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What to Expect From BioMarin (BMRN) This Earnings Season?

BioMarin Pharmaceutical Inc.BMRN will report fourth-quarter and full-year 2017 results on Feb 22, after market close. BioMarin delivered a positive earnings surprise of 41.67% in the last quarter.

BioMarin's earnings track record has been strong, with the company beating estimates in each of the past four quarters, delivering an average positive surprise of 84.71%.

BioMarin Pharmaceutical Inc. Price and EPS Surprise

BioMarin Pharmaceutical Inc. Price and EPS Surprise | BioMarin Pharmaceutical Inc. Quote

BioMarin shares have declined 5.4% in the past year. This compares unfavorably with 2.4% decrease registered by the industry during this period.

Let's see how things are shaping up for the company this quarter.

Factors at Play

Key orphan disease drugs, Vimizim and Kuvan, which have been driving BioMarin's top line for some time now, are likely to maintain the trend this quarter too. Robust patient growth and penetration are likely to propel sales of the drugs. The respective Zacks Consensus Estimate for Vimizim and Kuvan for the third quarter is $111 million and $107 million.

However, Naglazyme and Vimzin revenues may vary on a quarterly basis due to inconsistent ordering patterns from some countries.

A slowdown in federal purchasing orders in Brazil hurt Naglazyme and Vimizim product revenues in the third quarter. However, BioMarin expects improved sales from Brazil in the fourth quarter.

Nevertheless, the drugs continue to witness steady patient growth and we expect the trend to continue this quarter.

We expect management to discuss how the pipeline is progressing on the conference call. Brineura was approved in both the United States and EU in 2017 for the treatment of children with CLN2 disease - a form of Batten disease. Its commercial launch is underway in the United States and EU.

Though Brineura generated sales of $3.1 million in the third quarter, we expect higher sales in the fourth quarter.

On the Q4 investor call, we expect management to comment on Brineura's launch progress and also on the launch preparation for pegvaliase. Pegvaliase, developed for treating phenylketonuria (PKU), is under review in the United States with the FDA expected to give its decision in the first half of this year.

Importantly, on the Q3 call, the company had said that due to the ramp up of BMN 270 and vosoritide programs, R&D spending will increase in the fourth quarter. This will result in lower adjusted net income compared to the first half of the year, similar to the trend seen in the third quarter.

Earnings Whispers

Our proven model does not conclusively show that BioMarin is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here, as you will see below.

Zacks ESP: Its Earnings ESP is -0.38%. The Zacks Consensus Estimate is pegged at a loss of 24 cents. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Zacks Rank: BioMarin's Zacks Rank #3 increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings beat.

We caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are some biotech stocks with the right combination of elements to beat on earnings this time around:

Exelixis EXEL is scheduled to announce fourth-quarter results on Feb 26. The company has an Earnings ESP of +8.94% and a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here.

Puma Biotechnology PBYI is scheduled to release results on Mar 1. The company has an Earnings ESP of +2.02% and a Zacks Rank #3.

Gemphire Therapeutics Inc. GEMP is expected to release results on Mar 21. The company has an Earnings ESP of +6.62% and a Zacks Rank #2.

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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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