yet for its PRV. Hank Fuchs, executive vice president and chief medical officer, said only on the Tuesday conference call that the company may choose to cash in the voucher to secure priority review for one of its own pipeline programs or transfer the voucher to another company.

The value of such a transfer remains debatable. Researchers at Duke University have estimated that a PRV could be worth as much as $300 million if sold. (See BioWorld Today, Sept. 9, 2013.)

So far, only two companies have earned PRVs, both under the neglected tropical disease incentive. Novartis AG, of Basel, Switzerland, won a PRV, often hailed as a “golden ticket,” in 2009 for the approval of malaria drug Coartem, a combination of artemisinin derivative artemether and lumefantrine. Novartis used the voucher in 2011 when it filed a supplemental biologics license application for IL-1 drug Ilaris (canakinumab) in gouty arthritis; in that case, the FDA honored the six-month priority review but still rejected the drug after an advisory panel raised safety concerns. (See BioWorld Today, June 22, 2011.)

Johnson & Johnson also received a PRV upon approval of Sirturo (bedaquiline) for tuberculosis, though there’s no record of the New Brunswick, N.J.-based pharma having traded in the voucher for priority review to date.

A few provisions in rare pediatric disease PRV program differ from those of the previous neglected tropical disease program. For starters, the original PRV required companies to provide advanced notice of one year prior to redemption of the voucher, a rule that generated more than its share of criticism. So the rare disease PRV program requires only a 90-day notice to the FDA.

PRVs awarded for rare disease drug approvals also can be transferred an unlimited number of times, though once a firm has cashed in the voucher for a particular product, its can no longer be transferred.

The PRV voucher can be revoked if the rare pediatric disease product is not marketed within a year following its approval. But that is unlikely to happen in the case of Biomarin’s Vimizim, which is “ready to ship immediately,” Jeff Ajer, chief commercial officer, told investors on the conference call.

Vimizim will be marketed by the firm’s existing sales force for Naglazyme (galsulfase), its drug for mucopolysaccharidosis VI. That sales team is already scaled up, trained “and ready for a strong product launch,” Ajer said.

ANALYST: INVESTMENT ‘WORTH IT’

Launch in Europe is expected later this year, pending EU approval in about two months assuming a positive CHMP opinion this week. So far, Biomarin has identified about 1,500 patients worldwide with mucopolysaccharidosis Type IVA, also known as Morquio A syndrome. About 15 percent of those are in the U.S.

By the end of this year, the company hopes to have about 350 people receiving the drug.

Pricing fell in line with analyst expectations. Biomarin priced Vimizim at $1,068 per vial. At nine vials per weekly infusion for the typical patient, that puts the annual cost at about $380,000 per patient. As a comparison, the company’s other enzyme replacement therapies Naglazyme and mucopolysaccharidosis I drug Aldurazyme (laronidase) run about $400,000 and $250,000, respectively, per patient per year.

Vimizim is the first drug approved for Morquio A syndrome, a rare, autosomal recessive lysosomal storage disorder caused by a deficiency in N-acetylgalactosamine-6-sulfate sulfatase (GALNS), which leads to problems in bone development, growth and mobility. Designed to replace the missing GALNS enzyme, Vimizim demonstrated improvements in the six-minute walk test in patients, ages 5 to 57. Data from that 176-subject study served as the basis for the drug’s approval. (See BioWorld Today, Nov. 20, 2013, and Feb. 18, 2014.)

For 2014, Biomarin is anticipating Vimizim sales totaling $60 million to $80 million, a range that mirrored the Street’s expectations.

The only surprise, in fact, from the company’s conference call was its raised R&D guidance. Biomarin disclosed new guidance of $500 million to $530 million for the year, “substantially higher than our and Street estimates” of $427 million and $406 million, respectively, wrote Wells Fargo analyst Brian Abrahams in a research note.

That increase isn’t surprising given the late-stage and midstage programs Biomarin has in development, including PEG-PAL, which is expected to yield phase III data this year. PEG-PAL, a pegylated recombinant version of phenylalanine ammonia lysate, entered the pivotal program last year in phenylketonuria (PKU). Biomarin is positioning the drug for patients who don’t respond to its approved PKU drug Kuvan and those who are not able to comply with the phenylalanine-lowering diet. (See BioWorld Today, June 6, 2013.)

J.P. Morgan analyst Cory Kasimov acknowledged that the firm’s R&D projections for 2014 are high and grab “unwanted attention,” though he pointed out in a research note Biomarin’s successful R&D engine. “With no high-profile, late-stage product failures to date, [Biomarin] has spent relatively small amounts to get drugs approved in industry-leading” time frames.

As examples, Kasimov listed Kuvan, which cost $59 million and went from investigational new drug application (IND) to approval in 3.25 years; Naglazyme, which cost $100 million and took five years from IND to approval; Aldurazyme, which cost $102 million and took 5.25 years; and Vimizim, which required an investment of $300 million and five years.

“The bottom line is that with the company’s track record of success,” he added, Biomarin’s “investment in its pipeline has been worth it to this point.”

Coming in 2015 are phase II data for BMN-111 in achondroplasia. The company also is working on BMN-701, a fusion protein of insulin-like growth factor 2 and acid alpha glucosidase for Pompe disease, and BMN-673, considered a promising long-term prospect for the company as a treatment for genetically defined cancers.

Shares of Biomarin (NASDAQ:BMRN) closed Wednesday at $76.35, down 4 cents.