Good morning, everyone. I'm Sean Laaman, Head of U.S. Mid-Cap Biotech Equity Research here at Morgan Stanley, and welcome to the Morgan Stanley Global Healthcare Conference. Before we commence, I'll make you aware of some important disclosures. For those disclosures, please visit the Morgan Stanley Research Disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. Excuse me. For this session, we have the pleasure of hosting BridgeBio Pharma with Julie Everett, COO of BridgeBio Skeletal Dysplasias and Chief Business Officer, Chinmay Shukla. Welcome to the both of you, and thank you for your time today. I've got some macro considerations. We're just talking about interest rates offline, but just some macro considerations to discuss before we really dig in on Bridge.
How has the rise of China-originated innovation changing your competitive positioning, if at all, and does it influence your BD and R&D playbooks?
Yeah. Happy to talk about that. Sean, first of all, thank you for hosting us, and thank you to all the investors for joining us today and across the day as we try to tell our story. In terms of China, we see that as an opportunity, and there are some risks, but we do see it mainly as an opportunity. I think the speed of innovation is much faster. We do have active relationships with investigators and universities in China. A lot of it is done through our sister company, GondolaBio, which focuses more on the early-stage part of the genetic disease R&D playbook.
I think that for us, in terms of opportunities, I would say the ability to quickly set up trials and run trials, the ability to partner with an even broader number of academics, as well as get genetic data from a much broader population. Those are all opportunities. I do think that there are some threats in terms of protecting our IP, and we do think about that. We think about the fact that any time we publish a structure, someone can easily then make the molecule. So we are thoughtful about that. But on balance, we view more people trying to help patients with genetic diseases as better for patients in America and patients globally, as well as for our business.
Sure. Thank you, Chinmay. Next question on the macro. Are you implementing AI across your business, and has it already changed a decision, a timeline, a cost, or even a POS?
Yeah. We view AI in two different buckets. AI in terms of increasing probability of success or telling us what's the next big cancer drug is not something which we think is going to be that helpful. But I think that there is a ton of operational details in terms of running a biotech company which AI can definitely make better, and that even in our own company, we see AI improving. I think the three examples that I can give you are, number one, in the commercial setting, whether it's in terms of making it easier for folks to write letters of medical necessity, whether it's analyzing data, as well as if we think about overall surfacing information to our reps in a more insightful manner. Those are all areas where AI is helping.
In terms of biostats, it does help a lot in terms of just code generation. That's obviously a big use of AI and probably the most validated use of AI. Then I think that we're also looking at other steps in the business, whether it's site activation, enrolling trials, how can we use AI to speed up those elements? Those are a little bit earlier stage, but I would definitely say it's having an impact now, and I think it's going to have a bigger impact in the future.
Wonderful. Thank you. I'm going to guess your next answer to this next question will probably be all of the above. Which policy variable, is it FDA, Medicare negotiation, MFN, tariffs, or global pricing matters most to BridgeBio's economics, and have you changed anything because of it?
The answer to that is all of the above. But I think we announced a partnership with the U.S. government recently. For us, we've been working closely with the regulators, whether it's on the FDA side. We're very pleased to say that the FDA considered their decision on encaleret and gave it priority review. Whether it's on the pricing side, we announced a partnership with the U.S. government on that. We think that we're able to find ways to both help patients as well as preserve our ability to do innovation, and that is very exciting to us.
Sure. Thank you. Now we'll go Bridge specific. I have a series of questions on Attruby because I think that's the dominating investment debate, and then I'll move on to some questions on the skeletal dysplasias, if that's okay. Attruby, very strong numbers, up 23% sequentially with growth led by treatment-naive starts and the switch pool is normalized. The total revenue beat was largely driven by royalty rather than U.S. Attruby. Is the U.S. line growing faster as you had expected?
We are thrilled with how Attruby's launch has gone thus far, and actually, we are even more thrilled about what's to come in the future, given all the datasets which have come out. In terms of what we think is driving that growth, let me break it down near term and longer term. The biggest driver of Attruby's growth is, number one, increasing first-line market, as well as increasing share of Attruby in that first-line setting. I think both of those things are big tailwinds for us, and I do think that the kidney-protective data, the EFC data, as well as the real-world evidence which is starting to come out will all help Attruby gain more share in the future. And the drumbeat of data from all companies will expand the first-line market in the future.
