BioMarin Announces Third Quarter 2017 Financial Results
SAN RAFAEL, Calif., Oct. 26, 2017 /PRNewswire/ --
Financial Highlights (in millions of U.S. dollars, except per share data, unaudited)
Three Months Ended September 30, Nine Months Ended September 30,
-------------------------------- -------------------------------
2017 2016 % 2017 2016 %
Change Change
------ ------
Total Revenues $334.1 $279.9 19% $955.3 $816.8 17%
Aldurazyme Net
Product
Revenues 22.4 23.7 (5)% 61.7 58.8 5%
Brineura Net
Product
Revenues 3.1 - n/a 3.4 - n/a
Kuvan Net
Product
Revenues 105.8 90.9 16% 300.1 257.8 16%
Naglazyme Net
Product
Revenues 72.1 77.8 (7)% 238.4 221.6 8%
Vimizim Net
Product
Revenues 90.3 80.9 12% 299.3 260.3 15%
GAAP Net Loss $(12.5) $(37.4) $(65.7) $(539.5)
GAAP Net Loss
per Share -
Basic $(0.07) $(0.22) $(0.38) $(3.29)
GAAP Net Loss
per Share -
Diluted $(0.07) (0.22) $(0.38) $(3.30)
$
Non-GAAP
Income (Loss)
(1) $7.8 $2.9 $68.7 $(8.9)
September 30, December 31,
2017 2016
---- ----
Cash, cash
equivalents
and
investments $1,673.4 $1,362.4
(1) Non-GAAP income (loss) is defined
by the Company as reported GAAP
Net Income (Loss), excluding net
interest expense, provision for
(benefit from) income taxes,
depreciation expense, amortization
expense, stock-based compensation
expense, contingent consideration
expense and, in certain periods,
certain other specified items as
detailed below. Refer to Non-GAAP
Information beginning on page 9 of
this press release for a complete
discussion of the Company's Non-
GAAP financial information and
reconciliations to the comparable
GAAP reported information.
BioMarin Pharmaceutical Inc. (NASDAQ: BMRN) today announced financial results for the third quarter ended September 30, 2017. For the quarter ended September 30, 2017, GAAP Net Loss was $(12.5) million, or $(0.07) per basic and diluted share, compared to GAAP Net Loss of $(37.4) million, or $(0.22) per basic and diluted share for the quarter ended September 30, 2016. The reduction in GAAP Net Loss year over year was primarily due to the $31.5 million net upfront license payment received as a result of the License and Settlement Agreements entered into with Sarepta Therapeutics Inc. in July 2017. The decreased GAAP Net Loss was also driven by increased net product revenues for Kuvan and Vimizim, partially offset by a decrease in the Benefit From Income Taxes, and increased Selling, General and Administrative expenses for Kuvan, Brineura and Vimizim. BioMarin also announced today that full year GAAP net loss guidance is being reduced to between ($110) million and ($130) million.
Non-GAAP Income for the third quarter ended September 30, 2017 was $7.8 million, compared to Non-GAAP Income of $2.9 million for the quarter ended September 30, 2016. BioMarin also announced today that full year Non-GAAP Income guidance is being increased to between $60 million and $80 million.
Total Revenues were $334.1 million for the third quarter of 2017, and were $955.3 million for the nine months ended September 30, 2017, an increase of 19% and 17% respectively compared to the same periods in 2016. For the nine months ended September 30, 2017, Kuvan net product revenues increased 16% year over year. Growth was driven by a 9% increase in the number of commercial patients on Kuvan therapy in the U.S and the continued growth in the ex-North American territories acquired in 2016. For the nine months ended September 30, 2017, Naglazyme net product revenues increased by 8% year over year, due primarily to an increase of 7% in the number of Naglazyme commercial patients. Vimizim net product revenues increased 15% year over year during the nine months ended September 30, 2017. The number of Vimizim commercial patients increased 23% year over year.
