Press release from PR Newswire
BioMarin Announces First Quarter 2011 Financial Results
Thursday, April 28, 2011
BioMarin Announces First Quarter 2011 Financial Results16:00 EDT Thursday, April 28, 2011Net Product Revenue Growth of 30% in the First Quarter of 2011; Improved Top and Bottom-Line Guidance Conference Call and Webcast to Be Held Today at 5:00 p.m. ETNOVATO, Calif., April 28, 2011 /PRNewswire/ -- Financial Highlights ($ in millions, except per share data, unaudited)ItemQ1 2011Q1 2010 ComparisonTotal BioMarin Revenue$109.528.8% increaseTotal Net Product Revenue$109.129.7% increaseNaglazyme Net Product Revenue$60.624.7% increaseAldurazyme BioMarin Net Product Revenue*$18.7$14.2Kuvan Net Product Revenue$26.725.9% increaseFirdapse Net Product Revenue$3.1$0.1GAAP Net Income (Loss)$(4.4)$1.2GAAP Net Income (Loss) per share$ (0.04) (basic and diluted)$0.01 (basic and diluted)Non-GAAP Adjusted EBITDA$17.3$14.8Non-GAAP Adjusted EBITDA per share$0.16 (basic), $0.14 (diluted)$0.15 (basic), $0.14 (diluted) * Net product transfer revenue had a positive $1.8 million impact on net Aldurazyme revenue to BioMarin in the first quarter of 2011 and a negative $1.7 million impact on net Aldurazyme revenue to BioMarin in the first quarter of 2010.BioMarin Pharmaceutical Inc. (Nasdaq: BMRN) today announced financial results for the first quarter of 2011. GAAP net loss was $4.4 million ($0.04 per diluted share) for the first quarter of 2011, compared to GAAP net income of $1.2 million ($0.01 per diluted share) for the first quarter of 2010. Non-GAAP adjusted EBITDA was $17.3 million ($0.14 per diluted share) for the first quarter of 2011, compared to non-GAAP adjusted EBITDA of $14.8 million ($0.14 per diluted share) for the first quarter of 2010. Non-GAAP adjusted EBITDA excludes depreciation and amortization, contingent consideration expense, interest income and expense, income taxes, stock compensation expense and material non-recurring items. The reconciliation of the non-GAAP measures to the GAAP net income in the first quarter of 2011 is detailed in the table provided near the end of the press release.As of March 31, 2011, BioMarin had cash, cash equivalents and short and long-term investments totaling $394.0 million, as compared to $402.3 million as of December 31, 2010. Cash and investment balances declined $8.3 million in the first quarter of 2011 due primarily to the timing of cash receipts that were collected in early April. For 2011, the company expects to remain cash flow neutral to slightly positive."Our clinical pipeline is advancing with more programs in the clinic than ever in the history of the company," said Jean-Jacques Bienaime, Chief Executive Officer of BioMarin. "We saw a strong quarter from our commercial business, driven in part by the timing of a Naglazyme order from Brazil early in the quarter, along with consistent new patient adds around the world. We remain focused on growing the commercial business and the successful advancement of our pipeline projects."Net Product Revenue (in millions)Three Months Ended March 31,20112010$ Change% ChangeNaglazyme (1) $ 60.6$ 48.6$ 12.024.7%Kuvan (2) $ 26.7$ 21.2$ 5.525.9%Firdapse (3) $ 3.1$ 0.1$ 3.0100%+(1) Changes in foreign currency rates, net of hedges, had a positive $0.1 million impact on Naglazyme sales in the three months ended March 31, 2011. Naglazyme revenues experience quarterly fluctuations due to the timing of government ordering patterns in certain countries. (2) The quantity of commercial tablets dispensed to patients in the U.S. increased 21.1 percent in the first quarter of 2011 compared to the first quarter of 2010.(3) A product for the treatment of Lambert Eaton Myasthenic Syndrome (LEMS) which was launched in the EU in April 2010. Three Months Ended March 31, 20112010$ Change% Change Aldurazyme revenue reported by Genzyme (4) $42.8$39.9$2.97.3%Royalties due from Genzyme16.915.91.0Incremental (previously recognized) 1.8(1.7)3.5Total Aldurazyme net product revenues (5) $ 18.7$14.2$4.5(4) Changes in foreign currency rates caused an increase to Aldurazyme sales by Genzyme of $0.4 million in the three months ended March 31, 2011. In the first quarter of 2011, the number of Aldurazyme vials shipped increased 6.4 percent over the first quarter of 2010.