I think that it will take, as we mentioned on our second quarter earnings call, it'll take about 12 months or so for all of this data to percolate in the community and then start to change prescribing habits. In the near term, we do see steady expansion of Attruby of somewhere around $25 million - $30 million quarter-over-quarter in terms of sales growth. And I think that longer term, we've never been more confident that we will get to $4 billion in peak year sales, and maybe there is even some upside beyond that.
Sure. Thank you. I guess you've reiterated blockbuster worldwide sales for this product in 2026, including the partner recorded BEYONTTRA sales. What U.S.-only number does that imply?
Yeah. Since we're not giving annual guidance, we haven't broken down U.S., ex-U.S., all of that. But obviously, a majority of the sales that we book do come from America.
A big portion of that blockbuster status would come from America. If you look last quarter, we had about $222 million in U.S. net product revenue. We furthermore had about $15 million or so of royalty revenue. I think we've said that our royalty from Bayer starts at about 30% and then tiers up from there. So what you would see is the product was already annualizing to a blockbuster status, right? Because you take the $222 + million, let's just conservatively say [15 times 345], and you can see that, A, that's greater than $250 million, and B, you can see a majority of that revenue is coming from the U.S. We expect that to continue in the future. We think that the U.S. will be a much larger market than Europe, although Europe is a very important market for us.
We are thrilled with how the launch is going there, and of course, we have a very large royalty that we receive.
Sure. Thank you. Next question to me is quite important to your story, so I will try and word it carefully. Management has framed the CARDIO-TTRansform miss as leaving the combination case scientifically dead and reinforcing stabilizer first. The readout was arguably anti-combination rather than anti-silencer, since monotherapy showed a nominal benefit. In second line, where many physicians still reach for a silencer, why is this a clean win for stabilizers?
Yeah. So maybe I will use this as an opportunity to talk more broadly about what came out at ESC and why we feel like it was a very good data set for stabilizers in general and Attruby in particular. I think there are a few things which are very clear now. I think the first thing is stabilizers are the first-line therapy of choice. A vast majority of the market today and in the future is going to be first-line patients. Attruby is a differentiated near-complete stabilizer, which also has unique kidney protective effects and other core benefits. On the first-line side, the story is very clear. It is a stabilizer market, and our job there is to get as many patients on Attruby as possible.
I think as I think about the second-line setting, there were physicians who were reaching for a combination therapy, which I think has now been proven to be ineffective. I think that we also saw from CARDIO-TTRansform, as well as some of the other presentations which came out at ESC, that the two knockdowns are very similar to each other.
They both have very similar levels of placebo-adjusted knockdowns. We also saw that the knockdowns take a very long time to show an effect.
It takes about 18 months- 20 months for the curves to separate. We put all of that data together, and we do think that knockdowns will remain an important part of this market. But increasingly, even in the second line, we are going to see physicians think about if you have a patient who is progressing on a weak stabilizer, do you just put them on a near complete stabilizer? Or do you try to have a different modality? I think that put together, we do think that all the data sets indicate that Attruby should keep taking share in the first-line setting and should also have a small benefit in the second-line setting, although the second line is a much smaller market than the first line.
Sure. I guess on the second line, Alnylam recently reset their 2026 TTR guidance lower on the same second line, slowing. Is the switch market shrinking for everyone or just shifting?
Yeah. I think what we have said, and we have been saying this for almost nine months now. We have always expected that the second-line market would stabilize. Because if you think about it last year when both us and Amvuttra came on the market, you had a large number of Vyndamax patients who were progressing and who did not have a choice other than to stay on Vyndamax at the time. So we knew that there would be more switching earlier on. It is very hard to predict quarter to quarter how these dynamics work, and so our expectation was that that elevated switch would last probably for about two years or so. We have seen that kind of happen where the second-line market is stabilizing.
There was further fuel added to the fire because last year, Pfizer pulled VYNDAQEL off the market, and so all the about high teens of tafamidis patients who were on VYNDAQEL, they all had to be switched to Vyndamax.
That further made it such that everyone had a chance to get some of those patients, right? So Q4 of last year, Q1 of this year, the second-line market was further elevated because of that. You have started to see that normalize a lot in Q2 and beyond, and we've always expected the second-line market to be smaller. We've always incorporated that into our thinking, into our remarks, and we were not surprised by it in any way.
What I would say is Attruby is positioned so well in the first-line setting and the first-line market has continued to grow, despite the second-line market being much smaller in Q3 compared to Q1 of this year. If you look at the total volume, if you look at the net patients added in Q1, in Q2, and our expectation in Q3 is that that net patient added volume is very similar and hasn't really gone down for us. The first-line strength has overcome the smaller second-line market.
Sure. Thank you. Moving on slightly, talk about the post-hoc renal data, and maybe just for the audience who may be unfamiliar, just give us a snapshot on the data and what is the mechanism by which post-hoc renal data could change prescribing?
Yeah. Actually, I want to let Julie comment on how it might change prescribing because she's close to the commercial story at both Attruby and infigratinib. Let me just recap the data. It's really exciting data. When we got the phase III results for Attruby, we saw that there was an acute dip in eGFR in the early few weeks after starting therapy. Initially, that was concerning to us because normally an eGFR dip is concerning. However, we looked into it a lot more closely, and what we saw is that the effect actually mimics what you see with SGLT2 inhibitors and ARBs, that it's actually a kidney protective effect.
If you look at the UACR albumin ratios and other markers of kidney health, and you look at the overall nephro profile, what you see is that the kidney, which was in stress after the initiation of Attruby, very rapidly starts to basically rest.
That confers a kidney protective benefit similar to what you see with SGLT2is and ARBs. We have investigated this in a lot of detail. We are very excited that now there is a peer-reviewed manuscript which is out there, so we can go and educate on this. We have also now started to look and survey KOLs. We had a kidney summit a few months ago. Physicians are getting more and more excited about it the more they learn about this profile. It is a counterintuitive profile, so it does take a little bit of time to educate on it.
But once they get it, they actually have been super excited about it, which is why we announced that we are going to go into a rare kidney indication with Attruby just to further expand upon the benefit there. But in terms of how that changes the commercial-
Yeah, no, I will give a very quick answer. I think we have, excuse me, we have gotten very positive feedback from prescribers saying that this is just one more data point that continues to build that clinical differentiated story for Attruby. What is interesting is that when you look at tafamidis data, they saw a very muted impact, a very muted trend like this, and there was nothing demonstrated with the silencer therapies. So this is truly a point of differentiation. Whether we think it will inflect prescribing in the near term versus more the medium or long term, I think it is the latter because it is going to take our MSLs and our sales representatives a little bit of time to get in and educate prescribers on this data.
As Chinmay said, it is not a simple story. You really have to understand how this is tying to outcomes.
I think it'll be more like a one to two, three -year timeframe that we'll see some inflection, but it just increases our confidence and the ability to execute on that 30%-40% peak market share.
Wonderful. Thank you. Next couple of questions, a lot of my inbound is around pricing and-
Sure
forward pricing outlook. I'll try and wrap these questions into one. Pfizer's reportedly been discounting, and you said you will not chase its price. Does holding price cost you share in the near term, and how would you know? The second part is, tafamidis generics arrive around 2031. What protects Attruby's price and share against a generic stabilizer in the class?
Yeah. I think the first place to start on all these questions is the fact that Attruby is a second generation, near complete, better molecule, better stabilizer, more effective stabilizer than the first generation molecule. That's how pharmaceutical companies evolves the world. We make the first generation molecule, then we improve upon it in our second generation molecule. So Attruby is that improved upon second generation molecule. It is clinically differentiated across numerous axes, whether it's the near complete stabilization, whether it's really strong effects on key subgroups like AFib as well as variants, whether it's this unique nephroprotective effect that we have seen. Now what we are starting to see is in the real world.
