BioMarin Pharmaceutical Inc.’s (BMRN) second quarter 2010 break-even earnings (excluding special items but including stock-based compensation expenses) was better than the year-ago loss of $.004 per share. The Zacks Consensus Estimate pointed towards earnings of $0.02 per share.
Total revenues climbed approximately 11% year-over-year to $91.9 million in the reported quarter. The year-over-year increase was driven by strong sales of its enzyme replacement therapies. However, revenues in the reported quarter fell short of the Zacks Consensus Revenue Estimate of $95 million.
Net product revenues in the reported quarter climbed approximately 11.2% to $90.6 million. Royalty and license revenues slipped to $0.2 million from $0.9 million in the year-ago quarter. Revenues from collaborative agreements accounted for the remaining total revenues in the reported quarter.
Revenues from Naglazyme in the reported quarter jumped 10.3% year-over-year to $47.3 million. Naglazyme is an enzyme replacement therapy for treating mucopolysaccharidosis VI, a rare genetic enzyme deficiency disorder.
Revenues from Aldurazyme recorded by Genzyme Corp. (GENZ) who sells the drug, an enzyme replacement therapy for treating mucopolysaccharidosis I, climbed 4.5% year-over-year to $43.7 million.
Net product revenues for BioMarin from Aldurazyme slipped 19% to $17.5 million in the reported quarter. Net product revenues from Kuvan tablets, for treating mild-to-moderate forms of the genetic disease phenylketonuria, grew 45.3% year-over-year to $24.7 million.
In addition to these three products, BioMarin possesses the rights to Firdapse through its acquisition of Huxley Pharmaceuticals in October 2009. Firdapse (amifampridine phosphate) is indicated for treating Lambert Eaton myasthenic syndrome (LEMS), a rare autoimmune disease. Net revenues from Firdapse were negligible in the quarter but are expected to pick up in the coming quarters.
Muscle Disease Candidate
In addition to announcing results for the second quarter of 2010, BioMarin also stated that the further development of BMN-195 for treating a type of muscle disease would be halted. The decision followed the disappointing showing of the candidate in an early-stage study.
2010 Outlook Trimmed
The company trimmed its 2010 revenue outlook to $370 million-$393 million, from its prior forecast of $374 million – $405 million. The 2010 projection for Firdapse sales has been lowered to $7 million-$10 million from the previously expected range of $10 million-$15 million. The delayed launch of Firdapse is primarily responsible for the reduction in guidance.
The company launched the LEMS drug in the European Union in April 2010, starting with Germany and the UK . The drug is expected to be launched in other major European markets by the end of the year.
Net income (excluding special items) for 2010 is now forecasted between $30 million and $38 million as against the earlier projection between $39 million and $49 million.
Our Take
Even though we are pleased with the acquisition of Huxley Pharmaceuticals, which has added Firdapse to BioMarin’s product portfolio, we remain concerned about the disappointing performance of the company’s first approved product Aldurazyme. We believe that the company’s other two marketed products Naglazyme and Kuvan, will continue performing well in the coming quarters.
We maintain our short term recommendation of Zacks#3 Rank (Hold) and long-term recommendation of “Neutral” on the stock.
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