Analyst Conference Summary


Biomarin Pharmaceuticals

conference date: August 4, 2016 @ 1:30 PM Pacific Time
for quarter ending: June 30, 2016 (second quarter, Q2 2016)

Forward-looking statements

Overview: Huge difference between GAAP and non-GAAP net income due to an impairment charge.

Basic data (GAAP):

Revenue was $300.1 million, up 27% sequentially from $236.7 million, up 20% from $250.1 million year-earlier.

Net income was negative $423.6 million, down sequentially from negative $85.1 million, and down from negative $82.0 million year-earlier.

Diluted EPS was negative $2.61, down sequentially from negative $0.53 , and down from negative $0.51 year-earlier.


Increased full 2016 revenue guidance by $50 million to $1.1 to $1.15 billion.

$670 to $690 million R&D expense for 2016, lower than prior. SG&A guidance unchanged.

$30 to $50 million non-GAAP net loss expected for 2016.

Believes profitability will improve in 2017.

Conference Highlights:

Jean-Jacques Bienaimé, Chairman and CEO of BioMarin said, "the increase in Total BioMarin Revenue guidance for 2016 is testament to the innovation BioMarin provides patients, mostly children, with rare and ultra-rare disorders. Prospects for new product launches in 2017 increased during the first half of the year due to positive data readouts for Brineura and pegvaliase."

The FDA accepted for review a Biologics License Application (BLA) for Brineura, an investigational therapy to treat children with CLN2 disease, a form of Batten disease. The Prescription Drug User Fee Act (PDUFA) goal date for an approval decision is January 27, 2017.

therapy Q2 2016 revenue (millions) Q1 2016
revenue (millions)
Q2 2015
revenue (millions)
y/y change

Collaboration, royalty and other revenue was $1.6 million, up sequentially from $1.3 million.

Non-GAAP net income was $16.1 million, up sequentially from negative $27.2 million, and up from negative $5.8 million year-earlier.

Cash and equivalents ended at $704.9 million.

"During the three months ended June 30, 2016, the Company incurred impairment charges and made other adjustments related to the Kyndrisa and related exons and the reveglucosidase alfa programs. In May 2016, the Company withdrew its Marketing Authorization Application for the approval of Kyndrisa from the EMA. Additionally, in June 2016, the Company discontinued the clinical and regulatory development program for reveglucosidase alfa. Following these events, the Company determined the IPR&D intangible assets related to these programs were fully impaired, resulting in a total impairment charge of $599.1 million. Additionally, the Company reversed the contingent acquisition consideration liabilities as it was determined that achievement of certain future regulatory and commercial milestones associated with these programs was no longer probable, resulting in a $64.9 million credit to Contingent consideration expense for the period. Also related to the impairment of the IPR&D assets, the Company reversed certain deferred tax liabilities associated with the future amortization of the IPR&D intangible assets, resulting in a $153.5 million credit to the Benefit from income taxes for the period."

In Q2 Biomarin hopes to receive a positive European, CHMP opinion on Kyndrisa for Duchenne muscular dystrophy amenable to exon 51 skipping.

Believes can reach $1.5 billion in product revenue by 2020. Believes can reach non-GAAP break even by 2017.

Total operating costs (GAAP) were $872.9 million, consisting of: cost of sales $51.6 million, research and development $167.0 million, selling, general and administrative $109.6 million, and intangible amortization & contingent benefit of $54.4 million, and the impairment of intangible assets charge of $599 million. Loss from operations was $572.8 million. Other expense net $1.4 million. Income tax benefit $159.4 million.

Brineura (Cerliponase alfa) for CLN2, late-infantile form of Batten disease PDUFA date is January 27, 2017.

Pegvaliase for phenylketonuria (PKU) Phase 3 results met the primary endpoint. Biogen will submit a Biologics License Application (BLA) to U.S. FDA in the third quarter of 2016 or first quarter of 2017.

BMN 270 gene therapy product for hemophilia A: interim results established proof of concept. Exceeded our expectations for efficacy and safety. Biomarin plans a Phase 2b study designed to be registration enabling.

Vosoritide for achondroplasia: following positive Phase 2 results, to be released later this year, a Phase 3 study is planned to begin before the end of 2016.


Did anything affect Naglazyme sales in the quarter besides the Brazilian government, and what can we expect from them going forward? No, had Brazil orders in both quarters, but the one in 2015 was very large, covered them until Q1 2016. We believe we will see an appropriate order from Brazil in Q3.

Hemophilia A less responsive patient? We are still working on the causes of the range of results we have seen. We have demonstrated we can get into the meaningful range of factor 8 expression without causing liver toxicity.

Magnitude of Q2 factors for Vimizim, and rate going forward? We estimate $15 million of Q2 sales was actually from demand for future quarters. Our updated Vimizim guidance for the year is $340 to $360 million. We are seeing some choppiness in Vimizim revenues, but underlying patient growth remains strong.

Dosing for BMN 270? We did one patient at a mid-dose level and got a moderate response. The patients want to achive a good Factor 8 expression without toxicity, so to hit that we are trying more than one dose level.

Brineura patient number estimate? CLN2 patients often have a delay in diagnosis, and so are advanced at diagnosis, and rapidly progress. So not all patients will be suitable for treatment. We do have a good handle on who the physicians are who treat this type of patient, and we want to help see patients diagnosed at an earlier stage of the disease.

Liver inflammatory response has actually been fairly minimal for BMN 270 so far.

We have increased confidence in our ability to meet our 2017 targets.

Is there just one patient who has lower Factor 8 expression over time? We are seeing variability from week to week. Nothing material happened in the other patients. The only reason we highlighted the one patient was that he was already at the low end of the range, and got closer to that low end of range. We are still relatively early in the process.

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Disclaimer: My analyst call summaries may include both our condensations of statements made by company representatives and my own analysis. They are not covered by any warranty. I cannot guarantee anything said by company representatives is true. I try not to make errors, but it is possible. This is investment journalism, not financial advice.

Copyright 2016 William P. Meyers