) second quarter 2014 loss on an adjusted basis of 19 cents per
share was much narrower than the Zacks Consensus Estimate of a loss
of 42 cents but wider than the year-ago loss of 16 cents per share.
The narrower-than-expected loss was primarily due to
Biomarin Pharmaceutical Inc - Earnings Surprise
Total revenues (on an adjusted basis) climbed 36.7% to $192
million in the reported quarter, beating the Zacks Consensus
Estimate of $159 million. The year-over-year increase was
attributable to higher net product revenues.
Net product revenues in the second quarter of 2014 surged 42.1% to
$188.2 million. Naglazyme, approved for treating MPS-VI, a rare
genetic enzyme deficiency disorder, accounted for a significant
portion of product revenues in the quarter. Revenues from the drug
were up 40.6% to $98.3 million. Sales were positively impacted by
the timing of government ordering patterns in some international
Net product revenues from Kuvan tablets, indicated for treating
mild-to-moderate forms of phenylketonuria, were up 14.7% to $46.9
million. The impressive rise was due to higher demand for the drug.
BioMarin had launched Kuvan in powder form for oral solution
earlier in the year. The launch of the new form will boost the
drug's sales potential. The new version will benefit very young and
elderly patients who are either intolerant to or have difficulty
with the tablet version. BioMarin receives royalties from partner
) on Aldurazyme. Aldurazyme royalties (excluding transfer revenues)
amounted to $24.4 million in the second quarter, up 15.1%.
Net revenues from Firdapse, currently marketed in the EU, came in
at $4.6 million in the quarter compared with $4.1 million a year
ago. Firdapse was launched in Apr 2010 in the EU for treating
patients suffering from LEMS, a rare autoimmune disorder. The drug
has performed disappointingly since launch.
The latest entrant in BioMarin's product portfolio is Vimizim. The
drug was cleared in the EU last month for treating patients
suffering from MPS IVA. Approval of the drug in the U.S. came in
Feb 2014. Approvals in the EU and Canada came in Apr 2014 and Jul
2014 respectively. The drug contributed $14.3 million in the second
quarter of 2014 to total revenues. Following the U.S. approval of
Vimizim, BioMarin was awarded a voucher under an FDA program to
encourage the development of drugs to treat rare pediatric
diseases. The company sold the rare pediatric disease priority
review voucher (PRV) for $67.5 million to Regeneron Ireland, an
indirect, wholly owned subsidiary of Regeneron Pharmaceuticals (
Both research & development (R&D) expenses (25.7%) and
selling, general & administrative (SG&A) expenses (34.4%)
were steeper during the quarter. BioMarin's efforts to develop its
pipeline led to the increase in R&D expenses. Costs associated
with the marketing of Vimizim pushed up SG&A expenses.
2014 Revenue Outlook Upped
Encouraged by the strong sales of its primary products in the
second quarter, BioMarin raised its top-line outlook for 2014.
BioMarin now expects total revenues in the range of $745 million to
$765 million (old guidance: $650 million to $680 million). The sale
of the PRV voucher also contributed to the raised revenue outlook.
The Zacks Consensus Estimate for 2014 (prior to the release) was
$673 million. We expect it to be revised upwards following the
fresh outlook issued by the company.
We also expect the shares of the company to react positively to the
narrower-than-expected loss, higher-than-expected revenues and
The company now expects total Naglazyme revenues in the range of
$305 million to $320 million (old guidance: $290 million to $310
million). Kuvan net product sales are still expected in the range
of $180 million to $200 million. The company still projects 2014
Vimizim sales of $60 million to $70 million. The company expects
Vimizim sales at the high end of the projected range.
Selling, general & administrative expenses are now expected in
the range of $280 million to $295 million (old guidance: $265
million to $285 million). Though the company expects R&D
expenses to rise in the remainder of the year, it lowered its
R&D guidance primarily because it has spent less than
anticipated in development programs. Based on its spending
dynamics, BioMarin now expects R&D expenses in the range of
$460 million to $480 million (old guidance: $500 million to $530
BioMarin carries a Zacks Rank #3 (Hold). A better ranked stock in
the health care space is Celgene Corporation (
) sporting a Zacks Rank #1 (Strong Buy).
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