2008-08-05 15:00:00
BioMarin Announces Second Quarter 2008 Financial Results
Second Quarter Profit Driven by Strong Revenue Growth Improved Total
Revenue Guidance
Conference Call and Webcast to Be Held Today at 5:00 p.m. ET (22:00 CET)
NOVATO, Calif., Aug. 5 /EMWNews/ --
Financial Highlights ($ in millions, except per share data)
Item Q2 2008 Q2 2007 Comparison
Total BioMarin Revenue $64.2 122% increase
Naglazyme Net Product Revenue $35.1 67.9% increase
Aldurazyme Net Sales by Genzyme $38.7 33.0% increase
Aldurazyme BioMarin Net Product Revenue $13.4 NA
Kuvan Net Product Revenue $12.0 NA
GAAP Net Income (Loss) $3.8, $0.04 ($3.9), ($0.04)
per share per share
Non-GAAP Net Income (Loss) $9.7, $0.10 $0.4, $0.00
per share per share
2008 Guidance
Item Updated Guidance Previous
Guidance
Total BioMarin Revenue* $288 to $326 $271 to $316
Total Net Product Revenue $247 to $285 $230 to $275
Naglazyme Net Product Revenue $130 to $140 $115 to $125
Aldurazyme Net Product Sales by Genzyme Unchanged $135 to $145
Aldurazyme Net Product Revenue to BioMarin $72 to $80 $70 to $80
Kuvan Net Product Revenue $45 to $65 $45 to $70
Net Income (GAAP)* $30 to $42 $28 to $40
Net Income (non-GAAP)* $54 to $69 $52 to $67
*Assumes that the $30 million milestone for EU Kuvan approval will be
earned in 2008
BioMarin Pharmaceutical Inc. (Nasdaq and SWX: BMRN) today announced
financial results for the second quarter ended June 30, 2008. Net income
was $3.8 million ($0.04 per share) for the second quarter of 2008, compared
to a net loss of $3.9 million ($0.04 per share) for the second quarter of
2007. Non-GAAP net income was $9.7 million ($0.10 per share) for the second
quarter of 2008, compared to non-GAAP net income of $0.4 million ($0.00 per
share) for the second quarter of 2007. Non-GAAP net income/loss excludes
non-cash stock compensation expense, which was $5.9 million for the three
months ended June 30, 2008, compared to $4.3 million for the three months
ended June 30, 2007. Net income for the six months ended June 30, 2008 was
$5.5 million ($0.06 per share), compared to a net loss of $13.2 million
($0.14 per share) for the six months ended June 30, 2007. Non-GAAP net
income was $15.9 million ($0.16 per share) for the six months ended June
30, 2008, compared to non-GAAP net loss of $5.4 million ($0.06 per share)
for the six months ended June 30, 2007. Non-cash stock compensation expense
for the six months ended June 30, 2008 and June 30, 2007 was $10.4 million
and $7.8 million, respectively.
As of June 30, 2008, BioMarin had cash, cash equivalents, and
short-term investments totaling $575.7 million.
"Higher than expected sales of Naglazyme and Aldurazyme and the steady
uptake of Kuvan drove improved financials, making this our third
consecutive profitable quarter," said Jean-Jacques Bienaime, Chief
Executive Officer of BioMarin. "The Kuvan launch is progressing according
to plan, and we continue to be optimistic about the long-term potential of
the drug, as well as the continued geographic expansion of Naglazyme, and
the timely development of the PEG-PAL, BMN 110 for MPS IVA and other
promising pipeline programs. In the second quarter, we licensed from Summit
the preclinical candidate SMT C1100 for Duchenne muscular dystrophy, adding
to our growing pipeline."
Net Product Revenue
Net product revenue from Naglazyme (galsulfase), an enzyme replacement
therapy for mucopolysaccharidosis VI (MPS VI), was $35.1 million for the
second quarter of 2008, an increase of 67.9 percent compared to net product
revenue of $20.9 million for the second quarter of 2007. Net product
revenue from Naglazyme for the six months ended June 30, 2008 was $62.8
million, an increase of 59.8 percent from net product revenue of $39.3
million for the six months ended June 30, 2007. BioMarin is commercializing
Naglazyme in the United States, Europe, Latin America, and Turkey and
through distributors in other international markets.
Net sales of Aldurazyme (laronidase), an enzyme replacement therapy for
mucopolysaccharidosis I (MPS I) recorded by Genzyme, was $38.7 million for
the second quarter of 2008, an increase of 33.0 percent compared to net
sales of $29.1 million for the second quarter of 2007. Net sales of
Aldurazyme recorded by Genzyme for the six months ended June 30, 2008 was
$75.5 million, compared to net sales of $55.9 million for the six months
ended June 30, 2007.
