Will BioMarin (BMRN) Beat Estimates this Earnings Season? - Analyst Blog

BioMarin Pharmaceutical Inc. ( BMRN ) is scheduled to report fourth-quarter 2014 results on Feb 25 after the market closes.

BioMarin's track record has been pretty good with the company reporting narrower-than-expected losses in each of the trailing four quarters. Last quarter, the company delivered a positive earnings surprise of 27.27%. In fact, the company has posted positive earnings surprises in each of the trailing four quarters with an average beat of 37.16%. Let's see how things are shaping up for this announcement.

Vimizim in Focus

Last month, at the J.P. Morgan Healthcare Conference, BioMarin stated that its key products Naglazyme, Aldurazyme, Kuvan, Vimizim and Firdapse should continue to perform well. BioMarin expects total revenues from these five marketed products to surpass $700 million in 2014.

Moreover, BioMarin increased the guidance for its potential blockbuster drug, Vimizim, on the back of continued impressive performance. The company expects Vimizim sales in the range of $75 million to $77 million (old guidance: $65 million to $70 million) in 2014 with fourth quarter sales expected in the range of $34.6 million to $36.6 million. The company believes Vimizim could generate revenues of approximately $110 million in its first full four quarters.

With more than 1,650 mucopolysaccharidosis type IVA patients identified, Vimizim is already off to a strong start, even surpassing the company's expectations. Vimizim should continue to perform well in 2015 as reimbursement in additional EU and secondary markets pick up.

At the time of releasing third quarter results, BioMarin had lowered its net loss guidance to $50 million to $65 million for 2014. The narrowed loss guidance assumed higher revenues and lower R&D expenses. However, BioMarin will see a sequential increase in the SG&A spend as the company continues to step up marketing efforts for Vimizim in the U.S. and EU.

The key highlight of the quarter was BioMarin's acquisition of Prosensa for about $680 million. The acquisition added Duchenne muscular dystrophy candidate, drisapersen, to BioMarin's portfolio. The deal is expected to be accretive to BioMarin's earnings beginning 2017 assuming drisapersen gains early approvals.

On the fourth quarter call, the focus will be on the company's outlook for 2015 and its pipeline since multiple data readouts are lined up for the rest of the year.

Earnings Whispers?

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

Zacks ESP: The Earnings ESP for BioMarin is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are at a loss of 59 cents per share.

Zacks Rank: BioMarin carries a Zacks Rank #1 (Strong Buy). BioMarin's Zacks Rank #1 when combined with an ESP of 0.00% makes surprise prediction difficult.

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

Stocks That Warrant a Look

Impax Laboratories Inc. ( IPXL ) has an earnings ESP of +27.27% and carries a Zacks Rank #1. It is scheduled to report fourth-quarter results on Feb 24.

The earnings ESP for Sarepta Therapeutics, Inc. ( SRPT ) is +14.46% and carries a Zacks Rank #3 (Hold). The company is scheduled to release its fourth-quarter results on Feb 26.

Isis Pharmaceuticals, Inc. ( ISIS ) has an Earnings ESP of +108.33% and carries a Zacks Rank #2 (Buy). The company is scheduled to release results on Feb 27.

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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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