With BioMarin Pharmaceuticals (NASDAQ:BMRN) announcing that it will be profitable in 2017 on a non-GAAP basis with the approval of its Duchenne muscular dystrophy drug, drisapersen, in either the U.S. or Europe, most of the focus on the conference call will be on the potential approval of drisapersen.
Here are three things you should pay attention to as the biotech reports first quarter earnings.
Drisapersen in the U.S.
On Monday, BioMarin announced that it completed its submission of the application to market drisapersen in the United States. The Food and Drug Administration has two months to review the application and decide whether to accept the application. Drisapersen's previous owner, Prosensa, which BioMarin bought last year, said the FDA gave the company "positive feedback" about applying with the current data set, so the FDA's accepting the application seems likely.
An approval, on the other hand, is far from a sure thing. The drug failed its phase 3 trial, but BioMarin is hoping that the "totality of data" will be enough to get the drug an accelerated approval, which requires the company to run a follow-up trial to confirm that the drug works. Given the unmet need -- there aren't any drugs approved to treat Duchenne muscular dystrophy -- BioMarin might be able to gain approval despite the far-from-clean data.
We'll find out about the exact timing of when to expect an FDA decision when the FDA accepts the application, but the decision should come around the end of the year, assuming the drug gets an accelerated approval. There will also probably be an FDA advisory panel meeting of outside experts that will make a recommendation to the FDA, so listen for management's feelings on the challenges of that meeting.
Drisapersen in Europe
BioMarin plans to submit its application to market drisapersen in Europe this summer. Compared with their U.S. counterparts, European regulators tend to be more lenient on efficacy issues -- and more stringent on safety issues, but that doesn't seem to be an issue with drisapersen -- so the likelihood of approval is probably higher in the EU than in the United States.
BioMarin hasn't said much about the European application beyond the plan to apply during the summer. With the U.S. application wrapped up, hopefully the company gives some indication on its plans to persuade regulators to approve the drug there. Like the U.S., the approval will probably be contingent on BioMarin's running an additional clinical trial to confirm that the drug works.
Oh, yeah, the rest of BioMarin's drugs
On its fourth-quarter conference call, BioMarin said it expects revenue of between $840 million and $870 million this year. The guidance included $35 million in "lost" revenue from changes in currencies. Since the dollar has strengthened further, we may see further scale-back of the guidance unless the quarter blows past expectations and the company feels it can make up for the additional currency exchange-rate changes.
Of all of BioMarin's drugs, Vimizim is the one to keep an eye on, as it should contribute the most to BioMarin's year-over-year growth. Last year, BioMarin sold $77 million worth of Vimizim, which treats a genetic disease called Mucopolysaccharidosis type IVA, but it expects that to more than double to between $170 million and $200 million this year.
BioMarin finished the year with $37 million worth of Vimizim sales in the fourth quarter, so the biotech needs quarter-over-quarter growth of about 13% to meet the midpoint of its goal. At constant growth, which probably isn't going to happen since the drug is still launching in different countries, BioMarin needs first-quarter sales for Vimizim of around $41.8 million to reach the midpoint of its goal.