- 08 июня 2017, 16:47
- Zacks Investment Research
A month has gone by since the last earnings report for BioMarin Pharmaceutical Inc. BMRN. Shares have lost nearly 8% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
BioMarin Posts Earnings in Q1, Sales Rise Y/Y
BioMarin reported earnings of $0.03 per share in the first quarter of 2017 (including stock-based compensation expense), significantly better than the year-ago loss of $0.36 and the Zacks Consensus Estimate of a loss of $0.30 per share. Strong product sales and lower R&D costs pulled up profits in the quarter.
Total revenue came in at $304 million in the quarter, up 28% from the year-ago quarter. The top line was aided by strong net product sales. Revenues also beat the Zacks Consensus Estimate of $292 million by 3.9%. Fx did not have any significant effect in sales in the quarter
Vimizim contributed $106 million to total revenue, up 45% year over year and 13% sequentially attributable to the 31% growth in new patients on Vimizim therapy.
The company expects continued growth in 2017 as the franchise continues to benefit from robust underlying patient demand.
Kuvan revenues rose 19% to $92 million, reflecting patient growth in North America and the completion of the transition of the ex-North American territories acquired in 2016. The number of patients on Kuvan therapy in North America increased by 8% in the first quarter.
Naglazyme sales rose 25% year over year to $81 million benefitting from forward purchases from the Middle East markets and booking an order from Brazil in the first quarter of 2017 compared to the absence of the same in the first quarter of 2016. The drug continued to witness steady patient growth with the number of commercial patients increasing 9% in the quarter.
Naglazyme and Vimzim revenues vary on a quarterly basis, primarily due to the timing of central government orders from Latin America.
Though the company booked orders for each of Vimizim and Naglazyme in Q1 from Brazil, it still warned about inconsistent order patterns likely to persist from Brazil in 2017.
BioMarin received Aldurazyme royalties – totaling $19 million (up 19%) – from Sanofi’s Genzyme in the quarter.
Research and development (R&D) expenses declined 8.6% to $127.0 million (excluding stock-based compensation expense) owning to the discontinuance of the Kyndrisa and reveglucosidase alfa programs last year. Selling, general and administrative (SG&A) expenses increased 15.5% to $97.0 million (excluding stock-based compensation expense).
At the end of the first quarter, BioMarin had $1.2 billion in cash, cash equivalents and investments.
The company re-affirmed its previously issued 2017 sales and earnings guidance.
BioMarin expects a total revenue in the range of $1.25 −$1.30 billion, representing double-digit revenue growth. The revenue guidance assumes the launch of Brineura in 2017.
Vimizim sales are expected in the range of $400–$430 million while Kuvan sales are projected in the range of $380−$410 million, representing an increase of about 14% over 2016 at the mid-point. Naglazyme sales are projected in the range of $300−$330 million.
R&D expenses are expected within $620–$650 million while SG&A expenses are projected in the range of $520–$550 million.
Due to the ramp up of BMN 270 and vosoritide programs and the Brineura launch and pegvaliase pre-commercialization activities, the company expects R&D and SG&A spending to increase in the later quarters of the year which will result in lower profits. At the call, the company mentioned that it expects to bring a new product candidate into clinical development in 2017.
Adjusted earnings are expected to turn positive. The company expects an adjusted net income of $30 - $70 million in 2017. Meanwhile, management is committed to continued profitability improvements over the longer term.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
At this time, BioMarin's stock has a subpar Growth score of 'D' on both growth and the momentum front. Charting a somewhat similar path, the stock was allocated a grade of 'F' on the value side, putting it in the lowest quintile 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.
Our style scores indicate investors will probably be better served looking elsewhere.
The stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
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