BioMarin (BMRN) Q1 Earnings Lower Than Expected, Sales Beat

BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) reported lower-than-expected earnings for the first quarter of 2018 but beat estimates for sales.

First-quarter adjusted earnings of 12 cents per share were lower than the Zacks Consensus Estimate of 13 cents and year-ago earnings of 20 cents. Earnings decreased year over year due to higher operating costs, partially offset by increased gross margins. However, the company reported a loss of 26 cents per share including amortization, depreciation and stock-based compensation expenses.

Total revenues came in at $373.4 million, up 22.9% from the year-ago quarter driven by higher product revenues. Revenues also topped the Zacks Consensus Estimate of $348.16 million.

BioMarin’s shares fell almost 1.4% in after-market trading on Apr 25, presumably on the company’s lower-than-expected earnings. So far this year, BioMarin’s shares have slightly outperformed the industry . While BioMarin’s shares are down 8.6%, the industry has witnessed a decrease of 10.1%.

Quarterly Details

Product revenues were $369.1 million in the quarter, up 22.1% year over year, supported by continued strong demand for BioMarin’s marketed products. Royalty and other revenues were $4.3 million in the first quarter, compared with $1.6 million in the year-ago quarter.

Kuvan revenues rose 7% to $99.1 million, reflecting patient growth in North America and continued uptake internationally. The number of patients on Kuvan therapy in the United States increased 9% year over year.

Naglazyme sales fell 7% year over year to $75 million due to the timing of government orders in certain countries. However, the number of patients increased 4% year over year.

Vimizim contributed $117.1 million to total revenues, up 11% year over year. The drug continued to witness steady patient growth as the number of patients on Vimizim therapy increased 16% in the quarter.

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

BioMarin received Aldurazyme royalties – totaling $66.1 million – from Sanofi’s (NYSE:SNY) Genzyme in the quarter. Royalties for Aldurazyme were $19.4 million in the year ago quarter. The significant increase in the royalty amount was due to the adoption of the new accounting standard and timing of sales to Genzyme.

The newest drug in BioMarin’s portfolio, Brineura, generated sales of $6.9 million in this quarter compared with $5.2 million in the fourth quarter of 2017. Brineura received approval for the treatment of children with CLN2 disease – a form of Batten disease – both in the United States and the EU in the first half of 2017. Its commercial launch is underway in the United States and EU.

Firdapse sales were up 20% year over year to $4.9 million.

Research and development (R&D) expenses were 26.9% higher year over year while selling, general and administrative (SG&A) expenses increased 15.3% in the quarter.

At the end of the first quarter of 2018, BioMarin had $1.7 billion in cash, cash equivalents and investments compared with $1.8 billion at the end of 2017.

Pipeline Update

In March 2018, BioMarin announced that the European Medicines Agency has accepted a Marketing Authorization Application for pegvaliase.

A FDA decision on its approval is expected late next month. Pegvaliase has been developed to treat phenylketonuria (“PKU”). The company said on the call that it is preparing for the launch in the United States.

Moreover, BioMarin has selected another gene therapy candidate for the treatment of PKU. An Investigational New Drug (“IND”) application to initiate studies on the candidate is expected to be filed next year in the United States.

BioMarin launched two separate phase III studies on valoctocogene roxaparvovec, its investigational gene therapy for severe hemophilia A. While one of these (GENEr8–1 study) is evaluating 6e13 vg/kg dose, the other one (GENEr8–2 study) is evaluating 4e13 vg/kg dose.

Another phase I/II study to evaluate a dose of 6e13 vg/kg of the candidate in patients producing neutralizing antibodies against AAV5 is likely to start this quarter.

Meanwhile, the global phase III program on another candidate, vosoritide for the treatment of children (ages 5-14) with achondroplasia (the most common form of dwarfism) continues to enroll as planned with top-line data expected in the second half of 2019.

In February 2018, the company presented interim data from a phase I/II study of BMN 250, evaluated for the treatment of Sanfilippo B syndrome or MPS IIIB. The data demonstrated normalization of an important biomarker and liver size, as well as suggested stabilization in cognitive decline.

Meanwhile, BioMarin is expected to file an IND this year for BMN-290, which will be developed for the treatment of Friedreich's ataxia, a rare autosomal recessive disorder.

2018 Outlook Maintained

BioMarin continues to expects total revenues in the range of $1.47 −$1.53 billion in 2018. The Zacks Consensus Estimate is pegged at $1.49 billion.

Vimizim sales are expected in the range of $460–$500 million. Kuvan sales are projected in the range of $440–$480 million, an increase of about 13% from 2017. Naglazyme sales are projected in the range of $325−$355 million. Brineura sales are expected in the range of $35–$55 million

Expenses related to R&D are expected within $645-$685 million while SG&A expenses are projected in the range of $575-$615 million.

The company expects adjusted net income in the range of $100 - $140 million.

Get The News You Want

Read market moving news with a personalized feed of stocks you care about.

Get The App

BioMarin Pharmaceutical Inc. Price, Consensus and EPS Surprise

Original post

Written By: Zacks Investment Research