BioMarin Announces First Quarter 2018 Financial Results
BioMarin Announces First Quarter 2018 Financial Results
- Total Revenues Top $373 million in the Quarter; GAAP Net Loss of $44 million; Non-GAAP Income of $21 million
- Subjects in Gene Therapy Pivotal Studies for Hemophilia A to Receive Valoctocogene Roxaparvovec Manufactured at New BioMarin Commercial Facility
- Gene Therapy Product for the Treatment of Phenylketonuria Selected as New IND Candidate for 2019
SAN RAFAEL, Calif., April 25, 2018 /PRNewswire/ --
Financial Highlights (in millions of U.S. dollars, except per share data, unaudited)
Three Months Ended March 31,
----------------------------
2018 2017 % Change
---- ---- --------
Total Revenues $373.4 $303.7 23%
Vimizim Net
Product
Revenues 117.1 105.8 11%
Kuvan Net
Product
Revenues 99.1 92.3 7%
Naglazyme Net
Product
Revenues 75.0 80.6 (7)%
Aldurazyme Net
Product
Revenues 66.1 19.4 241%
Brineura Net
Product
Revenues 6.9 - n/a
GAAP Net Loss $(44.1) $(16.3)
GAAP Net Loss
per Share -
Basic $(0.25) $(0.09)
GAAP Net Loss
per Share -
Diluted $(0.26) $(0.09)
Non-GAAP Income
(1) $21.3 $34.3
March 31, December 31,
2018 2017
---- ----
Cash, cash
equivalents and
investments $1,696.4 $1,781.7
(1) Non-GAAP Income 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.
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 first quarter ended March 31, 2018. For the quarter ended March 31, 2018 GAAP Net Loss was $44.1 million, or $0.25 loss per basic and $0.26 loss per diluted share, respectively, compared to GAAP Net Loss of $16.3 million, or $0.09 loss per basic and diluted share, respectively, for the quarter ended March 31, 2017. The increase in GAAP Net Loss year over year was primarily due to higher research and development expenses for expansion of our clinical programs related to BMN-250, valoctocogene roxaparvovec and vosoritide, largely offset by higher gross profit from increased Aldurazyme and Kuvan net product revenues. In addition, higher selling, general and administrative expenses in support of the ongoing commercial launch of Brineura and for the anticipated launch of pegvaliase contributed to the increase in GAAP Net Loss in the quarter compared to the same period last year.
Non-GAAP Income for the quarter ended March 31, 2018 was $21.3 million, compared to Non-GAAP Income of $34.3 million for the quarter ended March 31, 2017. Similar to the GAAP results for the quarter ended March 31, 2018, the decrease in Non-GAAP Income was primarily due to increased research and development expenses, partially offset by increased gross margins on net product revenues, as well as higher selling, general and administrative expenses compared to the same period last year.
Total revenues were $373.4 million for the quarter ended March 31, 2018 compared to $303.7 million for the quarter ended March 31, 2017, an increase of 23%. For the quarter ended March 31, 2018, Aldurazyme net product revenues increased $46.7 million year over year, or 241%, of which $27.2 million is due to the different revenue recognition principles applied as a result of our adoption of Accounting Standards Codification 606 Revenue from Contracts with Customers, (ASC 606), and $19.5 million due to the timing of product sales to Genzyme. Vimizim net product revenues increased by $11.3 million, or 11%, year over year, due primarily to an increase of 16% in the number of Vimizim commercial patients. Kuvan net product revenues increased $6.8 million, or 7%, year over year, driven by a 9% increase in the number of commercial patients on Kuvan therapy in North America and continued growth in ex-North American territories. Naglazyme net product revenues decreased $5.6 million, or 7%, year over year during the quarter ended March 31, 2018, primarily due to the timing of government orders in certain countries. The number of Naglazyme commercial patients increased 4% year over year.
