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BioMarin (BMRN) Q1 Earnings Beat, FDA Delays Vosoritide Decision

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BioMarin Pharmaceutical Inc.’s (BMRN - Free Report) adjusted earnings of 56 cents per share beat the Zacks Consensus Estimate of 32 cents. Earnings were, however, down 11.1% year over year due to lower revenues and gross profit.

Total revenues were $486 million in the reported quarter, down 3% from the year-ago period. Sales, however, beat the Zacks Consensus Estimate of $445 million.

In the quarter, the company continued to experience the adverse impact of COVID-19. The ongoing pandemic caused disruption in new patient starts for some of its products in the United States.

Shares of BioMarin were down 2.4% in after-hours trading on Thursday following announcement of the earnings results. In fact, the stock has plunged 8.6% so far this year compared with the industry’s decrease of 0.6%.

price chart for BMRN

Quarterly Details

Product revenues (including Aldurazyme) were $467.8 million in the quarter, down 4.3% year over year. Product revenues from BioMarin's marketed brands (excluding Aldurazyme) declined 4% year over year to $417.8 million. Royalty and other revenues were $18.3 million in the quarter, up 40.2%.

In the phenylketonuria (“PKU”) franchise, Kuvan revenues declined 42% to $70.8 million due to generic competition as the drug lost U.S. market exclusivity in October 2020. Palynziq injection sales grossed $54 million in the quarter, up 56% year over year, driven by growing number of U.S. patients who have now achieved maintenance dosing. Total sales of PKU franchise declined 20% year over year to $124.8 million.

Naglazyme sales declined 6% to $107.3 million. Vimizim contributed $158.4 million to total revenues, up 15% 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 $27.3 million in the quarter, up 14% year over year. On the first-quarter conference call, management stated that Naglazyme, Vimizim and Brineura have maintained strong patient compliance despite the effects of COVID-19 worldwide.

Product revenues from Aldurazyme totaled $50 million, down 10% year over year due to unfavorable timing of product fulfillment to Sanofi’s (SNY - Free Report) subsidiary Genzyme.

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

R&D expenses remained almost flat year over year to $123.7, while SG&A expenses decreased 6.4% to $143.8 million.

2021 Guidance

BioMarin maintained the financial guidance it provided early this year. The company expects total revenues in the range of $1.75-$1.85 billion. The Zacks Consensus Estimate stands at $1.81 billion.

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

We remind investors, that in August last year, the FDA issued a complete response letter (“CRL”) to BioMarin’s biologics license application (“BLA”) for valoctocogene roxaparvovec. 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 safety and efficacy 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 was announced in January.

Investors were expecting the FDA to grant accelerated approval to the drug on the PDUFA date of Aug 21, 2020. 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 roxaparvovec to 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 June 2021.

Another important candidate in its pipeline is vosoritide, which has been developed to treat achondroplasia, the most common form of dwarfism. Regulatory applications for vosoritide are under review in the EU and the United States. BioMarin submitted two-year results from the phase III extension study on vosoritide to the FDA, which resulted in the action date getting extended. A decision from the FDA is now expected on Nov 20, 2021 compared with the earlier date of Aug 20, 2021. This delay in the PDUFA date for vosoritide might have also resulted in the stock going down in after-hours trading on Thursday.

A potential approval will make the drug the first and only approved treatment for achondroplasia in the United States. BioMarin expects potential approval of vosoritide in Europe in the third quarter of 2021.

Zacks Rank & Stocks to Consider

BioMarin currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the biotech sector include ASLAN Pharmaceuticals Limited (ASLN - Free Report) and Nabriva Therapeutics AG (NBRV - Free Report) , both carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

ASLAN Pharmaceuticals’ loss per share estimates have narrowed 26.3% for 2021 and 43.9% for 2022 over the past 60 days. The stock has surged 75.9% year to date.

Nabriva Therapeutics’ loss per share estimates have narrowed by 40.9% for 2021 and 45.3% for 2022 over the past 60 days.

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