Full Press Release Details
NOVATO, Calif. , Oct. 28 /PRNewswire-FirstCall/ --
Financial Highlights ($ in millions, except per share data, unaudited)
| Item | Q3 2010 | Q3 2009 Comparison | |
| Total BioMarin Revenue | $97.8 | 21.0% increase | |
| Total Net Product Revenue | $96.6 | 23.2% increase | |
| Naglazyme Net Product Revenue | $51.7 | 22.8% increase | |
| Aldurazyme BioMarin Net Product Revenue* | $16.5 | $14.6 | |
| Kuvan Net Product Revenue | $26.2 | 20.7% increase | |
| Firdapse Net Product Revenue | $2.2 | NA | |
| GAAP Net Income | $217.3** | $6.6 | |
| GAAP Net Income per share | $2.13 (basic), $1.68 (diluted) | $0.7 (basic and diluted) | |
| Non-GAAP Net Income | $6.0 | $15.5 | |
| Non-GAAP Net Income per share | $0.06 (basic and diluted) | $0.15 (basic), $0.14 (diluted) | |
| * Net product transfer revenue had an immaterial impact on net Aldurazyme revenue to BioMarin in the third quarter of 2010 and a negative $1.3 million impact on net Aldurazyme revenue to BioMarin in the third quarter of 2009. | |||
| ** During the third quarter of 2010, the company reserved its deferred tax asset valuation allowance and recorded a one-time credit of $223.1 million. |
BioMarin Pharmaceutical Inc. (Nasdaq: BMRN ) today announced financial results for the third quarter of 2010. GAAP net income was $217.3 million ( $1.68 per diluted share) for the third quarter of 2010, compared to GAAP net income of $6.6 million ( $0.07 per diluted share) for the third quarter of 2009. Non-GAAP net income was $6.0 million ( $0.06 per diluted share) for the third quarter of 2010, compared to non-GAAP net income of $15.5 million ( $0.14 per diluted share) for the third 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.
GAAP net income for the nine months ended September 30, 2010 was $218.0 million ( $1.74 per diluted share), compared to GAAP net loss of $5.2 million ( $0.05 per diluted share) for the nine months ended September 30, 2009 . Non-GAAP net income was $23.4 million ( $0.22 per diluted share) for the nine months ended September 30, 2010 , compared to non-GAAP net income of $33.9 million ( $0.33 per diluted share) for the nine months ended September 30, 2009 .
As of September 30, 2010 , BioMarin had cash, cash equivalents and short and long-term investments totaling $440.9 million , as compared to $455.4 million at the end of June 30, 2010 .
"In the third quarter, we saw strong commercial performance, despite being a seasonally weaker quarter. During the quarter, based upon, among other things, our expectations to generate taxable income for the foreseeable future, we reversed most of our deferred tax asset valuation allowance which resulted in a one-time credit totaling $223.1 million ," said Jean-Jacques Bienaime , Chief Executive Officer of BioMarin. "Our pipeline has advanced tremendously over the last few months as highlighted at our recent R&D Day, and we are committed to investing in advancing the pipeline over the next two years to drive future growth. We look forward to keeping you updated on the many clinical milestones expected in the coming year."
