Financial Highlights ($ in millions, except per share data) Item Q3 2008 Q3 2007 Comparison Total BioMarin Revenue $72.6 190.5% increase Naglazyme Net Product Revenue $33.3 56.3% increase Aldurazyme Net Sales by Genzyme $38.2 18.3% increase Aldurazyme BioMarin Net Product Revenue $20.7 NA Kuvan Net Product Revenue $13.8 NA GAAP Net Income (Loss) $0.8, $0.01 per share ($5.2), ($0.05) per share Non-GAAP Net Income (Loss) $8.2, $0.08 per share ($0.2), ($0.00) per share 2008 Guidance Unchanged ($ in millions) Item Guidance Total BioMarin Revenues* $288 to $326 Total Net Product Revenues $247 to $285 Naglazyme Net Product Revenue $130 to $140 Aldurazyme Net Product Sales by Genzyme $135 to $145 Aldurazyme Net Product Revenue to BioMarin $72 to $80 Kuvan Net Product Revenue $45 to $65 Net Income (GAAP)* $30 to $42 Net Income (non-GAAP)* $54 to $69
*Assumes that the $30 million milestone for EU Kuvan approval will be earned in 2008
BioMarin Pharmaceutical Inc.
As of September 30, 2008, BioMarin had cash, cash equivalents, and short-term investments totaling $563.0 million.
"Our three growing commercial products contributed to healthy revenue growth during the third quarter of 2008 as compared to the third quarter of 2007. The international market for Naglazyme continues to expand at rates beyond our original expectations, with the largest increase in the absolute patient numbers in two years. The decline in sequential revenue resulted from ordering patterns from some customers outside the United States, and we still see tremendous potential in this product," said Jean-Jacques Bienaime, Chief Executive Officer of BioMarin.
Mr. Bienaime continued, "As of October 24, 208 patients have been referred through the Kuvan free drug program, including patients in the pilot program. We are supporting a number of investigator-sponsored trials to generate additional data to support the use of Kuvan, as well as various patient communication and online efforts. Also, our partner Merck Serono received a positive CHMP opinion for Kuvan in late September which bodes well for potential approval by the end of the year. We are well on our way to achieving our first fully profitable year with a strong cash position and a full development pipeline. Going forward, we remain focused on the Kuvan launch, the continued geographic expansion of Naglazyme, and the timely development of the PEG-PAL, GALNS for MPS IVA and other promising pipeline programs."
Net Product Revenue
Net product revenue from Naglazyme (galsulfase), an enzyme replacement therapy for mucopolysaccharidosis VI (MPS VI), was $33.3 million for the third quarter of 2008, an increase of 56.3 percent compared to Naglazyme net product revenue of $21.3 million for the third quarter of 2007. Net product revenue from Naglazyme for the nine months ended September 30, 2008 was $96.2 million, an increase of 58.7 percent from Naglazyme net product revenue of $60.6 million for the nine months ended September 30, 2007. BioMarin is directly commercializing Naglazyme in the United States, Western Europe, Brazil, and Turkey and through distributors in other international markets.
Net sales of Aldurazyme (laronidase), an enzyme replacement therapy for mucopolysaccharidosis I (MPS I) recorded by Genzyme, were $38.2 million for the third quarter of 2008, an increase of 18.3 percent compared to net sales by Genzyme of $32.3 million for the third quarter of 2007. Net sales of Aldurazyme recorded by Genzyme for the nine months ended September 30, 2008 were $113.7 million, an increase of 28.8 percent compared to net sales by Genzyme of $88.3 million for the nine months ended September 30, 2007.
Net product revenue to BioMarin related to Aldurazyme was $20.7 million for the third quarter of 2008. This reflects an increase in net product revenue from the amounts payable to BioMarin by Genzyme due to incremental product transfer revenue as transfers of product to Genzyme exceeded the amount of product shipped to third party customers by Genzyme during the third quarter of 2008. Net product revenue to BioMarin related to Aldurazyme was $58.1 million for the nine months ended September 30, 2008.
Beginning January 1, 2008, as a result of the restructuring of the joint venture with Genzyme, BioMarin receives a royalty of 39.5% to 50% of worldwide net sales. BioMarin recognizes a portion of this amount as product transfer revenue when product is released to Genzyme. This amount will eventually be credited against the calculated royalties earned when the product is sold by Genzyme to third parties.
Net product revenue from Kuvan (sapropterin dihydrochloride) Tablets, a product for the treatment of phenylketonuria (PKU), was $13.8 million for the third quarter of 2008 and $31.6 million for the nine months ended September 30, 2008.
Collaborative Agreement Revenues
Collaborative agreement revenues for the third quarter of 2008 were $2.4 million, compared to $3.1 million for the third quarter of 2007. Collaborative agreement revenues for the nine months ended September 30, 2008 were $7.4 million, compared to $10.8 million for the nine months ended September 30, 2007. Collaborative agreement revenues decreased in 2008 compared to 2007 due to less reimbursable Kuvan development expenses during the third quarter and first nine months of 2008.
