Press release from PR Newswire
BioMarin Announces First Quarter 2010 Financial Results
Thursday, April 29, 2010
BioMarin Announces First Quarter 2010 Financial Results16:00 EDT Thursday, April 29, 2010First Quarter Profitability Driven by Continued Growth of Naglazyme Conference Call and Webcast to Be Held Today at 5:00 p.m. ETNOVATO, Calif., April 29 /PRNewswire-FirstCall/ --Financial Highlights ($ in millions, except per share data, unaudited)ItemQ1 2010Q1 2009 ComparisonTotal BioMarin Revenue$85.014.8% increaseTotal Net Product Revenue$84.116.9% increaseNaglazyme Net Product Revenue$48.623.4% increaseAldurazyme BioMarin Net Product Revenue*$14.2$17.0Kuvan Net Product Revenue$21.236.8% increaseFirdapse Net Product Revenue$0.1NAGAAP Net Income (Loss)$1.2$(13.2)GAAP Net Income (Loss) per share$0.01 (basic and diluted)$(0.13) (basic and diluted)Non-GAAP Net Income$8.8$9.3Non-GAAP Net Income per share$0.09 (basic), $0.08 (diluted)$0.09 (basic and diluted)* � Net product transfer revenue had a negative $1.7 million impact on net Aldurazyme revenue to BioMarin � � in Q1 2010 and a positive $2.5 million impact on net Aldurazyme revenue to BioMarin in Q1 2009.BioMarin Pharmaceutical Inc. (Nasdaq: BMRN) today announced financial results for the first quarter of 2010. GAAP net income was $1.2 million ($0.01 per diluted share) for the first quarter of 2010, compared to GAAP net loss of $13.2 million ($0.13 per diluted share) for the first quarter of 2009. �Non-GAAP net income was $8.8 million ($0.08 per diluted share) for the first quarter of 2010, compared to non-GAAP net income of $9.3 million ($0.09 per diluted share) for the first quarter of 2009. �Non-GAAP net income excludes non-cash stock compensation expense, certain nonrecurring material items and the tax effect of the adjustments. �The reconciliation of the non-GAAP measures to the GAAP net income is detailed in the table provided near the end of the press release.As of March 31, 2010, BioMarin had cash, cash equivalents and short and long-term investments totaling $452.4 million. �"The year 2010 is off to a solid start, with several milestones already reached, including the recent launch of Firdapse in the EU and positive results from the Phase I/II trial for GALNS for the treatment of MPS IVA, with details in a separate press release issued this afternoon," said Jean-Jacques Bienaime, Chief Executive Officer of BioMarin. �"In addition to the positive results from the Morquio Phase I/II trial released today, we also look forward to additional clinical milestones in 2010 including results from the Phase I trial of BMN-195 for DMD in the second quarter of 2010, results from the Phase II PEG-PAL trial in the third quarter of 2010, the IND filing for BMN-673 and the initiation of the Phase III trial for GALNS in the fourth quarter of 2010."Net Product RevenueNet product revenue from Naglazyme (galsulfase), an enzyme replacement therapy for mucopolysaccharidosis VI (MPS VI), was $48.6 million for the first quarter of 2010, an increase of 23.4 percent compared to Naglazyme net product revenue of $39.4 million for the first quarter of 2009. Naglazyme sales in the three months ended March 31, 2010 were not significantly impacted by changes in foreign currency rates, net of hedges.Net sales of Aldurazyme (laronidase), an enzyme replacement therapy for mucopolysaccharidosis I (MPS I) recorded by Genzyme, were $39.9 million for the first quarter of 2010, an increase of 8.4 percent compared to net sales of Aldurazyme by Genzyme of $36.8 million for the first quarter of 2009. �Changes in foreign currency rates caused an increase to Aldurazyme sales by Genzyme of $1.7 million in the three months ended March 31, 2010. �Net product revenue to BioMarin related to Aldurazyme was $14.2 million for the first quarter of 2010, compared to net product revenue to BioMarin of $17.0 million for the first quarter of 2009. �During the first quarter of 2010, units shipped to third party customers by Genzyme exceeded BioMarin inventory transfers to Genzyme, which resulted in a decrease in BioMarin net product revenue from the royalty payable to BioMarin by Genzyme of $1.7 million. �During the first quarter of 2009, BioMarin inventory transfers exceeded units shipped to third party customers by Genzyme, which resulted in an increase of $2.5 million in BioMarin net product revenue from the royalty payable to BioMarin by Genzyme. Net product revenue from Kuvan (sapropterin dihydrochloride) Tablets, a product for the treatment of phenylketonuria (PKU), was $21.2 million for the first quarter of 2010, an increase of 36.8 percent compared to $15.5 million for the first quarter of 2009. �The quantity of