| Net Product Revenue (in millions) | |||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30 | ||||||||||||||||||||||
| 2009 | 2010 | $ Change | % Change | 2009 | 2010 | $ Change | % Change | ||||||||||||||||
| Naglazyme (1) | $ | 42.1 | $ | 51.7 | $ | 9.6 | 22.8% | $ | 124.3 | $ | 147.5 | $ | 23.2 | 18.7% | |||||||||
| Kuvan (2) | 21.7 | 26.2 | 4.5 | 20.7% | 54.1 | 72.1 | 18.0 | 33.3% | |||||||||||||||
| Firdapse (3) | − | 2.2 | 2.2 | N/A | − | 3.4 | 3.4 | N/A |
| (1) | Changes in foreign currency rates, net of hedges, had a positive $0.1 million impact on Naglazyme sales in the three months ended September 30, 2010 and a negative $1.4 million impact on Naglazyme sales in the nine months ended September 30, 2010. Naglazyme revenues experience quarterly fluctuations due to the timing of distributor purchases in certain countries due to government ordering patterns. | |
| (2) | The quantity of commercial tablets dispensed to patients in the U.S., increased 3.7 percent in the third quarter of 2010 compared to the second quarter of 2010 and increased 29.7 percent in the third quarter of 2010 compared to the third quarter of 2009. | |
| (3) | A product for the treatment of Lambert Eaton Myasthenic Syndrome (LEMS) which was launched in the EU in April 2010. |
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||
| 2009 | 2010 | $ Change | % Change | 2009 | 2010 | $ Change | % Change | ||||||||||||||||||||
| Aldurazyme revenue reported by Genzyme (4) | $ | 40.3 | $ | 40.8 | $ | 0.5 | 1.2% | $ | 116.4 | $ | 124.3 | $ | 7.9 | 6.8% | |||||||||||||
| Royalties due from Genzyme | 15.9 | 16.5 | 0.6 | 46.0 | 50.2 | 4.2 | |||||||||||||||||||||
| Incremental (previously recognized) Aldurazyme product transfer revenue | (1.3) | - | 1.3 | 7.4 | (2.0) | (9.4) | |||||||||||||||||||||
| Total Aldurazyme net product revenues (5) | $ | 14.6 | $ | 16.5 | $ | 1.9 | $ | 53.4 | $ | 48.2 | $ | (5.2) |
| (1) | Changes in foreign currency rates caused a decrease to Aldurazyme sales by Genzyme of $1.5 million in the three months ended September 30, 2010 and a decrease to Aldurazyme sales by Genzyme of $0.6 million for the nine months ended September 30, 2010. In the third quarter of 2010, the number of Aldurazyme vials shipped increased 5.1 percent over the third quarter of 2009. | |
| (2) | 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. |
Reversal of Tax Valuation Allowance
During the third quarter of 2010, the company recorded a non-cash gain in its consolidated statement of operations totaling $223.1 million . Based upon the company's expectations of generating U.S. taxable income in the future and the resulting expected utilization of its net operating loss carryforwards and R&D tax credits, the company has recorded the $223.1 million non-cash benefit to the Provision for (benefit from) income taxes line item on the consolidated statement of operations and a corresponding increase in other current assets and other assets categories on our balance sheet.
Other Transactions During Q3 2010
During the third quarter of 2010, the company acquired ZyStor Therapeutics, Inc. and incurred one-time costs associated with closing the transaction totaling $1.8 million , which are classified as general and administrative expenses.
In addition, the company recorded intangible asset amortization and contingent consideration costs during the third quarter of $4.0 million . The increase in such costs compared with prior quarters is due to the recognition of additional contingent consideration expense associated with the increased likelihood of achieving certain near term milestones related primarily to BMN-673 development including the filing of an IND and clinical milestones.
