But to suffice it to say that we have a lot of confidence in the future of the CNP franchise, a number of different opportunities for treating and transforming the lives of patients and a number of different approaches to take to give families as many good choices they can have for treating their children.
Operator: We’ll move next to Salveen Richter at Goldman Sachs.
Salveen Richter: Good afternoon. Thanks for taking my question. On the strategic review here across the [Technical Difficulty] levers for lowering OpEx from this line? And how are you thinking separately about the mid to late-stage pipeline in this context? And be the that may need to be done to sort of essentially add to the revenue pipeline on the floor.
Brian Mueller: Thanks, Salveen. This is Brian. You broke up for just a second when you mentioned the line item you were asking about. Would you mind repeating which one?
Salveen Richter: Sure. The R&D line item.
Brian Mueller: Yeah. R&D, thanks. So as you noted, starting with your question, thank you, by the way. The strategic review is looking at both strategy and operations and efficiency, and we’ll be eager to share details at Investor Day. But big picture, similar to the margin expansion narrative just enhanced now that we talked about in the past. It starts with a bit of core leverage of what we’ve built over the last many years, specific to R&D, full end-to-end, early-stage research, clinical regulatory to medical affairs, leveraging that engine. And then next, we’ll be streamlining the business and cost transformation. So doing that same work but more efficiently. And then third, as you’re seeing today is prioritizing the work on the right assets.
So those three things, we believe, will provide leverage. We’ll share more details on what the specific levers are and the tools around cost transformation and business efficiency at Investor Day, but those are the three big levers. I’ll hand it over to Hank on the pipeline question.
Henry Fuchs: Yeah, Salveen. The portfolio evaluation that we undertook was actually it started as a planned activity. But I think what’s new this year because we’ve been doing it annually every — so every — for the last several years. But what was new, I think, this year, well, a higher degree of rigor and a higher bar set and a tighter commercial input, as Alexander mentioned, as well. And I have to comment that I’m very pleased about that tighter commercial connection starting under Jeff and looking forward to Kristin (ph) joining, where we’ll really be able to have the opportunity to look at assets which are both important and transformational to patients, but also valuable to BioMarin as an organization. What didn’t change in any of this review is this notion that we’re going to do what we can to make a big difference in people’s lives.
We’re going to leverage good biology to find those assets that we believe are highly likely to work. Increasingly, what we’ve been doing is tying the timing considerations of our portfolio to our emerging growth strategy, which kind of leaves on the last piece of your question over — I’ll turn it over to Alexander to talk about your comments about the rest of the pipeline and potentially making room for later stage or other assets.
Alexander Hardy: Yeah. Thanks very much, Hank. Thank you, Salveen for the question. Yes. I mean, we are — we have a real commitment to innovation at BioMarin, and we’re excited about what we see in our early pipeline. We’re excited about the three assets that we are prioritizing to accelerate, and we’re extremely excited about the VOXZOGO life cycle management, which we’re really excited at this call to be able to share some really significant progress, I think, as you heard in Hank’s comments. . But we also see that going forward, in terms of meeting our ambitions for sustained growth into the long, long term, we see a role for external innovation. In the past, that’s been very successful for us from an early research standpoint.
We now see that there’s an opportunity by dialing in on assets that could augment our existing portfolio that leverage our distinctiveness, i.e., what we know and we know we do well, better than others, that we should be more open to those sorts of opportunities. I would just stress that our guidance at the moment for this year does not reflect any incremental BD activity. We will share more, and you’ll have to keep history of saying this. We’ll share more at Investor Day about our plans in the space. But in the interim, we’ve got no plans right now to transact major BD, but we do see a growing role for this in the future.
Salveen Richter: Helpful. Thank you.
Operator: We’ll take our next question from Chris Raymond at Piper Sandler.
