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BioMarin Cuts '14 Revenue View after Voucher Sale Evaluation

Zacks Equity Research

BioMarin Pharmaceutical (BMRN) lowered its guidance for 2014 revenues after a thorough evaluation of its transaction with Regeneron Ireland, an indirect, wholly owned subsidiary of Regeneron Pharmaceuticals (REGN).

We remind investors that along with its earnings release last month BioMarin had announced the sale of the rare pediatric disease priority review voucher for $67.5 million to Regeneron. The biopharmaceutical company was awarded the voucher under an FDA program to encourage the development of drugs to treat rare pediatric diseases following the U.S. approval of Vimizim (morquio A syndrome) in February this year. The drug was approved in the EU in April.

Along with its earnings release, BioMarin had stated that it expects total revenues for 2014 in the range of $745 million to $765 million. The projection was inclusive of the amount received from the sale of the voucher. However, following a complete assessment of the transaction, BioMarin mentioned that the proceeds should be treated as a gain on the sale of intangible assets.

Consequently, the amount was removed from the top-line guidance which has now declined to a band of $680 million to $700 million. The Zacks Consensus Estimate for 2014 (prior to the curtailed guidance) was $759 million. We expect it to come down as well following the fresh outlook issued by the company. The 2014 guidance for product sales remains unaltered. Consequently, Vimizim sales for 2014 are still expected in the range of $60 million to $70 million.

Vimizim is the fifth member of BioMarin’s product portfolio. The other marketed products of the company are Naglazyme (MPS-VI), Kuvan (phenylketonuria), Aldurazyme (MPS I) and Firdapse (:LEMS).

Apart from the strong product portfolio, BioMarin also boasts of an interesting pipeline. Multiple pipeline related events are lined up in the coming quarters. Successful development and subsequent commercialization of the candidates would strengthen BioMarin further.

BioMarin carries a Zacks Rank #3 (Hold). Better-ranked stocks in the health care space include Mallinckrodt (MNK) and Amgen (AMGN). Both stocks sport a Zacks Rank # 1 (Strong Buy).

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