| Revenue Guidance ($ in millions) | |||
| Item | 2010 Guidance | Previous 2010 Guidance | |
| Total BioMarin Revenues | $372 to $393 | $370 to $393 | |
| Total Net Product Revenues | $367 to $387 | $365 to $387 | |
| Naglazyme Net Product Revenue | $194 to $200 | $190 to $200 | |
| Kuvan Net Product Revenue | Unchanged | $98 to $102 | |
| Aldurazyme Net Product Revenue to BioMarin | $68 to $75 | $70 to $75 | |
| Firdapse Net Product Revenue | Unchanged | $7 to $10 |
| Selected Income Statement Guidance ($ in millions) | |||
| Item | 2010 Guidance | Previous 2010 Guidance | |
| Cost of Sales (% of Total Revenue) | Unchanged | 19% to 20% | |
| Selling, General and Admin. Expense* | $147 to $152 | $145 to $150 | |
| Research and Development Expense* | $147 to $152 | $140 to $145 | |
| Amortization and Contingent Consideration | $8 to $9 | NA | |
| Interest Income | $4 | $3 to $4 | |
| GAAP Net Income (Loss)** | $213 to $218 | $(6) to $2 | |
| Stock Compensation Expense | Unchanged | $37 | |
| Non-GAAP Net Income | $28 to $33 | $30 to $38 | |
| * Previous guidance did not include $5.0 million to $7.0 million in additional operating expenses associated with the acquisition of ZyStor Therapeutics, Inc. | |||
| ** Includes $223.1 million resulting from reversal of deferred tax asset valuation allowance |
Anticipated Upcoming Milestones
| 4Q 2010: File IND for BMN-673 (PARP inhibitor) | |
| December 2010/ January 2011: Initiation of Phase 1 trial for BMN-701 for Pompe disease | |
| Early 2011: Initiation of pivotal Phase III trial for Firdapse for LEMS in the U.S. | |
| Early 1Q 2011: Initiation of pivotal Phase III trial for GALNS for MPS IVA | |
| 1Q 2011: Initiation of Phase Ib trial for BMN-673 (PARP inhibitor) | |
| Mid-2011: Final top-line results from PEG-PAL Phase II trial, including daily dosing and formulation studies | |
| Late 2011: Availability of blood Phe monitor | |
| 4Q 2011/1Q 2012: Initiation of Phase III PEG-PAL trial | |
| 1Q 2012: Initiation of Phase I trial for BMN-111 for Achondroplasia | |
| 1H 2012: NDA filing for Firdapse for LEMS in the U.S. | |
| 4Q 2012: Approval of Firdapse for LEMS in the U.S. | |
| 4Q 2012: U.S. and European filings for GALNS for MPS IVA |
Research and Development Programs
BioMarin 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.
Advanced Programs
Mid-Stage Programs
Preclinical Programs
Non-GAAP Financial Information and Reconciliation
The above results for the three and nine months ended September 30, 2010 and September 30, 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 September 30, | Nine Months Ended September 30, | Year Ended December 31, | Year Ending December 31, | ||||||||||||||||||||
| Notes: | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | |||||||||||||||||
| (actuals) | (forecast) | ||||||||||||||||||||||
| GAAP Net Income (Loss) | $ | 6.6 | 217.3 | $ | (5.2) | $ | 218.0 | $ | (0.5) | $ | 213.0 to 218.0 | ||||||||||||
| Stock-based compensation expense | 8.9 | 10.0 | 25.7 | 27.7 | 34.5 | 37.0 | |||||||||||||||||
| Upfront license fees | (1) | - | - | 8.8 | - | 8.8 | - | ||||||||||||||||
| Impairment charges | (2) | - | - | 5.9 | - | 5.9 | - | ||||||||||||||||
| Net gain on the sale of equity investments | - | - | (1.6) | (1.0) | (1.6) | (1.0) | |||||||||||||||||
| Acquisition expenses | (3) | 1.8 | 1.8 | - | 2.0 | ||||||||||||||||||
| Tax benefit | (4) | - | (223.1) | (223.1) | - | (223.0) | |||||||||||||||||
| Income tax effect of Non-GAAP adjustments | (5) | - | 0.3 | - | - | - | |||||||||||||||||
| Non-GAAP net income | $ | 15.5 | $ | 6.0 | $ | 33.9 | $ | 23.4 | $ | 47.1 | $ | 28.0 to 33.0 | |||||||||||
| Notes: | |||||||||||||||||||||||
| (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 transactions costs associated with the acquisition of ZyStor Therapeutics Inc., during the third quarter of 2010. | |||||||||||||||||||||||
| (4) Represents the release of the Company's income tax valuation allowance during the third quarter of 2010. | |||||||||||||||||||||||
| (5) 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, 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.