Christopher Raymond: Yeah. Thanks. So just on the leverage you guys highlighted here. The focus today is all on the [indiscernible] pipeline. But I guess I wanted to ask on another important line item, which is SG&A, BioMarin’s historical spending as a percent of revenue has been pretty meaningfully above that of your large-cap peers. Yeah. And I know the last Q, if you will hasn’t dropped yet with respect to all the transformation you’re affecting here, Alexander. But any sort of thoughts there in terms of the potential in terms of having maybe a more in-line SG&A line item.
Brian Mueller: Hey, Chris. This is Brian Mueller. Thank you for the question. I’ll start just to give you a little more color on the line item. And then maybe hand it over to Alexander as he thinks about the opportunity. So I might reference back to the comments I gave in response to Salveen’s question on R&D, it does start with leverage. So importantly, as you know, in order for us to get to the $2 billion plus in revenue, mostly through the base enzyme products business where we sell in almost 80 markets, very diverse, complicated global sales and marketing, supply chain and related supporting infrastructure. That’s the level of operational capability that we built over the last decade. And basically, over the last couple of years and now going forward, we’re growing into it and making that machine work.
It’s that same infrastructure that’s not launching VOXZOGO that’s driving a lot of the margin improvement that you’re seeing last year and this year. It will be that same infrastructure that launches future products grows the business from here. So it does start with leveraging what we built, recognizing that, that was a significant investment in the last few years. And then next, what we’re doing is streamlining it. Again, our focus over the last several years has been that organic capability growth. We’re now focused on optimizing the business, and prioritizing [indiscernible] we’re also making sure we’re reallocating resources, not just to the right places organizationally and globally, but in the right brands. VOXZOGO with this growth we’ve seen and its future potential deserves more resource allocation.
How can we continue to sustain this robust launch? And for the mature brands is there an opportunity to be more efficient there and recognize that while they’re still growing, they may not require the same level of investment that they did over the years. So that’s the approach. Alexander, can comment on the opportunity?
Alexander Hardy: Yes. Thanks very much, Brian. Thanks for the question, Chris. Yes. I mean I’ve been really impressed by the potential leverage we have with our footprint in 70 countries and the capabilities we have globally. So building off the leverage, just like we’ve done with R&D, we’re considering how to really leverage the capabilities we’ve got to have a greater impact and to be more efficient. And that’s one of the work streams that we have is cost transformation. It’s looking at all the line items on our P&L to say how can we now optimize that. So you can expect to hear more from us at an Investor Day about our specific plans on the G&A line. On the sales and marketing line and additional efficiency in how we do research and development.
This will all be rolled up into the long-term guidance that we’ll be providing and our path to significantly improved margins, which as we’ve said, at the start of this year was one of our priorities. So more details to come, but it’s certainly one of the areas of focus for us.
Christopher Raymond: Thank you.
Operator: We’ll take our next question from Akash Tewari at Jefferies.
Unidentified Participant: Hey. This is Amy (ph) on for Akash. Thanks so much for taking our question. So first, what’s driving the difference between the reported VOXZOGO demand increase and the revenue increase from the numbers it seems like the demand is up more than sales from a quarter-over-quarter basis, would really appreciate any color on how to reconciliate this? And then also, if we can sneak in one more. Is there an increased appetite to divest the gene therapy franchise and can you outline how much spend this makes up currently on OpEx? Thanks so much.
Brian Mueller: Thanks for the question, Amy. This is Brian. I’ll start and Jeff has any other color to add. I think what you’re starting to see on the VOXZOGO line is the consequences of its robust growth globally and a number of significant markets now online. Whereby we’ve got two things going on. One, some order timing. We’ve seen that trend over the years with the enzyme business. We’re seeing a bit of larger for those markets that place less frequent larger orders. We’re seeing some VOXZOGO revenue impacted by basic order timing. Two is the timing of patient additions at being a chronic therapy, any new patient additions for VOXZOGO, especially in say, the second half of the quarter are going to be less revenue generating than patients that were on drug the entire quarter.