As of March 31, 2018, BioMarin had cash, cash equivalents and investments totaling approximately $1.7 billion, as compared to $1.8 billion on December 31, 2017.
Commenting on first quarter results, Jean-Jacques Bienaimé, Chairman and Chief Executive Officer of BioMarin, said, "2018 is a year of execution as we aim to achieve numerous value-creating catalysts across the business. In clinical development, we intend to complete enrollment of our global GENEr8-1 pivotal study with the only late-stage gene therapy product for the treatment of Hemophilia A, valoctocogene roxaparvovec. Concurrently, we continue to anticipate reaching roughly $1.5 billion in Total Revenues for the full-year 2018, per our guidance. On the regulatory front, following the acceptance of our Biologics License Application for pegvaliase for the treatment of phenylketonuria (PKU), which received a Priority Review designation, we anticipate FDA action by the end of May 2018. In the quarter, we were also pleased to have submitted the Marketing Authorization Application for pegvaliase in Europe."
Mr. Bienaimé continued, "The adult PKU market is primed for an efficacious treatment option that lowers Phe while allowing for near normal protein intake. We understand that the PKU community is anxiously awaiting the potential approval of pegvaliase given the dramatic phenylalanine (Phe) reductions observed in our Phase 3 studies. We are very excited to be on the cusp of the second potential product approval in less than two years, following the approval of Brineura in 2017. On the heels of a potential pegvaliase approval, we are also thrilled to announce our next gene therapy program for PKU that leverages both our expertise developing and manufacturing AAV products as well as our long-established commercial footprint selling Kuvan. We are not aware of any other company of our size that has six commercial products, a stable of potential blockbuster late-stage clinical product candidates and over $1 billion in annual revenues. I believe BioMarin is unique in our industry and that we are only beginning to unlock the value of both our base business and development pipeline."
Revenues (in millions of U.S. dollars, unaudited)
Total Revenues
--------------
Three Months Ended March 31,
----------------------------
2018 2017 $ Change % Change
---- ---- -------- --------
Vimizim $117.1 $105.8 $11.3 11%
Kuvan 99.1 92.3 6.8 7%
Naglazyme 75.0 80.6 (5.6) (7)%
Aldurazyme(1) 66.1 19.4 46.7 241%
Brineura 6.9 - 6.9 n/a
Firdapse 4.9 4.1 0.8 20%
--- --- ---
Net Product Revenues 369.1 302.2 66.9 22%
Royalty and Other Revenues 4.3 1.5 2.8
--- --- ---
Total Revenues $373.4 $303.7 $69.7 23%
====== ====== =====
(1) The ASC 606 Revenue from
Contracts with Customers
accounting standard was adopted
using the modified
retrospective approach. As
such, prior period revenues
have not been restated and
therefore Aldurazyme revenues
are not comparable for the
periods presented.
Effect on Aldurazyme Net Product Revenues for the Adoption of ASC 606
Effective January 1, 2018, the Company adopted ASC 606, which provides principles for recognizing revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company adopted ASC 606 on a modified retrospective basis through a cumulative adjustment of a $20.0 million reduction to Accumulated Deficit, a $26.0 million increase in Accounts Receivable and a $6.0 million decrease in Deferred Tax Assets.
The adoption of ASC 606 did not have an impact on the timing of revenue recognition for the products directly marketed by BioMarin. However, under the new guidance, we now recognize Aldurazyme revenues under our agreement with Genzyme at the point in time when control of the product is transferred from BioMarin to Genzyme. The amount of revenue recognized is based on the entire estimated payment that BioMarin expects to receive when the product is sold by Genzyme to its customers. Under the former revenue accounting standards, we only recognized $100.00 per vial when product was transferred to Genzyme and did not recognize the variable consideration component until Genzyme had sold the product. This change in accounting standard contributed $27.2 million to the increase in Aldurazyme revenues in the first quarter. Any variances between the amounts that we estimate to receive at the time of our product transfers to Genzyme and the actual payments that we ultimately receive from Genzyme based on their sales of the product will affect Net Product Revenues and earnings in the period such variances become known, although such amounts are not expected to be material.
