Net Product Revenue Increase of 25% Led by Naglazyme International Expansion
Conference Call and Webcast to Be Held Today at 5:00 p.m. ET (22:00 CET)
NOVATO, Calif., April 30 /PRNewswire-FirstCall/ --
BioMarin Pharmaceutical Inc. today announced financial results for the first quarter ended March 31, 2009. GAAP net loss was $13.2 million ($0.13 per fully diluted share) for the first quarter of 2009, compared to GAAP net income of $1.7 million ($0.02 per fully diluted share) for the first quarter of 2008.
Non-GAAP net income was $9.3 million ($0.09 per fully diluted share) for the first quarter of 2009, compared to non-GAAP net income of $4.1 million ($0.04 per fully diluted share) for the first quarter of 2008. Non-GAAP net income/loss excludes non-cash stock compensation expense, and to provide more clarity on BioMarin’s ongoing core business, also excludes certain nonrecurring material items and the tax effect of the adjustments.
As of March 31, 2009, BioMarin had cash and short and long-term investments totaling $555.9 million.
“All three of our commercial products are independently profitable, which helps fund the advancement of several promising programs including PEG-PAL for PKU and GALNS for MPS IVA. We are strategically developing earlier stage programs and looking for attractive later stage in-licensing or acquisition opportunities to ensure continued growth,” said Jean-Jacques Bienaime, Chief Executive Officer of BioMarin.
Mr. Bienaime continued, “Starting in the first quarter of 2009, we are adjusting our methodology of our non-GAAP net income to provide more clarity on our ongoing core business, Naglazyme, Kuvan and Aldurazyme, and to allow for a better basis of comparison across time periods. The 2009 non-GAAP guidance, and historical quarterly financial results presented exclude nonrecurring material items and the tax effect of those adjustments in addition to non-cash stock compensation expense. We feel confident in meeting our overall top and bottom line financial objectives for 2009. Excluding nonrecurring material items, both our R&D and SG&A expenses remained flat in the first quarter of 2009 compared to the fourth quarter of 2008. We will continue to carefully manage expenses and product development choices in our pipeline to maximize long-term value for both the company and our shareholders.”
Net Product Revenue
Net product revenue from Naglazyme (galsulfase), an enzyme replacement therapy for mucopolysaccharidosis VI (MPS VI), was $39.4 million for the first quarter of 2009, an increase of 42.2 percent compared to Naglazyme net product revenue of $27.7 million for the first quarter of 2008.
Net sales of Aldurazyme (laronidase), an enzyme replacement therapy for mucopolysaccharidosis I (MPS I) recorded by Genzyme, were $36.8 million for the first quarter of 2009, which was flat compared to net sales by Genzyme for the first quarter of 2008. In the first quarter of 2009, changes in foreign exchange rates caused a negative impact of $3.6 million of Aldurazyme sales by Genzyme. However, in the first quarter of 2009, Aldurazyme unit volume increased nine percent compared to the first quarter of 2008 as the number of patients on therapy worldwide continues to grow.
Net product revenue to BioMarin related to Aldurazyme was $17.0 million for the first quarter of 2009, including $2.5 million of incremental product transfer revenue. This compares to net product revenue to BioMarin of $24.1 million, which included $9.5 million of incremental product transfer revenue for the first quarter of 2008. During both the first quarter of 2009 and the first quarter of 2008, BioMarin recorded net product revenue that was higher than the royalty earned on Genzyme third party sales during the respective periods due to the incremental product transfer revenue related to net increases in Genzyme Aldurazyme inventory levels during each period.
Net product revenue from Kuvan (sapropterin dihydrochloride) Tablets, a product for the treatment of phenylketonuria (PKU), was $15.5 million for the first quarter of 2009, compared to $5.8 million for the first quarter of 2008. The quantity of commercial tablets dispensed to patients, the best metric to track true patient demand, increased 9.5 percent in the first quarter of 2009 compared to the fourth quarter of 2008.
Impairment Loss on La Jolla Pharmaceutical Company and Summit Corporation Investments
In the first quarter of 2009, BioMarin recorded impairment loss on investments of $5.9 million, comprised of $1.4 million related to its equity investment in Summit Corporation plc and $4.5 million related to its equity investment in La Jolla Pharmaceutical Company. The remaining investments of $0.2 million in Summit Corporation and $1.8 million in La Jolla Pharmaceutical are reflected on the balance sheet as of March 31, 2009. Since both of these companies have announced that they do not have sufficient resources to fund operations for the next twelve months, the guidance below reflects the assumption that the remaining investments in both companies will be written down to zero by the end of the year.
2009 Guidance
All revenue and selected income statement guidance remains unchanged from the press release issued February 18, 2009 with the exception of research and development expense, impairment loss on investments and non-GAAP net income.
Non-GAAP Financial Information and Reconciliation
The above results for the first quarter of 2009, first quarter of 2008, full year results for 2008 and financial guidance for 2009 are determined in accordance with GAAP. 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.
Non-GAAP net income in the first quarter of 2009 and the first quarter of 2008 excluded (1) stock compensation expense of $7.8 million in the first quarter of 2009 and $4.5 million for the first quarter of 2008; (2) upfront license fees of $8.8 million associated with the Riquent transaction classified as research and development expense in the first quarter of 2009; (3) impairment charges of $5.9 million in the first quarter of 2009; (4) the gross margin associated with the initial Aldurazyme product transfer to Genzyme of $2.3 million associated with the restructuring BioMarin/Genzyme LLC in the first quarter of 2008 and (5) income tax effect of $0.2 million in the first quarter of 2008.
Anticipated non-GAAP net income for the year ended December 31, 2009 and actual results for the year ended December 31, 2008 exclude (1) stock compensation expense in the range of $32 million to $35 million for 2009 and $25.3 million for 2008; (2) upfront license fees of $8.8 million associated with the Riquent transaction million in 2009 and $1.4 million associated with the Summit transaction in 2008; (3) impairment charges of $7.9 million in 2009 and $4.1 million in 2008; (4) Kuvan approval milestones of $31.5 million in 2008; (5) the gross margin of the initial Aldurazyme product transfer to Genzyme of $2.3 million associated with the restructuring of BioMarin/Genzyme LLC in the first quarter of 2008 and (6) income tax effect of $2.2 million in 2008. The reconciliation of these measures to the estimated GAAP net income is detailed in the table provided at the end of the press release.
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 and Aldurazyme 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.
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. BioMarin is also making investments in manufacturing and laboratory facilities to support the advancement of these programs.
Anticipated Upcoming Milestones
Conference Call Details
BioMarin will host a conference call and webcast to discuss first quarter 2009 financial results today, Thursday, April 30, at 5:00 p.m. ET (22:00 CET). This event can be accessed on the investor section of the BioMarin website at www.BMRN.com.
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 PEG-PAL (PEGylated recombinant phenylalanine ammonia lyase), which is currently in Phase I clinical development for the treatment of PKU and GALNS (N-acetylgalactosamine 6-sulfatase), which is currently in Phase I/II clinical development for the treatment of MPS IVA. 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
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 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; 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 2008 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, Eugenia Shen, +1-415-506-6570, or Media, Susan Berg,
+1-415-506-6594, both of BioMarin Pharmaceutical Inc.
Web site: http://www.bmrn.com/