Diluted Earnings Per Share Calculation
For the third quarter of 2010, the nine months ended September 30, 2010 and the full year forecast for the year ending 2010, the calculation of GAAP diluted earnings per share includes the 26.3 million shares related to the outstanding convertible debt. The remaining periods presented excludes the 26.3 million shares related to the outstanding convertible debt from the calculation of GAAP diluted earnings per share as their impact is considered anti-dilutive.
The calculation of non-GAAP diluted earnings per share for the third quarter and first nine months of 2009 include 16.0 million shares related to the Company's convertible notes due in April 2017 . The calculation of non-GAAP diluted earnings per share for the third quarter of 2009 includes the March 2013 notes reflecting 10.4 million shares. The remaining periods presented exclude the 26.3 million shares related to the outstanding convertible debt from the non-GAAP diluted earnings per share calculation as their impact is considered anti-dilutive.
Conference Call Details
BioMarin will host a conference call and webcast to discuss third quarter 2010 financial results today, Thursday, October 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: October 28, 2010 | |
| Time: 5:00 p.m. ET | |
| U.S. / Canada Dial-in Number: 866.202.3048 | |
| International Dial-in Number: 617.213.8843 | |
| Participant Code: 60493555 | |
| Replay Dial-in Number: 888.286.8010 | |
| Replay International Dial-in Number: 617.801.6888 | |
| Replay Code: 45911037 |
BioMarin 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 GALNS (N-acetylgalactosamine 6-sulfatase), which is currently in clinical development for the treatment of MPS IVA and PEG-PAL (PEGylated recombinant phenylalanine ammonia lyase), which is currently in Phase II clinical development for the treatment of PKU. For additional information, please visit www.BMRN.com . Information on BioMarin's website is not incorporated by reference into this press release.
Forward-Looking Statement
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: | |
| Investors | |
| Eugenia Shen | |
| BioMarin Pharmaceutical Inc. | |
| (415) 506-6570 |
| BIOMARIN PHARMACEUTICAL INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except for share and per share data) | |||||||||
| December 31, 2009 (1) | September 30, 2010 | ||||||||
| (unaudited) | |||||||||
| ASSETS | |||||||||
| Current assets: | |||||||||
| Cash and cash equivalents | $ | 167,171 | $ | 127,539 | |||||
| Short-term investments | 133,506 | 224,428 | |||||||
| Accounts receivable, net | 73,540 | 78,734 | |||||||
| Inventory | 78,662 | 91,741 | |||||||
| Other current assets | 14,848 | 31,747 | |||||||
| Total current assets | 467,727 | 554,189 | |||||||
| Investment in BioMarin/Genzyme LLC | 441 | 1,161 | |||||||
| Long-term investments | 169,849 | 88,955 | |||||||
| Property, plant and equipment, net | 199,141 | 213,755 | |||||||
| Intangible assets, net | 40,977 | 104,604 | |||||||
| Goodwill | 23,722 | 53,364 | |||||||
| Other assets | 15,306 | 228,505 | |||||||
| Total assets | $ | 917,163 | $ | 1,244,533 | |||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||
| Current liabilities: | |||||||||
| Accounts payable, accrued liabilities and other current liabilities | $ | 78,068 | $ | 92,097 | |||||
| Deferred revenue | 86 | — | |||||||
| Total current liabilities | 78,154 | 92,097 | |||||||
| Convertible debt | 497,083 | 497,083 | |||||||
| Other long-term liabilities | 19,741 | 69,689 | |||||||
| Total liabilities | 594,978 | 658,869 | |||||||
| Stockholders' equity: | |||||||||