On October 18, 2017, the Company commented on its Total Revenue and Non-GAAP Income (Loss) trends for the third quarter and full-year 2017. In terms of the overall commercial business, BioMarin stated that sales of products in markets throughout most of the world are performing at or above internal expectations. However, the Company said the one exception is Brazil, where a slowdown in federal purchasing orders had extended into the third quarter of this year. As a result, third quarter revenues were negatively impacted. Since October 18, the Brazilian Ministry of Health has initiated their purchasing process which is expected to result in net product revenue from Brazil in the fourth quarter. Based on this order Total Revenues for full-year 2017 are confirmed to be within prior guidance.
As of September 30, 2017, BioMarin had cash, cash equivalents and investments totaling approximately $1.7 billion, as compared to $1.4 billion on December 31, 2016.
Commenting on the quarter, Jean-Jacques Bienaimé, Chairman and Chief Executive Officer of BioMarin, said, "We achieved a number of important strategic milestones so far this year, including record Total Revenues in the third quarter and the go ahead from both U.S. and U.K. health authorities to begin Phase 3 studies with valoctocogene roxaparvovec (formerly referred to as BMN 270) gene therapy program for severe hemophilia A by year-end." Mr. Bienaimé continued, "We had many significant updates at our recent R&D Day, including the announcement of our next IND candidate BMN 290 for Freidriech's Ataxia, a rare neurologic disorder that affects nearly 15,000 people worldwide. We were also pleased to share that vosoritide for achondroplasia demonstrated a sustained increase in annualized growth rate at 30 months of treatment. For pegvaliase, we anticipate FDA action on our Biologics License Application in the first half of 2018, as well as our planned submission of the Marketing Authorization Application in Europe in the first quarter of 2018. With these programs all advancing, supported by our strong base commercial business, we have reduced our GAAP Net Loss guidance and increased our Non-GAAP Income guidance for the full-year 2017."
Revenues (in millions of U.S. dollars, unaudited)
------------------------------------------------
Total Revenues
Three Months Ended September 30, Nine Months Ended September 30,
-------------------------------- -------------------------------
2017 2016 $ Change % 2017 2016 $ Change %
Change Change
------ ------
Aldurazyme $22.4 $23.7 $(1.3) (5)% $61.7 $58.8 $2.9 5%
Brineura 3.1 - 3.1 n/a 3.4 - 3.4 n/a
Firdapse 5.1 5.0 0.1 2% 14.0 13.7 0.3 2%
Kuvan (1) 105.8 90.9 14.9 16% 300.1 257.8 42.3 16%
Naglazyme (2) 72.1 77.8 (5.7) (7)% 238.4 221.6 16.8 8%
Vimizim (2) 90.3 80.9 9.4 12% 299.3 260.3 39.0 15%
---- ---- --- ----- ----- ----
Net Product Revenues 298.8 278.3 20.5 7% 916.9 812.2 104.7 13%
Royalty and Other Revenues 35.3 1.6 33.7 38.4 4.6 33.8
---- --- ---- ---- --- ----
Total Revenues $334.1 $279.9 $54.2 19% $955.3 $816.8 $138.5 17%
====== ====== ===== ====== ====== ======
(1) Kuvan revenue growth was
driven by a 9% increase in
the number of commercial
patients on Kuvan therapy in
the U.S. and continued growth
in the ex-North American
territories acquired in 2016.
(2) Naglazyme and Vimizim net
product revenues experience
quarterly fluctuations
primarily due to the timing
of government ordering
patterns in certain
countries.