People are starting to compare these drugs, and we've already seen some early evidence that Attruby outperforms VYNDAMAX, and we know that there's going to be more real-world evidence coming out at HFSA. We're very excited to see what that shows and whether that continues this trend. You have a drug which is clinically differentiated, and what we think is it has unique and superior properties than the first generation product. I think that as we think about that really flows to how we think about our pricing strategy. What we think is that the way to win in this market for Attruby is to win on clinical differentiation. We want to have parity access, and if we can't have parity access, we want to at least have parity process. Currently, even when VYNDAMAX is on formulary, the process is very similar between the two drugs.
One requires a prior auth, one requires a letter of medical necessity. Yes, of course, Pfizer is rebating. Of course, we are working through it, and that's part of why over the next three to four quarters, we've said we're going to grow steady even though our share is increasing. However, we do think that we've been able to work through it quite nicely to date. You asked me how we know that is last year, Pfizer put up a rebate with UnitedHealthcare, and so that's now been in the channel for almost 15 months. First of all, most scripts go through just normally, but even when there is a denial, the appeal rates are north, success is north of 90% there. The most important thing, and the most heartening thing for us is even into the United accounts, our share has grown.
I am sure it is having some effect. As I always say, we've not run the control trial, which is without rebates, how much would we have grown?
Sure.
We've been able to grow through it just because we are clinically differentiated. By the way, that is also what has given us a lot of confidence that post-generic tafamidis entry in 2032, early 2032, we should still be able to grow pretty nicely. Part of it is because the channel dynamics here do favor higher priced drugs with specialty pharmacies being a key component in the channel. Part of it is because of clinical differentiation, which we've expanded upon quite a bit today, and the fact that we're not just another stabilizer, we're a better second-generation stabilizer. Then the last thing is, if you look at every single analog, when a second-to-market product is branded, better product is on the market, the first-to-market going generic doesn't impact the second-to-market sales.
Great. Sure. Thank you. A complete answer. Moving on from Attruby. Oral infigratinib and achondroplasia, I have got a series of question here. I believe you have described infigratinib as probably the most underappreciated of the three launches, and U.S. is roughly 25% penetrated, about 75% in Europe. Is your thesis upon launch more about expanding the market rather than share gains?
Yeah. Great question. We believe at launch that there is three distinct patient populations, and our clinical data is resonating very well with prescribers and families across all three. The first is those who are currently on a CNP product today, whether that is VOXZOGO or Yuviwel. The second is those who were previously treated and have discontinued. The third and largest category in the U.S. is those who have not yet sought treatment. That is the vast majority of patients in the U.S. To understand how we can unlock that population, you really have to interrogate why they are not on treatment today. There is two primary reasons. The first is just that the CNP products are limited mechanistically and by route of administration. It is really a molecule limitation, not a category limitation.
If you think about daily injections, again, I do not know how many of you have children, but to have to actually sit down, restrain your child, try to give them an injection, whether it is daily or weekly, for something that is not acutely symptomatic, the child does not feel any different, right? The injection, the route of administration being an injection is very limited. The second element, again, infigratinib being an oral. The second element is the clinical data. Infigratinib is the only asset of the three to show benefits beyond height. Pause for a moment. It also showed the greatest benefit on height, right? The primary endpoint being annualized height velocity, 1.74 cm per year versus 1.57 cm and 1.49 cm.
Right on primary outcome alone, the most efficacious product, but also the only agent to show within 52 weeks benefits on proportionality, arm span, and just last week at the European Society for Paediatric Endocrinology, we released data showing within 52 weeks benefits on sleep apnea and otitis media. These are very debilitating childhood complications that can be resolved with infigratinib therapy. I can walk through the data more later. But those reasons we feel can allow us to expand in the U.S. that 25% treatment penetration to a much, much larger number, not just compete within those who are treated today, but expand the pie. Outside of the U.S., to your question, it is much more penetrated today, depending on the country, about 60%-75% treatment penetration in Europe and elsewhere.
The good news is the data resonates with both the switch population, the discontinued population, and the naive population. Source of business may differ slightly by geography, but those proof points of clinical differentiation are consistent across geography.
Sure. Thank you. BioMarin says under 10% of VOXZOGO patients switch to Yuviwel. Your colleagues read that as evidence of low brand stickiness rather than high. Which interpretation does the data support?