Net product revenue to BioMarin related to Aldurazyme for the second
quarter of 2008 was $13.4 million. This reflects a reduction in net product
revenue from the amount payable to BioMarin by Genzyme due to the timing of
inventory transfers to Genzyme, which were less than units shipped to third
party customers by Genzyme during the second quarter of 2008. Beginning
January 1, 2008, as a result of the restructuring of the joint venture with
Genzyme, BioMarin receives a royalty of 39.5% to 50% of worldwide net
sales. In addition, BioMarin recognizes product transfer revenue when
product is shipped to Genzyme. This amount will eventually be deducted from
royalties earned when the product is sold by Genzyme.
Net product revenue from Kuvan (sapropterin dihydrochloride) Tablets, a
product for the treatment of phenylketonuria (PKU), for the second quarter
of 2008 was $12.0 million, more than doubling reported sales in the first
quarter of 2008. Of the 49 U.S. patients in the extension study,
approximately 73% (36 patients) have continued on therapy and transitioned
to commercial therapy. Of the 36 patients who transitioned onto commercial
therapy, 36 (100%) are still on Kuvan as of June 30, 2008. The majority of
these patients have been on Kuvan for over two years. Also, as of June 30,
2008, of all the commercial patients on Kuvan for 90 days or more, 88%
remain on therapy and are current with refills.
Collaborative Agreement Revenues
Collaborative agreement revenues for the second quarter of 2008 were
$2.5 million, compared to $3.5 million for the second quarter of 2007.
Collaborative agreement revenues for the six months ended June 30, 2008
were $5.0 million, compared to $7.7 million for the six months ended June
30, 2007. Collaborative agreement revenues decreased in 2008 compared to
2007 due to less reimbursable Kuvan development expenses during the second
quarter and first six months of 2008.
2008 Financial Guidance
BioMarin estimates 2008 net sales of Naglazyme will be in the range of
$130 million to $140 million, revised from a range of $115 million to $125
million.
Net sales of Aldurazyme by Genzyme are estimated to be in the range of
$135 million to $145 million. BioMarin's net product revenue related to
Aldurazyme is estimated to be between $72 million and $80 million, revised
from a range of $70 million to $80 million, which includes both the royalty
earned on net sales by Genzyme and incremental product revenue related to
the transfer of Aldurazyme inventory to Genzyme to meet future product
demand.
BioMarin estimates 2008 Kuvan net sales to be in the range of $45
million to $65 million, revised from a range of $45 million to $70 million.
BioMarin estimates its Generally Accepted Accounting Principles (GAAP)
net income for the fiscal year ending December 31, 2008 will be in the
range of $30 million to $42 million, revised from a range of $28 million to
$40 million, which includes the impact of the recently announced licensing
deal with Summit and assumes that the $30 million milestone for EU Kuvan
approval will be earned in 2008. The net income estimate includes
approximately $24 million to $27 million in non-cash stock compensation
expense. Non-GAAP net income, excluding the impact of non-cash stock
compensation, is estimated to be in the range of $54 million to $69
million, revised from a range of $52 million to $67 million.
Non-GAAP Financial Information and Reconciliation
The above 2007 and 2008 second quarter and first half results and 2008
financial guidance include actual and Management's 2008 estimated net
income, respectively, determined in accordance with GAAP and non-GAAP net
income. As used in this release, non-GAAP income is net income calculated
in accordance with GAAP, but excluding non-cash stock compensation expense,
a non-GAAP financial measure. Stock compensation expense excluded in the
calculation of non-GAAP net income was $5.9 million for the second quarter
of 2008, $4.3 million for the second quarter of 2007, $10.4 million for the
six months ended June 30, 2008, $7.8 million for the six months ended June
30, 2007 and $24.0 million to $27.0 million for Management's estimate of
2008 net income. The reconciliation of this measure to the estimated GAAP
net income is as follows (in millions):
2008
Q2 2008 Q2 2007 1H 2008 1H 2007 Management
Guidance
GAAP net income (loss) $3.8 ($3.9) $5.5 ($13.2) $30.0 - $42.0
Non-cash stock
compensation expense 5.9 4.3 10.4 7.8 24.0 - 27.0
Non-GAAP net income
(loss) $9.7 $0.4 $15.9 ($5.4) $54.0 - $69.0
Management believes that this non-GAAP information is useful to
investors, taken in conjunction with BioMarin's GAAP information because
Management uses such information internally for its operating, budgeting
and financial planning purposes, and to enhance investors' overall
understanding of the company's prospects for the future.
