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BioMarin (BMRN) to Report Q4 Earnings: What's in the Cards?

Zacks Equity Research

BioMarin Pharmaceutical BMRN is set to report fourth-quarter and full-year 2019 results on Feb 26, after market close. In the last reported quarter, the company delivered a positive earnings surprise of 26.5%.

BioMarin’s shares have risen 4.1% in the past year against the industry’s decrease of 3.4%.

 

 

The company’s earnings performance has been mixed. Its earnings beat expectations in two of the last four quarters and missed in the other two, with the negative surprise being 33.76%, on average.

BioMarin Pharmaceutical Inc. Price and EPS Surprise

 

BioMarin Pharmaceutical Inc. Price and EPS Surprise

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

Factors to Consider

Key orphan disease drugs, Vimizim and Kuvan, are likely to have driven BioMarin’s top line in the quarter. Robust patient growth is expected to have driven sales of Kuvan higher. The respective Zacks Consensus Estimate for sales of Kuvan, Vimizim and Naglazyme is$123 million, $150 million and $93 million.

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

New patient growth is likely to have driven sales of BioMarin’s newest drugs, Brineura and Palynziq injection higher in the fourth quarter. The Zacks Consensus Estimate for sales of Brineura and Palynziq stands at$22.05 million and $32.38 million, respectively.

However, lower royalty revenues on Aldurazyme, which BioMarin receives from Genzyme, a subsidiary of Sanofi SNY, is likely to have hurt revenues, to an extent.

Meanwhile, expenses associated with pipeline development and Palynziq commercial efforts and launch preparations for pipeline candidates, valoctocogene roxaparvovec (valrox) and vosoritide, are expected to get reflected in the bottom-line number.

We also expect management to discuss pipeline progress on the conference call. Important pipeline candidates are valrox, a gene therapy for severe hemophilia A and vosoritide for the treatment of children (ages 5-14) with achondroplasia.

BioMarin filed regulatory applications for valrox in U.S/EU in the fourth quarter, which was accepted and granted priority review by the FDA this month. The FDA is expected to give its decision on the same on Aug 21.

Regarding vosoritide, in December 2019, BioMarin announced positive top-line data from the phase III study evaluating vosoritide in children aged 5 to 14 with achondroplasia. Data showed that patients treated with the candidate achieved placebo-adjusted change from baseline in growth velocity of 1.6 cm/yr after treatment duration of one year. The company is planning to meet regulatory authorities in the first half of 2020 to discuss plans for submission of marketing applications for the candidate.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for BioMarin this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here.

Earnings ESP: Its Earnings ESP is -14.96% as the Zacks Consensus Estimate is pegged higher (21 cents per share) than the Most Accurate Estimate (18 cents per share). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: BioMarin currently carries a Zacks Rank #3.

Stocks to Consider

Here are two biotech stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases.

Vericel Corporation VCEL has an Earnings ESP of +11.29% and a Zacks Rank #1. The company is scheduled to release fourth-quarter results on Feb 25. You can see the complete list of today’s Zacks #1 Rank stocks here.

AMAG Pharmaceuticals AMAG has an Earnings ESP of +36.55% and a Zacks Rank #3.

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