Good question. I think it's interesting if you look at that, we have to remember that Yuviwel's done very well, and I just want to say that, encouraging for us as we look at the unmet need that exists in the market today. I think we're highly encouraged by the Yuviwel launch since it is still an injection, and we know that there's a lot of patients that are injection averse. What we're seeing is that there's a lot of patients starting VOXZOGO in that infant and toddler population where they are currently the only approved product that has that indication. It's a little bit difficult to tease out and understand how many patients are truly switching because there's new patients being added at the same time, which is good for them in terms of their source of business.
I would actually read this as parents being loyal to their child and not necessarily loyal to a brand. If you are a parent, you are going to want to choose the product that has the most benefit for your child and that is the least burdensome. That's why we feel encouraged that from a stickiness perspective, we feel that when infigratinib comes to the market, we are going to see families from all three of those categories of source of business opt for infigratinib because there isn't a loyalty to a product that has such significant daily or weekly burden.
Sure. Thank you. A safety-related question. FGFR3 inhibition is a systemic mechanism in growing children. What is the long-term safety monitoring commitment, and how do you expect families to weigh that against injection risk?
None. So, great question. Thank you for asking. We are very pleased with it. Not surprised, but pleased with the PROPEL 3 very clean safety profile, safety package. Obviously the NDA has been filed, and it is with the agency right now. But recall, all of these assets in achondroplasia are approved with the Subpart H accelerated approval pathway, and then they require conversion to full approval down the line. There is no, at this time, additional safety monitoring anticipated. We will not know for sure until we receive FDA approval and any post-marketing requirements or commitments. But recall, all patients who were in the pivotal PROPEL 3 study will continue to be followed to allow that conversion to full approval. All long-term data will continue to be captured there. We anticipate no monitoring requirements in the commercial setting.
Sure. Thank you. NDA submitted, accepted for priority review, I think a mid 2027 launch, if I've got that right.
We should hear back in the next couple of months in terms of a PDUFA date and whether it's standard review or priority review. But recall that infigratinib, just given its significantly differentiated profile, the FDA has previously granted fast track and breakthrough, fast track status and breakthrough designation. I think we're encouraged by that and the likelihood of priority review, but we should know imminently here in the next couple of weeks.
Sure. Thank you. How should investors consider the cadence of an ex-U.S. rollout for infigratinib?
Great question. The U.S. is the first market. The MAA, the marketing authorization for Europe will be filed in the fourth quarter here coming up as well. We are encouraged by that. Slightly different cadence of review timeline for U.S. and Europe. The procedure in Europe is very structured, very rigid. We will slot right in there. We anticipate, if all goes well, a European approval end of next year or beginning of 2027, and then a launch in Europe in early 2027 as well.
Sure. Thank you. Hypochondroplasia in the infant and toddler segments are the expansion. Where do those sit in sequence, and how does the overlay look against BMN 333 and TYRA-300?
Yeah. Maybe I can quickly-
Do you want to take that one? I can pass
take those and just in the interest of time. Yes, we are actually, to build on one of your other questions on safety, the agency has allowed us to go into infant and toddler even before they have seen the PROPEL 3 data. That tells you just how convinced the agency is in terms of the safety profile here. The trial is enrolling really well. I think that the great thing about the infant toddler study is that we are going to go down sequentially. First, we will do the two to three-year cohort, and then we will go below two years. I think that we will be filing and expanding the label as soon as the data for each of those cohorts is available. Then I think similarly for hypochondroplasia, we are currently in the dose expansion phase.
Recall, we designed that trial before we saw the PROPEL 3 results. We are only testing two doses right now, and we are thinking about whether we should test more doses or not. You can expect an update on that later this year.
Thank you, Chinmay. Moving on to BBP-418. PDUFA set for November 27 with priority review. Population roughly around 7,000 patients in U.S. and Europe. Concentrated prescribing about, I think, 150 MDA centers. What does a successful launch curve look like, and how quickly does it reach steady state?
