BioMarin Pharmaceutical Inc.’s (BMRN) second quarter 2011 loss of $0.05 per share was narrower than the Zacks Consensus loss estimate of $0.12 per share. The narrower-than-expected loss was attributable to higher revenues recorded by BioMarin in the second quarter of 2011. The company suffered a loss of $0.01 per share in the year-ago quarter.
Total revenues climbed approximately 20.2% to $110.6 million in the reported quarter. Revenues surpassed the Zacks Consensus Estimate of $105 million. Revenues were boosted by higher sales of the key products at BioMarin.
Net product revenues in the reported quarter climbed approximately 21% to $109.6 million. Naglazyme, approved for treating MPS-VI, a rare genetic enzyme deficiency disorder, contributed the bulk of the net product revenues recorded in the quarter. Revenues from the drug climbed 27.5% to $60.3 million.
Net product revenues from Kuvan tablets, indicated for treating mild-to-moderate forms of phenylketonuria (PKU), grew 16.6% to $28.8 million. The increase was attributable to the higher demand for commercial tablets in the US.
Revenues for BioMarin from another enzyme replacement therapy, Aldurazyme, decreased marginally to $17.3 million. BioMarin co-markets the drug with Sanofi-Aventis (SNY).
In addition to the above-mentioned products, BioMarin possesses the rights to Firdapse through its acquisition of Huxley Pharmaceuticals in October 2009. Net revenues from Firdapse, currently marketed in Europe, were $3.2 million in the quarter. Firdapse was launched in April 2010, in the European Union, for treating patients suffering from Lambert Eaton Myasthenic Syndrome (LEMS) – a rare autoimmune disorder.
2011 Guidance
Apart from announcing financial results, BioMarin also provided guidance for 2011. The company raised the guidance for total revenue and net product revenue. Total revenues are expected in the range of $436 million-$465 million (old guidance $422 million-$452 million). Net product revenues are expected in the range of $429 million- $458 million (old guidance $416 million-$446 million).
Revenue guidance for the marketed products at BioMarin is as follows: Naglazyme – $225 million-$240 million (old guidance $211-$225 million); Kuvan – $112-$120 million (unchanged); Aldurazyme – $79–$83 million (unchanged); and Firdapse – $13- $15 million (old guidance: $14-$18 million).
The outlook for selling, general and administrative expenses remained unchanged at $164-$174 million. BioMarin raised the lower end of the guidance for research and development (R&D) expenses. 2011 R&D expenses are expected in the range of $200 million-$205 million as opposed to the earlier expected range of $195 million-$205 million.
Our Recommendation
We currently have a Neutral recommendation on BioMarin. The stock carries a Zacks #3 Rank (short-term Hold rating).
We are encouraged by BioMarin’s better-than-expected performance in the second quarter of 2011. Moreover, the company has a robust pipeline with multiple events lined up. The successful development and commercialization of pipeline candidates would help drive long-term growth at BioMarin.
However, the disappointing initial sales ramp of Firdapse, launched in the EU in April 2010, concerns us. Moreover, we expect cash burn to increase owing to the company’s heavy investments in pipeline development.
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