2008 Financial Guidance Maintained
BioMarin estimates 2008 net sales of Naglazyme will be in the range of $130 million to $140 million.
Net sales of Aldurazyme by Genzyme are estimated to be in the range of $135 million to $145 million. BioMarin's net product revenue related to Aldurazyme is estimated to be between $72 million and $80 million, which includes both the royalty earned on net sales by Genzyme and incremental product revenue related to the transfer of Aldurazyme inventory to Genzyme to meet future product demand.
BioMarin estimates 2008 Kuvan net sales to be in the range of $45 million to $65 million.
BioMarin estimates its Generally Accepted Accounting Principles (GAAP) net income for the fiscal year ending December 31, 2008 will be in the range of $30 million to $42 million, which assumes that the $30 million milestone for EU Kuvan approval will be earned in 2008. The net income estimate includes approximately $24 million to $27 million in non-cash stock compensation expense. Non-GAAP net income, excluding the impact of non-cash stock compensation expense, is estimated to be in the range of $54 million to $69 million.
Non-GAAP Financial Information and Reconciliation
The above results for the third quarter and first nine months of 2007 and 2008 and financial guidance for 2008 include actual and Management's 2008 estimated net income, respectively, determined in accordance with GAAP and non-GAAP net income. As used in this release, non-GAAP income is net income calculated in accordance with GAAP, but excluding non-cash stock compensation expense, a non-GAAP financial measure. Stock compensation expense excluded in the calculation of non-GAAP net income was $7.4 million for the third quarter of 2008, $5.0 million for the third quarter of 2007, $17.8 million for the nine months ended September 30, 2008, $12.8 million for the nine months ended September 30, 2007 and $24.0 million to $27.0 million for Management's estimate of 2008 net income. The reconciliation of this measure to the estimated GAAP net income is as follows (in millions):
Nine Nine months months ended ended September September 2008 Q3 Q3 30, 30, Management 2008 2007 2008 2007 Guidance GAAP net income (loss) $0.8 $(5.2) $6.3 $(18.4) $30.0 - $42.0 Non-cash stock compensation expense 7.4 5.0 17.8 12.8 24.0 - 27.0 Non-GAAP net income (loss) $8.2 ($0.2) $24.1 $(5.6) $54.0 - $69.0
Management believes that this non-GAAP information is useful to investors, taken in conjunction with BioMarin's GAAP information because Management uses such information internally for its operating, budgeting and financial planning purposes, and to enhance investors' overall understanding of the company's prospects for the future.
Anticipated Upcoming Milestones -- 4Q08: Kuvan approval by EMEA and related $30 million milestone from Merck Serono -- 1Q09: Results from Phase 2 PAD trial -- 1Q09: Results from BH4+Vitamin C study -- 1Q09: Results from Phase 2 PAH trial -- 1Q09: Results from proteinuria in chronic kidney disease trial -- 1Q09: Initiation of Phase 1 trial for GALNS for MPS IVA -- 1Q09/2Q09: Results from PEG-PAL Phase 1 trial -- 1Q09/2Q09: Initiation of PEG-PAL Phase 2 trial Upcoming Investor Conferences and Events -- November 11-14: Credit Suisse Healthcare Conference -- December 2-3: Piper Jaffray Healthcare Conference
BioMarin will host a conference call and webcast to discuss third quarter 2008 financial results today, Tuesday, October 28, at 5:00 p.m. ET (22:00 CET). This event can be accessed on the investor section of the BioMarin website at http://www.bmrn.com/.
Date: October 28, 2008 Time: 5:00 p.m. ET (22:00 CET) U.S. / Canada Dial-in Number: 800.299.9630 International Dial-in Number: 617.786.2904 Participant Code: 70952576 Replay Dial-in Number: 888.286.8010 Replay International Dial-in Number: 617.801.6888 Replay Code: 67493262 About BioMarin
BioMarin develops and commercializes innovative biopharmaceuticals for serious diseases and medical conditions. The company's product portfolio comprises three approved products and multiple clinical and pre-clinical product candidates. Approved products include Naglazyme(R) (galsulfase) for mucopolysaccharidosis VI (MPS VI), a product wholly developed and commercialized by BioMarin; Aldurazyme(R) (laronidase) for mucopolysaccharidosis I (MPS I), a product which BioMarin developed through a 50/50 joint venture with Genzyme Corporation; and Kuvan(R) (sapropterin dihydrochloride) Tablets, for phenylketonuria (PKU), developed in partnership with Merck Serono, a division of Merck KGaA of Darmstadt, Germany. Other product candidates include 6R-BH4 for cardiovascular indications, which is currently in Phase 2 clinical development for the treatment of peripheral arterial disease and sickle cell disease, and PEG-PAL (PEGylated recombinant phenylalanine ammonia lyase), which is currently in Phase 1 clinical development for the treatment of PKU. For additional information, please visit http://www.bmrn.com/. Information on BioMarin's website is not incorporated by reference into this press release.
