BioMarin Pharmaceutical Sets Its Sights on $2 Billion

BioMarin Pharmaceutical (BMRN -1.60%) continued to increase sales of its drugs in the second quarter, adding its seventh commercial product this quarter as it drives toward GAAP profitability. (It's already there on an adjusted basis.)

BioMarin Pharmaceutical results: The raw numbers

Data source: BioMarin Pharmaceutical.

What happened with BioMarin Pharmaceutical this quarter?

• Sales of top-selling Vimizim grew 24% year over year, although some of that was due to timing of orders from Latin America and other regions where governments tend to buy in bulk.
• Sales of Kuvan increased 7% year over year, driven by the U.S., where the number of patients on the drug increased 10% year over year.
• The launch of Brineura remains slow, with sales of just under $11 million during the quarter, but that was to be expected given the small number of CLN2 disease patients. With no other drugs available to treat the disease, the crucial step for BioMarin is just finding the patients.
• In May, the Food and Drug Administration approved Palynziq, the commercial name of pegvaliase, for adults with phenylketonuria, the same disease that Kuvan treats, although Kuvan is primarily used by children. The drug is currently under review by European regulators as well.

Image source: Getty Images.

What management had to say

CEO Jean-Jacques Bienaime highlighted the company's midterm growth prospects: "With Palynziq now approved in the U.S. and on track for an EU approval in the second half of 2019, we believe we can generate approximately $2 billion in revenues in 2020 with our currently commercialized products alone." Not too bad, considering it only broke the combined $1 billion mark in 2016.

Chief Commercial Officer Jeffrey Ajer pointed out the mix of patients starting Palynziq:

I can't resist saying how pleased I am with that rapid uptake of naïve patient enrollments possibly exceeding our expectations at this stage. There is a mix of patient types in there. They're mainly naive to therapy. There are a handful of Kuvan switch patients inside there.

The naive patients are obviously more financially beneficial to BioMarin since they don't cannibalize sales of Kuvan.

Looking forward

Management left its 2018 guidance pretty much intact. BioMarin plans to spend a little more on research and development than previously planned to fund the expanded clinical trial for its hemophilia gene therapy, valoctocogene roxaparvovec (val rox). But the company will be able to absorb the increase, so earnings should still be in the range of previously announced guidance.

While the growth of BioMarin's currently approved drugs is certainly important, the results of the phase 3 trials for val rox will likely drive the biotech's valuation into the next decade. One of the phase 3 trials is scheduled to complete enrollment in the first quarter of next year, with the other completing a quarter or two after that, setting up results in 2020.