BioMarin Pharmaceuticals: Lumpy Sales Strike Again

BioMarin Pharmaceuticals beat revenue expectations for the second quarter, but since the better-than-expected results came mostly from a one-time benefit from Naglazyme sales, the biotech kept its 2015 guidance steady.

Sales of top-selling Naglazyme jumped 13% year over year in the second quarter, but, as we've seen in other quarters,large orders in Latin America can make for lumpy sales. Management noted that there are about the same number of patients on Naglazyme as there were a year ago, so the jump really is a one-time benefit that can be ignored.

Sales of BioMarin's newest drug, Vimizim, which treats a genetic disease called Mucopolysaccharidosis type IVA, more than tripled year over year to $53.9 million. Second-quarter sales were only marginally larger than the $50.6 million in the first quarter, but the previous quarter contained about $5 million in stocking. If you back that out, sales increased about 20% quarter over quarter. To hit the low end of management's guidance for Vimizim sales of between $200 million and $220 million, BioMarin needs about 9% quarter-over-quarter growth for the remaining two quarters of the year.

Sales of Kuvan increased 28% year over year in the second quarter thanks to more patients starting treatment and those already on Kuvan taking it more regularly.

All told, BioMarin revenue was up 32% year over year in the second quarter. But despite the solid increase in revenue, spending was also up considerably -- research and development expenses jumped 47% year over year -- resulting in a larger net loss, $82 million, than the $33.5 million net loss seen in the year-ago quarter.

Of course, an $82 million net loss isn't a major issue. A lot of it is non-cash charges, and BioMarin still has almost $1.2 billion in the bank. The biotech isn't in danger of running out of cash anytime soon.

In fact, BioMarin is still hoping to show a non-GAAP income in 2017 assuming its Duchene muscular dystrophy drug drisapersen is approved in the U.S. or Europe. Regulatory agencies on both sides of the pond have accepted BioMarin's marketing application; the first inclination about the drisapersen's chances for approval will come when an FDA advisory committee reviews the drug.

There's a tentative advisory committee meeting scheduled for November, but the FDA hasn't told management that it's to review drisapersen. The agency may be waiting until it accepts Sarepta Therapeutics'application for its completing drug eteplirsen to finalize the tentative meeting and book the reviews of both drugs back to back.

With Sarepta on its heels, BioMarin is preparing to hit the ground running if the FDA gives the biotech a thumbs up later this year. Interestingly, management said that while more than half of Duchene muscular dystrophy patients had been genotyped, many doctors weren't sure which patients would be appropriate for an exon 51 skipping therapy, such as drisapersen or eteplirsen. That shouldn't come as too much of a surprise since there hasn't been much of an incentive for doctors to differentiate genotypes since there aren't any therapies available to treat patients right now. But it means BioMarin is going to have to spend a lot of time educating doctors, something the orphan-drug specialist already has lots of experience doing for its other drugs.

Beyond drisapersen, BioMarin has a well stocked pipeline, including vosoritide for the treatment of achondroplasia, a form of short-limbed dwarfism. During the second quarter, BioMarin presented phase 2 data for the 15g/kg/daily dose that produced a 50% increase in mean annualized growth velocity, which is enough for children to return to a normal growth rate.

BioMarin is working toward taking the 15g/kg/daily doseinto phase 3 development, but it also recently started testing a 30g/kg/daily doseof vosoritide that it hopes could be used for patients that start treatment late and need to catch up.

The biotech is also ready to start testing BMN 270, a gene therapy, for treating hemophilia. With all the competition in the space, BioMarin's ability to get in the clinic first will give it a distinct advantage since gene therapies will hopefully result in cures, so patients will only require one treatment.

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