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BioMarin (BMRN) Beats on Q1 Earnings, Lowers Sales View

Zacks Equity Research

BioMarin Pharmaceutical Inc.’s BMRN adjusted earnings of 63 cents per share beat the Zacks Consensus Estimate of 33 cents. Earnings were significantly better than the year-ago earnings of 14 cents per share due to higher revenues and lower costs

Total revenues were $502.1 million in the reported quarter, up 25% from the year-ago period, driven by higher product revenues. Sales beat the Zacks Consensus Estimate of $470 million.

In the quarter, the company experienced minimal business interruptions due to COVID-19. However, it expects more meaningful impact in the future quarters of 2020 due to disruptions of day-to-day operations of clinics and hospitals.

BioMarin’s shares have risen 12% this year so far compared with the industry’s increase of 1.8%.

 

 

Quarterly Details

Product revenues (including Aldurazyme) were $489.0 million in the quarter, reflecting a 24% increase year over year. Product revenues from BioMarin's marketed brands (excluding Aldurazyme) grew 24% year over year to $433.3 million. Royalty and other revenues were $13.03 million in the quarter, higher than $6.3 million a year ago.

Kuvan revenues rose 14% to $122 million driven by patient growth in North America.

Palynziq injection sales grossed $34.6 million in the quarter compared with $31.7 million in the previous quarter, driven by new patients initiating therapy as well as the growing number of U.S. patients who have now achieved maintenance dosing. The majority of Palynziq sales came from the United States. BioMarin expects meaningful revenue contributions from the EU for Palynziq in 2020.

Naglazyme sales rose 32% to $114.3 million mainly due to orders from Brazil and Russia.

Vimizim contributed $137.2million to total revenues, up 9% year over year owing to orders from Brazil.

Naglazyme and Vimzim revenues vary on a quarterly basis, primarily due to the timing of central government orders from some countries, mainly Brazil.

Brineura generated sales of $24.0 million in the first quarter, lower than $25.2 million reported in the previous quarter due to a modest year-end inventory build in the EMEA region in the fourth quarter.

BioMarin received Aldurazyme royalties — totaling $24.0 million — from Genzyme, a subsidiary of Sanofi SNY in the quarter, up 97% year over year.

R&D expenses declined 22.9% year over year to $123.8 million due to lower costs for development of Roctavian/valoctocogene roxaparvovec/valrox. Marketing expenses associated with Palynziq commercial efforts and launch preparations for Roctavian resulted in 16% increase in SG&A expenses to $153.7 million.

2020 Guidance

BioMarin lowered its total revenue guidance by 5% due to the uncertainty surrounding the coronavirus outbreak and its potential impact on its business. It expects the pandemic to cause demand interruptions such as missed patient infusions and disruption to new patient starts However, BioMarin expects the demand patterns to return to normal levels in the second half of the year

Total revenue guidance was lowered from a range of $1.95-$2.05 billion to $1.85-$1.95 billion.

Vimizim sales are expected in the range of $530-$570 million, lower than $560-$610 million expected previously. Kuvan sales guidance was maintained in the range of $430-$480 million. Naglazyme sales are predicted in the band of $360-$400 million, lower than $380-$420 million expected previously. Brineura sales are expected within $85-$115 million (maintained). Palynziq sales are forecast in the $160-$190 million range compared with the previous expectation of $180-$210 million.

The guidance for costs was maintained. R&D costs are expected to be within $675-$725 million. SG&A expenses are anticipated in the range of $780-$830 million.

The company still expects adjusted net income in the range of $260-$310 million, the midpoint of which indicates growth of more than 70%.

Pipeline Update

Earlier this month, BioMarin announced that it is planning to file regulatory applications for important pipeline candidate vosoritide in the third quarter in the United States and Europe, following its meetings with health authorities. Vosoritide has been developed to treat achondroplasia, the most common form of dwarfism.The regulatory applications will be filed based on data from successfully completed phase III study, which evaluated vosoritide as a treatment for achondroplasia in children aged 5 to 14 for 52 weeks. The filings will be further supported by long-term safety and efficacy from a phase II study and ongoing extension studies on vosoritide in dwarf children.

A potential approval will make the drug the first and only approved treatment for achondroplasia in the United States and Europe.

In February, the FDA accepted and granted priority review to its biologics license application (BLA) seeking approval for valrox, its investigational a gene therapy for severe hemophilia A. On the conference call, the company announced valrox’s brand name to be Roctavian.

With the FDA granting priority review to the application, a decision is expected on Aug 21. Per the company, if the BLA is approved, valrox will be the first gene therapy in the United States to be approved to treat any type of hemophilia. Meanwhile, the EMA also validated the marketing application for the product.  BioMarin earlier said that the EMA’s review process commenced in January under accelerated assessment. However, along with the earnings release, the company said that the review process in EU may be extended by atleast three months or the application may go back to the standard review process due to the COVID-19 delay. As such, an opinion from the CHMP is expected in late 2020/early 2021.

Zacks Rank and Stocks to Consider

BioMarin currently carries a Zacks Rank #3 (Hold).

BioMarin Pharmaceutical Inc. Price, Consensus and EPS Surprise

 

BioMarin Pharmaceutical Inc. Price, Consensus and EPS Surprise

BioMarin Pharmaceutical Inc. price-consensus-eps-surprise-chart | BioMarin Pharmaceutical Inc. Quote

A couple of better-ranked stocks in the biotech sector are Rubius Therapeutics RUBY and Vertex Pharmaceuticals VRTX, both with a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Rubius Therapeutics’ loss estimates for 2020 have narrowed from $2.40 per share to $2.16 per share over the past 60 days.

Vertex’s earnings per share estimates have moved up 1.3% for 2020 over the past 30 days. Share price of the company has increased 14.7% this year.

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