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BioMarin Announces Fourth Quarter and Full Year 2008 Financial Results
2008 First Profitable Full Year
Conference Call and Webcast to Be Held Today at 5:00 p.m. ET (22:00 CET)
Feb 18, 2009
PRNewswire-FirstCall
NOVATO, Calif.
  Financial Highlights ($ in millions, except per share data)

  Item                         FY 2008           FY 2007 Comparison
  Total BioMarin Revenue        $296.5            143.9% increase
  Naglazyme Net Product
   Revenue                      $132.7            53.9% increase
  Aldurazyme Net Sales by
   Genzyme                      $151.3            22.3% increase
  Aldurazyme BioMarin Net
   Product Revenue              $72.5             NA
  Kuvan Net Product Revenue     $46.7             $0.4
  GAAP Net Income (Loss)        $30.8             ($15.8)
  GAAP Net Income (Loss)
   per share                    $0.31 (basic),   ($0.16) (basic and diluted)
                                $0.29 (diluted)
  Non-GAAP Net Income (Loss)    $56.1             $2.5
  Non-GAAP Net Income (Loss)
   per share                    $0.57 (basic),    $0.03 (basic and diluted)
                                $0.52 (diluted)



BioMarin Pharmaceutical Inc. today announced financial results for the fourth quarter and year ended December 31, 2008. Net income was $24.5 million ($0.21 per fully diluted share) for the fourth quarter of 2008, compared to net income of $2.6 million ($0.03 per fully diluted share) for the fourth quarter of 2007. Non-GAAP net income was $31.9 million ($0.27 per fully diluted share) for the fourth quarter of 2008, compared to non-GAAP net income of $8.1 million ($0.08 per fully diluted share) for the fourth quarter of 2007. Non-GAAP net income/loss excludes non-cash stock compensation expense, which was $7.4 million for the three months ended December 31, 2008 and $5.5 million for the three months ended December 31, 2007.

Net income for the year ended December 31, 2008 was $30.8 million ($0.29 per fully diluted share), compared to a net loss of $15.8 million ($0.16 per fully diluted share) for the year ended December 31, 2007. Non-GAAP net income was $56.1 million ($0.52 per fully diluted share) for the year ended December 31, 2008, compared to non-GAAP net income of $2.5 million ($0.03 per fully diluted share) for the year ended December 31, 2007. Non-cash stock compensation expense for the year ended December 31, 2008 and December 31, 2007 was $25.3 million and $18.3 million, respectively.

As of December 31, 2008, BioMarin had cash, cash equivalents, and short-term investments totaling $559.8 million.

"We achieved our first profitable full year in 2008, with an increase of 144 percent in total revenue over 2007 driven by our three growing commercial products. We ended the year with a strong cash position and a promising development pipeline," said Jean-Jacques Bienaime, Chief Executive Officer of BioMarin. "In 2009, we look forward to the advancement of several programs including PEG-PAL for PKU and GALNS for MPS IVA. We also plan to continue making investments in growth opportunities as we look for attractive in- licensing or acquisition opportunities."

Net Product Revenue

Net product revenue from Naglazyme (galsulfase), an enzyme replacement therapy for mucopolysaccharidosis VI (MPS VI), was $36.5 million for the fourth quarter of 2008, an increase of 43.1 percent compared to Naglazyme net product revenue of $25.5 million for the fourth quarter of 2007. Net product revenue from Naglazyme for the year ended December 31, 2008 was $132.7 million, an increase of 53.9 percent from Naglazyme net product revenue of $86.2 million for the year ended December 31, 2007.

Net sales of Aldurazyme (laronidase), an enzyme replacement therapy for mucopolysaccharidosis I (MPS I) recorded by Genzyme, were $37.6 million for the fourth quarter of 2008, an increase of 6.2 percent compared to net sales by Genzyme of $35.4 million for the fourth quarter of 2007. Net sales of Aldurazyme recorded by Genzyme for the year ended December 31, 2008 were $151.3 million, an increase of 22.3 percent compared to net sales by Genzyme of $123.7 million for the year ended December 31, 2007.

