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Why Is BioMarin (BMRN) Up 14.8% Since Last Earnings Report?
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It has been about a month since the last earnings report for BioMarin Pharmaceutical (BMRN - Free Report) . Shares have added about 14.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is BioMarin due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
BioMarin Beats on Q1 Earnings, Lowers Sales View
BioMarin’s adjusted earnings of 63 cents per share beat the Zacks Consensus Estimate of 33 cents. Earnings were significantly better than the year-ago earnings of 14 cents per share due to higher revenues and lower R&D costs.
Total revenues were $502.1 million in the reported quarter, up 25% from the year-ago period, driven by higher product revenues. Sales beat the Zacks Consensus Estimate of $470 million.
In the quarter, the company experienced minimal business interruptions due to COVID-19. However, it expects more meaningful impact in the future quarters of 2020 due to disruptions of day-to-day operations of clinics and hospitals.
Quarterly Details
Product revenues (including Aldurazyme) were $489.0 million in the quarter, reflecting a 24% increase year over year. Product revenues from BioMarin's marketed brands (excluding Aldurazyme) grew 24% year over year to $433.3 million. Royalty and other revenues were $13.03 million in the quarter, higher than $6.3 million a year ago.
Kuvan revenues rose 14% to $122 million driven by patient growth in North America.
Palynziq injection sales grossed $34.6 million in the quarter compared with $31.7 million in the previous quarter, driven by new patients initiating therapy as well as the growing number of U.S. patients who have now achieved maintenance dosing. The majority of Palynziq sales came from the United States. In the quarter, however, BioMarin experienced a seasonal slowing of new patient enrollments and patient starts for Palynziq
In the EU, Palynziq injection was approved in May 2019. BioMarin said that multiple clinics across Germany were now treating patients and early uptake trends were encouraging. The company is working to get reimbursement approvals in other European countries and expects meaningful contribution from European sales of Palynziq in 2020.
Naglazyme sales rose 32% to $114.3 million mainly due to orders from Brazil and Russia.
Vimizim contributed $137.2 million to total revenues, up 9% year over year owing to orders from Brazil.
Naglazyme and Vimzim revenues vary on a quarterly basis, primarily due to the timing of central government orders from some countries, mainly Brazil.
Brineura generated sales of $24.0 million in the first quarter, lower than $25.2 million reported in the previous quarter due to a modest year-end inventory build in the EMEA region in the fourth quarter.
BioMarin received Aldurazyme royalties totaling $55.7 million from Genzyme in the quarter, up 23% year over year.
R&D expenses declined 22.9% year over year to $123.8 million due to lower costs for development of Roctavian/valoctocogene roxaparvovec/valrox. Marketing expenses associated with Palynziq commercial efforts and launch preparations for Roctavian resulted in 16% increase in SG&A expenses to $153.7 million.
As of Mar 31, 2020, BioMarin had $1.15 billion in cash, cash equivalents and investments, compared with $1.17 billion at the end of Dec 31, 2019.
2020 Guidance
BioMarin lowered its total revenue guidance by 5% due to the uncertainty surrounding the coronavirus outbreak and its potential impact on its business. It expects the pandemic to cause demand interruptions such as missed patient infusions and disruption to new patient starts However, BioMarin expects the demand patterns to return to normal levels in the second half of the year.
Total revenue guidance was lowered from a range of $1.95-$2.05 billion to $1.85-$1.95 billion.
Vimizim sales are expected in the range of $530-$570 million, lower than $560-$610 million expected previously. Kuvan sales guidance was maintained in the range of $430-$480 million. Naglazyme sales are predicted in the band of $360-$400 million, lower than $380-$420 million expected previously. Brineura sales are expected within $85-$115 million (maintained). Palynziq sales are forecast in the $160-$190 million range compared with the previous expectation of $180-$210 million.
The guidance for costs was maintained. R&D costs are expected to be within $675-$725 million. SG&A expenses are anticipated in the range of $780-$830 million.
The company still expects adjusted net income in the range of $260-$310 million, the midpoint of which indicates growth of more than 70%.
Pipeline Update
In February, the FDA accepted and granted priority review to its biologics license application (BLA), seeking approval for valrox, its investigational gene therapy for severe hemophilia A. On the conference call, the company announced valrox’s brand name to be Roctavian.
With the FDA granting priority review to the application, a decision is expected on Aug 21. Per the company, if the BLA is approved, valrox will be the first gene therapy in the United States to be approved to treat any type of hemophilia. Meanwhile, the Health Products Regulatory Authority of Ireland, on behalf of EMA, conducted a pre-approval inspection of its gene therapy manufacturing facility for the production of valrox, and issued a cGMP certification.
Meanwhile, the EMA also validated the marketing application for the product. BioMarin earlier said that the EMA’s review process commenced in January under accelerated assessment. However, along with the earnings release, the company said that the review process in EU may be extended by at least three months or the application may go back to the standard review process due to the COVID-19 delay. As such, an opinion from the CHMP is expected in late 2020/early 2021.
Meanwhile, initial dosing for PKU gene therapy candidate, BMN 307 is now expected to happen in the second half of 2020, delayed by COVID-19.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month. The consensus estimate has shifted -157.49% due to these changes.