Details of Net Product Revenues Attributable to Aldurazyme
Three Months Ended September 30, Nine Months Ended September 30,
-------------------------------- -------------------------------
2017 2016 $ Change % 2017 2016 $ Change %
Change Change
------ ------
Aldurazyme
revenue
reported by
Genzyme $58.4 $58.9 $(0.5) (1)% $176.3 $168.5 $7.8 5%
Three Months Ended September 30, Nine Months Ended September 30,
-------------------------------- -------------------------------
2017 2016 $ Change 2017 2016 $ Change
---- ---- -------- ---- ---- --------
Royalties earned from
Genzyme $24.5 $26.9 $(2.4) $74.2 $71.2 $3.0
Net product transfer
revenues (3) (2.1) (3.2) 1.1 (12.5) (12.4) (0.1)
---- ---- --- ----- ----- ----
Total Aldurazyme net
product revenues $22.4 $23.7 $(1.3) $61.7 $58.8 $2.9
===== ===== ===== ===== ===== ====
(3) To the extent units shipped to
third party customers by
Genzyme exceed BioMarin
inventory transfers to
Genzyme, BioMarin will record
a decrease in net product
revenues from the amounts
payable to BioMarin for the
amount of previously
recognized product transfer
revenue. If BioMarin
inventory transfers exceed
units shipped to third party
customers by Genzyme,
BioMarin will record
incremental net product
transfer revenues for the
period. Positive net product
transfer revenues result in
the period if BioMarin
transferred more units to
Genzyme than Genzyme sold to
third-party customers.
2017 Financial Guidance
-----------------------
Full-year Revenue Guidance ($ in millions)
Item
----
Provided August 2, 2017 Updated October 26, 2017
----------------------- ------------------------
Total Revenues $1,285 to $1,335 $1,290 to $1,320
Kuvan Net Product Revenues $380 to $410 $400 to $420
Naglazyme Net Product Revenues $300 to $330 $310 to $330
Vimizim Net Product Revenues $400 to $430 $400 to $420
Select Full-year Income Statement Guidance ($ in millions, except percentages)
Item
----
Provided August 2, 2017 Updated October 26, 2017
----------------------- ------------------------
Cost of Sales (% of Total
Revenues) 17.5% to 18.5% 17.5% to 18.5%
Research and Development Expense $610 to $640 $600 to $620
Selling, General and Admin.
Expense $530 to $560 $530 to $550
GAAP Net Loss $(115) to $(155) $(110) to $(130)
Non-GAAP Income $30 to $70 $60 to $80
Key Program Updates at R&D Day October 18, 2017
-- BMN 290 for Freidriech's Ataxia (FA): BioMarin announced that it has
selected as its next drug development candidate, BMN 290, a selective
chromatin modulation therapy intended for treatment of FA. FA is a rare
autosomal recessive disorder with worldwide prevalence of approximately
15,000, which results in disabling neurologic and cardiac progressive
decline. Currently there are no approved disease modifying therapies for
FA. In preclinical models, BMN 290 increases frataxin expression in
affected tissues more than two-fold. BMN 290 is a second-generation
compound derived from a compound the Company acquired from Repligen
Corporation (Repligen) that had human clinical data demonstrating
increases in frataxin in FA patients. The Company selected BMN 290 for
its favorable penetration into the central nervous system and cardiac
target tissues, and its preservation of the selectivity of the original
Repligen compound. The Company expects to submit the IND application for
BMN 290 in the second half of 2018.
-- Valoctocogene roxaparvovec (formerly referred to as BMN 270) gene
therapy for hemophilia A: BioMarin announced today that it had been
granted Breakthrough Therapy Designation from the U.S. Food and Drug
Administration (FDA) for valoctocogene roxaparvovec. The designation is
intended to expedite the development and review of medicines to treat a
serious disease and preliminary clinical evidence indicates that the
drug may demonstrate substantial improvement over existing therapies.
The Company also announced that the 6e13 vg/kg dose and 4e13 vg/kg dose
had been cleared by both U.S. and U.K. health authorities to begin Phase
3 studies. The protocol for each Phase 3 study, one using the 6e13 vg/kg
dose and one using the 4e13 vg/kg dose, will likely include
approximately 40 patients for a duration of 52 weeks per study. The
Company expects to file for approval of valoctocogene roxaparvovec with
52-week data from the Phase 3 studies. BioMarin expects to initiate the
global Phase 3 program in the fourth quarter of 2017, complete
enrollment of the last patient by the end of 2018 and provide top-line
Phase 3 data by the end of 2019.At R&D Day, the Company provided an
update on the ongoing open-label Phase 1/2 study of the 4e13 vg/kg dose
at up to 36 weeks of observation at the September 14, 2017 data cut.
