BioMarin Pharmaceutical Inc.
Oct 27, 2016

BioMarin Announces Third Quarter 2016 Financial Results

- Third Quarter 2016 Total BioMarin Revenues Increase 34% Year over Year to $280 million

- Vimizim Net Product Revenues Increase 25% Year over Year to $81 million in the Third Quarter 2016

- Kuvan Net Product Revenues Increase 42% Year over Year to $91 million in the Third Quarter 2016  

 Financial Highlights (in millions of U.S. dollars, except per share data, unaudited)

  Three Months Ended September 30,  Nine Months Ended September 30, 
  2016  2015  % Change  2016  2015  % Change 
                         
Total BioMarin Revenues $280  $209   34% $817  $662   23%
Vimizim Net Product Revenues  81   65   25%  260   170   53%
Naglazyme Net Product Revenues  78   54   44%  222   243   (9)%
Kuvan Net Product Revenues  91   64   42%  258   175   47%
Aldurazyme Net Product Revenues  24   21   14%  59   59    
                         
GAAP Net Loss $(43) $(91)     $(551) $(240)    
GAAP Net Loss per Share - Basic $(0.26) $(0.57)     $(3.36) $(1.51)    
GAAP Net Loss per Share - Diluted $(0.26) $(0.60)     $(3.37) $(1.51)    
                         
non-GAAP Income (Loss) $3  $(41)     $(9) $(73)    
                         
  September 30,  December 31,                 
  2016  2015                 
Cash, cash equivalents and investments $1,398  $1,018                 

SAN RAFAEL, Calif., Oct. 27, 2016 (GLOBE NEWSWIRE) -- BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) today announced financial results for the third quarter ended September 30, 2016. GAAP net loss was $43 million, or $(0.26) per basic and diluted share, for the third quarter of 2016, compared to GAAP net loss of $91 million, or $(0.57) and $(0.60) per basic and diluted share, respectively, for the third quarter of 2015. Non-GAAP income was $3 million for the quarter ended September 30, 2016, compared to non-GAAP loss of $41 million for the third quarter of 2015.

The change in GAAP net loss and non-GAAP income and loss compared to the prior year quarter was primarily due to increased gross margins from Naglazyme, Kuvan and Vimizim net product revenues, partially offset by increased selling, general and administrative expenses for Vimizim and Kuvan.

Total BioMarin Revenues were $280 million for the third quarter of 2016, an increase of 34% compared to the same period in 2015. Vimizim net product revenues increased to $81 million, a 25% year over year increase. Patients on therapy for Vimizim increased 46% year over year. The decrease in Vimizim net product revenues quarter to quarter was attributable to forward buying in Latin America and the Middle East in the second quarter of 2016. Naglazyme net product revenues increased to $78 million, a 44%, year over year increase, due to the timing of central government orders from Latin America in the current quarter. Naglazyme patients on therapy continue to show consistent growth with an increase of 10% year over year.  Kuvan net product revenues increased to $91 million, a 42% year over year increase, including $71 million contributed from revenue in North America due to a 15% increase in patients on therapy, and $20 million contributed from net product revenues in the newly acquired ex-North American territories.

As of September 30, 2016, BioMarin had cash, cash equivalents and investments totaling $1.4 billion, which includes $713 million of net proceeds from the August 12, 2016 public offering, as compared to $1.0 billion on December 31, 2015.

Commenting on the quarter, Jean-Jacques Bienaimé, Chairman and Chief Executive Officer of BioMarin, said, "In the third quarter of 2016 we shared proof-of-concept data from our BMN 270 gene therapy program for the treatment of Hemophilia A, currently the only factor VIII product in clinical development in this indication.  In addition, 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."

Mr. Bienaimé continued, "In addition, just last week we announced the results of the 30µg/kg dose cohort from our Phase 2 study with vosoritide in achondroplasia, which demonstrated similar efficacy as the lower dose of 15µg/kg.  Based on these results, we intend to initiate a one-year, randomized, placebo-controlled Phase 3 study in children with achondroplasia ages 5-14 at the 15µg/kg dose with a subsequent open-label extension by year-end.  If the data from both the vosoritide and BMN 270 gene therapy programs continue to mature as we hope, we believe that each of these product candidates has the potential to ultimately drive a billion dollars in annual revenue, if approved and successfully commercialized." 