commercial tablets dispensed to patients in the U.S., increased 36.9 percent in the first quarter of 2010 compared to the first quarter of 2009 and decreased 7.2 percent in the first quarter of 2010 compared to the fourth quarter of 2009. �Kuvan sales and patient referral trends improved in April, and the company continues to expect that 2010 Kuvan revenue will be in the range of $98 million to $108 million.2010 Guidance BioMarin maintains the previously provided 2010 guidance for all items.Revenue Guidance ($ in millions)Item2010 GuidanceTotal BioMarin Revenues$374 to $405Total Net Product Revenues$368 to $398Naglazyme Net Product Revenue$190 to $200Kuvan Net Product Revenue$98 to $108Aldurazyme Net Product Revenue to BioMarin$70 to $75Firdapse Net Product Revenue$10 to $15Selected Income Statement Guidance ($ in millions)Item2010 GuidanceCost of Sales (% of Total Revenue)19% to 21%Selling, General and Admin. Expense$145 to $150Research and Development Expense$140 to $145Amortization/Contingent Consideration*$7 to $9Interest Income$3 to $4GAAP Net Income (Loss)$2 to $12Stock Compensation Expense$37Non-GAAP Net Income$39 to $49* �Represents ongoing amortization and changes in fair value of contingent consideration associated with the Huxley and LEAD acquisitions.Firdapse Launch UpdateBioMarin launched Firdapse for LEMS in the EU in mid-April, starting with Germany and the UK. �Firdapse pricing has been filed in Germany at 23 Euros per 10mg tablet. �Since dosages can range from 15 mg to 60 mg a day, the annual cost of therapy can vary widely from patient to patient. �BioMarin estimates that the annual cost will range between 10,000 and 50,000 Euros per year. �Anticipated Upcoming Milestones2Q 2010: Results from Phase 1 trial for BMN-195 for DMD3Q 2010: Initiation of Kuvan neurocognitive outcomes study 3Q 2010: Results from PEG-PAL Phase II trial4Q 2010: Initiation of pivotal Phase III trial for GALNS for MPS IVA4Q 2010: File IND for BMN-673 (PARP inhibitor)1Q 2011: Initiation of Phase Ib trial for BMN-6731H 2011: Availability of blood Phe monitorResearch and Development ProgramsBioMarin continues to make significant investments in research and development to ensure continued growth of the company. �The current pipeline includes programs which are in various stages of development and are focused on treating a range of unmet medical needs. �BioMarin is also making significant investments in manufacturing and laboratory facilities to support the advancement of these programs. �The company plans to host an R&D Day on October 19, 2010 to highlight ongoing R&D programs.Advanced ProgramsFirdapse: BioMarin launched Firdapse for LEMS in the EU, starting with Germany and the UK earlier this month. �The company expects to meet with the FDA regarding the development strategy in the U.S. in the second quarter of 2010.GALNS for MPS IVA: BioMarin reported positive results from the Phase I/II trial. �Highlights include: (1) keratan sulfate levels fell within a few weeks after the start of therapy and decreased further as the study progressed, compared to baseline; (2) patients demonstrated a clinically meaningful improvement in two different measures of endurance and two different measures of pulmonary function as compared to baseline and (3) the frequency and severity of infusion reactions appear comparable to those observed with Naglazyme and Aldurazyme. �BioMarin expects to initiate a pivotal Phase III study in the fourth quarter of 2010. � Kuvan outcomes study/ Lifecycle development: �BioMarin expects to initiate a randomized, placebo-controlled, 13-week Kuvan outcomes study in the third quarter of 2010. �Endpoints include clinically validated measures of neuropsychiatric symptoms. �Several other programs are underway to expand and protect the market and to improve the ability of healthcare providers and patients to better manage PKU. �These programs include a state-of-the-art handheld device to measure blood Phe levels in PKU patients. Human studies of this device are planned for 2010. �Regulatory approval and commercial availability of the handheld blood Phe monitor are expected in the first half of 2011. Mid-Stage ProgramsPEG-PAL for PKU: The ongoing Phase II clinical trial is an open-label, multi-center study to be conducted in approximately 35 patients in a series of dose-escalating cohorts. �The primary treatment period of eight once weekly injections at a fixed dose will be followed by eight weeks of dose and frequency optimization and an extension period. �Results from the Phase II PEG-PAL trial are expected in Q3 2010. � BMN-195 - Utrophin upregulator for Duchenne Muscular Dystrophy: BioMarin initiated the Phase I trial in