VGM Scores
Currently, BioMarin has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, BioMarin has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is BioMarin (BMRN) Up 14.8% Since Last Earnings Report?
It has been about a month since the last earnings report for BioMarin Pharmaceutical (BMRN - Free Report) . Shares have added about 14.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is BioMarin due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
BioMarin Beats on Q1 Earnings, Lowers Sales View
BioMarin’s adjusted earnings of 63 cents per share beat the Zacks Consensus Estimate of 33 cents. Earnings were significantly better than the year-ago earnings of 14 cents per share due to higher revenues and lower R&D costs.
Total revenues were $502.1 million in the reported quarter, up 25% from the year-ago period, driven by higher product revenues. Sales beat the Zacks Consensus Estimate of $470 million.
In the quarter, the company experienced minimal business interruptions due to COVID-19. However, it expects more meaningful impact in the future quarters of 2020 due to disruptions of day-to-day operations of clinics and hospitals.
Quarterly Details
Product revenues (including Aldurazyme) were $489.0 million in the quarter, reflecting a 24% increase year over year. Product revenues from BioMarin's marketed brands (excluding Aldurazyme) grew 24% year over year to $433.3 million. Royalty and other revenues were $13.03 million in the quarter, higher than $6.3 million a year ago.
Kuvan revenues rose 14% to $122 million driven by patient growth in North America.
Palynziq injection sales grossed $34.6 million in the quarter compared with $31.7 million in the previous quarter, driven by new patients initiating therapy as well as the growing number of U.S. patients who have now achieved maintenance dosing. The majority of Palynziq sales came from the United States. In the quarter, however, BioMarin experienced a seasonal slowing of new patient enrollments and patient starts for Palynziq
In the EU, Palynziq injection was approved in May 2019. BioMarin said that multiple clinics across Germany were now treating patients and early uptake trends were encouraging. The company is working to get reimbursement approvals in other European countries and expects meaningful contribution from European sales of Palynziq in 2020.
Naglazyme sales rose 32% to $114.3 million mainly due to orders from Brazil and Russia.
Vimizim contributed $137.2 million to total revenues, up 9% year over year owing to orders from Brazil.
Naglazyme and Vimzim revenues vary on a quarterly basis, primarily due to the timing of central government orders from some countries, mainly Brazil.
Brineura generated sales of $24.0 million in the first quarter, lower than $25.2 million reported in the previous quarter due to a modest year-end inventory build in the EMEA region in the fourth quarter.
BioMarin received Aldurazyme royalties totaling $55.7 million from Genzyme in the quarter, up 23% year over year.
R&D expenses declined 22.9% year over year to $123.8 million due to lower costs for development of Roctavian/valoctocogene roxaparvovec/valrox. Marketing expenses associated with Palynziq commercial efforts and launch preparations for Roctavian resulted in 16% increase in SG&A expenses to $153.7 million.
As of Mar 31, 2020, BioMarin had $1.15 billion in cash, cash equivalents and investments, compared with $1.17 billion at the end of Dec 31, 2019.
2020 Guidance
BioMarin lowered its total revenue guidance by 5% due to the uncertainty surrounding the coronavirus outbreak and its potential impact on its business. It expects the pandemic to cause demand interruptions such as missed patient infusions and disruption to new patient starts However, BioMarin expects the demand patterns to return to normal levels in the second half of the year.
Total revenue guidance was lowered from a range of $1.95-$2.05 billion to $1.85-$1.95 billion.
Vimizim sales are expected in the range of $530-$570 million, lower than $560-$610 million expected previously. Kuvan sales guidance was maintained in the range of $430-$480 million. Naglazyme sales are predicted in the band of $360-$400 million, lower than $380-$420 million expected previously. Brineura sales are expected within $85-$115 million (maintained). Palynziq sales are forecast in the $160-$190 million range compared with the previous expectation of $180-$210 million.
The guidance for costs was maintained. R&D costs are expected to be within $675-$725 million. SG&A expenses are anticipated in the range of $780-$830 million.
The company still expects adjusted net income in the range of $260-$310 million, the midpoint of which indicates growth of more than 70%.
Pipeline Update
In February, the FDA accepted and granted priority review to its biologics license application (BLA), seeking approval for valrox, its investigational gene therapy for severe hemophilia A. On the conference call, the company announced valrox’s brand name to be Roctavian.
With the FDA granting priority review to the application, a decision is expected on Aug 21. Per the company, if the BLA is approved, valrox will be the first gene therapy in the United States to be approved to treat any type of hemophilia. Meanwhile, the Health Products Regulatory Authority of Ireland, on behalf of EMA, conducted a pre-approval inspection of its gene therapy manufacturing facility for the production of valrox, and issued a cGMP certification.
Meanwhile, the EMA also validated the marketing application for the product. BioMarin earlier said that the EMA’s review process commenced in January under accelerated assessment. However, along with the earnings release, the company said that the review process in EU may be extended by at least three months or the application may go back to the standard review process due to the COVID-19 delay. As such, an opinion from the CHMP is expected in late 2020/early 2021.
Meanwhile, initial dosing for PKU gene therapy candidate, BMN 307 is now expected to happen in the second half of 2020, delayed by COVID-19.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month. The consensus estimate has shifted -157.49% due to these changes.
VGM Scores
Currently, BioMarin has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, BioMarin has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.