Net product revenue to BioMarin related to Aldurazyme was $14.4 million for the fourth quarter of 2008. This reflects a reduction in net product revenue from the royalty payable to BioMarin by Genzyme due to the timing of inventory transfers to Genzyme, which were less than units shipped to third party customers by Genzyme during the fourth quarter of 2008. Net product revenue to BioMarin related to Aldurazyme was $72.5 million for the year ended December 31, 2008, which included $12.4 million of net incremental product transfer revenue during 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 $15.1 million for the fourth quarter of 2008 and $46.7 million for the year ended December 31, 2008.

Collaborative Agreement Revenues

Collaborative agreement revenues for the fourth quarter of 2008 were $31.5 million and included the $30 million milestone payment from Merck Serono for Kuvan marketing approval in the E.U., compared to $17.5 million for the fourth quarter of 2007 which included the $15 million milestone payment from Merck Serono for the filing of the MAA for Kuvan. Collaborative agreement revenues for the year ended December 31, 2008 were $38.9 million, compared to $28.3 million for the year ended December 31, 2007.

Impairment Loss on Investments

In the fourth quarter of 2008, BioMarin recorded an impairment charge of $4.1 million for the decline in the value of its equity investment in Summit Corporation plc. Based on the current market conditions, the low volume of trading in Summit securities and its current financial condition, BioMarin determined that its investment in Summit was impaired as of year end and adjusted the recorded amount of its investment to the stock's market price on December 31, 2008. The remaining investment in Summit Corporation plc. of $1.6 million is reflected on the balance sheet as of December 31, 2008.

  2009 Guidance
  Revenue Guidance ($ in millions)

  Item                                          2009 Guidance    2008 Actual
  Total BioMarin Revenues                       $307 to $336     $296.5
  Total Net Product Revenues                    $300 to $329     $251.9
  Naglazyme Net Product Revenue                 $160 to $175     $132.7
  Kuvan Net Product Revenue                     $70 to $80       $46.7
  Aldurazyme Net Product Revenue to BioMarin*   $69 to $74       $72.5


  *  The 2009 Aldurazyme guidance, as compared to 2008, reflects increased
     royalties earned offset by a reduction of $7 million to $9 million in
     net incremental product transfer revenue, mostly related to the initial
     inventory transfer.



  Selected Income Statement Guidance ($ in millions)

  Item                                       Guidance
  Cost of Sales (% of Total Revenue)         19% to 21%
  Selling, General and Admin. Expense        $120 to $130
  Research and Development Expense*          $110 to $120
  Costs Associated with Riquent Deal**       Up to $15
  Interest Income                            $5 to $7
  Net Income (Loss) (GAAP)                   $(15) to $0
  Stock Compensation Expense                 $32 to $35
  Net Income (non-GAAP)                      $17 to $35

  *   Excludes upfront research and development expenses associated with the
      Riquent deal
  **  Represents upfront costs associated with the Riquent deal to be
      allocated between research and development expense and investment
      impairment



BioMarin estimates that top line product revenue will grow approximately 20% to 25% in 2010 and approximately 15% to 20% in 2011. These revenue estimates reflect growth from existing commercial products and do not include potential sales from additional new products. BioMarin expects GAAP net income in the range of $35 million to $40 million in 2010 and in the range of $60 million to $65 million in 2011. Excluding stock compensation expense, non-GAAP net income is projected to be in the range of $70 million to $80 million in 2010 and in the range of $95 million to $105 million in 2011. These estimates are based on BioMarin's current business plan and do not include the effect of any significant business development transaction that the company may choose to do in the future.

Non-GAAP Financial Information and Reconciliation

The above results for the fourth quarter and full year of 2007 and 2008 and financial guidance for 2009, 2010 and 2011 include actual and Management's 2009, 2010 and 2011 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 fourth quarter of 2008, $5.5 million for the fourth quarter of 2007, $25.3 million for the year ended December 31, 2008 and $18.3 million for the year ended December 31, 2007. Management estimates stock compensation expense of $32.0 million to $35.0 million in 2009, approximately $35.0 million to $40.0 million in 2010 and approximately $35.0 million to $40.0 million in 2011. The reconciliation of this measure to the estimated GAAP net income is as follows (in millions):