Net Product Revenues (in millions of U.S. dollars, unaudited)

Total BioMarin Revenues

  Three Months Ended September 30,  Nine Months Ended September 30, 
  2016  2015  $ Change  % Change  2016  2015  $ Change  % Change 
                                 
Vimizim (1) $81  $65  $16   25% $260  $170  $90   53%
Naglazyme (1)  78   54   24   44%  222   243   (21)  (9)%
Kuvan (2)  91   64   27   42%  258   175   83   47%
Aldurazyme  24   21   3   14%  59   59       
Firdapse  4   4         13   11   2   18%
Net product revenues $278  $208  $70   34% $812  $658  $154   23%
                                 
Collaborative, royalty, license and other revenues $2  $1  $1      $5  $4  $1     
Total BioMarin Revenues $280  $209  $71   34% $817  $662  $155   23%
                                 

(1) Vimizim and Naglazyme net product revenues experience quarterly fluctuations primarily due to the timing of government ordering patterns in certain countries. The Company does not believe these fluctuations reflect a change in underlying demand.
(2) North America contributed $71 million in the third quarter with an additional $20 million coming from the newly acquired ex-North American territories.

Details of Net Product Revenues Attributable to Aldurazyme

  Three Months Ended September 30,  Nine Months Ended September 30, 
  2016  2015  $ Change  % Change  2016  2015  $ Change  % Change 
Aldurazyme revenue reported by Genzyme $59  $54  $5   9% $169  $164  $5   3%


  Three Months Ended September 30,    Nine Months Ended September 30, 
  2016  2015  $ Change    2016  2015  $ Change 
Royalties earned from Genzyme $27  $23  $4    $71  $69  $2 
Net product transfer revenues (3) $(3) $(2) $(1)   $(12) $(10) $(2)
Total Aldurazyme net product revenues $24  $21  $3    $59  $59  $ 
                           

(3) To the extent units shipped to third party customers by Genzyme exceed BioMarin inventory transfers to Genzyme, BioMarin will record a decrease in net product revenues from the royalty payable to BioMarin for the amount of previously recognized product transfer revenue. If BioMarin inventory transfers exceed units shipped to third party customers by Genzyme, BioMarin will record incremental net product transfer revenues for the period. Positive net product transfer revenues result in the period if BioMarin transferred more units to Genzyme than Genzyme sold to third-party customers.

Updated 2016 Financial Guidance

Revenue Guidance ($ in millions)

Item    
  Provided August 4, 2016 Updated October 27, 2016
Total BioMarin Revenues $1,100 to $1,150 Unchanged
Vimizim Net Product Revenues $340 to $360 Unchanged
Naglazyme Net Product Revenues $290 to $320 Unchanged
Kuvan Net Product Revenues $340 to $360 Unchanged

Select Income Statement Guidance ($ in millions, except percentages)

Item    
  Provided August 4, 2016 Updated October 27, 2016
Cost of Sales (% of Total BioMarin Revenues) 18.0% to 19.0% Unchanged
Selling, General and Admin. Expense $470 to $490 $460 to $480
Research and Development Expense $670 to $690 $650 to $670
GAAP Net Loss $(620) to $(650) $(600) to $(630)
non-GAAP Loss $(30) to $(50) $(10) to $(30)

Recent Key Program Updates 

Conference Call Details

BioMarin will host a conference call and webcast to discuss third quarter 2016 financial results today, Thursday, October 27, 2016 at 4:30 p.m. ET. This event can be accessed on the investor section of the BioMarin website at www.BMRN.com.

U.S. / Canada Dial-in Number: 877.303.6313
International Dial-in Number: 631.813.4734
Conference ID: 96042296

Replay Dial-in Number: 855.859.2056
Replay International Dial-in Number: 404.537.3406
Conference ID: 96042296

About BioMarin
BioMarin is a global biotechnology company that develops and commercializes innovative therapies for patients with serious and life-threatening rare and ultra-rare genetic diseases. The Company's portfolio consists of five commercialized products and multiple clinical and pre-clinical product candidates. For additional information, please visit www.BMRN.com.