Reaffirmed 2018 Full-Year Financial Guidance ($ in millions,
except %), as presented February 22, 2018
------------------------------------------------------------
Item 2018 Guidance
---- -------------
Total Revenues $1,470 to $1,530
Kuvan Net Product Revenues $440 to $480
Naglazyme Net Product Revenues $325 to $355
Vimizim Net Product Revenues $460 to $500
Brineura Net Product Revenues $35 to $55
Cost of Sales (% of Total
Revenues) 20.0% to 21.0%
Research and Development Expense $645 to $685
Selling, General and Admin.
Expense $575 to $615
GAAP Net Loss $(115) to $(165)
Non-GAAP Income * $100 to $140
*All Financial Guidance items are
calculated based on Generally
Accepted Accounting Principles
(GAAP) with the exception of Non-
GAAP Income. 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.
Key Program Highlights
-- Gene therapy product candidate for phenylketonuria (PKU): Today, the
Company announced that a gene therapy product will be the next IND
(after BMN 290 for Friedreich's ataxia) candidate for the treatment of
PKU in 2019. PKU is an autosomal recessive disorder in which
phenylalanine hydroxylase, the enzyme that metabolizes the amino acid
phenylalanine (Phe), is deficient. PKU leads to high levels of
neurotoxic phenylalanine, which would affect neurocognitive development,
if left untreated. In preclinical models, BioMarin's PKU gene therapy
product candidate demonstrated sustained, normalized Phe levels without
hypophenylalanemia in an ongoing study and out to 53 weeks at the last
observation. The product candidate will be an AAV vector containing the
DNA sequence that codes for the phenylalanine hydroxylase enzyme that is
deficient in people with PKU.
-- Valoctocogene roxaparvovec (formerly referred to as BMN 270) gene
therapy for hemophilia A: In December 2017, the Company announced that
it had dosed the first patient in the global GENEr8-1 Phase 3 study with
the 6e13 vg/kg dose of valoctocogene roxaparvovec for the treatment of
patients with severe hemophilia A. The first patient in the GENEr8
pivotal studies to receive valoctocogene roxaparvovec that was
manufactured in BioMarin's new commercial gene therapy facility will be
dosed in the near future.The global Phase 3 program includes two studies
with valoctocogene roxaparvovec, one with the 6e13 vg/kg dose (GENEr8-1)
and one with the 4e13 vg/kg dose (GENEr8-2). Both Phase 3 GENEr8 studies
are open-label single-arm studies to evaluate the efficacy and safety of
valoctocogene roxaparvovec. The primary endpoint in both studies will be
based on the factor VIII activity level achieved following valoctocogene
roxaparvovec, and the secondary endpoints will be annualized factor VIII
replacement therapy use rate and annualized bleed rate. In the second
quarter BioMarin intends to begin a Phase 1/2 Study with the 6e13 kg/vg
dose and with approximately 10 patients who produce neutralizing
antibodies against AAV5.Also announced today, the Company intends to
provide an update on the ongoing Phase 2 program with valoctocogene
roxaparvovec at the World Federation of Hemophilia 2018 World Congress
next month. BioMarin plans to share a two-year update of the 6e13 vg/kg
dose cohort, as well as a one-year update of the 4e13 vg/kg dose
cohort.On March 21, 2018, BioMarin announced that the International
Society for Pharmaceutical Engineering selected the Company's gene
therapy manufacturing facility as the 2018 Facility of the Year Category
Winner for Project Execution. The recognition highlighted the company's
successful construction of the facility in Novato, California, which
took less than a year to transform basic infrastructure into one of the
first gene manufacturing facilities of its kind in the world.
