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Why Is BioMarin (BMRN) Up 0.4% Since Last Earnings Report?

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It has been about a month since the last earnings report for BioMarin Pharmaceutical (BMRN). Shares have added about 0.4% in that time frame, underperforming the S&P 500.

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

Beats on Q2 Earnings, Ups 2021 Guidance

BioMarin’s second-quarter 2021 adjusted earnings of 53 cents per share beat the Zacks Consensus Estimate of 30 cents. Earnings surged 65.6% year over year on higher gross profit.

Total revenues were $501.7 million in the reported quarter, up 17% year over year. Sales also beat the Zacks Consensus Estimate of $449 million.

Excluding Kuvan revenues, which are being hurt due to generic erosion, total revenues grew 9% in the quarter.

Quarterly Details

Product revenues (including Aldurazyme) were $486.7 million in the quarter, up 16.1% year over year. Product revenues from BioMarin's marketed brands (excluding Aldurazyme) increased 19% year over year to $458.6 million. Royalty and other revenues were $15 million in the quarter, up 43.7%.

In the phenylketonuria (PKU) franchise, Kuvan revenues declined 36% to $78.8 million due to generic competition as the drug has lost exclusivity in the United States. Palynziq injection sales grossed $59 million in the quarter, up 45% year over year, driven by the growing number of U.S. patients who now achieved maintenance dosing as well as new patients initiating therapy. The number of U.S. patients on commercial Palynziq therapy rose 30% in the quarter.

However, new patient starts in the United States were lower than management expectations hurt by the pandemic impact as PKU clinics were not operating at full capacity. In Europe, Palynziq uptake was hurt by the pandemic due to softer new patient starts and delays in pricing and reimbursement negotiations.

 BioMarin expects patient growth for Palynziq in Europe when PKU clinics can freely operate and normalcy returns. In the United States, BioMarin expects U.S. PKU clinics to increase new patient starts at a slower pace than originally anticipated.

Total sales of PKU franchise declined 16% year over year to $137.8 million.

Naglazyme sales increased 47% to $118.8 million. Vimizim contributed $171.7 million to total revenues, up 47% year over year. Sales of both Naglazyme and Vimizim benefited from the favorable timing of orders from the Middle East and Europe. Naglazyme and Vimzim revenues vary on a quarterly basis, primarily according to the timing of central government orders from some countries.

Patients on commercial Naglazyme and Vimizim therapy both increased over 10% each year over year in the quarter. The company said that Naglazyme and Vimizim revenues are expected to be concentrated in the first half of 2021, which means that volumes in the above markets could be lower in the second half of the year.

Brineura generated sales of $30.3 million in the quarter, up 17% year over year. Patients on commercial Brineura therapy increased by more than 30% year over year.

On the second-quarter conference call, management stated that Naglazyme, Vimizim and Brineura maintained strong patient compliance driven by solid demand despite the impact of the pandemic.

Product revenues from Aldurazyme totaled $28.1 million, down 13% year over year.

R&D expenses declined 1.5% year over year to $133.2 million while SG&A expenses increased 3.7% to $151.5 million.

2021 Guidance

BioMarin raised its financial guidance for the year based on demand trends in the first half and strong expectations for the second half of the year. The company now expects total revenues in the range of $1.79-$1.88 billion compared with the earlier projection of $1.75-$1.85 billion.

Vimizim sales are expected in the range of $580-$620 million compared with the previous guidance of $570-$610 million. Kuvan sales are anticipated in the range of $260-$290 million compared with the previous expectation of $250-$290 million. Naglazyme sales are expected in the range of $375-$405 million compared with the previous range of $365-$395 million. Palynziq sales are expected in the range of $220-$260 million compared with the previous range of $210-$250 million. Brineura sales guidance was maintained in the range of $120-$140 million.

R&D costs are expected in the $645-$685 million band, which was previously expected within $645-$695 million. SG&A expenses are anticipated in the range of $735-$775 million, which was earlier anticipated within $725-$775 million. SG&A costs are expected to be weighted toward the second half of 2021.

The company now expects adjusted net income in the range of $190-$240 million, which was earlier expected in the band of $170-$220 million.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -29.38% due to these changes.

VGM Scores

At this time, BioMarin has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. 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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