Analyst Conference Summary

biotechnology

conference date: October 26, 2017 @ 1:30 PM Pacific Time
for quarter ending: September 30, 2017 (third quarter, Q3 2017)

Forward-looking statements

Overview: Continued revenue ramp and pipeline development.

Basic data (GAAP):

Revenue was $334.1 million, up 5% sequentially from $317.4 million, and up 19% from $279.9 million year-earlier.

Net income was negative $12.5 million, up sequentially from negative $36.8 million, but up from negative $37.4 million year-earlier.

Diluted EPS was negative $0.07, up sequentially from negative $0.21 and up from negative $0.22 year-earlier.

Guidance:

Confirmed 2017 revenue of $1.29 to $1.32 billion. Improved net loss estimates: $110 to $130 million GAAP net loss; $60 to $80 million non-GAAP net loss.

Conference Highlights:

Jean-Jacques Bienaimé, Chairman and CEO of BioMarin said, "We had many significant updates at our recent R&D Day, including the announcement of our next IND candidate BMN 290 for Freidriech's Ataxia, a rare neurologic disorder that affects nearly 15,000 people worldwide.  We were also pleased to share that vosoritide for achondroplasia demonstrated a sustained increase in annualized growth rate at 30 months of treatment.  For pegvaliase, we anticipate FDA action on our Biologics License Application in the first half of 2018, as well as our planned submission of the Marketing Authorization Application in Europe in the first quarter of 2018."

Sarepta bought EXONDYS 51 rights for $35 million plus possible further milestone payments and royalties. The $31.5 million net upfront payment helped reduce GAAP loss.

Non-GAAP net income was $7.8 million, down sequentially from $26.6 million, and up sequentially from $2.9 million year-earlier. Stock-based compensation excluded was $ million.

Cash and equivalents ended at $1.67 billion, sequentially from $1.21 billion. Long term convertible debt was $1.17 million.

Total operating costs (GAAP) were $347.9 million, consisting of: cost of sales $59.5 million, research and development $154.1 million, selling, general and administrative $130.5 million, and intangible amortization & contingent consideration of $3.8 million. Loss from operations was $13.7 million. Other expense net $ million. Income tax benefit $ million.

Brineura (Cerliponase alfa) for CLN2, late-infantile form of Batten disease BLA was approved by the FDA in April. Because children with CLN2 die quickly, there is not a relatively large pool of diagnosed patients waiting. Also recommended for approval by the CHMP in Europe. The U.S. launch has begun.

Pegvaliase for phenylketonuria (PKU) Phase 3 results met the primary endpoint. Biogen submitted a Biologics License Application (BLA) to U.S. FDA. A decision could be announced in the first half o 2018.

BMN 270 (Valoctocogene roxaparvovec) gene therapy product for hemophilia A: interim results established proof of concept. Further data released in January were positive. Phase 2b study designed to be registration enabling. Announced today that BNM 270, a gene therapy for hemophilia A, received breakthrough therapy designation from the FDA.

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 continued, with complete enrollment anticipated in mid-2018. Primary endpoint is growth velocity in children. Demonstrated a sustained increase in annualized growth rate at 30 months of treatment in Phase 2. An infant (Age 0-5 years) study will begin next year.

Revenues are expected from Brazil in Q4. They order in bulk, then a quarter or more can go by without them making purchases. Our percent of sales in Brazil continues to decrease.

Q&A:

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

Brazil revenue? They order in bulk, then a quarter or more can go by without them making purchases. Our percent of sales in Brazil continues to decrease.

Kuvan? Still growing revenue. Been on the market a long time. Pegvaliase could help as well. A pediatric trial will start after we get approval for adults.

Gene therapy facility capabilities? It can produce 2000 patient years of materials per year. We could expand at other sites. Planning is underway, but building would depend on commercial success. There are several potential gene therapy candidates down the road.

We plan to roll out an IND per year. Freidriech's Ataxia is next in line.

Vosoritide hypertension reports? Not common, 4 patients out of thousand of doses, and not clearly related to the drug itself. 2 occured during needle placement. The patient community cares about outcomes.

Before Kuvan was launched PKU was managed purely by dieticians. We believe there will be substantial demand for Pegvaliase if approved.

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