Since the last data update provided during the second quarter earnings
call on August 2, 2017, five of the six patients at the 4e13 vg/kg dose
tracked to the low range of normal, and the sixth is in the mild range
for Factor VIII levels. Median annualized bleed and factor VIII use
rates for 4e13 and 6e13 vg/kg were zero after Week 4.The World Health
Organization (WHO) has approved, and BioMarin was issued, the
International Nonproprietary Name (INN) "valoctocogene roxaparvovec" for
the Company's gene therapy to treat hemophilia A. INNs identify
pharmaceutical substances or active pharmaceutical ingredients. Each INN
is a unique name that is globally recognized and is public property. A
nonproprietary name is also known as a generic name.BioMarin has
commissioned its gene therapy manufacturing facility, located in Novato,
California. Good Manufacturing Practices (GMP) production of
valoctocogene roxaparvovec has commenced and is intended to support
clinical development activities and anticipated commercial demand, upon
product approval. This facility is capable of supporting the
manufacturing of product for approximately 2,000 patients per year, and
the production process was developed in accordance with International
Conference on Harmonisation guidance for Pharmaceuticals for Human Use
facilitating worldwide registration with health authorities.
-- Pegvaliase for phenylketonuria (PKU): BioMarin announced that the
pegvaliase Biologics License Application (BLA) remains on track for FDA
action during the first half of 2018. The Company plans to submit a
Marketing Authorization Application to the European Medicines Agency in
the first quarter of 2018. Pegvaliase is a PEGylated recombinant
phenylalanine ammonia lyase enzyme product that reduces blood
phenylalanine (Phe) levels in adult patients with PKU who have
uncontrolled blood Phe levels on existing management.
-- Vosoritide for achondroplasia: BioMarin provided an update on its
open-label Phase 2 study of vosoritide, an analog of C-type Natriuretic
Peptide (CNP), in children with achondroplasia, the most common form of
disproportionate short stature in humans.Vosoritide for achondroplasia
has demonstrated sustained increase in average growth velocity over 30
months of treatment in 10 children, who completed 30 months of daily
dosing at 15 µg/kg/day. Over this period of time, patients experienced
mean absolute growth increase of approximately 4 cm over what their
baseline growth velocity would have predicted.The sustained increase in
annualized growth velocity was accompanied by sustained improvements
over time in height compared to age- and gender-matched unaffected
children as measure by z-scores. In addition, treatment with vosoritide
shows continued improvement over time in proportionality as measured by
a ratio of the upper and lower body measurements, or U/L ratio. The
ongoing, global Phase 3 study is a randomized, placebo-controlled study
of vosoritide in approximately 110 children with achondroplasia ages
5-14 for 52 weeks. The study will be followed by a subsequent open-label
extension. Children in this study will have completed a minimum
six-month baseline study to determine their respective baseline growth
velocity prior to entering the Phase 3 study. Vosoritide is being tested
in children in the age range where their growth plates are still open.
This is approximately 25 percent of people with achondroplasia. The
Company expects to complete enrollment of the Phase 3 study in mid-2018
and provide top-line data in the second half of 2019.Given the
importance of early intervention in this indication, at R&D Day, the
Company announced that it will begin an infant/toddler study in the
first half of 2018 in children ages 0-5 years old.
-- BMN 250 for MPS IIIB (Sanfilippo Syndrome, Type B): The Company
discussed preliminary results from the Phase 1/2 trial with BMN 250 that
demonstrated reduced heparan sulfate (HS) levels, a biomarker in the
cerebrospinal fluid (CSF), in the brains of affected children. BMN 250,
is an investigational enzyme replacement therapy using a novel fusion of
recombinant human alpha-N-acetylglucosaminidase (NAGLU) with a peptide
derived from insulin-like growth factor 2 (IGF2), for the treatment of
Sanfilippo B syndrome or mucopolysaccharidosis IIIB (MPS IIIB).
Discovered by BioMarin, BMN 250 is being studied in a multicenter,
international clinical trial evaluating safety and tolerability, as well
as cognitive function of patients with Sanfilippo B receiving BMN 250.