(5) To the extent units shipped to third party customers by Genzyme exceed BioMarin inventory transfers to Genzyme, BioMarin records a decrease in net product revenue from the royalty payable to BioMarin for the amount of previously recognized product transfer revenue. If BioMarin inventory transfers exceed units shipped to third party customers by Genzyme, BioMarin will record incremental net product transfer revenue for the period.2011 Guidance Revenue Guidance ($ in millions)Item2011 GuidancePrevious 2011 GuidanceTotal BioMarin Revenues$422 to $452$417 to $452Total Net Product Revenues$416 to $446$411 to $446Naglazyme Net Product Revenue$211 to $225$206 to $225Kuvan Net Product RevenueUnchanged$112 to $120Aldurazyme Net Product Revenue to BioMarinUnchanged$79 to $83Firdapse Net Product RevenueUnchanged$14 to $18Selected Income Statement Guidance ($ in millions)Item2011 GuidancePrevious 2011 GuidanceCost of Sales (% of Total Revenue)Unchanged18% to 20%Selling, General and Admin. ExpenseUnchanged$164 to $174Research and Development ExpenseUnchanged$195 to $205Amortization and Contingent ConsiderationUnchanged$15Interest IncomeUnchanged$3Income Tax Expense (Benefit)Unchanged$15GAAP Net Income (Loss)$(52) to $(42)$(60) to $(48)Stock Compensation ExpenseUnchanged$43Non-GAAP Adjusted EBITDA$51 to $61$43 to $55Anticipated Upcoming Milestones2Q 2011: Initiation of pivotal Phase III trial for Firdapse for LEMS in the U.S.3Q 2011: Top-line results from Phase II trial for PEG-PAL, including daily dosing and formulation studies1Q 2012: Initiation of Phase III trial for PEG-PAL1Q 2012: Initiation of Phase I trial for BMN-111 for Achondroplasia1H 2012: 510k approval and commercial availability of the handheld blood Phe monitor for PKU2H 2012: Top-line results for Phase III trial for GALNS for MPS IVA2H 2012: Top-line results for PKU-016 Kuvan neurocognitive study2H 2012: Top-line results for Phase I/II trial for BMN-701 for Pompe disease4Q 2012/1Q 2013: Market authorization application filings for GALNS for MPS IVAResearch and Development ProgramsBioMarin continues to make significant investments in research and development to ensure persistent growth of the company. The current pipeline includes programs in various stages of development that are focused on treating a range of serious unmet medical needs. Advanced Clinical ProgramsGALNS for MPS IVA: BioMarin is enrolling patients in the randomized, double-blind, placebo-controlled Phase III study with primary endpoint of six-minute walk distance, 24 weeks in treatment duration and treatment doses of two mg/kg/week and two mg/kg/every other week. The company expects to enroll approximately 160 patients across 40 centers worldwide and to report top-line results in the second half of 2012.Kuvan Outcomes Study: PKU-016, a randomized, placebo-controlled, 13-week Kuvan outcomes study is ongoing. Endpoints include clinically validated measures of neuropsychiatric symptoms and if successful, may enable a label amendment. The company expects to report top-line results in the second half of 2012.Hand-Held Blood Phe Monitor: Several programs are underway to expand and protect the market and to improve the ability of healthcare providers and patients to better manage PKU. Regulatory approval and commercial availability of the handheld blood Phe monitor are expected in the first half of 2012. Firdapse: BioMarin expects to initiate a Phase III trial for LEMS in the U.S. in the second quarter of 2011. Mid-Stage Clinical ProgramsPEG-PAL for PKU: Top-line results for the Phase II study, including a study comparing daily and weekly dosing and a formulation study are expected in the third quarter of 2011. The company expects to initiate a Phase III trial in the first quarter of 2012.Early-Stage Clinical ProgramsBMN-673 (PARP inhibitor): The company initiated a Phase I/II trial in the first quarter of 2011. The trial is an open-label study of once daily, orally administered BMN-673 in patients ages 18 and older with advanced or