BioMarin Prices Share Offering

BioMarin Pharmaceutical Inc. (BMRN - Analyst Report) recently announced the pricing of an underwritten public offering of 6.5 million shares of its common stock. BioMarin expects gross proceeds of around $248.9 million from this public offering.

The public offering is expected close on June 5, 2012. The underwriters will also be granted a 30-day option to purchase an additional 650,000 shares of the common stock. BioMarin intends to use the raised funds for general corporate purposes, including working capital and research and development (R&D).

BioMarin has been focusing on developing its pipeline and has five clinical readouts by the end of 2012. These include data readouts from a phase III trial for GALNS, a phase II trial for PEG-PAL, a phase I/II trial for BMN-701 for Pompe's disease, a phase I/II trial for BMN-673 for solid tumors, and a phase I trial in healthy volunteers for BMN-111 for achondroplasia.

During the first quarter of 2012, BioMarin’s R&D expenses shot up 64% from the year-ago quarter due to costs related to the GALNS phase III trials. Increased stock based compensation along with other pipeline development expenses also added to R&D expenses.

The company raised its R&D guidance for the year 2012 to $265 million-$275 million. The company mentioned that almost 20% of the projected R&D expenses are for clinical drug supply. BioMarin currently has four marketed products – Naglazyme, Kuvan, Aldurazyme and Firdapse – which are funding the pipeline development process.

At the end of the first quarter of 2012, BioMarin had a cash balance of $288 million. The raised funds should come in handy towards the company’s pipeline development efforts. BioMarin’s primary focus is on the development of GALNS.

We currently have a long-term Neutral recommendation on BioMarin, which carries a Zacks #3 Rank (Hold) in the short run.