Designed to restore functional NAGLU activity in the brain, BMN 250 is
administered via intracerebroventricular (ICV) infusion.In the completed
dose escalation portion of the study (Part 1), which was primarily
designed to determine safety and pharmacodynamic activity of BMN 250,
three patients received escalating doses (30mg, 100mg, 300mg) of BMN 250
over 9 to12 months. CSF HS levels, which were markedly elevated at
baseline, were reduced to the non-affected or normal range in all three
patients, whether assessed as total or disease-specific HS. Sanfilippo B
patients are missing one of four enzymes for HS degradation.In those
same patients, abdominal MRI scans showed significantly enlarged liver
size at baseline followed by rapid decreases in liver size into the
normal range for age with BMN 250 treatment, suggesting that
ICV-administered BMN 250 reaches the peripheral circulation and may have
activity in somatic organs. In contrast, most Sanfilippo B patients
enrolled in BioMarin's concurrently-running observational study
(250-901) had increased liver size at baseline and experienced further
increases in liver size over time. Two of the three treated patients
from the dose escalation arm showed stabilization or some improvement
compared to their pre-dose baselines in cognitive Development Quotient
(DQ), a measure of cognitive function normalized to age. Patients with
untreated Sanfilippo B usually show progressive decline in DQ.
Conference Call Details
BioMarin will host a conference call and webcast to discuss third quarter 2017 financial results today, Thursday, October 26, 2017 at 4:30 p.m. ET. This event can be accessed on the investor section of the BioMarin website at www.biomarin.com.
U.S. / Canada Dial-in Number: 866.502.9859
International Dial-in Number: 574.990.1362
Conference ID: 96054850
Replay Dial-in Number: 855.859.2056
Replay International Dial-in Number: 404.537.3406
Conference ID: 96054850
About BioMarin
BioMarin is a global biotechnology company that develops and commercializes innovative therapies for patients with serious and life-threatening rare and ultra-rare genetic diseases. The Company's portfolio consists of six approved products and multiple clinical and pre-clinical product candidates. For additional information, please visit www.biomarin.com.
Forward-Looking Statement
This press release contains forward-looking statements about the business prospects of BioMarin Pharmaceutical Inc. (BioMarin), including, without limitation, statements about: the expectations of Total Revenues, Net Product Revenues and expenses for BioMarin's commercial products, GAAP Net Loss, Non-GAAP Income (Loss) and other specified income statement guidance; the financial performance of BioMarin as a whole; the timing of BioMarin's clinical studies and trials and announcements of data from those studies and trials, including BioMarin's Phase 3 program with valoctocogene roxaparvovec; the ongoing Phase 3 study of vosoritide and the Phase 1/2 study of BMN 250; the continued clinical development and commercialization of BioMarin's commercial products and product candidates; including the filing of an IND for BMN 290 in the second half of 2018; the possible approval and commercialization of BioMarin's product candidates, including the filing of a Marketing Authorization Application for pegvaliase in Europe in the first quarter of 2018; the adequacy of production of valoctocogene roxaparvovec in the Company's commercial gene therapy manufacturing facility; and actions by regulatory authorities, including the expected FDA action on the pegvaliase BLA during the first half of 2018. 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: BioMarin's success in the commercialization of its commercial products; Genzyme Corporation's success in continuing the commercialization of Aldurazyme; results and timing of current and planned preclinical studies and clinical trials, BioMarin's ability to successfully manufacture its commercial products and product candidates; the content and timing of decisions by the FDA, the European Commission and other regulatory authorities concerning each of the described products and product candidates; the market for each of these products; actual sales of BioMarin's commercial products; and those factors detailed in BioMarin's filings with the Securities and Exchange Commission (SEC), including, without limitation, the factors contained under the caption "Risk Factors" in BioMarin's Quarterly Report on Form 10-Q for the quarter ended June 30, 2017 as such factors may be updated by any subsequent reports. 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(®), Brineura(®), Vimizim, Naglazyme(®), Kuvan(® )and Firdapse(®) are registered trademarks of BioMarin Pharmaceutical Inc., or its affiliates. Kyndrisa(TM) is a trademark of BioMarin Pharmaceutical Inc. Aldurazyme(®) is a registered trademark of BioMarin/Genzyme LLC.