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 expenses related to Vimizim, Naglazyme, Kuvan, Firdapse, and Aldurazyme and BioMarin's product candidates, including vosoritide and BMN 270; the financial performance of the BioMarin as a whole; the timing of BioMarin's clinical trials; the continued clinical development and commercialization of Vimizim, Naglazyme, Kuvan, Firdapse, Aldurazyme and BioMarin's product candidates; the possible approval and commercialization of BioMarin's 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 commercialization of Vimizim, Naglazyme, Kuvan, and Firdapse; 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 FDA, the European Commission and other regulatory authorities concerning each of the described products and product candidates; the market for each of these products; actual sales of Vimizim, Naglazyme, Kuvan, Firdapse and Aldurazyme; 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 2015 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®, Naglazyme®, Kuvan®, Firdapse® and Vimizim® are registered trademarks of BioMarin Pharmaceutical Inc., or its affiliates.  BrineuraTM is a trademarks of BioMarin Pharmaceutical Inc. Aldurazyme® is a registered trademark of BioMarin/Genzyme LLC.

  
BIOMARIN PHARMACEUTICAL INC. 
  
CONDENSED CONSOLIDATED BALANCE SHEETS 
September 30, 2016 and December 31, 2015 
(In thousands of U.S. dollars, except share and per share amounts) 
  
  September 30,  December 31, 
   2016  2015(1) 
ASSETS (unaudited)   
Current assets:        
Cash and cash equivalents $707,349  $397,040 
Short-term investments  327,499   195,579 
Accounts receivable, net (allowance for doubtful accounts: $66 and $93,
  at September 30, 2016 and December 31, 2015, respectively)
  215,894   164,959 
Inventory  347,420   271,683 
Other current assets  68,409   60,378 
Total current assets  1,666,571   1,089,639 
Noncurrent assets:        
Long-term investments  362,956   425,652 
Property, plant and equipment, net  729,836   704,207 
Intangible assets, net  561,387   683,996 
Goodwill  197,039   197,039 
Deferred tax assets  288,006   220,191 
Other assets  36,443   408,644 
Total assets $3,842,238  $3,729,368 
LIABILITIES AND STOCKHOLDERS' EQUITY        
Current liabilities:        
Accounts payable and accrued liabilities $306,129  $392,511 
Short-term convertible debt, net  22,460    
Short-term contingent acquisition consideration payable  48,746   52,946 
Total current liabilities  377,335   445,457 
Noncurrent liabilities:        
Long-term convertible debt, net  653,178   662,286 
Long-term contingent acquisition consideration payable  122,644   32,663 
Deferred tax liabilities     143,527 
Other long-term liabilities  43,273   44,588 
Total liabilities  1,196,430   1,328,521 
Stockholders' equity:        
Common stock, $0.001 par value: 250,000,000 shares authorized at
  September 30, 2016 and December 31, 2015: 171,697,649 and 161,526,044 shares
  issued and outstanding at September 30, 2016 and  December 31, 2015, respectively
  173   162 
Additional paid-in capital  4,231,514   3,414,837 
Company common stock held by Nonqualified Deferred Compensation Plan  (14,969)  (13,616)
Accumulated other comprehensive income  2,158   21,033 
Accumulated deficit  (1,573,068)  (1,021,569)
Total stockholders' equity  2,645,808   2,400,847 
Total liabilities and stockholders' equity $3,842,238  $3,729,368 
         

(1) December 31, 2015 balances were derived from the audited Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2015, filed with the U.S. Securities and Exchange Commission on February 29, 2016.

  
BIOMARIN PHARMACEUTICAL INC. 
  
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 
Three and Nine months Ended September 30, 2016 and 2015 
(In thousands of U.S. dollars, except per share amounts) 
(Unaudited) 
  