recurrent solid tumors. The primary objective of the study is to establish the maximum tolerated dose of daily oral BMN-673 and to obtain preliminary efficacy data in an expanded cohort of patients with genetically-defined tumors.BMN-701 for Pompe Disease: BioMarin initiated a Phase I/II trial in Pompe patients in the first quarter of 2011. The trial is an open-label study to evaluate the safety, tolerability, pharmacokinetics, pharmacodynamic and clinical activity of BMN-701 administered as an intravenous infusion every two weeks at doses of 5 mg/kg, 10 mg/kg and 20 mg/kg. The company expects to enroll up to 30 patients between the ages of 13 and 65 years old with late-onset Pompe disease for a treatment period of 24 weeks. The primary objective of the study is to establish the maximum tolerated dose of every other week administration of BMN-701 and to treat an expanded cohort of patients at the maximum tolerated dose. Top-line results are expected in the second half of 2012.Preclinical ProgramsBMN-111 for Achondroplasia: BioMarin expects to initiate a Phase I trial by the first quarter of 2012. BMN-111 is an analog of C-type Natriuretic Peptide (CNP), a small cyclic peptide that is a positive regulator of bone growth, for achondroplasia, the most common form of dwarfism. There are approximately between 18,000 and 24,000 patients in the U.S. and Europe, 25 percent of which is the estimated addressable market.Other early stage programs: BioMarin is working on multiple early development opportunities.Non-GAAP Financial Information and ReconciliationThe above results for the three months ended March 31, 2011 and March 31, 2010 and financial guidance for the year ending December 31, 2011 are presented both as determined in accordance with GAAP and on a non-GAAP basis. As used in this release, non-GAAP income is based on GAAP Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) adjusted to exclude non-cash stock compensation expense, contingent consideration expense and certain nonrecurring material items (adjusted EBITDA). The following tables detail the reconciliation of non-GAAP to GAAP financial metrics:Reconciliation of GAAP Net Income (Loss) to Non-GAAP Adjusted EBITDA(in millions)(unaudited) Three Months EndedMarch 31, Year Ending December 31, 2011 NOTES20112010GuidanceGAAP Net Income (Loss)$ (4.4)$ 1.2$(52) - $(42)Interest expense, net1.41.26Income tax expense4.80.615Depreciation4.73.424Amortization0.90.14EBITDA (Loss)7.46.5(3) - 7Stock-based compensation10.48.543Gain on sale of equity investments-(0.9)-Contingent consideration(1)(0.5)0.711Adjusted EBITDA$ 17.3$ 14.8$51 - $61(1) Represents the changes in the fair value of contingent acquisition consideration payable for the period.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, Aldurazyme and Firdapse 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 and uses the adjusted EBITDA methodology in establishing corporate goals for internal compensation programs.Diluted Earnings Per Share Calculation As of March 31, 2011 and March 31, 2010, the shares related to our outstanding convertible debt are 19.1 million and 26.3 million, respectively. The calculation of non-GAAP adjusted EBITDA diluted earnings per share for the quarter ended March 31, 2011 and March 31, 2010 includes the 19.1 million shares and the 10.3 million shares, respectively, related to the company's convertible debt, as their impact is considered dilutive. Conference Call DetailsBioMarin will host a conference call and webcast to discuss first quarter 2011 financial results today, Thursday, April 28, 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 28, 2011Time: 5:00 p.m. ET U.S. / Canada Dial-in Number: 888.396.2386International Dial-in Number: 617.847.8712Participant Code: 42725170Replay Dial-in Number: 888.286.8010Replay International Dial-in Number: 617.801.6888Replay Code: 56138656About 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), which has been approved by the European Commission for the treatment of Lambert Eaton Myasthenic Syndrome (LEMS). Product candidates include GALNS (N-acetylgalactosamine 6-sulfatase), which is currently in Phase III clinical development for the treatment of MPS IVA, PEG-PAL (PEGylated recombinant phenylalanine ammonia lyase), which is currently in Phase II clinical development for the treatment of PKU, BMN-701, a novel fusion protein of insulin-like growth factor 2 and acid alpha glucosidase (IGF2-GAA), which is currently in Phase I/II clinical development for the treatment of Pompe disease, and BMN-673, a poly ADP-ribose polymerase (PARP) inhibitor, which is currently in Phase I/II clinical development for the treatment of genetically-defined cancers. 