BIOMARIN PHARMACEUTICAL INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, 2017 and December 31, 2016
(In thousands of U.S. dollars, except share and per share amounts)
September 30, December 31,
2017 2016(1)
---- ------
ASSETS (unaudited)
Current assets:
Cash and cash equivalents $431,399 $408,330
Short-term investments 825,700 381,347
Accounts receivable, net 251,891 215,280
Inventory 457,393 355,126
Other current assets 83,646 61,708
------ ------
Total current assets 2,050,029 1,421,791
--------- ---------
Noncurrent assets:
Long-term investments 416,304 572,711
Property, plant and equipment, net 878,624 798,768
Intangible assets, net 530,957 553,780
Goodwill 197,039 197,039
Deferred tax assets 484,759 446,786
Other assets 22,985 32,815
------ ------
Total assets $4,580,697 $4,023,690
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $364,920 $370,505
Short-term convertible debt, net - 22,478
Short-term contingent acquisition consideration
payable 52,609 46,327
------ ------
Total current liabilities 417,529 439,310
Noncurrent liabilities:
Long-term convertible debt, net 1,166,036 660,761
Long-term contingent acquisition consideration
payable 126,790 115,310
Other long-term liabilities 56,780 42,034
------ ------
Total liabilities 1,767,135 1,257,415
--------- ---------
Stockholders' equity:
Common stock, $0.001 par value: 500,000,000
shares authorized; 175,495,350 and 172,647,588
shares issued and outstanding as of September
30, 2017 and December 31, 2016, respectively. 176 173
Additional paid-in capital 4,435,449 4,288,113
Company common stock held by Nonqualified
Deferred Compensation Plan (14,473) (14,321)
Accumulated other comprehensive income (loss) (21,434) 12,816
Accumulated deficit (1,586,156) (1,520,506)
---------- ----------
Total stockholders' equity 2,813,562 2,766,275
--------- ---------
Total liabilities and stockholders' equity $4,580,697 $4,023,690
========== ==========
(1) December 31, 2016 balances were
derived from the audited
Consolidated Financial
Statements included in the
Company's Annual Report on Form
10-K for the year ended December
31, 2016, filed with the U.S.
Securities and Exchange
Commission on February 27, 2017.
BIOMARIN PHARMACEUTICAL INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three and Nine Months Ended September 30, 2017 and 2016
(In thousands of U.S. dollars, except per share amounts)
(Unaudited)
Three Months Ended September 30, Nine Months Ended September 30,
-------------------------------- -------------------------------
2017 2016 2017 2016
---- ---- ---- ----
REVENUES:
Net product revenues $298,752 $278,262 $916,868 $812,195
Royalty and other revenues 35,396 1,634 38,473 4,568
------ ----- ------ -----
Total revenues 334,148 279,896 955,341 816,763
------- ------- ------- -------
OPERATING EXPENSES:
Cost of sales 59,480 50,738 165,791 145,473
Research and development 154,103 160,831 442,145 486,663
Selling, general and administrative 130,532 118,758 394,056 333,635
Intangible asset amortization and
contingent consideration 3,760 9,654 26,096 (34,318)
Impairment of intangible assets - - - 599,118
--- --- --- -------
Total operating expenses 347,875 339,981 1,028,088 1,530,571
------- ------- --------- ---------
LOSS FROM OPERATIONS (13,727) (60,085) (72,747) (713,808)
Equity in the loss of BioMarin/
Genzyme LLC (253) (104) (996) (374)
Interest income 3,976 1,633 10,031 4,561
Interest expense (10,884) (9,980) (31,043) (29,767)
Other income, net 267 1,723 4,282 504
--- ----- ----- ---
LOSS BEFORE INCOME TAXES (20,621) (66,813) (90,473) (738,884)
Benefit from income taxes (8,094) (29,388) (24,823) (199,394)
------ ------- ------- --------
NET LOSS $(12,527) $(37,425) $(65,650) $(539,490)
======== ======== ======== =========
NET LOSS PER SHARE, BASIC $(0.07) $(0.22) $(0.38) $(3.29)
====== ====== ====== ======
NET LOSS PER SHARE, DILUTED $(0.07) $(0.22) $(0.38) $(3.30)
====== ====== ====== ======
Weighted average common shares
outstanding, basic 175,103 167,714 174,071 163,963
======= ======= ======= =======
Weighted average common shares
outstanding, diluted 175,103 167,714 174,071 164,216
======= ======= ======= =======
Non-GAAP Information
