BioMarin Pharmaceutical Inc.’s (BMRN) second quarter 2012 loss of 27 cents per share was wider than the Zacks Consensus loss estimate of 20 cents per share and the year-ago loss of 5 cents per share. The wider loss was due to an increase in operating expenses, which offset the increase in revenues.
Total revenues climbed 12.1% to $124.0 million in the reported quarter, beating the Zacks Consensus Estimate of $122 million. The increase in total revenues was attributable to higher net product revenues.
The Quarter in Details
Net product revenues in the reported quarter climbed approximately 12.2% to $123.0 million. Naglazyme, approved for treating MPS-VI, a rare genetic enzyme deficiency disorder, accounted for the bulk of the net product revenues recorded in the quarter. Revenues from the drug increased 4.3% to $62.9 million.
Net product revenues from Kuvan tablets, indicated for treating mild-to-moderate forms of phenylketonuria, grew 20.5% to $34.7 million. BioMarin is working on expanding Kuvan’s label and is conducting a randomized, placebo-controlled, 13-week outcomes study. Top-line results from the study are expected in the second quarter of 2013.
Revenues from another enzyme replacement therapy, Aldurazyme, co-marketed with Sanofi (SNY), shot up 26.0% to $21.8 million. BioMarin recorded an increase of 8% in the number of Aldurazyme patients.
Net revenues from Firdapse, currently marketed in EU, were $3.6 million in the quarter, up 12.5% year over year. Firdapse was launched in April 2010, in the EU, for treating patients suffering from LEMS — a rare autoimmune disorder. The drug has performed disappointingly since launch.
Both research & development (R&D) expenses (up 47.1%) and selling, general &administrative expenses (SG&A) expenses (up 25.7%) shot up in the quarter, leading to a 41.1% rise in total operating expenses.
We are encouraged by BioMarin’s efforts to develop its pipeline. With multiple pipeline events lined up, R&D costs are expected to increase further in the coming quarters.
2012 Outlook
BioMarin continues to expect total revenues in the range of $475–$510 million, total product revenue in the range of $470–$505 million, Naglazyme net product revenues in the range of $250–$265 million, Aldurazyme at $81–$87 million and Firdapse at $13–$17 million. However, BioMarin increased its guidance for net product revenues from Kuvan to $130–$140 million from $126–$136 million.
While the SG&A guidance remained unchanged at $195–$205 million, the R&D guidance was raised to $285–$295 million, from the previous range of $265–$275 million.
Our Recommendation
We have a long-term Neutral recommendation on BioMarin, which carries a Zacks #3 Rank (Hold) in the short run. While we are pleased to see the company working on its pipeline, we prefer to remain on the sidelines pending further pipeline development.
BIOMARIN PHARMA (BMRN): Free Stock Analysis Report
SANOFI-AVENTIS (SNY): Free Stock Analysis Report
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