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 GALNS, Firdapse, PEG-PAL, BMN-673 , BMN-701 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, particularly with respect to GALNS, Firdapse, PEG-PAL, BMN 673 and BMN 701; 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®, Kuvan® and Firdapse? are registered trademarks of BioMarin Pharmaceutical Inc.Aldurazyme® is a registered trademark of BioMarin/Genzyme LLC.Contact:InvestorsMediaEugenia ShenBob PurcellBioMarin Pharmaceutical Inc.BioMarin Pharmaceutical Inc.(415) 506-6570(415) 506-3267BIOMARIN PHARMACEUTICAL INC.CONSOLIDATED BALANCE SHEETSMarch 31, 2011 and 2010(In thousands of U.S. dollars, except share and per share amounts)March 31, 2011December 31,2010 (1)ASSETS(unaudited)Current assets:Cash and cash equivalents$90,782$88,079Short-term investments161,799186,033Accounts receivable, net (allowance for doubtful accounts $969 and $63, respectively)106,19886,576Inventory110,067109,698Other current assets34,98433,874Total current assets503,830504,260Investment in BioMarin/Genzyme LLC1,1331,082Long-term investments141,378128,171Property, plant and equipment, net217,884221,866Intangible assets, net102,692103,648Goodwill53,05553,364Long-term deferred tax assets231,947236,017Other assets12,22714,215Total assets$1,264,146$1,262,623LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilities:Accounts payable and accrued liabilities$75,986$83,844Total current liabilities75,98683,844Convertible debt377,521377,521Other long-term liabilities89,79984,001Total liabilities543,306545,366Stockholders' equity:Common stock, $0.001 par value: 250,000,000 shares authorized at March 31, 2011 and December 31, 2010 : 110,873,519 and 110,634,465 shares issued and outstanding at March 31, 2011 and December 31, 2010, respectively111111Additional paid-in capital1,103,8851,090,188Company common stock held by Nonqualified Deferred Compensation Plan(1,733)(1,965)Accumulated other comprehensive income (loss)(5,787)188Accumulated deficit(375,636)(371,265)Total stockholders' equity720,840717,257Total liabilities and stockholders' equity$1,264,146$1,262,623(1)December 31, 2010 balances were derived from the audited consolidated financial statements.BIOMARIN PHARMACEUTICAL INC.CONSOLIDATED STATEMENTS OF OPERATIONSFor the Three Months Ended March 31, 2011 and 2010(In thousands, except for per share data)2011 2010REVENUES: (unaudited)(unaudited)Net product revenues$109,076$84,073Collaborative agreement revenues125201Royalty and license revenues255679Total revenues109,45684,953OPERATING EXPENSES: Cost of sales (excludes amortization of developed product technology)20,79617,412Research and development45,01730,097Selling, general and administrative41,03734,000Intangible asset amortization and contingent consideration312654Total operating expenses107,16282,163INCOME FROM OPERATIONS2,2942,790Equity in the loss of BioMarin/Genzyme LLC(542)(691)Interest income7821,190Interest expense(2,141)(2,429)Net gain from sale of investments-927INCOME BEFORE INCOME TAXES3931,787Provision for income taxes4,764636NET INCOME (LOSS)$(4,371)$1,151NET INCOME (LOSS) PER SHARE, BASIC & DILUTED$(0.04)$0.01Weighted average common shares outstanding, basic110,652101,144Weighted average common shares outstanding, diluted110,743103,720Total stock-based compensation expense included in the Consolidated Statements of Operations is as follows:Three Months EndedMarch 31,20112010(unaudited)(unaudited)Cost of sales$1,402$1,028Research and development3,6743,182Selling, general and administrative5,3044,336$10,380$8,546SOURCE BioMarin Pharmaceutical Inc.