  Three Months Ended September 30,  Nine Months Ended September 30, 
  2016  2015  2016  2015 
REVENUES:                
Net product revenues $278,262  $207,767  $812,195  $658,102 
Collaborative agreement revenues  1   131   234   849 
Royalty, license and other revenues  1,633   1,006   4,334   3,008 
Total revenues  279,896   208,904   816,763   661,959 
OPERATING EXPENSES:                
Cost of sales  50,738   34,904   145,473   103,965 
Research and development  160,831   158,713   486,663   458,688 
Selling, general and administrative  118,758   94,044   333,635   288,364 
Intangible asset amortization and contingent consideration  9,654   3,116   (34,318)  22,963 
Impairment of intangible assets        599,118    
Total operating expenses  339,981   290,777   1,530,571   873,980 
LOSS FROM OPERATIONS  (60,085)  (81,873)  (713,808)  (212,021)
Equity in the loss of BioMarin/Genzyme LLC  (104)  (186)  (374)  (539)
Interest income  1,633   1,344   4,561   3,050 
Interest expense  (9,980)  (9,447)  (29,767)  (28,911)
Debt conversion expense           (163)
Other income (expense)  1,723   (281)  504   (9,105)
LOSS BEFORE INCOME TAXES  (66,813)  (90,443)  (738,884)  (247,689)
Provision for (benefit from) income taxes  (24,016)  483   (187,385)  (7,273)
NET LOSS $(42,797) $(90,926) $(551,499) $(240,416)
NET LOSS PER SHARE, BASIC $(0.26) $(0.57) $(3.36) $(1.51)
NET LOSS PER SHARE, DILUTED $(0.26) $(0.60) $(3.37) $(1.51)
Weighted average common shares outstanding, basic  167,714   160,886   163,963   159,647 
Weighted average common shares outstanding, diluted  167,714   161,134   164,216   159,647 
                 

Non-GAAP Information

The results presented in this press release for the three and nine months ended September 30, 2016 and 2015 include both GAAP information and non-GAAP information. As used in this release, non-GAAP income (loss) is based on reported GAAP net loss and the guidance for full-year GAAP net loss before interest, income taxes, depreciation and amortization and further adjusted to exclude non-cash stock-based compensation expense, non-cash contingent consideration expense and certain other specified items, as detailed below. In addition, BioMarin includes in this press release the effects of these adjustments on certain components of GAAP net loss for each of the periods presented. In this regard, non-GAAP income (loss) and its components, including non-GAAP Cost of sales, non-GAAP Research and development expenses, non-GAAP Selling, general and administrative expense, non-GAAP intangible asset amortization and contingent consideration, non-GAAP Other income (expense) and non-GAAP Provision for (benefit from) income taxes are statement of operations line items prepared on the same basis as, and therefore components of, the overall non-GAAP measures.

BioMarin regularly uses both GAAP and non-GAAP results and expectations internally to assess the Company's core operating performance, as support for budgeting and financial planning purposes and to evaluate key business decisions. Because non-GAAP income (loss) and its components are important internal measurements for BioMarin, the Company believes that providing this information in conjunction with BioMarin's GAAP information enhances investors' understanding because it provides additional information regarding the performance of BioMarin's core operating results and business and development of its pipeline.

Non-GAAP income (loss) and its components are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read in conjunction with the consolidated financial information prepared in accordance with GAAP. Investors should note that the non-GAAP information is not prepared under any comprehensive set of accounting rules or principles and does not reflect all of the amounts associated with the Company's results of operations as determined in accordance with GAAP. Investors should also note that these non-GAAP measures have no standardized meaning prescribed by GAAP and, therefore, have limits in their usefulness to investors. In addition, from time to time in the future there may be other items that the Company may exclude for purposes of its non-GAAP measures; likewise, the Company may in the future cease to exclude items that it has historically excluded for purposes of its non-GAAP measures. Because of the non-standardized definitions, the non-GAAP measure as used by BioMarin in this press release and the accompanying tables may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by other companies.

The following table presents the reconciliation of GAAP Net Loss to non-GAAP Income (Loss):

Reconciliation of GAAP Net Loss to non-GAAP Income (Loss)
(In millions of U.S. dollars)
(unaudited)
  
 Three Months Ended  Nine Months Ended  Year Ending
 September 30,  September 30,  December 31, 2016
 2016  2015  2016  2015  Guidance
                  
GAAP Net Loss$(42.8) $(90.9) $(551.5) $(240.4) $(600.0) to $(630.0)
                  
Interest expense, net 8.3   8.1   25.2   25.9  33.0
Provision for (benefit from) income taxes (24.0)  0.5   (187.4)  (7.3) (187.0) - (197.0)
Depreciation expense 18.8   9.1   42.7   25.4  45.0 - 55.0
Amortization expense 7.5   2.6   22.6   7.8  30.0
Stock-based compensation expense 32.9   28.8   97.3   81.0  120.0 - 140.0
Contingent consideration expense (1) 2.2   0.5   (56.9)  15.1  (50.0) - (60.0)
Acquisition expenses (2)          7.0  -
Impairment charges (3)       599.1   12.8  599.0
                  
non-GAAP Income (Loss)$2.9  $(41.3) $(8.9) $(72.7) $(10.0) to $(30.0)
                  

The following reconciliation of the GAAP reported to non-GAAP information provides the details of the effects of the non-GAAP adjustments on certain components of the Company's operating results for each of the periods presented.

