BioMarin Cruises While It Waits on Seventh Approval

BioMarin Pharmaceuticals (BMRN -1.53%) is cruising along, posting solid double-digit revenue growth in the first quarter as it waits for its seventh potential product approval for pegvaliase, which is expected from the Food and Drug Administration (FDA) on or before May 25th.

BioMarin results: The raw numbers

Data source: BioMarin.

What happened with BioMarin this quarter?

• Sales of top-selling Vimizim grew 11% year over year, while Kuvan sales grew 7%. Naglazyme sales were down 7% year over year but they tend to be lumpy.
• The 23% increase in revenue was driven by a combination of a small contribution from recently launched Brineura, which wasn't on the market in the year-ago quarter, and Aldurazyme revenue, which more than tripled -- although that was mostly due to the new ASC 606 revenue accounting standard that calls for BioMarin to book all the revenue for Aldurazyme when it transfers the drug to its marketing partner Sanofi rather than when Sanofi sells the drug.
• Excluding the changes in revenue standards, sales would have been in the $346 million range, still a nice 14% year-over-year increase.
• BioMarin's loss was largely due to increased spending on the Brineura launch, anticipation of a launch of pegvaliase, and the phase 3 trials for valoctocogene roxaparvovec (valrox), its gene-therapy product for hemophilia A.
• The company disclosed that its third gene-therapy product will be for PKU, which will likely enter the clinic in 2019. In addition to the aforementioned valrox, BioMarin also has BMN 290, a gene-therapy program for a rare disease called Friedreich's ataxia that will be ready for an investigational new-drug application in the second half of this year.

Image source: Getty Images.

What management had to say

"The FDA is wrapping up their review of pegvaliase, and the anticipated follow-up process is unfolding as expected, including discussions on potential post-marketing commitments, labeling, and safety management," said Henry Fuchs, BioMarin's president of worldwide research and development.

The discussions are a good sign, as there's no sense in regulators talking about the label and what the company will have to do after approval if it's not planning on approving the drug. Fuchs also hedged his bets when he said, "Of course, it ain't over till it's over."

The company gave a little bit of information on pricing for pegvaliase, as well. "We expect to price pegvaliase at a moderate premium to the average price of an adult Kuvan patient, which is currently about $150,000 a year annually," said BioMarin's chief financial officer Daniel Spiegelman, who was filling in for chief commercial officer Jeffrey Ajer, who had laryngitis.

Looking forward

The approval of pegvaliase in the U.S. is the next big driver for BioMarin, although sales are likely to ramp slowly because the drug is titrated gradually, starting at weekly dosing before eventually increasing to daily dosing. European regulators accepted the application for pegvaliase last month, setting up a potential approval across the pond, too.

Of course, the biggest opportunity for revenue growth comes from valrox, although the phase 3 data still is far away. Fortunately, investors will get to see updated data from the phase 2 trial next month at the World Federation of Hemophilia 2018 World Congress. The long-term data -- out to two years for the higher dose of the gene therapy -- is important because the longer the treatment lasts, the more valrox saves insurers on not having to pay for the current standard-of-care drugs, which increases the amount BioMarin can charge for the one-time treatment.

That is, if it doesn't get bought out first.