Anticipated Upcoming Milestones
-- 4Q08: Results from Phase 2 sickle cell disease trial
-- 4Q08: Results from BH4+Vitamin C study
-- 4Q08: Kuvan approval by EMEA
-- 4Q08/1Q09: Results from PEG-PAL Phase 1 trial
-- 1Q09: Results from Phase 2 PAD trial
-- 1Q09: Results from Phase 2 PAH trial
-- 1Q09: Results from proteinuria in chronic kidney disease trial
-- 1Q09: Initiation of PEG-PAL Phase 2 trial
-- 1Q09: Initiation of Phase 1 trial for ERT for MPS IVA
-- 1H09: Initiation of Phase 1 trial for Duchenne muscular dystrophy
Upcoming Investor Conferences and Events
-- September 9: Morgan Stanley Healthcare Conference -- New York City
-- September 16-18: Merrill Lynch Global Healthcare Conference -- London
-- September 22-25: UBS Global Life Sciences Conference -- New York City
-- September 23-24: Biotech in Europe Investor Forum
BioMarin will host a conference call and webcast to discuss second
quarter 2008 financial results today, Tuesday, August 5, at 5:00 p.m. ET
(22:00 CET). This event can be accessed on the investor section of the
BioMarin website at http://www.BMRN.com.
Date: August 5, 2008
Time: 5:00 p.m. ET (22:00 CET)
U.S. / Canada Dial-in Number: 866.700.0161
International Dial-in Number: 617.213.8832
Participant Code: 99466709
Replay Dial-in Number: 888.286.8010
Replay International Dial-in Number: 617.801.6888
Replay Code: 94527503
About BioMarin
BioMarin develops and commercializes innovative biopharmaceuticals for
serious diseases and medical conditions. The company's product portfolio
comprises three approved products and multiple clinical and pre-clinical
product candidates. Approved products include Naglazyme(R) (galsulfase) for
mucopolysaccharidosis VI (MPS VI), a product wholly developed and
commercialized by BioMarin; Aldurazyme(R) (laronidase) for
mucopolysaccharidosis I (MPS I), a product which BioMarin developed through
a 50/50 joint venture with Genzyme Corporation; and Kuvan(R) (sapropterin
dihydrochloride) Tablets, a product for the treatment of phenylketonuria
(PKU), developed in partnership with Merck Serono, a division of Merck KGaA
of Darmstadt, Germany. Other product candidates include 6R-BH4 for
cardiovascular indications, which is currently in Phase 2 clinical
development for the treatment of peripheral arterial disease and sickle
cell disease, and PEG-PAL (PEGylated recombinant phenylalanine ammonia
lyase), which is currently in Phase 1 clinical development for the
treatment of PKU. For additional information, please visit
http://www.BMRN.com. Information on BioMarin's website is not incorporated
by reference into this press release.
Forward-Looking Statement
This press release contains forward-looking statements about the
business prospects of BioMarin Pharmaceutical Inc., including, without
limitation, statements about: the expectations of revenue and sales related
to Naglazyme, Kuvan, and Aldurazyme; the financial performance of the
BioMarin as a whole; the timing of BioMarin's clinical trials of 6R-BH4 for
other indications, PEG-PAL and other product candidates; the continued
clinical development and commercialization of Aldurazyme, Naglazyme, Kuvan,
and its product candidates; and actions by regulatory authorities. These
forward-looking statements are predictions and involve risks and
uncertainties such that actual results may differ materially from these
statements. These risks and uncertainties include, among others: our
success in the continued commercialization of Naglazyme and Kuvan; Genzyme
Corporation's success in continuing the commercialization of Aldurazyme;
results and timing of current and planned preclinical studies and clinical
trials; our ability to successfully manufacture our products and product
candidates; the content and timing of decisions by the U.S. Food and Drug
Administration, the European Commission and other regulatory authorities
concerning each of the described products and product candidates; the
market for each of these products and particularly Aldurazyme, Naglazyme
and Kuvan; actual sales of Aldurazyme, Naglazyme and Kuvan; Merck Serono's
activities related to Kuvan; and those factors detailed in BioMarin's
filings with the Securities and Exchange Commission, including, without
limitation, the factors contained under the caption "Risk Factors" in
BioMarin's 2007 Annual Report on Form 10-K, and the factors contained in
BioMarin's reports on Form 10-Q. Stockholders are urged not to place undue
reliance on forward-looking statements, which speak only as of the date
hereof. BioMarin is under no obligation, and expressly disclaims any
obligation to update or alter any forward-looking statement, whether as a
result of new information, future events or otherwise.