| Common stock, $0.001 par value: 250,000,000 shares authorized at December 31, 2009 and September 30, 2010; 100,961,922 and 102,464,509 shares issued and outstanding at December 31, 2009 and September 30, 2010, respectively | 101 | 103 | |||||||
| Additional paid-in capital | 899,950 | 948,394 | |||||||
| Company common stock held by Nonqualified Deferred Compensation Plan | (1,715) | (2,176) | |||||||
| Accumulated other comprehensive income (loss) | 933 | (1,581) | |||||||
| Accumulated deficit | (577,084) | (359,076) | |||||||
| Total stockholders' equity | 322,185 | 585,664 | |||||||
| Total liabilities and stockholders' equity | $ | 917,163 | $ | 1,244,533 | |||||
| (1) December 31, 2009 balances were derived from the audited consolidated financial statements. |
| BIOMARIN PHARMACEUTICAL INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS For the Three and Nine Months Ended September 30, 2009 and 2010 (In thousands, except for per share data, unaudited) | |||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
| 2009 | 2010 | 2009 | 2010 | ||||||||||||||
| Revenues: | |||||||||||||||||
| Net product revenues | $ | 78,383 | $ | 96,559 | $ | 231,769 | $ | 271,224 | |||||||||
| Collaborative agreement revenues | 648 | 130 | 2,025 | 507 | |||||||||||||
| Royalty and license revenues | 1,776 | 1,061 | 3,780 | 2,922 | |||||||||||||
| Total revenues | 80,807 | 97,750 | 237,574 | 274,653 | |||||||||||||
| Operating expenses: | |||||||||||||||||
| Cost of sales (excludes amortization of developed product technology) | 14,970 | 18,003 | 49,180 | 49,816 | |||||||||||||
| Research and development | 26,991 | 39,366 | 87,673 | 105,112 | |||||||||||||
| Selling, general and administrative | 28,667 | 38,348 | 87,762 | 109,625 | |||||||||||||
| Intangible asset amortization and contingent consideration | 46 | 3,972 | 2,914 | 6,206 | |||||||||||||
| Total operating expenses | 70,674 | 99,689 | 227,529 | 270,759 | |||||||||||||
| Income (loss) from operations | 10,133 | (1,939) | 10,045 | 3,894 | |||||||||||||
| Equity in the loss of BioMarin/Genzyme LLC | (680) | (639) | (1,773) | (2,194) | |||||||||||||
| Interest income | 1,012 | 968 | 4,051 | 3,193 | |||||||||||||
| Interest expense | (2,880) | (3,008) | (11,375) | (8,072) | |||||||||||||
| Impairment loss on equity investments | — | — | (5,848) | — | |||||||||||||
| Net gain from sale of investments | — | — | 1,585 | 927 | |||||||||||||
| Income (loss) before income taxes | 7,585 | (4,618) | (3,315) | (2,252) | |||||||||||||
| Provision for (benefit from) income taxes | 945 | (221,952) | 1,884 | (220,260) | |||||||||||||
| Net income (loss) | $ | 6,640 | $ | 217,334 | $ | (5,199) | $ | 218,008 | |||||||||
| Net income (loss) per share, basic | $ | 0.07 | $ | 2.13 | $ | (0.05) | $ | 2.14 | |||||||||
| Net income (loss) per share, diluted | $ | 0.07 | $ | 1.68 | $ | (0.05) | $ | 1.74 | |||||||||
| Weighted average common shares outstanding, basic | 100,331 | 102,110 | 100,098 | 101,660 | |||||||||||||
| Weighted average common shares outstanding, diluted | 101,815 | 131,278 | 100,098 | 130,821 |
| STOCK-BASED COMPENSATION EXPENS E | |||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||
| September 30, | September 30, | ||||||||||||
| 2009 | 2010 | 2009 | 2010 | ||||||||||
| Cost of sales | $ | 1,192 | $ | 1,044 | $ | 3,179 | $ | 2,852 | |||||
| Research and development expense | 3,408 | 3,621 | 8,488 | 10,244 | |||||||||
| Selling, general and administrative expense | 4,321 | 5,292 | 14,064 | 14,578 | |||||||||
| Total stock-based compensation expense | $ | 8,921 | $ | 9,957 | $ | 25,731 | $ | 27,674 |
SOURCE BioMarin Pharmaceutical Inc.