BioMarin Announces First Quarter 2018 Financial Results Financial Highlights (in millions of U.S. dollars, except per share data, unaudited) Three Months Ended March 31, 2018 2017 % Change Total...

SAN RAFAEL, Calif. , April 25, 2018 /PRNewswire/ --

BioMarin Pharmaceutical Inc. (NASDAQ: BMRN ) today announced financial results for the first quarter ended March 31, 2018 . For the quarter ended March 31 , 2018 GAAP Net Loss was $44.1 million , or $0.25 loss per basic and $0.26 loss per diluted share, respectively, compared to GAAP Net Loss of $16.3 million , or $0.09 loss per basic and diluted share, respectively, for the quarter ended March 31, 2017 . The increase in GAAP Net Loss year over year was primarily due to higher research and development expenses for expansion of our clinical programs related to BMN-250, valoctocogene roxaparvovec and vosoritide, largely offset by higher gross profit from increased Aldurazyme and Kuvan net product revenues. In addition, higher selling, general and administrative expenses in support of the ongoing commercial launch of Brineura and for the anticipated launch of pegvaliase contributed to the increase in GAAP Net Loss in the quarter compared to the same period last year.

Non-GAAP Income for the quarter ended March 31, 2018 was $21.3 million , compared to Non-GAAP Income of $34.3 million for the quarter ended March 31, 2017 . Similar to the GAAP results for the quarter ended March 31, 2018 , the decrease in Non-GAAP Income was primarily due to increased research and development expenses, partially offset by increased gross margins on net product revenues, as well as higher selling, general and administrative expenses compared to the same period last year.

Total revenues were $373.4 million for the quarter ended March 31, 2018 compared to $303.7 million for the quarter ended March 31, 2017 , an increase of 23%. For the quarter ended March 31, 2018 , Aldurazyme net product revenues increased $46.7 million year over year, or 241%, of which $27.2 million is due to the different revenue recognition principles applied as a result of our adoption of Accounting Standards Codification 606 Revenue from Contracts with Customers , (ASC 606), and $19.5 million due to the timing of product sales to Genzyme. Vimizim net product revenues increased by $11.3 million , or 11%, year over year, due primarily to an increase of 16% in the number of Vimizim commercial patients. Kuvan net product revenues increased $6.8 million , or 7%, year over year, driven by a 9% increase in the number of commercial patients on Kuvan therapy in North America and continued growth in ex-North American territories. Naglazyme net product revenues decreased $5.6 million , or 7%, year over year during the quarter ended March 31, 2018 , primarily due to the timing of government orders in certain countries. The number of Naglazyme commercial patients increased 4% year over year.

As of March 31, 2018 , BioMarin had cash, cash equivalents and investments totaling approximately $1.7 billion , as compared to $1.8 billion on December 31, 2017 .

Commenting on first quarter results, Jean-Jacques Bienaimé, Chairman and Chief Executive Officer of BioMarin, said, "2018 is a year of execution as we aim to achieve numerous value-creating catalysts across the business. In clinical development, we intend to complete enrollment of our global GENEr8–1 pivotal study with the only late-stage gene therapy product for the treatment of Hemophilia A, valoctocogene roxaparvovec. Concurrently, we continue to anticipate reaching roughly $1.5 billion in Total Revenues for the full-year 2018, per our guidance. On the regulatory front, following the acceptance of our Biologics License Application for pegvaliase for the treatment of phenylketonuria (PKU), which received a Priority Review designation, we anticipate FDA action by the end of May 2018. In the quarter, we were also pleased to have submitted the Marketing Authorization Application for pegvaliase in Europe ."

Mr. Bienaimé continued, "The adult PKU market is primed for an efficacious treatment option that lowers Phe while allowing for near normal protein intake. We understand that the PKU community is anxiously awaiting the potential approval of pegvaliase given the dramatic phenylalanine (Phe) reductions observed in our Phase 3 studies. We are very excited to be on the cusp of the second potential product approval in less than two years, following the approval of Brineura in 2017. On the heels of a potential pegvaliase approval, we are also thrilled to announce our next gene therapy program for PKU that leverages both our expertise developing and manufacturing AAV products as well as our long-established commercial footprint selling Kuvan. We are not aware of any other company of our size that has six commercial products, a stable of potential blockbuster late-stage clinical product candidates and over $1 billion in annual revenues. I believe BioMarin is unique in our industry and that we are only beginning to unlock the value of both our base business and development pipeline."

Effect on Aldurazyme Net Product Revenues for the Adoption of ASC 606

Effective January 1, 2018 , the Company adopted ASC 606, which provides principles for recognizing revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company adopted ASC 606 on a modified retrospective basis through a cumulative adjustment of a $20.0 million reduction to Accumulated Deficit, a $26.0 million increase in Accounts Receivable and a $6.0 million decrease in Deferred Tax Assets.

The adoption of ASC 606 did not have an impact on the timing of revenue recognition for the products directly marketed by BioMarin. However, under the new guidance, we now recognize Aldurazyme revenues under our agreement with Genzyme at the point in time when control of the product is transferred from BioMarin to Genzyme. The amount of revenue recognized is based on the entire estimated payment that BioMarin expects to receive when the product is sold by Genzyme to its customers. Under the former revenue accounting standards, we only recognized $100.00 per vial when product was transferred to Genzyme and did not recognize the variable consideration component until Genzyme had sold the product. This change in accounting standard contributed $27.2 million to the increase in Aldurazyme revenues in the first quarter. Any variances between the amounts that we estimate to receive at the time of our product transfers to Genzyme and the actual payments that we ultimately receive from Genzyme based on their sales of the product will affect Net Product Revenues and earnings in the period such variances become known, although such amounts are not expected to be material.

Key Program Highlights

BioMarin will host a conference call and webcast to discuss first quarter 2018 financial results today, Wednesday, April 25, 2018 at 4:30 p.m. ET . This event can be accessed on the investor section of the BioMarin website at www.biomarin.com .

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 six approved products and multiple clinical and pre-clinical product candidates. For additional information, please visit www.biomarin.com .

Forward-Looking Statements

BioMarin ® , Brineura ® , Firdapse ® , Kuvan ® , Naglazyme ® and Vimizim ® are registered trademarks of BioMarin Pharmaceutical Inc., or its affiliates. Aldurazyme ® is a registered trademark of BioMarin/Genzyme LLC.

Non-GAAP Information

The results presented in this press release for the three months ended March 31, 2018 and 2017 include both GAAP information and Non-GAAP information. As used in this release, Non-GAAP Income (Loss) is defined by the Company as GAAP Net Loss excluding net interest expense, provision for (benefit from) income taxes, depreciation expense, amortization expense, stock-based compensation expense, contingent consideration expense and, in certain periods, certain other specified items, as detailed below when applicable. 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 Gain on the Sale of Intangible Asset and Non-GAAP 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.

Non-GAAP Income (Loss) and its components are not meant to be considered in isolation, as a substitute for, or superior to 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:

The following reconciliation of the GAAP reported to the 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.

SOURCE BioMarin Pharmaceutical Inc.