  
Reconciliation Of Certain GAAP Reported Information To non-GAAP Information 
Three and Nine Months Ended September 30, 2016 and 2015 
(In millions of U.S. dollars) 
(Unaudited) 
  
 Three Months Ended September 30, 
 2016  2015 
     Adjustments          Adjustments     
 GAAP
Reported
  Interest,
Taxes,
Depreciation
and
Amortization
  Stock-Based
Compensation,
Contingent
Consideration
and Other
 Adjustments
  non-GAAP  GAAP
Reported
  Interest,
Taxes,
Depreciation
and
Amortization
  Stock-Based
Compensation,
Contingent
Consideration
and Other
Adjustments
  non-GAAP 
                                
Cost of sales$50.7  $  $(2.1) $48.6  $34.9  $  $(1.4) $33.5 
Research and development 160.8   (11.1)  (14.2)  135.5   158.7   (4.3)  (12.6)  141.8 
Selling, general and administrative 118.8   (7.7)  (16.6)  94.5   94.0   (4.8)  (14.8)  74.4 
Intangible asset amortization and contingent consideration (1) 9.7   (7.5)  (2.2)     3.1   (2.6)  (0.5)   
Interest expense, net (8.3)  8.3         (8.1)  8.1       
Other income (expense) 1.6         1.6   (0.5)        (0.5)
Provision for (benefit from) income taxes (24.0)  24.0         0.5   (0.5)      
Net Loss/non-GAAP Income (Loss) (42.8)  10.6   35.1   2.9   (90.9)  20.3   29.3   (41.3)


 Nine Months Ended September 30, 
 2016  2015 
     Adjustments          Adjustments     
 GAAP
Reported
  Interest,
Taxes,
Depreciation
and
Amortization
  Stock-Based
Compensation,
Contingent
Consideration
and Other
 Adjustments
  non-GAAP  GAAP 
Reported
  Interest,
Taxes,
Depreciation
and
Amortization
  Stock-Based
Compensation,
Contingent
Consideration
and Other
Adjustments
  non-GAAP 
                                
Cost of sales$145.5  $  $(6.0) $139.5  $104.0  $  $(4.5) $99.5 
Research and development 486.7   (23.4)  (43.0)  420.3   458.7   (11.7)  (35.0)  412.0 
Selling, general and administrative (2) 333.6   (19.3)  (48.3)  266.0   288.4   (13.7)  (48.5)  226.2 
Intangible asset amortization and contingent consideration (1) (34.3)  (22.6)  56.9      22.9   (7.8)  (15.1)   
Impairment of intangible assets (3) 599.1      (599.1)               
Interest expense, net (25.2)  25.2         (25.9)  25.9       
Other income (expense) 0.1         0.1   (9.8)     12.8   3.0 
Benefit from income taxes (187.4)  187.4         (7.3)  7.3       
Net Loss/non-GAAP Loss (551.5)  (96.9)  639.5   (8.9)  (240.4)  51.8   115.9   (72.7)

(1) Includes the expense associated with the change in the fair value of contingent acquisition consideration payable for the period, resulting from changes in estimated probabilities and timing of achieving certain regulatory and commercial milestones. Amounts for the nine months ended September 30, 2016 include $43.8 million and $21.1 million related to the change in probability of achieving the Kyndrisa and reveglucosidase alfa development milestones, respectively, as a result of discontinuance of these programs in June 2016.
(2) Includes $7.0 million of acquisition costs for the nine months ended September 30, 2015 related to the acquisition of Prosensa Holdings N.V.
(3) Includes $574.1 million and $25.0 million for the impairment of intangible assets associated with the discontinuance of the Kyndrisa and reveglucosidase alfa development programs, respectively, in June 2016.

 

Contact:
Investors:
Traci McCarty
BioMarin Pharmaceutical Inc.
(415) 455-7558

Media:
Debra Charlesworth
BioMarin Pharmaceutical Inc.
(415) 455-7451