Analyst Conference Summary

biotechnology

Biomarin Pharmaceuticals
BRMN

conference date: February 23, 2017 @1:30 PM Pacific Time
for quarter ending: December 31, 2016 (fourth quarter, Q4 2016)

[yet]
Forward-looking statements

Overview: Hopes to ramp revenue and achieve positive non-GAAP results for 2017.

Basic data (GAAP):

Revenue was $300 million, up % sequentially from $ million, up 32% from $228 million year-earlier.

Net income was negative $91 million, down sequentially from negative $ million, and down from $69 million year-earlier.

Diluted EPS was negative $0.53, down sequentially from negative $ , and down from $0.39 year-earlier.

Guidance:

Full year 2017 revenue expected between $1.25 and $1.30 billion. Non-GAAP net income should be positive at $30 to $70 million. GAAP net loss of $140 to $180 million.

Those results assume Kuvan revenue of $380 to $410 million, Naglazyme $300 to $330 million, and Vimizim 4400 to $430 million. Cost of sales 17.5% to 18.5% of revenue. R&D expense $620 to $650 million, SG&A expense $520 to $550 million.

$160 to $190 million is expected to be used for capital expense.

Conference Highlights:

Jean-Jacques Bienaimé, Chairman and CEO of BioMarin said, "Our regulatory filings for approval of Brineura, for the treatment of Batten disease, were accepted and validated in both the U.S. and EU. With the Prescription Drug User Fee Act (PDUFA) goal date for an FDA approval decision of April 27, 2017, we hope to have an approved treatment option for this devastating childhood disease in the near future. [. . . Also] At the end of 2016, we initiated a one-year, randomized, placebo-controlled Phase 3 study in children with achondroplasia ages 5-14 using a daily 15µg/kg dose. We recently provided encouraging preliminary results with our earliest clinical-stage program BMN 250 for the treatment of MPS IIIB, or Sanfilippo Syndrome, Type B. We are now moving to the expansion phase of the development program that will assess the impact of treatment with BMN 250 on the neurocognitive function in this rapidly progressive pediatric brain disease. Finally, in addition to the filing of the BLA for pegvaliase for the treatment of phenylketonuria expected in the second quarter of 2017, we expect to start to turn the corner to profitability with the achievement of positive non-GAAP results for the full year 2017." 

Believe scrutiny of drug pricing will not apply to BioMarin's drugs for rate diseases because of the innovative nature of the therapies and the value to patients. U.S. Medicare sales represent less than 3% of BioMarin's global revenue.

therapy Q4 2016 revenue (millions) Q3 2016
revenue (millions)
Q4 2015
revenue (millions)
y/y change
Vimizim
94
59
59%
Naglazyme
75
60
25%
Kuvan
90
65
38%
Aldurazyme
35
39
-10%
Total
298
228
31%

Collaboration, royalty and other revenue was $1.9 million.

Non-GAAP net income was negative $27 million, up sequentially from $ million, and up from negative $70 million year-earlier. Stock-based compensation excluded was $37 million.

Cash and equivalents ended at $1.40 billion. Long term convertible debt was $661 million.

Total operating costs (GAAP) were $390 million, consisting of: cost of sales $64 million, research and development $175 million, selling, general and administrative $143 million, and intangible amortization & contingent benefit of $7 million. Loss from operations was $90 million. Other expense net $3 million. Income tax benefit $1 million.

Brineura (Cerliponase alfa) for CLN2, late-infantile form of Batten disease BLA was accepted by the FDA with a PDUFA date of April 27, 2017. Preparing for the commercial launch, but because children with CLN2 die quickly, there is not a relatively large pool of diagnosed patients waiting.

Pegvaliase for phenylketonuria (PKU) Phase 3 results met the primary endpoint. Biogen plans to submit a Biologics License Application (BLA) to U.S. FDA in Q2.

BMN 270 gene therapy product for hemophilia A: interim results established proof of concept. Further data released in January were positive. Biomarin plans a Phase 2b study designed to be registration enabling, possibly in Q3.

BMN 250 for MPS IIIB (Sanfilippo Syndrome Type B) preliminary Phase 1/2 data released in January showed reduced heparan sulfage biomarker at 30 mg. Newer patients are safely at 300 mg. Study will now move to the expansion phase.

Vosoritide for achondroplasia Phase 3 study was initiated in December. Primary endpoint is growth velocity in children.

Q&A:

[note this is a summary, not a transcript. And very selective, given the length of this particular Q&A session]

Hemophilia A factor activity level FDA says is unacceptable? We are in the midst of talking to regulators globally, and they have seen much of our data. An upper limit of acceptable has not been given to us by health authorities. The actual dose we pick for the upcoming registration enabling trial will be the lowest dose that produces clinically relevant efficacy.

Reminded everyone that PDUFA dates are goals, not absolute deadlines for FDA decisions.

BMN 250, how much does the patient population vary? The natural history is not as well described as other diseases. We are usuing a development quotient, with normalizatin for age. It is a devastating condition, with lethality in patients' 20s and 30s.

BMN 270 targets a huge need. Even best available therapy still allows for bleeding events. A one-and-done treatment could allow patients to lead more normal lives.

Latin American orders tend to be large and relatively infrequent, resulting in choppy revenue for specific drugs. Same for some other nations like Saudi Arabia.

Op ex growing 3% in guidance for 2017, is that good for a longer term model? We are committed to op ex growing less quickly than revenue.

To our knowledge there is no other factor 8 hemophilia gene therapies in the clinic. There are facto 9 therapies, and we have looked at their variability issues. The normal range of Factor VIII is 3 fold, which is one reason we chose to develop for it. But some patients will be outside of the normal range; we have had one over, and one under.

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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 2017 William P. Meyers