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Loss at BioMarin Wider Than Expected

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BioMarin Pharmaceutical Inc.’s (BMRN - Free Report) third quarter 2013 loss (excluding debt conversion expense) of 36 cents per share was wider than the Zacks Consensus Estimate of a loss of 28 cents per share and the year-ago loss of 4 cents per share. The wider loss was due to higher expenses.

Quarterly Highlights

Total revenues climbed 6.9% to $136.9 million in the reported quarter but missed the Zacks Consensus Estimate of $140 million. The year-over-year increase in total revenues was attributable to higher net product revenues.

Net product revenues in the reported quarter surged approximately 6.3% to $134.3 million. Naglazyme, approved for treating MPS-VI, a rare genetic enzyme deficiency disorder, accounted for a significant portion of product revenues recorded in the quarter. Revenues from the drug were up 1.1% to $63.2 million during the quarter. The marginal rise in Naglazyme sales was due to the delay of the centralized order from the Brazilian Ministry of Health.

Net product revenues from Kuvan tablets, indicated for treating mild-to-moderate forms of phenylketonuria (PKU), were up 19.8% to $43.6 million. The impressive rise was due to higher demand for the drug. BioMarin recorded revenues from another enzyme replacement therapy, Aldurazyme, co-marketed by Sanofi (SNY - Free Report) , of $23.4 million, down 1.7%.

Net revenues from Firdapse, currently marketed in the EU, came in at $4.1 million in the quarter, flat sequentially. Firdapse was launched in Apr 2010, in the EU, for treating patients suffering from LEMS, a rare autoimmune disorder. The drug has performed disappointingly since launch.

Both research & development expenses (33.1%) and selling, general & administrative expenses (33.4%) were on the upswing during the quarter. Total BioMarin’s efforts to develop its pipeline contributed to the rise in R&D expenses.

2013 Outlook

Apart from announcing financial results for the third quarter of 2013, the company also maintained its outlook for 2013. BioMarin still expects total revenues in the range of $530–$555 million. The company also maintained total Naglazyme revenues in the range of $265–$285 million and Kuvan net product sales in the range of $155–$170 million for 2013.

BioMarin also maintained its guidance with on cost items. SG&A expenses are still expected in the range of $220–$240 million and R&D expenses continue to be forecasted in the range of $340–$380 million.

Pipeline Update

Apart from the 4 marketed products, BioMarin has a robust pipeline. The most important pipeline candidate at BioMarin is Vimizim. The candidate is being developed for the treatment of patients suffering from mucopolysaccharidosis Type IVA (MPS IVA) or morquio A syndrome.

The candidate is under review in the U.S. and the EU. BioMarin is also seeking approval of the candidate in Brazil. The target date in the U.S. is Feb 28, 2014. BioMarin stated that prior to the final decision an advisory panel of the U.S. Food and Drug Administration (FDA) will review Vimizim’s marketing application on Nov 19, 2013. The European approval of Vimizim is also on track with the European Medicines Agency (EMA) validating Vimizim marketing authorization application and granting it accelerated review status. Consequently, BioMarin expects the EMA’s Committee for Medicinal Products for Human Use to render an opinion on the marketing application by year-end/early 2014.

Another interesting candidate in BioMarin’s pipeline is PEG-PAL, which is currently in phase III development for the treatment of phenylketonuria (PKU). Top-line data from the study is expected by the end of next year. BioMarin has other interesting candidates like BMN 701 (Pompe disease) in its pipeline. The successful development and commercialization of the robust pipeline will help drive long-term growth at BioMarin.

BioMarin currently carries a Zacks Rank #3 (Hold). Companies like Actelion Ltd. and Isis Pharmaceuticals, Inc. are well placed with a Zacks Rank #1 (Strong Buy).

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