-- Pegvaliase for phenylketonuria (PKU): On March 28, 2018 the European
Medicines Agency accepted BioMarin's submission of a Marketing
Authorization Application for pegvaliase. The U.S. Food and Drug
Administration accepted the Biologics License Application (BLA) for
pegvaliase and granted priority review status in August 2017, with the
current Prescription Drug User Fee Act Action Goal Date of May 25, 2018.
Pegvaliase is a PEGylated recombinant phenylalanine ammonialyase enzyme
product to reduce blood Phe levels in adult patients with PKU who have
uncontrolled blood Phe levels on existing management.
-- Vosoritide for achondroplasia: Vosoritide, an analog of C-type
natriuretic peptide (CNP), is being studied in children with
achondroplasia, the most common form of disproportionate short stature
in humans. Vosoritide 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 a mean cumulative height increase of
approximately 4 cm over what their baseline growth velocity would have
predicted. The Company's multi-pronged program was developed to
demonstrate the ability to improve clinical outcomes in children with
achondroplasia. The program includes four distinct areas of focus to
support global approval. Currently enrolling, the 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. The feeder study in the U.S. is fully enrolled and the Company
expects to complete enrollment of the Phase 3 study in mid-2018.
BioMarin expects to provide top-line data in the second half of 2019.
The long-term, open-label Phase 2 program to corroborate maintenance of
effect is anticipated to provide over 5 years of clinical data at the
time of the planned New Drug Application submission. Given the
importance of early intervention in this indication, the Company intends
to begin an infant/toddler study in 2018 in children 0-5 years old.
Finally, the Company has undertaken a Natural History program to augment
clinical understanding of outcomes of untreated patients for comparison
to treated patients.
-- BMN 250 for MPS IIIB (Sanfilippo Syndrome, Type B): On February 7, 2018
at the WORLDSymposium 2018, the Company updated preliminary results from
the Phase 1/2 trial with BMN 250, 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). In 6 of 6 BMN
250-treated subjects, normalization of heparan sulfate (HS) levels, a
biomarker in the cerebrospinal fluid (CSF), was observed. Normalization
of liver size in 3 of 3 BMN 250-treated subjects from the dose
escalation arm of the study was also observed. These data suggest that
BMN 250, which is administered via intracerebroventricular (ICV)
infusion, reaches peripheral circulation and has activity in somatic
organs. Development Quotient (DQ), a measure of cognitive function
normalized to age, was also observed. In 3 of 3 treated patients from
the dose escalation arm of the study, preliminary data suggest
stabilization of cognitive DQ at the high dose of BMN 250 in all
subjects. Patients with untreated Sanfilippo B syndrome usually show
progressive decline in DQ.Invented 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 ICV infusion, the same delivery
modality used to treat children with Brineura.
-- BMN 290 for Friedreich's Ataxia: In the fourth quarter of 2017, BioMarin
announced that it had selected as its next clinical drug development
candidate, BMN 290, a selective chromatin modulation therapy intended
for treatment of Friedreich's ataxia. Friedreich's ataxia is a rare
autosomal recessive disorder that results in disabling neurologic and
cardiac progressive decline associated with a deficiency in frataxin.
Prior to the lead compound being acquired by BioMarin from Repligen
Corporation (Repligen), it demonstrated increases in frataxin in
Friedreich's ataxia patients. On the basis of these results, the Company
selected an improved candidate, 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. In
preclinical models conducted by BioMarin, BMN 290, a compound derived
from the original Repligen compound, increases frataxin message
expression in brain tissues more than two-fold. Currently, there are no
approved disease modifying therapies for Friedreich's ataxia. The
Company expects to submit the IND application for BMN 290 in the second
half of 2018.
