BioMarin Pharmaceuticals (BMRN 2.69%) started the year with a slow first quarter coming in under its 15% growth target, but management still feels like the company is in a good position to hit its previously announced 2019 revenue guidance, with sales of Palynziq ramping up and lumpy sales of its other drugs eventually averaging out.
BioMarin results: The raw numbers
|
Metric |
Q1 2019 |
Q1 2018 |
Year-Over-Year Change |
|---|---|---|---|
|
Revenue |
$400.7 million |
$373.4 million |
7.3% |
|
Income from operations |
($54.0 million) |
($44.4 million) |
N/A |
|
Earnings per share |
($0.32) |
($0.26) |
N/A |
Data source: BioMarin.
What happened with BioMarin this quarter?
- Sales of Kuvan, which treats phenylketonuria (PKU), were up 8% year over year.
- The launch of the company's new PKU treatment for adults, Palynziq, is off to a good start, with 414 patients on drug at the end of Q1, up 60% compared to the end of the previous quarter. Sales are still pretty small at just $12.3 million, but that's to be expected because new patients ramp slowly to the maintenance dose over the first six months or more of treatment.
- Sales of Brineura were up 77% year over year, but that was off a low base. Revenue came in at $12.2 million as the company makes progress finding patients with CLN2, the neurological genetic disease that Brineura treats.
- Older drugs Vimizim, Naglazyme, and Aldurazyme contributed year-over-year increases of 7%, 16%, and a year-over-year decrease of 31%, respectively, but revenue from all the drugs fluctuates based on timing of sales, which can be lumpy. Looking at demand, net patient growth for Vimizim was 12%. Naglazyme had 6% patient growth. And sales of Aldurazyme by BioMarin's partner Genzyme increased 20% year over year.
Image source: Getty Images.
What management had to say
As BioMarin comes up on three-year data for the midstage clinical trial of valoctocogene roxaparvovec (valrox), its gene therapy for hemophilia, Chief Commercial Officer Jeff Ajer noted:
The most important thing out of the three-year update is the bleeding data. And the two reasons for that are: one, that's the clinical morbidity of a patient's experience, it's what cost the healthcare system a lot of money, it's going to be what payers care a lot about. That's not to say that they won't care about other things, but for sure they're going to care about bleeding rate data. And so, what I think about that is little to no bleeding in the third year is going to be great.
BioMarin plans to file an application to start clinical trials for a second gene therapy, BMN 307 for PKU, but CEO Jean-Jacques Bienaime told investors that it wasn't abandoning the development of other types of therapies that have gotten the company to where it is now, saying, "Although gene therapy is a very important component of BioMarin in the future, at this time, we are not planning on turning into a gene therapy company."
Looking forward
Management reaffirmed its 2019 revenue guidance of $1.68 billion to $1.75 billion. The company thinks it can hit its 15% revenue goal again next year, putting in on track for approximately $2 billion in revenue in 2020. At that point, valrox and vosoritide, which treats a genetic disorder that results in dwarfism called achondroplasia, will hopefully both be approved and can accelerate growth.
An update on the long-term valrox data should be released shortly before the June 7 deadline for submitting the late-breaker abstract to the International Society on Thrombosis and Haemostasis annual meeting. Later in the year, BioMarin plans to make a decision about whether to apply for accelerated approval for valrox using a subset of the data or just wait for the full data for a full approval.