This 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, and Aldurazyme; the financial performance of the BioMarin as a whole; the timing of BioMarin's clinical trials of 6R-BH4 for other indications, PEG- PAL and other product candidates; the continued clinical development and commercialization of Aldurazyme, Naglazyme, Kuvan, 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 and Kuvan; Genzyme Corporation's success in continuing the commercialization of Aldurazyme; results and timing of current and planned preclinical studies and clinical trials; 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 and Kuvan; actual sales of Aldurazyme, Naglazyme and Kuvan; 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 2007 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(R) , Naglazyme(R) and Kuvan(R) are a registered trademarks of BioMarin Pharmaceutical Inc.
Aldurazyme(R) is a registered trademark of BioMarin/Genzyme LLC. Contact: Investors Media Eugenia Shen Susan Berg BioMarin Pharmaceutical Inc. BioMarin Pharmaceutical Inc. (415) 506-6570 (415) 506-6594 BIOMARIN PHARMACEUTICAL INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except for share and per share data) December 31, September 30, 2007 (1) 2008 (unaudited) ASSETS Current assets: Cash and cash equivalents $228,343 $271,217 Short-term investments 357,251 291,752 Accounts receivable, net 16,976 51,135 Advances to BioMarin/Genzyme LLC 2,087 206 Inventory 32,445 68,094 Other current assets 7,195 14,609 Total current assets 644,297 697,013 Investment in BioMarin/Genzyme LLC 44,881 343 Other investments - 4,659 Property, plant and equipment, net 76,818 110,716 Intangible assets, net 9,596 6,068 Goodwill 21,262 21,262 Restricted cash 2,889 6,219 Other assets 15,536 12,758 Total assets $815,279 $859,038 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities $49,907 $47,982 Current portion of acquisition obligation, net of discount 6,309 71,158 Deferred revenue 5,327 1,443 Other current liabilities - 152 Total current liabilities 61,543 120,735 Convertible debt 497,375 497,240 Long-term portion of acquisition obligation, net of discount 66,553 - Other long-term liabilities 2,082 3,162 Total liabilities 627,553 621,137 Stockholders' equity: Common stock, $0.001 par value: 250,000,000 shares authorized at December 31, 2007 and September 30, 2008; 97,114,159 and 99,691,581 shares issued and outstanding at December 31, 2007 and September 30, 2008, respectively 97 100 Additional paid-in capital 794,917 841,657 Company common stock held by deferred compensation plan - (939) Accumulated other comprehensive income (loss) 139 (1,818) Accumulated deficit (607,427) (601,102) Total stockholders' equity 187,726 237,901 Total liabilities and stockholders' equity $815,279 $859,038 (1) December 31, 2007 balances were derived from the audited consolidated financials. BIOMARIN PHARMACEUTICAL INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS For the Three and Nine Months Ended September 30, 2007 and 2008 (In thousands, except for per share data, unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2007 2008 2007 2008 Revenues: Net product revenues $21,325 $67,812 $60,600 $185,895 Collaborative agreement revenues 3,107 2,414 10,758 7,389 Royalty and license revenues 574 2,420 5,369 3,933 Total revenues 25,006 72,646 76,727 197,217 Operating expenses: Cost of sales 4,460 14,063 13,135 40,844 Research and development 17,241 26,175 54,585 67,559 Selling, general and administrative 19,521 28,964 53,075 77,836 Amortization of acquired intangible assets 1,093 1,093 3,278 3,278 Total operating expenses 42,315 70,295 124,073 189,517 Income (loss) from operations (17,309) 2,351 (47,346) 7,700 Equity in the income (loss) of BioMarin/Genzyme LLC 8,446 (572) 21,159 (1,692) Interest income 7,948 3,407 18,549 13,157 Interest expense (4,109) (4,105) (10,163) (12,297) Income (loss) before income taxes (5,024) 1,081 (17,801) 6,868 Provision for income taxes 192 252 572 543 Net income (loss) $(5,216) $829 $(18,373) $6,325 Net income (loss) per share, basic $(0.05) $0.01 $(0.19) $0.06 Net income (loss) per share, diluted $(0.05) $0.01 $(0.19) $0.06 Weighted average common shares outstanding, basic 96,199 99,537 95,523 98,705 Weighted average common shares outstanding, diluted 96,199 103,403 95,523 103,916 (1) The following is the stock-based compensation expense included in the respective captions of the condensed consolidated statements of operations above: Three Months Ended Nine Months Ended September 30, September 30, 2007 2008 2007 2008 Cost of sales $136 $430 $416 $1,019 Selling, general and administrative expense 3,001 4,468 7,635 10,674 Research and development 1,864 2,501 4,767 6,118 Total stock-based compensation expense $5,001 $7,399 $12,818 $17,811
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CONTACT: investors, Eugenia Shen, +1-415-506-6570, media, Susan Berg,
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