Analyst Conference Summary

biotechnology

conference date: February 22, 2018 @ 1:30 PM Pacific Time
for quarter ending: December 31, 2017 (fourth quarter, Q4 2017)

Forward-looking statements

Overview: Continued revenue ramp. Large income tax provision hurt GAAP earnings. Positive non-GAAP net income.

Basic data (GAAP):

Revenue was $358.3 million, up 7% sequentially from $334.1 million, and up 19% from $300.1 million year-earlier.

Net income was negative $51.4 million, down sequentially from negative $12.5 million, but up from negative $90.7 million year-earlier.

Diluted EPS was negative $0.30, down sequentially from negative $0.07 and up from negative $0.53 year-earlier.

Guidance:

Full year 2018 revenue expected between $1.47 and $1.53 billion. This includes: Kuvan $440 to $480 million; Naglazyme $325 to $355 million; Vimizim $460 to $500 million; Brineura $35 to $55 million. Cost of sales 20.0% to 21.0% of total revenue. R&D expense $645 to $685 million. SG&A $575 to $615 million. GAAP net loss $115 to $165 million, but Non-GAAP net income $100 to $140 million.

Assumes launch of Pegvaliase in second half, but believes could achieve the revenue launch even without the launch.

Conference Highlights:

Jean-Jacques Bienaimé, Chairman and CEO of BioMarin said, "On the regulatory front, during the first half of 2017, we received U.S. and EU approval of our sixth commercial product, Brineura, the first treatment approved for CLN2 disease. Our late-stage clinical programs all advanced as expected, including vosoritide, pegvaliase and valoctocogene roxaparvovec (formerly referred to as BMN 270). In addition to receiving PRIME and Breakthrough Therapy designations for valoctocogene roxaparvovec gene therapy for severe hemophilia A, we shared new 1.5 year results demonstrating sustained FVIII levels within the normal range. This achievement led to the start of our global GENEr8–1 and GENEr8-2 Phase 3 studies for the treatment of patients with severe hemophilia A."

"We begin 2018 poised to move our 5 potential new product candidates to their next stage of clinical or regulatory development while driving top line revenues from our six commercialized products."

Non-GAAP net income was $5.2 million, down sequentially from $7.8 million, and up from negative $27.5 million year-earlier. Stock-based compensation excluded was $ million.

Cash and equivalents ended at $1.78 billion, up sequentially from $1.67 billion. Long term convertible debt was $813 million, short term convertible debt $361 million. Plans to use cash to eliminate debt due in 2018.

Total operating costs (GAAP) were $300.3 million, consisting of: cost of sales $76.0 million, research and development $168.6 million, selling, general and administrative $160.3 million, and intangible amortization & contingent consideration of $20.4 million. Gain of sale of intangible asset was $125 million. Operating income was $58.0 million. Other expense net $3.4 million. Income taxes $106.0 million.

The $125 million gain was from the sale of a priority review voucher. A tax expense of $25 million is associated with that gain. The rest of the tax expense was due to the changes in the tax laws.

Brineura (Cerliponase alfa) for CLN2, late-infantile form of Batten disease was approved by the FDA in April 2018. Because children with CLN2 die quickly, there is not a relatively large pool of diagnosed patients waiting. Expanding sales in Europe.

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 May 2018. The EU application should be made in Q1 2018. Pricing could be at a modest increase over Kuvan.

BMN 270 (Valoctocogene roxaparvovec, often "ValRox") 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. Launched a Phase 3 study in December 2018.

BMN 250 for MPS IIIB (Sanfilippo Syndrome Type B) updated preliminary Phase 1/2 data released in February showed normalization of heparan sulfate biomarker. 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.

BMN 290 for Friedrich's Ataxia should have an IND submitted in the second half of 2018, followed by a Phase 1 trail initiation.

For the full year 2017 revenue was $1.31 billion. GAAP net income was negative 117.0 million, for an EPS of negative $0.67.

Q&A:

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

Guidance, what did you attribute to Pegvaliase? We don't give revenue guidance for newly launched products. Doctors have said they are likely to try patients in small batches. So a measured pace for new patient introductions. But the 200 patients currently on therapy would not need a titration period, they could go to full commercial therapy.

For BMN 250 we have seen normalization of liver size, which was a basis for the approval of other drugs.

Pegvaliase decision to wait on infant program? We wanted to build a good safety database given the nature of the drug and the alternative nutritional therapy for children. We will revisit this upon regulatory action.

Pegvaliase pricing would be for maintenance, with 3 different pre-filled syringe SKUs. Could price per milligram or per syringe. During induction/titration, would just be dozing once a week, then gradually increasing to the daily dose. So either way revenue would be fractional during the introductory phase.

OpenIcon Analyst Conference Summaries Main Page

Search

More Analyst Conference Pages: