BioMarin (BMRN) Q4 Earnings Beat, 2021 Sales View Dull

BioMarin Pharmaceutical Inc.

’s

BMRN

adjusted earnings of 21 cents per share beat the Zacks Consensus Estimate of 17 cents. Earnings were however down 16% year over year due to lower revenues and gross profit.

Total revenues were $452.1 million in the reported quarter, down 1% from the year-ago period. Sales, however, beat the Zacks Consensus Estimate of $447 million.

In the quarter, the company continued to experience a significant impact of COVID-19. The pandemic caused demand interruptions such as missed patient infusions and disruption in new patient starts for some of its products.

Quarterly Details

Product revenues (including Aldurazyme) were $437.1 million in the quarter, almost flat year over year. Product revenues from BioMarin’s marketed brands (excluding Aldurazyme) rose 6% year over year to $435.8 million. Royalty and other revenues were $15.1 million in the quarter, down 15.6%.

In the phenylketonuria (PKU) franchise, Kuvan revenues declined 27% to $89.0 million due to generic competition as the drug lost U.S. market exclusivity in October 2020. Palynziq injection sales grossed $49.6 million in the quarter, up 56% year over year driven by new patients initiating therapy as well as the growing number of U.S. patients who have now achieved maintenance dosing. Total sales of PKU franchise declined 10% year over year to $138.6 million.

Naglazyme sales rose 26% to $119.7 million. Vimizim contributed $142.5 million to total revenues, up 8% year over year. Sales of both Naglazyme and Vimizim benefited from the favorable timing of orders from the Middle East and Latin America.  Naglazyme and Vimzim revenues vary on a quarterly basis, primarily due to the timing of central government orders from some countries.

Brineura generated sales of $35.0 million in the quarter, up 39% year over year.

Product revenues from Aldurazyme totaled $1.2 million, down 95% year over year due to unfavorable timing of product fulfillment to

Sanofi

’s

SNY

subsidiary Genzyme.

Genzyme is BioMarin’s sole customer for Aldurazyme and is responsible for marketing and selling Aldurazyme to third parties.

R&D expenses declined 14.1% year over year to $133.5 due to lower clinical activity spend for valoctocogene roxaparvovec for severe hemophilia A. SG&A expenses increased 2.5% to $165.2 million.

Full Year Results

Full-year 2020 total revenues increased 9% to $1.86 billion. Adjusted earnings were $1.63 per share in 2020 compared with 93 cents in the year-ago quarter.

2021 Guidance

BioMarin issued its financial guidance for 2021. The company expects the pandemic to hurt sales in 2021. Total revenues are expected in the range of $1.75-$1.85 billion. The Zacks Consensus Estimate stands at $1.91 billion.

Despite the sales and earnings beat, BioMarin’s shares were down almost 2% in after-hours trading on Feb 25 as the sales guidance fell short of investor expectations. BioMarin’s shares have declined 6.8% this year so far against the

industry

’s increase of 6%.

Vimizim sales are expected in the range of $570-$610 million. Kuvan sales guidance was maintained in the range of $250-$290 million. Naglazyme sales range is $365-$395 million. Brineura sales are expected within $120-$140 million. Palynziq sales guidance was maintained in the range of $210-$250 million.

R&D costs are expected to be within $645-$695 million. SG&A expenses are anticipated in the range of $725-$775 million.

The company expects adjusted net income to be in the range of $170-$220 million.

Pipeline Update

In August 2020, the FDA issued a complete response letter (CRL) to BioMarin’s biologics license application (BLA) for valoctocogene roxaparvovec, a gene therapy for severe hemophilia A. The BLA application was based on interim data from an ongoing phase III study and the updated three-year results from a long-term phase I/II study

However, the FDA was not satisfied with the data and asked for two-year follow-up data on annualized bleed rates from the ongoing phase III study to provide additional evidence of a durable effect.  One year of follow-up of all patients in the study were announced last month.

With a mean follow-up of 71.6 weeks, data from the phase III study – GENEr8-1 – showed that treatment with a single dose (6e13 vg/kg) of the gene therapy candidate significantly reduced annualized bleeding rate (ABR) by 84% and the mean annualized factor VIII (a clotting protein) infusion rate in the rollover population by 99%. Meanwhile, the mean annualized bleed rate was 0.9 in a subset of patients dosed more than two years ago.

Investors were expecting the FDA to grant accelerated approval to the drug on the PDUFA date of Aug 21. It was expected that valoctocogene roxaparvovec, if approved, would be a transformational product as it has the potential to dramatically change the treatment paradigm. However, the CRL now pushes potential approval of valoctocogene roxaparvovecto 2022 and is a major blow to BioMarin’s prospects. BioMarin also withdrew its marketing authorization application (MAA) in the EU for valoctocogene roxaparvovec. BioMarin plans to re-submit the MAA along with this latest one-year data to the EMA in the second quarter of 2021 and will also share the data with the FDA.

Another important candidate in its pipeline is vosoritide, which has been developed to treat achondroplasia, the most common form of dwarfism. The regulatory applications for vosoritide are under review in the EU and the United States. A decision in the United States is expected on Aug 20, 2021. A potential approval will make the drug the first and only approved treatment for achondroplasia in the United States. BioMarin estimates that around 25,000 children suffer from this disorder in its commercial territories, which represents a decent sales growth opportunity.

In December 2020, BioMarin announced data from a phase III extension study on vosoritide, which showed that the candidate demonstrated sustained growth effects for over two years in the above patient population.

Zacks Rank and Stocks to Consider

BioMarin currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the biotech sector include

Moderna


MRNA

and

Acorda Therapeutics


ACOR

. While Moderna sports a Zacks Rank #1 (Strong Buy), Acorda has a Zacks Rank #2 (Buy).

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