healthy volunteers in the first quarter of 2010 and expects to report results in the second quarter of 2010. �BMN-195 is an orally available small molecule which may upregulate utrophin, a potential substitution for the missing dystrophin protein in DMD patients. �Preclinical ProgramsBMN-185 - IgA protease for IgA nephropathy: BioMarin is completing early preclinical work. �IgA proteases have been shown to cleave IgA complexes, the deposition of which causes IgA nephropathy, an orphan kidney disorder with few treatment alternatives. BMN-673 (PARP inhibitor): �The company expects to file an IND for BMN-673 by the end of 2010 and initiate a Phase 1b trial in the first quarter of 2011. �BMN-673 has shown evidence of superiority over other compounds in development in preclinical experiments. Undisclosed programs: BioMarin is working on multiple early development opportunities, of which two undisclosed biologics are advancing toward IND-enabling decisions. �The company plans to announce the next candidate for IND-filing at the upcoming R&D Day on October 19, 2010.Non-GAAP Financial Information and ReconciliationThe above results for the quarters ended March 31, 2010 and March 31, 2009 and financial guidance for the year ending December 31, 2010 are presented both as determined in accordance with GAAP and on a non-GAAP basis. �As used in this release, non-GAAP income is calculated in accordance with GAAP, but excludes non-cash stock compensation expense, certain nonrecurring material items and the tax effect of the adjustments. �The following tables detail the reconciliation of non-GAAP to GAAP financial metrics:Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Income�(In millions)(Unaudited)�Three Months Ended Year Ending�March 31, �December 31,Notes:200920102010(forecast)GAAP Net Income (Loss)$(13.2)1.2$2.0 to 12.0Stock-based compensation expense7.88.537.0Upfront license fees (1)8.8--Impairment charges(2)5.9--Net gain on the sale of equity investments-(0.9)-Income tax effect of Non-GAAP adjustments(3)---Non-GAAP net income $9.3$8.8$39.0 to 49.0Notes: (1) Represents upfront license payments related to our collaboration agreement with �La Jolla Pharmaceutical Company in the first quarter of 2009.(2) Includes impairment losses on investments in Summit plc. and La Jolla Pharmaceutical Company recognized during the first quarter of 2009. (3) Represents the tax effect of the adjustments.BioMarin believes that this non-GAAP information is useful to investors, taken in conjunction with BioMarin's GAAP information because it provides additional information regarding the performance of BioMarin's core ongoing business, Naglazyme, Kuvan and Aldurazyme and development of its pipeline. �By providing information about both the overall GAAP financial performance and the non-GAAP measures that focus on continuing operations, the company believes that the additional information enhances investors' overall understanding of the company's business and prospects for the future. �Further, the company uses both the GAAP and the non-GAAP results and expectations internally for its operating, budgeting and financial planning purposes.Diluted Earnings Per Share Calculation The calculation of both GAAP and non-GAAP diluted earnings per share for the first quarter of 2010 and the first quarter of 2009 excludes the 26.3 million shares related to the outstanding convertible debt as their impact is considered anti-dilutive. �Conference Call DetailsBioMarin will host a conference call and webcast to discuss first quarter 2010 financial results today, Thursday, April 29, at 5:00 p.m. ET. This event can be accessed on the investor section of the BioMarin website at www.BMRN.com.Date: April 29, 2010Time: 5:00 p.m. ET U.S. / Canada Dial-in Number: �866.804.6921International Dial-in Number: �857.350.1667Participant Code: 38613991Replay Dial-in Number: 888.286.8010Replay International Dial-in Number: 617.801.6888Replay Code: 77798822About BioMarinBioMarin develops and commercializes innovative biopharmaceuticals for serious diseases and medical conditions. The company's product portfolio comprises four approved products and multiple clinical and pre-clinical product candidates. Approved products include Naglazyme� (galsulfase) for mucopolysaccharidosis VI (MPS VI), a product wholly developed and commercialized by BioMarin; Aldurazyme� (laronidase) for mucopolysaccharidosis I (MPS I), a product which BioMarin developed through a 50/50 joint venture with Genzyme Corporation; Kuvan� (sapropterin dihydrochloride) Tablets, for phenylketonuria (PKU), developed in partnership with Merck Serono, a division of Merck KGaA of Darmstadt, Germany; and Firdapse? (amifampridine