Narrower-Than-Expected Loss at BioMarin - Analyst Blog

BioMarin Pharmaceutical Inc. 's ( BMRN ) second quarter 2013 loss of 16 cents per share was narrower than the Zacks Consensus Estimate of a loss of 28 cents per share and the year-ago loss of 27 cents per share. The narrower loss was due to higher revenues.

The Quarter in Details

Total revenues climbed 10.3% to $136.8 million in the reported quarter but missed the Zacks Consensus Estimate of $135 million. The year-over-year increase in total revenues was attributable to higher net product revenues.

Net product revenues in the reported quarter climbed approximately 7.6% to $132.4 million. Naglazyme, approved for treating MPS-VI, a rare genetic enzyme deficiency disorder, accounted for a significant portion of product revenues recorded in the quarter. Revenues from the drug were up 11.1% to $69.9 million during the quarter.

Net product revenues from Kuvan tablets, indicated for treating mild-to-moderate forms of phenylketonuria (PKU), were up 17.9% to $40.9 million. BioMarin is conducting a randomized, placebo-controlled, 13-week outcomes study (PKU-016) in patients treated with Kuvan. In Feb 2013, the company announced positive results from the PKU-016 study.

BioMarin recorded revenues from another enzyme replacement therapy, Aldurazyme, co-marketed by Sanofi ( SNY ), of $17.5 million, down 19.7%.

Net revenues from Firdapse, currently marketed in the EU, came in at $4.1 million in the quarter. 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.

While research & development (R&D) expenses up were up 10.1%, selling, general & administrative (SG&A) expenses went down 1.7% during the quarter. Total operating expenses were up 1.2% in the reported quarter.

Pipeline Update

In Mar 2013, BioMarin submitted a Biologics License Application (BLA) to the FDA for Vimizim (GALNS) for the treatment of patients suffering from mucopolysaccharidosis Type IVA (MPS IVA) or morquio A syndrome. The BLA submission was based on positive results from a phase III study on Vimizim. Vimizim was granted a priority review designation by the FDA and a final verdict on the U.S approval of the candidate is expected in Feb 2014.

BioMarin also submitted a Marketing Authorization Application (MAA) to the European Medicines Agency (EMA) for the candidate earlier this year. BioMarin expects the Committee for Medicinal Products for Human Use (CHMP) of the EMA to provide its verdict on the EU approval of Vimizim by year end.

Moreover, BioMarin initiated a phase III study on its PKU candidate PEG-PAL during the reported quarter, with top-line data expected by the end of next year. The company expects to commence a phase III study on BMN-673 shortly in patients suffering from breast cancer. BioMarin also has several other pipeline related events lined up this year.

2013 Outlook

Apart from announcing financial results for the second quarter of 2013, the company also maintained its revenues outlook for 2013. BioMarin still expects total revenues in the range of $530-$555 million. The Zacks Consensus Estimate of $539 million is well within the company's guidance range.

The company also maintained total Naglazyme revenues in the range of $265-$285 million and Kuvan net product sales in the range of $155-$170 million for 2013.

However, BioMarin narrowed its SG&A expenses guidance to the range of $220-$240 million from the previous range of $220-$250 million. The company meanwhile continues to expect 2013 R&D in the range of $340-$380 million.

Our Take

We are impressed with the company's progress with its pipeline. Vimizim, on approval, is expected to drive growth at BioMarin. We expect investor focus to stay on the candidate's regulatory progress.

BioMarin currently carries a Zacks Rank #3 (Hold). However, companies such as Jazz Pharmaceuticals Public Limited Company ( JAZZ ) and Cadence Pharmaceuticals Inc. ( CADX ) look better positioned. While Jazz Pharma carries a Zacks Rank #1 (Strong Buy), Cadence carries a Zacks Rank #2 (Buy).

BIOMARIN PHARMA (BMRN): Free Stock Analysis Report

CADENCE PHARMA (CADX): Free Stock Analysis Report

JAZZ PHARMACEUT (JAZZ): Free Stock Analysis Report

SANOFI-AVENTIS (SNY): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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