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BioMarin (BMRN) Down 7.7% Since Last Earnings Report: Can It Rebound?

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It has been about a month since the last earnings report for BioMarin Pharmaceutical (BMRN). Shares have lost about 7.7% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is BioMarin due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

BioMarin Beats on Q4 Earnings, Gives 2021 Outlook

BioMarin’s adjusted earnings of 21 cents per share beat the Zacks Consensus Estimate of 17 cents. Earnings were however down 16% year over year due to lower revenues and gross profit.

Total revenues were $452.1 million in the reported quarter, down 1% from the year-ago period. Sales, however, beat the Zacks Consensus Estimate of $447 million.

In the quarter, the company continued to experience a significant impact of COVID-19. The pandemic caused demand interruptions such as missed patient infusions and disruption in new patient starts for some of its products.

Quarterly Details

Product revenues (including Aldurazyme) were $437.1 million in the quarter, almost flat year over year. Product revenues from BioMarin's marketed brands (excluding Aldurazyme) rose 6% year over year to $435.8 million. Royalty and other revenues were $15.1 million in the quarter, down 15.6%.

In the PKU franchise, Kuvan revenues declined 27% to $89.0 million due to generic competition as the drug lost U.S. market exclusivity in October 2020. Palynziq injection sales grossed $49.6 million in the quarter, up 56% year over year driven by new patients initiating therapy as well as the growing number of U.S. patients who have now achieved maintenance dosing. However, in Europe, Palynziq uptake was hurt by the pandemic due to clinic closures and disruption of pricing and reimbursement negotiations.

Total sales of PKU franchise declined 10% year over year to $138.6 million.

Naglazyme sales rose 26% to $119.7 million. Vimizim contributed $142.5 million to total revenues, up 8% year over year. Sales of both Naglazyme and Vimizim benefited from the favorable timing of orders from the Middle East and Latin America.  Naglazyme and Vimzim revenues vary on a quarterly basis, primarily due to the timing of central government orders from some countries.

Brineura generated sales of $35.0 million in the quarter, up 39% year over year driven by patient growth.

Product revenues from Aldurazyme totaled $1.2 million, down 95% year over year due to unfavorable timing of product fulfillment to Genzyme.

R&D expenses declined 14.1% year over year to $133.5 due to lower clinical activity spend for valoctocogene roxaparvovec for severe hemophilia A. SG&A expenses increased 2.5% to $165.2 million due to preparation for the potential commercial launches of vosoritide and Roctavian.

As of Dec 31, 2020, BioMarin had $1.35 billion in cash, cash equivalents and investments, compared with $1.8 billion at the end of Sep 30, 2020.

Full Year Results

Full-year 2020 total revenues increased 9% to $1.86 billion. Adjusted earnings were $1.63 per share in 2020 compared with 93 cents in the year-ago quarter.

2021 Guidance

BioMarin issued its financial guidance for 2021. The company expects the pandemic to continue to hurt sales in 2021. The company also expects significant declines in Kuvan revenues in the United States.

Total revenues are expected in the range of $1.75-$1.85 billion. Though the absolute sales range is lower than 2020, the guidance, at the midpoint indicates growth of 9% year over year for the core business (excluding Kuvan).

Vimizim sales are expected in the range of $570-$610 million. Kuvan sales guidance was maintained in the range of $250-$290 million. Naglazyme expected sales range is $365-$395 million. Brineura sales are expected within $120-$140 million. Palynziq sales guidance was maintained in the range of $210-$250 million. R&D costs are expected to be within $645-$695 million. SG&A expenses are anticipated in the range of $725-$775 million. The company expects adjusted net income to be in the range of $170-$220 million.

Pipeline Update

BioMarin said it plans to re-submit the MAA for valoctocogene roxaparvovec along with this latest one-year data to the EMA in the second quarter of 2021 and will also share the data with the FDA and discuss with the agency on potentially submitting a BLA with one-year results.

BioMarin supplemented its NDA for vosoritide with two-year phase III data. The move could push the PDUFA date for the NDA from August to November.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended downward during the past month. The consensus estimate has shifted -58.89% due to these changes.

VGM Scores

Currently, BioMarin has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, BioMarin has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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