                            Year       Year
                           Ended      Ended
               Q4    Q4   December   December    2009      2010       2011
              2008  2007  31, 2008   31, 2007  Guidance  Guidance   Guidance

  GAAP net
   income                                     $(15.0) -    $35.0 -   $60.0 -
   (loss)     $24.5  $2.6  $30.8    $(15.8)    $0           $40.0     $65.0
  Non-cash
   stock
   compensation                                 32.0 -      35.0 -    35.0 -
   expense      7.4   5.5   25.3      18.3       35.0        40.0      40.0
  Non-GAAP                                     $17.0 -     $70.0 -   $95.0 -
   net income $31.9  $8.1  $56.1      $2.5      $35.0       $80.0     $105.0



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.

Diluted Earnings Per Share Calculation

GAAP diluted earnings per share for the fourth quarter of 2008 and non-GAAP diluted earnings per share for the fourth quarter and full year 2008 includes 26.3 million shares related to the outstanding convertible debt. The calculation of GAAP diluted earnings per share for the fourth quarter of 2008 and non-GAAP diluted earnings per share for the fourth quarter and full year 2008 reflects the exclusion of the theoretical interest expense from net earnings that would no longer be incurred if the debt was converted into shares. For the full year 2008 GAAP diluted earnings per share and the fourth quarter and full year 2007 GAAP and non-GAAP diluted earnings per share, the 26.3 million shares related to the convertible debt are excluded from the diluted earnings per share calculation as their impact is considered anti-dilutive.

  Anticipated Upcoming Milestones
  --  1Q09: Results from BH4+Vitamin C study
  --  1Q09: Results from Phase 2 PAH trial
  --  1Q09/2Q09: Initiation of Phase 1 trial for GALNS for MPS IVA
  --  2Q09: Results from proteinuria in chronic kidney disease trial
  --  2Q09: Results from PEG-PAL Phase 1 trial
  --  2Q09: Initiation of PEG-PAL Phase 2 trial


  Upcoming Investor Conferences and Events
  --  March 4-5: Credit Suisse Global Healthcare Conference
  --  March 10-11: Barclays Healthcare Conference
  --  March 16-18: Cowen Healthcare Conference
  --  April 1: Citi Biotech Day


BioMarin will host a conference call and webcast to discuss fourth quarter and full year 2008 financial results today, Wednesday, February 18, 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: February 18, 2009
  Time: 5:00 p.m. ET (22:00 CET)
  U.S. / Canada Dial-in Number:  866.700.6293
  International Dial-in Number:  617.213.8835
  Participant Code: 35749059
  Replay Dial-in Number: 888.286.8010
  Replay International Dial-in Number: 617.801.6888
  Replay Code: 73992450


  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 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.

Forward-Looking Statement

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, GALNS 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; the results of the final analysis of the ASPEN trial by La Jolla Pharmaceuticals; 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 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
                        December 31, 2007 and 2008
           (In thousands, except for share and per share data)

                                                  December 31,  December 31,
                                                      2007          2008
                     ASSETS
  Current assets:
    Cash and cash equivalents                       $228,343      $222,900
    Short-term investments                           357,251       336,892
    Accounts receivable, net                          16,976        54,298
    Advances to BioMarin/Genzyme LLC                   2,087           174
    Inventory                                         32,445        73,162
    Other current assets                               7,195        50,270

      Total current assets                           644,297       737,696

  Investment in BioMarin/Genzyme LLC                  44,881           915
  Other investments                                       --         1,633
  Property, plant and equipment, net                  76,818       124,979
  Intangible assets, net                               9,596         7,626
  Goodwill                                            21,262        21,262
  Other assets                                        18,425        12,584

      Total assets                                  $815,279      $906,695


        LIABILITIES AND STOCKHOLDERS' EQUITY
  Current liabilities:
    Accounts payable and accrued liabilities         $49,907       $58,851
    Current portion of acquisition obligation,
     net of discount                                   6,309        70,741
    Deferred revenue                                   5,327           307
    Other current liabilities                             --           182