BioMarin will host a conference call and webcast to discuss first quarter 2018 financial results today, Wednesday, April 25, 2018 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 Replay Dial-in Number: 855.859.2056
---------------------------- -----------------------------------
International Dial-in Number: Replay International Dial-in
574.990.1362 Number: 404.537.3406
----------------------------- -----------------------------
Conference ID: 1665515 Conference ID: 1665515
---------------------- ----------------------
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 Statements
This press release and the associated conference call and webcast contain 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 and Phase 1/2 study with valoctocogene roxaparvovec; the ongoing Phase 2 and Phase 3 studies 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 BioMarin's plans to file an IND for BMN 290 in the second half of 2018 and an IND for its new gene therapy candidate for the treatment of PKU in 2019; the possible approval and commercialization of BioMarin's product candidates, including the potential of some of these products to reach blockbuster status; the adequacy of production of valoctocogene roxaparvovec in the Company's commercial gene therapy manufacturing facility and the imminent dosing of the first patient from product manufactured in this facility; and actions by regulatory authorities, including the expected FDA action on the pegvaliase BLA at the end of May 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 Annual Report on Form 10-K for the year ended December 31, 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(®), Firdapse(®), Kuvan(®), Naglazyme(® )and Vimizim(®) are registered trademarks of BioMarin Pharmaceutical Inc., or its affiliates. Aldurazyme(®) is a registered trademark of BioMarin/Genzyme LLC.
BIOMARIN PHARMACEUTICAL INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, 2018 and December 31, 2017
(In thousands of U.S. dollars, except share and per share amounts)
March 31, December 31,
2017 (2)
2018 (1)
-------
ASSETS (unaudited)
Current assets:
Cash and cash equivalents $473,980 $598,028
Short-term investments 908,815 797,940
Accounts receivable, net 318,394 261,365
Inventory 468,161 475,775
Other current assets 71,760 74,036
------ ------
Total current assets 2,241,110 2,207,144
--------- ---------
Noncurrent assets:
Long-term investments 313,599 385,785
Property, plant and equipment, net 895,392 896,700
Intangible assets, net 509,902 517,510
Goodwill 197,039 197,039
Deferred tax assets 407,009 399,095
Other assets 32,666 29,852
------ ------
Total assets $4,596,717 $4,633,125
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $346,538 $401,921
Short-term convertible debt, net 365,326 360,949
Short-term contingent acquisition consideration
payable 61,607 53,648
------ ------
Total current liabilities 773,471 816,518
Noncurrent liabilities:
Long-term convertible debt, net 817,672 813,521
Long-term contingent acquisition consideration
payable 137,618 135,318
Other long-term liabilities 60,953 59,105
------ ------
Total liabilities 1,789,714 1,824,462
--------- ---------
Stockholders' equity:
Common stock, $0.001 par value: 500,000,000
shares authorized; 177 176
176,653,480 and 175,843,749 shares issued and
outstanding, respectively.
Additional paid-in capital 4,510,451 4,483,220
Company common stock held by Nonqualified
Deferred Compensation Plan (14,017) (14,224)
Accumulated other comprehensive loss (28,545) (22,961)
Accumulated deficit (1,661,063) (1,637,548)
---------- ----------
Total stockholders' equity 2,807,003 2,808,663
--------- ---------
Total liabilities and stockholders' equity $4,596,717 $4,633,125
========== ==========
(1) As of January 1, 2018, the
Company adopted the requirements
of ASC 606 using the modified
retrospective method, and as a
result, there is a lack of
comparability to the prior
periods presented.
(2) December 31, 2017 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, 2017, filed with the U.S.
Securities and Exchange
Commission on February 26, 2018.
