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BioMarin (BMRN) Reports Narrower-than-Expected Q1 Loss

BioMarin Pharmaceutical Inc. BMRN reported a loss of 35 cents per share in the first quarter of 2016 (including stock-based compensation expense), substantially narrower than the Zacks Consensus Estimate of a loss of 85 cents. However, the reported figure was wider than the year-ago loss of 25 cents.

The company’s revenues came in at $236.7 million in the quarter, up 16.7% from the year-ago quarter, driven by strong sales of Vimizim and Kuvan. Revenues, however, narrowly missed the Zacks Consensus Estimate of $240 million.

Quarter Details

Vimizim contributed $72.6 million to the total revenue, up 43.5% year over year on growth of commercial patient count and continued global launch.

Kuvan revenues soared 53.2% to $76.9 million driven by strong sales in North America.

Naglazyme sales plunged 16.4% year over year to $65.4 million due to an uneven order pattern in Latin America.

BioMarin receives Aldurazyme royalties – totaling $16.4 million (down 9.9%) – from its partner Genzyme, a subsidiary of Sanofi SNY.

Meanwhile, Firdapse revenues were flat year over year at $4.1 million.

Research and development (R&D) expenses increased 11.8% to $158.8 million while selling, general and administrative (SG&A) expenses were up 13.5 % to $105.3 million.

2016 Outlook

BioMarin continues to expect total revenue in the range of $1.05 billion to $1.1 billion, while Vimizim sales are estimated in the band of $315–$340 million (previously $300–$330 million).

The company maintains its previous projections of Kuvan sales ($320 million to $350 million) and Naglazyme sales ($290 million and $320 million).

SG&A and R&D expenditure are also maintained at the previously guided range of $470–$490 million and $680–$720 million, respectively.

Pipeline Update

BioMarin continues to progress with its pipeline candidates. In the reported quarter, the company presented complete data from a phase I/II study on cerliponase alfa for the treatment of patients with late-infantile neuronal ceroid lipofuscinosis. The company plans to submit regulatory application for cerliponase alfa in both the U.S. and the E.U. in mid-2016.

Meanwhile, the company’s Duchenne muscular dystrophy (DMD) drug, Kyndrisa, is currently under review in the EU with an anticipated opinion from the Committee for Medicinal Products later this quarter.

Our Take

BioMarin’s first-quarter performance was mixed, with the company beating the bottom-line and missing the top-line estimates. However, continued global launch of Vimizim and strong sales of Kuvan should drive growth at BioMarin going forward. Meanwhile, we are concerned about Naglazyme’s uneven order patterns in Latin America.

BioMarin carries a Zacks Rank #3 (Hold). A couple of better-ranked stocks in the health care sector are Aegerion Pharmaceuticals, Inc. AEGR and Emergent BioSolutions, Inc. EBS, both sporting a Zacks Rank #1 (Strong Buy).

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