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BioMarin Pharmaceutical Inc.: Solid Earnings, Pipeline Progressing

By Brian Orelli, PhD - May 5, 2016 at 5:05PM

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The biotech is setting itself up nicely for "break even or better on a non-GAAP basis" in 2017.

BioMarin Pharmaceutical (BMRN 2.55%) announced earnings last week. While the revenue growth was solid, investors should be equally excited about BioMarin's maturing pipeline.

BioMarin Pharmaceutical results: The raw numbers


Q1 2016 Actuals

Q1 2015 Actuals

Growth (YOY)


$236.7 million

$202.9 million


(Loss) from Operations

($85.1 million)

($67.5 million)


(Loss) Per Share




Data source: BioMarin Pharmaceutical.

What happened with BioMarin Pharmaceutical this quarter?

  • Most of the revenue growth came from Vimizim -- up 43.5% year over year, and Kuvan, which increased 53.2% year over year.
  • Sales of Naglazyme continued its usual lumpy sales -- down this quarter because of timing of sales to Brazil -- but patient growth was up 8.5% year over year, so it's nothing to worry about.
  • The company held an R&D day last month where it shared data on BMN270, a gene therapy for hemophilia A, in which the patients appear to be improving the longer they're in the trial. Investors also got a look at extended data on vosoritide for dwarfism, showing that the drug continues to help patients after a year of therapy, and updates on other pipeline drugs.
  • Based on recently released positive phase 3 data for pegvaliase in patients with phenylketonuria (PKU), BioMarin plans to submit a marketing application to the Food and Drug Administration in the second half of 2016.
  • On the downside, the FDA turned down BioMarin's Duchenne muscular dystrophy drug Kyndrisa in January, but that was widely expected after a negative advisory committee meeting.

What management had to say
Jeff Ajer, BioMarin's chief commercial officer, gave an update on the acquisition of the PKU business from its former partner Merck Serono:

In international markets, we have successfully navigated through the transition process, and are now receiving orders directly from the majority of top markets worldwide. We view the acquisition of PKU rights in these markets would be an important opportunity for BioMarin to establish commercial leadership in the treatment of PKU, first with Kuvan, and in advance of regulatory developments with pegvaliase.

BioMarin's CFO Dan Spiegelman pointed out what will happen to GAAP earnings if EU regulators don't approve Kyndrisa, which points to the absurdity of using GAAP numbers for biotechs: "If Kyndrisa is not approved in the EU, we expect limited impact on our non-GAAP results for 2016, but GAAP results would be materially affected primarily due to a likely impairment charge of most or all of the Kyndrisa intangible asset and changes to expected acquisition amortization in contingent consideration expenses."

Looking forward
The decision from EU regulators about Kyndrisa is expected later this quarter. As previously disclosed, management thinks it can be "break even or better on a non-GAAP basis" in 2017, even if the drug is turned down. With marketing applications for pegvaliase and cerliponase alfa for Batten disease expected this year, 2017 looks like a growth year, even without Kyndrisa.

For this year, BioMarin will run a loss -- on both a GAAP and non-GAAP basis -- but it's moving in the right direction. Revenue guidance for sales of Vimizim increased to $315 million to $340 million from a previous guidance of $300 million to $320 million. All told, management expects to bring in at least $1.05 billion in revenue, making it a blockbuster -- albeit taking four drugs to get there.

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