BioMarin(R) , Naglazyme(R) and Kuvan(R) are a registered trademarks of
BioMarin Pharmaceutical Inc.
Aldurazyme(R) is a registered trademark of BioMarin/Genzyme LLC.
BIOMARIN PHARMACEUTICAL INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except for share and per share data)
December 31, June 30,
2007 (1) 2008
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $228,343 $252,209
Short-term investments 357,251 323,448
Accounts receivable, net 16,976 52,156
Advances to BioMarin/Genzyme LLC 2,087 248
Inventory 32,445 61,802
Other current assets 7,195 11,951
Total current assets 644,297 701,814
Investment in BioMarin/Genzyme LLC 44,881 315
Property, plant and equipment, net 76,818 105,199
Intangible assets, net 9,596 7,244
Goodwill 21,262 21,262
Restricted cash 2,889 5,008
Other assets 15,536 13,713
Total assets $815,279 $854,555
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $49,907 $54,267
Current portion of acquisition
obligation, net of discount 6,309 5,816
Deferred revenue 5,327 3,236
Other current liabilities - 104
Total current liabilities 61,543 63,423
Convertible debt 497,375 497,245
Long-term portion of acquisition
obligation, net of discount 66,553 65,752
Other long-term liabilities 2,082 2,108
Total liabilities 627,553 628,528
Stockholders' equity:
Common stock, $0.001 par value:
250,000,000 shares authorized at
December 31, 2007 and June 30, 2008;
97,114,159 and 99,208,948 shares
issued and outstanding at December 31,
2007 and June 30, 2008, respectively 97 99
Additional paid-in capital 794,917 828,434
Accumulated other comprehensive
income (loss) 139 (575)
Accumulated deficit (607,427) (601,931)
Total stockholders' equity 187,726 226,027
Total liabilities and stockholders'
equity $815,279 $854,555
(1) December 31, 2007 balances were derived from the audited consolidated
financials.
BIOMARIN PHARMACEUTICAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three and Six Months Ended June 30, 2007 and 2008
(In thousands, except for per share data, unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2007 2008 2007 2008
Revenues:
Net product revenues $20,941 $60,458 $39,276 $118,083
Collaborative agreement
revenues 3,505 2,509 7,652 4,975
Royalty and license revenues 4,438 1,207 4,795 1,513
Total revenues 28,884 64,174 51,723 124,571
Operating expenses:
Cost of sales (1) 4,557 9,593 8,674 26,781
Research and development (1) 19,186 23,755 37,345 41,383
Selling, general and
administrative (1) 17,295 25,203 33,555 48,872
Amortization of acquired
intangible assets 1,093 1,093 2,185 2,185
Total operating expenses 42,131 59,644 81,759 119,221
Income (loss) from operations (13,247) 4,530 (30,036) 5,350
Equity in the income (loss) of
BioMarin/Genzyme LLC 6,550 (587) 12,713 (1,120)
Interest income 6,907 4,101 10,601 9,750
Interest expense (3,720) (4,081) (6,055) (8,193)
Income (loss) before income
taxes (3,510) 3,963 (12,777) 5,787
Provision for income taxes 354 153 380 291
Net income (loss) $(3,864) $3,810 $(13,157) $5,496
Net income (loss) per share,
basic (0.04) $0.04 $(0.14) $0.06
Net income (loss) per share,
diluted $(0.04) $0.04 $(0.14) $0.05
Weighted average common shares
outstanding, basic 95,796 98,923 95,180 98,285
Weighted average common shares
outstanding, diluted 95,796 104,120 95,180 103,948
(1) The following is the stock-based compensation expense included in the
respective captions of the condensed consolidated statements of
operations above:
Three Months Ended Six Months Ended
June 30, June 30,
2007 2008 2007 2008
Stock-based compensation expense:
Cost of goods sold $117 $393 $281 $590
Research and development 1,554 2,059 2,903 3,616
Selling, general and
administrative 2,583 3,496 4,634 6,206
Total stock-based compensation
expense, net of tax $4,254 $5,948 $7,818 $10,412
Contact:
Investors Media
Eugenia Shen Susan Berg
BioMarin Pharmaceutical Inc. BioMarin Pharmaceutical Inc.
(415) 506-6570 (415) 506-6594
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