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BioMarin (BMRN) Q1 Earnings: Stock Likely to Beat Estimates

BioMarin Pharmaceutical Inc. BMRN is slated to report first-quarter 2016 results on Apr 28.

BioMarin’s track record has been satisfactory so far. The company reported a narrower-than-expected loss in three of the trailing four quarters, with an average negative surprise of 8.98%.



Let’s see how things are shaping up for this quarter.

Factors at Play

Vimizim and Kuvan, which boosted sales in the previous quarter, are likely to have generated higher revenues in the to-be-reported quarter as well. In addition, the launch of Vimizim in new markets should contribute to the top line.

The company’s efforts on expanding Vimizim’s reach in established markets to bring new patients onto therapy at a faster pace and introducing the drug in new markets in each quarter should drive revenues. For the full year, Vimizim sales are expected to be $300–$330 million.

Meanwhile, adoption of the American College of Medical Genetics and Genomics practice guidelines to raise awareness on the benefits of Kuvan and its importance in the life-long treatment of phenylketonuria, which had increased the utilization of the drug in both adolescents and adults, should continue to accelerate growth.

Having regained the rights to Kuvan, the company is now focused on transferring marketing authorizations and licenses in each country and undertaking order-to-cash activities. Also, with Kuvan’s market exclusivity in the EU slated to expire in 2024. BioMarin should get ample time to maximize its efforts on driving top-line growth.

On the flip side, negative currency movements and unpredictable order patterns of Naglazyme in Latin America are causes of concern. Naglazyme has also been experiencing historically uneven order patterns in Latin America. Nevertheless, the drug is expected to generate stable or increasing revenues in 2016.

With a number of data readouts lined up for the upcoming quarters, we expect investor focus to remain on further updates regarding the company’s pipeline during the first-quarter call.

Earnings Whispers

Our proven model shows that BioMarin is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong buy), #2 (Buy) or #3 (Hold) for this to happen.

Zacks ESP: The Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is +22.35%.

Zacks Rank: BioMarin carries a Zacks Rank #3, which when combined with the company’s positive ESP, makes us fairly confident of an earnings beat this season.

Note that we caution against stocks with a Zacks Rank #4 or #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing a negative estimate revision momentum.

Other Stocks That Warrant a Look

Biomarin is not the only company looking up this earnings season. Here are a few other health care stocks that you may want to consider as our model shows that they too have the right combination of elements to post an earnings beat this quarter:

Amgen Inc. AMGN has an Earnings ESP of +3.52% and a Zacks Rank #3. It is scheduled to report first-quarter results on Apr 28.

Innoviva, Inc. INVA has an Earnings ESP of +77.78% and a Zacks Rank #2. It is scheduled to report first-quarter results on Apr 28.

The Earnings ESP for Sanofi SNY is +4.17% and it carries a Zacks Rank #2. The company is scheduled to release first-quarter results on Apr 29.

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SANOFI-AVENTIS (SNY): Free Stock Analysis Report
 
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INNOVIVA INC (INVA): Free Stock Analysis Report
 
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