BIOMARIN PHARMACEUTICAL INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended March 31, 2018 and 2017
(In thousands of U.S. dollars, except per share amounts)
(Unaudited)
Three Months Ended March 31,
----------------------------
2018 (1) 2017
------- ----
REVENUES:
Net product revenues $369,099 $302,190
Royalty and other revenues 4,348 1,555
----- -----
Total revenues 373,447 303,745
------- -------
OPERATING EXPENSES:
Cost of sales 82,333 50,006
Research and development 183,948 145,003
Selling, general and administrative 138,336 120,019
Intangible asset amortization and
contingent consideration 13,202 8,925
------ -----
Total operating expenses 417,819 323,953
------- -------
LOSS FROM OPERATIONS (44,372) (20,208)
Equity in the income (loss) of
BioMarin/Genzyme LLC 68 (523)
Interest income 5,234 3,072
Interest expense (11,562) (10,119)
Other income (expense) (172) 3,472
---- -----
LOSS BEFORE INCOME TAXES (50,804) (24,306)
Benefit from income taxes (6,655) (8,016)
------ ------
NET LOSS $(44,149) $(16,290)
======== ========
NET LOSS PER SHARE, BASIC $(0.25) $(0.09)
====== ======
NET LOSS PER SHARE, DILUTED $(0.26) $(0.09)
====== ======
Weighted average common shares
outstanding, basic 175,932 172,710
======= =======
Weighted average common shares
outstanding, diluted 176,150 172,710
======= =======
(1) As of January 1, 2018, the
Company adopted the requirements
of ASC 606 using the modified
retrospective method, and as a
result, there is a lack of
comparability to the prior
periods presented.
Non-GAAP Information
The results presented in this press release for the three months ended March 31, 2018 and 2017 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, in certain periods, certain other specified items, as detailed below when applicable. 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 Cost of Sales, Non-GAAP Research and Development expenses, Non-GAAP Selling, General and Administrative expense, Non-GAAP Intangible Asset Amortization and Contingent Consideration, Non-GAAP Gain on the Sale of Intangible Asset and Non-GAAP 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. BioMarin also uses Non-GAAP Income (Loss) internally to understand, manage and evaluate its business and to make operating decisions, and compensation of executives is based in part on this measure.
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:
Reconciliation of GAAP Net Loss to Non-GAAP Income
(In millions of U.S. dollars)
(unaudited)
Three Months Ended Year Ending
March 31, December 31, 2018
---------
2018 2017 Guidance
---- ---- --------
GAAP Net Loss $(44.1) $(16.3) $(115.0) - $(165.0)
Interest expense, net 6.3 7.0 25.0 - 35.0
Benefit from income taxes (6.7) (8.0) (40.0) - 0.0
Depreciation expense 16.0 12.0 50.0 - 60.0
Amortization expense 7.6 7.5 30.0
Stock-based compensation
expense 36.6 30.7 150.0 - 170.0
Contingent consideration
expense 5.6 1.4 20.0 - 30.0
Gain on sale of intangible
asset - - (20.0)
Non-GAAP Income $21.3 $34.3 $100 - $140
===== ===== ===========
The following reconciliation of the GAAP reported to the 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 March 31
---------------------------
2018 2017
---- ----
Adjustments Adjustments
----------- -----------
Interest, Stock-Based Interest, Stock-Based
Taxes, Compensation, Taxes, Compensation,
Depreciation Contingent Depreciation Contingent
and Consideration and Consideration
Amortization and Other Amortization and Other
GAAP Adjustments Non-GAAP GAAP Adjustments Non-GAAP
Reported Reported
-------- --------
Cost of sales $82.3 $ - $(3.1) $79.2 $50.0 $ - $(2.3) $47.7
Research and development 183.9 (10.5) (13.3) 160.1 145.0 (6.5) (11.5) 127.0
Selling, general and
administrative 138.3 (5.5) (20.2) 112.6 120.0 (5.5) (16.9) 97.6
Intangible asset amortization 13.2 (7.6) (5.6) - 8.9 (7.5) (1.4) -
and contingent consideration
Interest expense, net (6.3) 6.3 - - (7.0) 7.0 - -
Benefit from income taxes (6.7) 6.7 - - (8.0) 8.0 - -
GAAP Net Loss/Non-GAAP Income (44.1) 23.2 42.2 21.3 (16.3) 18.5 32.1 34.3
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.
