National Editor

Partly to push Phase III development of its heparin-cleaving enzyme treatment, BioMarin Pharmaceutical Inc. said it plans to offer about $125 million in convertible subordinated notes due in 2008, with a conversion price yet to be determined.

"We're increasing the number of sites for [the Phase III trial with] Neutralase from 35 or 40 to about 75, and this is going to require some additional money," said Joshua Grass, manager of investor relations at Novato, Calif.-based BioMarin.

"This is the first of two Phase III trials, and we think it will help us execute the second at a faster rate," he added.

Neutralase, a carbohydrate-modifying enzyme that cleaves heparin, is in development for the reversal of anticoagulation by heparin in coronary arterial bypass grafting surgery. The company has worldwide rights to the drug.

With partner Genzyme General, of Cambridge, Mass., BioMarin recently won FDA approval for Aldurazyme, an enzyme replacement therapy for mucopolysaccharidosis-1. (See BioWorld Today, May 1, 2003.)

Leerink Swann & Co., of Boston, forecasts Aldurazyme will sell $12.1 million in 2003, pushing the company to profitability in 2005, and said investor interest next will focus on Aryplase, recombinant human arylsulfatase B, an enzyme replacement therapy for the treatment of mucopolysaccharidosis-VI, also known as Maroteaux-Lamy syndrome.

Recently disclosed results from a Phase II study indicate that Aryplase is well tolerated and associated with improvements in several clinical endpoints. On average, for example, subjects experienced improvements in endurance as measured by the distance walked at the six- and 12-minute time points of a 12-minute walk test and the number of stairs climbed in three minutes.

"The Aldurazyme story has given Aryplase a lot of credibility," Grass said. "It turns out the FDA was pretty upbeat on Aldurazyme. The regulatory path has been validated and The Street seems to feels the same."

Proceeds from the notes offering also would place BioMarin "in a better position to put a number of other products in the clinic," Grass told BioWorld Today. "They look awfully good in preclinical, but we haven't had the bandwidth to focus on them."

BioMarin acquired Neutralase in its 2001 buyout of Montreal-based IBEX Technologies Inc.'s pharmaceutical assets, and "what most people don't know is that we acquired several other enzymes" in the deal as well, Grass said. (See BioWorld Today, Oct. 11, 2001.)

"Two of those have been on the back burner," he said, and one could be the subject of a deal with another firm that has expressed interest in collaborating.

BioMarin also has "identified a manufacturing facility we want to expand into," through a lease arrangement, Grass added. "Right now we just have capacity for Aldurazyme and some capacity for clinical manufacturing," he said.

"We've also identified a couple of acquisition targets" for which the proceeds from the convertibles offering might be used, Grass said. "We're looking at things right now."

He noted BioMarin's strategy of "typically fairly small" acquisitions, "not entire companies, generally, but basically product acquisitions. They leverage our existing capabilities so we don't have to hire a bunch of new people."

The idea is to find products with potential and go after those.

"We don't do [research and development] in the traditional sense, with a barrage of scientists screening compounds against obscure targets," Grass said. Instead, the company gets products "not typically in the billion-dollar market size range," but also with less risk.

BioMarin s stock (NASDAQ:BMRN) lost $1.71 Tuesday, or 13.7 percent, to close at $10.81.