BioMarin Pharmaceutical Inc. Delays Profit to Pursue New Products
Published: Jan 03, 2013
Struggling biotechnology companies feel the heat from Wall Street when their drug candidates fall flat. But successful biotech companies can face a different kind of pressure from investors, says BioMarin CEO Jean-Jacques Bienaimé. BioMarin’s total revenues are still rising for the three drugs it shepherded to FDA approval from 2003 to 2007. The drugs–laronidase (Aldurazyme), galsulfase (Naglazyme), and sapropterin dihydrochloride (Kuvan)–treat rare genetic disorders that can cause severe symptoms such as deformed bones and mental impairment. The Novato, CA-based company, with revenues approaching $500 million for 2012, can choose when to become profitable, says Bienaimé. Wall Street investors have been pressing the company (NASDAQ: BMRN) to realize short-term profits while it can, says Bienaimé. But the chief executive continues to nurture a sizeable research program in the hope of adding to BioMarin’s product line. “We could be profitable today,’’ Bienaimé says. “But that would not be good for the long-term value of the company, and I don’t think it would be good for patients.” Bienaimé is betting that BioMarin can beat the daunting odds in drug development and continue to field successful new treatments. The company’s research and development costs have been rising as its pipeline drugs move forward into clinical trials. BioMarin’s R&D expenditures in 2011 were $214 million, or more than 48 percent of revenues. In 2012, R&D approached $300 million, and is expected to surpass that amount in 2013.