BioMarin Pharmaceuticals (BMRN +1.00%) used the word "profitability" in its fourth-quarter earnings release. Of course, it was surrounded by a couple of conditions: not until "2017," on a "non-GAAP basis," and requires the "near-term approval of drisapersen in either the U.S. or Europe."
But investors will take it, especially the "or" between "U.S." and "Europe."
You'll recall that BioMarin gained rights to drisapersen through its acquisition of Prosensa last year. BioMarin is looking to complete the FDA submission for the Duchenne Muscular Dystrophy drug in April.
That's about a month later than the previous timeline, but the delay seems to be simply due to making sure the data is presented in the best possible light. The phase 3 trial failed its primary endpoint, so the extra time spent on data analysis could be the difference between a "near term" approval and one that's years away if the FDA makes BioMarin run another study.
BioMarin has experience with less-than-perfect regulatory packages, including Aldurazyme, which missed its primary endpoint but still gained approval.
BioMarin plans to submit a marketing application to European regulators this summer. The fact that either territory would be enough to get to profitability on a non-GAAP basis in 2017 is good news, because European regulators tend to be a little more lax with imperfect data.
For example, InterMune, now part of Roche, was able to gain European approval for Esbriet with only half of the phase 3 clinical trials successful, but the FDA made the biotech run a third trial to confirm the drug really worked. It did.
While an approval of drisapersen is needed to reach profitability in 2017, BioMarin still can't forget about its already-approved drugs. Hitting the company's sales goals is critical to ensuring profitability. This year, BioMarin is looking for revenue between $840 million and $870 million.
At the midpoint, that's a 14% increase over 2014, substantially down from the 37% year-over-year growth BioMarin saw between 2013 and 2014, but part of the slower growth has to do with changes in currency, which is out of the company's hands. On a constant currency basis, at the midpoint, the guidance for 2015 comes in 20% higher than last year.
And let's not forget that BioMarin's management is notoriously conservative with its guidance. This time last year, management was guiding for 2014 revenue of $650 million to $680 million when BioMarin actually finished the year with $751 million in revenue.
Beyond drisapersen and the approved durgs, BioMarin's pipeline will determine how quickly that profitability increases beyond 2017. Data for the phase 3 trial testing pegvaliase, which used to go by PEG PAL, in patients with phenylketonuria is expected in the first quarter of 2016. Add a few months to complete the application and another eight months for review time -- if the drug gets a priority review -- and pegvaliase could be on the market in 2017 if the clinical trial data is positive.
And there's Cerliponase alfa, which also goes by BMN 190, for late infantile CLN2 disease, a form of Batten disease. The drug is only in a phase 1/2 trial, but the data from the first nine patients looked so good -- stable disease over six months versus an expected decline in motor and language function -- that there's a possibility to get approved based on a limited number of patients although BioMarin still has to work out the details with regulatory authorities. Look for the full data set in the fourth quarter of the year.