The results presented in this press release for the three and nine months ended September 30, 2017 and 2016 include both GAAP information and Non-GAAP information. As used in this release, Non-GAAP Income (Loss) is defined by the Company as GAAP Net Loss excluding net interest expense, provision for (benefit from) income taxes, depreciation expense, amortization expense, stock-based compensation expense, contingent consideration expense and certain other specified items, as detailed below. In addition, BioMarin includes in this press release the effects of these adjustments on certain components of GAAP Net Loss for each of the periods presented. In this regard, Non-GAAP income (loss) and its components, including Non-GAAP Royalty and Other Revenues, Non-GAAP Cost of Sales, Non-GAAP Research and Development expenses, Non-GAAP Selling, General and Administrative expense, Non-GAAP Intangible Asset Amortization and Contingent Consideration and Non-GAAP Provision for (Benefit From) Income Taxes are statement of operations line items prepared on the same basis as, and therefore components of, the overall Non-GAAP measures.
BioMarin regularly uses both GAAP and Non-GAAP results and expectations internally to assess its financial operating performance and evaluate key business decisions related to its principal business activities - the discovery, development, manufacture, marketing and sale of innovative biologic therapies. Because Non-GAAP Income (Loss) and its components are important internal measurements for BioMarin, the Company believes that providing this information in conjunction with BioMarin's GAAP information enhances investors' and analysts' ability to meaningfully compare the Company's results from period to period and to its forward looking guidance, and to identify operating trends in the Company's principal business.
Non-GAAP Income (Loss) and its components are not meant to be considered in isolation, as a substitute for, or superior to comparable GAAP measures and should be read in conjunction with the consolidated financial information prepared in accordance with GAAP. Investors should note that the Non-GAAP information is not prepared under any comprehensive set of accounting rules or principles and does not reflect all of the amounts associated with the Company's results of operations as determined in accordance with GAAP. Investors should also note that these Non-GAAP measures have no standardized meaning prescribed by GAAP and, therefore, have limits in their usefulness to investors. In addition, from time to time in the future there may be other items that the Company may exclude for purposes of its Non-GAAP measures; likewise, the Company may in the future cease to exclude items that it has historically excluded for purposes of its Non-GAAP measures. Because of the non-standardized definitions, the Non-GAAP measure as used by BioMarin in this press release and the accompanying tables may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by other companies.
The following table presents the reconciliation of GAAP Net Loss to Non-GAAP Income (Loss):
Reconciliation of GAAP Net Loss to Non-GAAP Income (Loss)
(In millions of U.S. dollars)
(unaudited)
Three Months Ended Nine Months Ended Year Ending
September 30, September 30, December 31, 2017
------------- -------------
2017 2016 2017 2016 Guidance
---- ---- ---- ---- --------
GAAP Net Loss $(12.5) $(37.4) $(65.7) $(539.5) $(130) - $(110)
Interest expense, net 6.9 8.3 21.0 25.2 30
Benefit from income taxes (8.1) (29.4) (24.8) (199.4) (20) - (50)
Depreciation expense 13.3 18.8 36.9 42.7 45 - 55
Amortization expense 7.6 7.5 22.7 22.6 30
Stock-based compensation expense 35.9 32.9 106.7 97.3 130 - 150
Contingent consideration expense
(1) (3.8) 2.2 3.4 (56.9) 10
Impairment charges (2) - - - 599.1 -
Royalty and other revenues (3) (31.5) - (31.5) - (35)
Non-GAAP Income (Loss) $7.8 $2.9 $68.7 $(8.9) $60 - $80
==== ==== ===== ===== =========
The following reconciliation of the GAAP reported to Non-GAAP information provides the details of the effects of the Non-GAAP adjustments on certain components of the Company's operating results for each of the periods presented.
