BioMarin Pharmaceutical Inc.: Sales Up, Losses Down, Waiting on Pipeline

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BioMarin Pharmaceutical (BMRN -0.44%) reported third-quarter earnings on Thursday and updated investors on its pipeline.

BioMarin Pharmaceutical results: The raw numbers

Data source: BioMarin Pharmaceutical press release. YOY = year over year.

What happened with BioMarin Pharmaceutical this quarter?

• As has been typical over the last few years, large orders of BioMarin's orphan drugs by foreign countries result in uneven growth patterns. This quarter it was Naglazyme with substantial growth, up 44% year over year, but sales of Naglazyme over the first nine months were still down 9% compared to the same period in 2015.
• Revenue from Kuvan, up 42% year over year, continues to benefit from BioMarin's reacquisition of rights to overseas sales from its former partner Merck Serono.
• Sales of Vimizim were up 25% year over year but down quarter over quarter, although the latter had to do with large purchases in Brazil and the Middle East that didn't recur in the third quarter.
• On the bottom line, BioMarin continues to lower its losses, and even showed a slight profit on an adjusted basis in the third quarter.
• In July, BioMarin presented data on its gene therapy for hemophilia A, BMN 270. Considering the high level of expression, the biotech has decided to try a lower dose that might not require the patient to also take steroids, before moving into larger trials required to get the drug approved.

What management had to say

"We've heard an anecdote from one of our investigators that one of our patients feels as though he won the lottery after being treated with BMN 270," said Henry Fuchs, president of worldwide research and development, on the conference call. That's the thing about gene therapy: It's a one-time treatment that results in a cure when it works. It's quite the dramatic shift in lifestyle compared to getting infusions for hemophilia every few days, which should bode well for sales if BioMarin can get BMN 270 approved.

There's been lots of talk about drug pricing this election cycle, but chairman and CEO Jean-Jacques Bienaime isn't worried about potential caps on raising drug prices: "If there were any kind of regulation or policy around limiting the number or the amount of price increase one can implement every year or so, that would have zero impact on our business today, because that's not what we've been doing."

Looking forward

Management held to its current 2016 revenue guidance of between $1.1 billion and $1.15 billion, but noted that revenue will likely come in at the lower end of the range. The company blamed recession and political instability in Brazil, as well as an attempted military coup in Turkey in July that disrupted its business.

In April of next year, BioMarin will hear about an FDA decision for Brineura, which treats Batten disease. The FDA decision was delayed by three months because BioMarin had to submit data from an ongoing extension study, which fortunately showed better efficacy at 81 weeks, compared to 48 weeks when the original study was completed. Data showing a longer response duration on the label should make the delay in approval worth it. A decision from EU regulators on Brineura is expected in the third quarter of next year.

Continuing on the pipeline front, BioMarin plans to start a phase 3 program for its dwarfism drug vosoritide by the end of this year. And next year will be busy, with the submission of a marketing application for pegvaliase in the first quarter of next year.