Yeah. I think that we're very excited about the limb-girdle launch. I think we have PDUFA upcoming here in just about two months or so. So it's a near-term opportunity for us. We've already identified 500 patients, mapped them to their provider. We know that there is high intent to treat in this segment. Again, to start with, their data has been transformational, right? Because not only are you seeing a stabilization of their disease, you're actually seeing patients on the drug improve and regain function. What we have said is we expect to penetrate the 500 patients in about two to three years. That's what good launches do. We also expect, in the meantime, over the next two to three years, to grow from 500 identified patients in the U.S. closer to the 2,000 - 2,500, which is the prevalent population in the U.S.
We would like to close that gap. We'll see how far we get there. That should sustain our launch starting years two to three and forward. Yeah, we do expect that that's what the launch curve would look like. Normally, these drugs peak at around year six or seven . We think that between the U.S. and Europe, this is a billion-dollar opportunity. There is no competition, so I do think every patient we find, we should be able to get on our drug.
Sure. Wonderful. Thank you. I do have more questions on that one, but in the interest of time, I do want to have a few more on encaleret and then move on to capital structure.
Of course.
Encaleret and the hypoparathyroidism opportunity. We have a PDUFA for May 8th next year, my mom's birthday, with priority review and no advisory committee. The EMA has accepted the MAA. You have more than 2,200 U.S. patients that have been identified under the ADH ICD-10 code at roughly 70 new diagnoses a month. What proportion convert to treatment?
Yeah. I think that ADH1 is a very severe disease. If you look at the symptoms of the disease, they really limit your day-to-day functioning.
Actually having low levels of calcium in the blood or high levels of calcium in the urine, they both affect you either day to day or in case of high urine calcium, it affects your kidney long term. For a disease as severe as this I do expect that there will be high intent to treat. Of course, we are focused on educating on this front, focused on really making sure that physicians understand that this is a disease where you do want treatment. Again, it helps us a lot that encaleret is able to basically normalize function there. Both urine and serum calcium were normalized in more than three-quarters of our patients. I do expect that a large majority of the patients that we identify will get on drug. We have about 2,200 patients on the claims database.
We have 500 that we have already genetically confirmed and identified mapped to a provider. Of course, the prevalence here is about 12,000 just in the U.S. I think that that is going to be another strong launch. The PDUFA is on May 8th, and hopefully we will celebrate your mom's birthday a little bit early.
Thank you. Just in the interest of time, I will move on. I've got more questions on that one.
Okay.
I'll move on to capital structure and the path to profitability. You closed $1 billion of preferred equity, taking pro forma cash to about $1.7 billion. Total liabilities are just over $3.7, including $879 million of deferred royalty obligations against stockholders' deficit of $2.5. What is the blended cost of capital across that structure?
Yeah. I think that we've always tried to think about what is the right form of capital to take and what's best for our shareholders who already own the company today, but also something that will attract more shareholders in the future. I'm not going to put a number on our cost of capital, but I think it has reduced over time. I still think our equity cost of capital is quite high given where we see the intrinsic value of the company. But we're focused on trying to tell our story, and hopefully, given that right now we don't need any capital for the BridgeBio business in any way whatsoever, we think that as we tell our story better and investors appreciate these next three launches as well as the profile of Attruby, there's $10 billion of peak year sales in this pipeline alone.
As that gets recognized, our cost of capital should keep decreasing. That's what I would say there.
Right. One last question. I should remember this, but I have to be honest and say I don't.
Okay.
Management guides to operating break even in 2027, still true? Yeah. While funding three launches. What has to be true on Attruby for that to hold?
Yeah. I think what we have said is a couple of things on this front. I think we've said that for the BridgeBio business, as it stands today with these four molecules as well as the Canavan program, we think that our operating losses last couple of quarters have been about $100 million. I think that that's going to stay at that rate in Q3, start to come down from Q4, probably break even late 2027, early 2028, and then transition to being cash flow generative. Attruby is already in margin expansion phase, and I think that the next three products, just given the profile of those launches, can quickly transition from being a place where we have to invest cash to actually generating cash in 2028. That's what I would say.
Like I said, excited about the profile for both Attruby and these next three launches.
Wonderful. Given we're out of time, might be a great place to stop it. Thank you, Chinmay, thank you, Julie, for your time. Appreciate it.
Thank you.
Thank you, Sean.