      Total current liabilities                       61,543       130,081

  Convertible debt                                   497,375       497,083
  Long-term portion of acquisition obligation,
   net of discount                                    66,553            --
  Other long-term liabilities                          2,082         2,856

      Total liabilities                              627,553       630,020

  Stockholders' equity:
    Common stock, $0.001 par value: 250,000,000
     shares authorized at December 31, 2007 and
     December 31, 2008; 97,114,159 and 99,868,145
     shares issued and outstanding at December 31,
     2007 and 2008, respectively                          97           100
    Additional paid-in capital                       794,917       852,947
    Company common stock held by deferred
     compensation plan                                    --          (882)
    Accumulated other comprehensive income               139         1,106
    Accumulated deficit                             (607,427)     (576,596)

      Total stockholders' equity                     187,726       276,675

      Total liabilities and stockholders' equity    $815,279      $906,695

       See accompanying notes to consolidated financial statements.



              BIOMARIN PHARMACEUTICAL INC. AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF OPERATIONS
    For the Three and Twelve Months Ended, December 31, 2007 and 2008
                  (In thousands, except per share data)

                                      Three Months Ended
                                         December 31,    Twelve Months Ended
                                          unaudited          December 31,
                                        2007     2008       2007      2008

  Revenues:
     Net product sales                 $26,202  $65,956   $86,802  $251,851
     Collaborative agreement revenues   17,506   31,518    28,264    38,907
     Royalty and license fee revenues    1,146    1,803     6,515     5,735
        Total revenues                  44,854   99,277   121,581   296,493

  Operating expenses:
     Cost of sales (excludes
      amortization)                      5,224   11,665    18,359    52,509
     Research and development           24,015   25,733    78,600    93,291
     Selling, general and
      administrative                    23,891   28,730    77,539   106,566
     Amortization of intangible assets   1,093    1,093     4,371     4,371

        Total operating expenses        54,223   67,221   178,869   256,737

  Income (loss) from operations         (9,369)  32,056   (57,288)   39,756

  Equity in the income (loss) of
   BioMarin/Genzyme LLC                  9,366     (579)   30,525    (2,270)
  Interest income                        7,383    3,231    25,932    16,388
  Interest expense                      (4,080)  (4,096)  (14,243)  (16,394)
  Impairment loss on investment             --   (4,056)       --    (4,056)

  Income (loss) before income taxes      3,300   26,556   (15,074)   33,424
  Income Taxes                             729    2,050       729     2,593

        Net income (loss)               $2,571  $24,506  $(15,803)  $30,831
        Net income (loss) per share,
         basic                           $0.03    $0.25    $(0.16)    $0.31
        Net income (loss) per share,
         diluted                         $0.03    $0.21    $(0.16)    $0.29
  Weighted average common shares
   outstanding, basic                   96,931   99,777    95,878    98,975
  Weighted average common shares
   outstanding, diluted                101,193  128,296    95,878   103,572



The following is the stock-based compensation expense included in the respective captions of the consolidated statements of operations above:

                                         Three Months
                                            Ended         Twelve Months
                                         December 31,         Ended
                                          unaudited        December 31,
                                         2007    2008     2007     2008

  Cost of sales                           $162    $503     $578   $1,521
  Selling, general and administrative
   expense                               3,092   4,471   10,727   15,145
  Research and development expense       2,211   2,466    6,978    8,584
  Total stock-based compensation
   expense                              $5,465  $7,440  $18,283  $25,250

First Call Analyst:
FCMN Contact: eshen@bmrn.com

SOURCE: BioMarin Pharmaceutical Inc.

CONTACT: investors, Eugenia Shen, +1-415-506-6570, or media, Susan Berg,
+1-415-506-6594, both of BioMarin Pharmaceutical Inc.


BioMarin

Diseases

Lysosomal Storage Disorders (MPS I, MPS IVA, MPS VI, CLN2 disease) PKU

Products

Palynziq®
Brineura®
Vimizim®
Kuvan®
Naglazyme®
Aldurazyme®

Patient/Physician Support Contact Information

BioMarin RareConnections
Tel: 866.906.6100
Fax: 888.863.3361
E-mail: support@biomarin-rareconnections.com

Global Medical Information

Contact Global Medical Information