Yahoo Finance Why Is BioMarin (BMRN) Down 4% Since Last Earnings Report?
A month has gone by since the last earnings report for BioMarin Pharmaceutical (BMRN). Shares have lost about 4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is BioMarin due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Q1 Earnings & Sales Beat Estimates
BioMarin reported first-quarter 2023 adjusted earnings per share of 60 cents, beating the Zacks Consensus Estimate of 43 cents and our model estimates of 41 cents. The reported figure was up 15% year over year, driven by higher revenues, which offset the impact of higher marketing costs for Roctavian’s launch.
Total revenues were $596.4 million in the reported quarter, up 15% year over year. This improvement was driven by the global uptake of Voxzogo. The top line beat the Zacks Consensus Estimate and our estimate of $572.53 million and $569.3 million, respectively.
Quarter in Detail
Product revenues (including Aldurazyme) totaled $586.4 million, up 16% year over year. The same from BioMarin's marketed brands (excluding Aldurazyme) increased 15% year over year to $552 million on higher revenues from the new drug, Voxzogo. This offset lower sales from Kuvan. Royalty and other revenues totaled $10.0 million, down 28% from the year-ago quarter's figure.
Vimizim sales rose 3% year over year to $189.2 million. Naglazyme sales were down 4% to $123 million. Vimizim and Naglazyme sales beat our model estimates of $178.2 million and $121.5 million, respectively.
Brineura generated sales of $39.1 million, up 8% year over year. The figure missed our model estimates of $42.1 million for the first quarter.
Voxzogo generated sales of $87.8 million compared with $66.8 million in the previous quarter. Sales were up 346% from that recorded in the year-ago quarter. Higher sales of Voxzogo were driven by continued global market expansion and rapid patient uptake in Japan and Brazil.
As of March 2023-end, an estimated 1,500 children were being treated with Voxzogo from 35 active markets.
In the PKU franchise, Kuvan revenues declined 15% to $50.5 million due to generic competition. The drug lost U.S. market exclusivity in late 2020. BioMarin is now in the third year of U.S. generic competition for Kuvan and expects new generic competitors in Europe.
Palynziq injection sales grossed $62.4 million in the quarter, up 14% year over year driven by new patient starts.
Product revenues from Aldurazyme totaled $34.4 million, up 41% from that recorded in the prior-year quarter.
2023 Guidance
Management reiterated its total revenue and earnings guidance for full year 2023. The company expects to record total revenues in the range of $2.375-$2.5 billion, implying an increase of around 15% at the midpoint. The revenue guidance, however, fell slightly short of the Zacks Consensus Estimate of $2.55 billion.
BioMarin expects revenues in the range of $1.7 billion to $1.85 billion from its Enzyme products, which include Aldurazyme, Vimizim, Naglazyme, Brineura and Palynziq. The total revenue guidance includes an assumed contribution from Kuvan of about $125 million globally. BioMarin, on the conference call, specified that Kuvan is no longer a source of growth for the company and management is lowering focus on the drug.
BioMarin slightly raised its previously issued Voxzogo sales guidance from a range of $330-$380 million to $380-$430 billion, based on the robust demand for the therapy seen in Europe and the United States.
The company now expects Roctavian sales in the range of $50-$150 million (previously $100-$200 million). This is due to an extension in the FDA’s previously set PDUFA target action date on the Roctavian BLA by an additional three months. The Roctavian guidance assumes a launch in the United States in 2023.
The gross margin is expected to be between 77.5% and 79%. The company expects R&D expenses to be in the range of 30 of revenues in 2023 while SGA expenses are expected to be between 36% and 38%.
BioMarin expects adjusted earnings per share to be in the range of $1.80 to $2.05.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -12.41% due to these changes.
VGM Scores
At this time, BioMarin has a poor Growth Score of F, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions looks promising. Notably, BioMarin has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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