Reconciliation Of Certain GAAP Reported Information To Non-GAAP Information
(In millions of U.S. dollars)
(Unaudited)
Three Months Ended September 30,
--------------------------------
2017 2016
---- ----
Adjustments Adjustments
----------- -----------
GAAP Interest, Royalty and Non- GAAP Interest, Royalty and Non-
Reported Taxes, Other GAAP Taxes, Other GAAP
Depreciation Revenues, Reported Depreciation Revenues,
and Stock-Based and Stock-Based
Amortization Compensation, Amortization Compensation,
Contingent Contingent
Consideration Consideration
and Other and Other
Adjustments Adjustments
---
Royalty and other
revenues (3) $35.4 $ - $(31.5) $3.9 $1.6 $ - $ - $1.6
Cost of sales 59.5 - (3.0) 56.5 50.7 - (2.1) 48.6
Research and development 154.1 (7.6) (13.8) 132.7 160.8 (11.1) (14.2) 135.5
Selling, general and
administrative 130.5 (5.7) (19.1) 105.7 118.8 (7.7) (16.6) 94.5
Intangible asset amortization
and contingent consideration
(1) 3.8 (7.6) 3.8 - 9.7 (7.5) (2.2) -
Impairment of intangible
assets (2) - - - - - - - -
Interest expense, net (6.9) 6.9 - - (8.3) 8.3 - -
Benefit from income taxes (8.1) 8.1 - - (29.4) 29.4 - -
GAAP Net Loss/Non-GAAP Income (12.5) 19.7 0.6 7.8 (37.4) 5.2 35.1 2.9
(Loss)
Nine Months Ended September 30,
-------------------------------
2017 2016
---- ----
Adjustments Adjustments
----------- -----------
GAAP Interest, Royalty and Non- GAAP Interest, Royalty and Non-
Reported Taxes, Other GAAP Reported Taxes, Other GAAP
Depreciation Revenues, Depreciation Revenues,
and Stock-Based and Stock-Based
Amortization Compensation, Amortization Compensation,
Contingent Contingent
Consideration Consideration
and Other and Other
Adjustments Adjustments
---
Royalty and other
revenues (3) $38.5 $ - $(31.5) $7.0 $4.6 $ - $ - $4.6
Cost of sales 165.8 - (7.8) 158.0 145.5 - (6.0) 139.5
Research and development 442.1 (20.2) (40.0) 381.9 486.7 (23.4) (43.0) 420.3
Selling, general and
administrative 394.1 (16.7) (58.9) 318.5 333.6 (19.3) (48.3) 266.0
Intangible asset amortization
and contingent consideration
(1) 26.1 (22.7) (3.4) - (34.3) (22.6) 56.9 -
Impairment of intangible
assets (2) - - - - 599.1 - (599.1) -
Interest expense, net (21.0) 21.0 - - (25.2) 25.2 - -
Benefit from income taxes (24.8) 24.8 - - (199.4) 199.4 - -
GAAP Net Loss/Non-GAAP Income (65.7) 55.8 78.6 68.7 (539.5) (108.9) 639.5 (8.9)
(Loss)
1. Amounts for the three and nine months
ended September 30, 2016 include $43.8
million and $21.1 million related to the
change in probability of achieving the
Kyndrisa and Reveglucosidase alfa
development milestones, respectively.
2. Amounts or the three and nine months
ended September 30, 2016 include $574.1
million and $25.0 million for the
impairment of intangible assets
associated with the discontinuance of
the Kyndrisa and Reveglucosidase alpha
development programs, respectively.
3. Primarily represents the one-time
upfront payment related to the License
and Settlement Agreement entered into
with Sarepta Therapeutics, Inc. in July
2017.
Contact:
Investors: Media:
Traci McCarty Debra Charlesworth
BioMarin Pharmaceutical Inc. BioMarin Pharmaceutical Inc.
(415) 455-7558 (415) 455-7451
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SOURCE BioMarin Pharmaceutical Inc.