phosphate), which has been approved by the European Commission for the treatment of Lambert Eaton Myasthenic Syndrome (LEMS). Other product candidates include PEG-PAL (PEGylated recombinant phenylalanine ammonia lyase), which is currently in Phase II clinical development for the treatment of PKU; GALNS (N-acetylgalactosamine 6-sulfatase), which is currently in clinical development for the treatment of MPS IVA and BMN 195, which is currently in Phase I clinical development for the treatment of Duchenne Muscular Dystrophy. For additional information, please visit www.BMRN.com. Information on BioMarin's website is not incorporated by reference into this press release.Forward-Looking StatementThis 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, Firdapse, and Aldurazyme; the financial performance of the BioMarin as a whole; the timing of BioMarin's clinical trials of PEG-PAL, GALNS, BMN-195 and other product candidates; the continued clinical development and commercialization of Aldurazyme, Naglazyme, Kuvan, Firdapse, 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, 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 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, Kuvan and Firdapse; actual sales of Aldurazyme, Naglazyme Kuvan and Firdapse; 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 2009 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� and Kuvan� are registered trademarks of BioMarin Pharmaceutical Inc.Firdapse? is a trademark of BioMarin Huxley Ltd.Aldurazyme� is a registered trademark of BioMarin/Genzyme LLC.Contact:InvestorsMediaEugenia ShenSusan BergBioMarin Pharmaceutical Inc.BioMarin Pharmaceutical Inc.(415) 506-6570(415) 506-6594BIOMARIN PHARMACEUTICAL INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(In thousands, except for share and per share data)December�31,2009March�31,2010ASSETS�(unaudited)Current assets:Cash and cash equivalents$167,171$108,963Short-term investments133,506214,679Accounts receivable, net73,54082,606Inventory78,66279,761Other current assets14,84814,422Total current assets467,727500,431Investment in BioMarin/Genzyme LLC4411,215Long-term investments169,849128,722Property, plant and equipment, net199,141203,949Intangible assets, net40,97777,416Goodwill23,72240,360Other assets15,30614,112Total assets$917,163$966,205LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilities:Accounts payable, accrued liabilities and other current liabilities$78,068$78,541Deferred revenue86158Total current liabilities78,15478,699Convertible debt497,083497,083Other long-term liabilities19,74145,183Total liabilities594,978620,965Stockholders' equity:Common stock, $0.001 par value: 250,000,000 shares authorized at December�31, 2009 and March 31, 2010; 100,961,922 and 101,551,221 shares issued and outstanding at December�31, 2009 and March 31, 2010, respectively101102Additional paid-in capital899,950917,738Company common stock held by deferred compensation plan(1,715)(1,072)Accumulated other comprehensive income9334,405Accumulated deficit(577,084)(575,933)Total stockholders' equity322,185345,240Total liabilities and stockholders' equity$917,163$966,205(1)December�31, 2009 balances were derived from the audited consolidated financial statements.CONSOLIDATED STATEMENTS OF OPERATIONSFor the Three Months Ended March 31, 2009 and 2010(In thousands, except for per share data, unaudited)Three Months Ended March 31,20092010Revenues:Net product revenues$71,914$84,073Collaborative agreement revenues509201Royalty and license revenues1,557679Total revenues73,98084,953Operating expenses:Cost of sales14,36217,412Research and development 34,35830,097Selling, general and administrative28,56834,000Intangible asset amortization and contingent consideration1,093654Total operating expenses78,38182,163Income (Loss) from operations(4,401)2,790Equity in the loss of BioMarin/Genzyme LLC(547)(691)Interest income2,1531,190Interest expense(4,087)(2,429)Impairment loss on equity investments(5,853)?��Net gain from sale of investments?��927Income (loss) before income taxes(12,735)1,787Provision for income taxes417636Net income (loss)$(13,152)$1,151Net income (loss) per share, basic and diluted $(0.13)$0.01Weighted average common shares outstanding, basic99,902101,144Weighted average common shares outstanding, diluted99,933103,720Three Months EndedMarch 31, 20092010Cost of sales$564$1,028Research and development expense2,4753,182Selling, general and administrative expense4,7574,336Total stock-based compensation expense$7,796$8,546SOURCE BioMarin Pharmaceutical Inc.For further information: investors, Eugenia Shen, +1-415-506-6570, or media, Susan Berg, +1-415-506-6594, both of BioMarin Pharmaceutical Inc.