BioMarin Pharmaceuticals' (NASDAQ:BMRN) second-quarter earnings report was a bit of a mixed bag, with some drugs growing, some on their typical roller-coaster ride, and earnings slipping due to increased spending on research and development.

While short-term investors may be a bit disappointed, long-term shareholders should look past the quarterly noise, as management reaffirmed 2019 guidance.

BioMarin Pharmaceutical results: The raw numbers

Metric

Q2 2019

Q2 2018

Change

Revenue

$387.8 million

$372.8 million

4%

Income from operations

($41.4 million

($25.3 million)

N/A

Earnings per share

($0.21)

($0.09)

N/A

Data source: BioMarin Pharmaceutical.

What happened with BioMarin Pharmaceutical this quarter?

  • Palynziq, which launched within the last year to treat phenylketonuria (PKU) in adults, added $18.8 million in the second quarter, while BioMarin's older PKU medication, Kuvan, grew 4%. Combined, revenue from the PKU franchise was up 21% year over year.
  • The number of patients using Vimizim increased 10% year over year, but sales decreased 4% compared to the year-ago quarter, as there was limited ordering of the drug from Brazil.
  • Sales of Naglazyme jumped 8% in the second quarter thanks to large orders in Saudi Arabia and Turkey.
  • Sales of Brineura, which treats a neurological genetic disease called CLN2, jumped 36% year over year, although it's still a small contributor at $14.8 million for the second quarter.
  • Revenue from Aldurazyme was down a whopping 76% year over year, but that was just due to the timing of shipments to Sanofi's Genzyme unit, which sells the drug. Sanofi reported sales of Aldurazyme increased 9% during the first six months of the year.
Doctor talking to a patient in front of a window

Image source: Getty Images.

What management had to say

Jeff Ajer, executive vice president and chief commercial officer, noted the potential for more stable revenue from Brazil:

In addition to continued organic growth across global markets, significant contributions from the Brazilian Minister of Health support our bullish outlook. Specifically, the Ministry of Health has recently published their intent to purchase approximately $95 million of Naglazyme combined with Vimizim over the next 12 months, the majority of which we anticipate to record in the second half of 2019.

BioMarin's chairman and CEO, Jean-Jacques Bienaime, pointed out that Palynziq should pick up in the second half of the year because it takes "four to six months for most of the patients to get to steady-state maintenance regimen, which is the one that generates some significant revenues in around $200,000 per patient per year. And now, we're getting to our state where a lot of patients that we enrolled in Q4 of last year, Q1 of this year targeting their steady state and are going to start generating some pretty significant revenues for the balance of the year."

Looking forward

Management is sticking with its 2019 revenue guidance of $1.68 billion to $1.75 billion, which will produce a net loss as reported under generally accepted accounting principles (GAAP) of $45 million to $85 million, although on an adjusted (non-GAAP) basis, BioMarin expects to bring in an income of $130 million to $170 million.

The next growth driver for the company is valoctocogene roxaparvovec (valrox), a gene therapy for hemophilia, which should be submitted to the FDA and European regulators in the fourth quarter, setting up an approval and launch next year.

Looking a little further ahead, the phase 3 program for vosoritide as a treatment for achondroplasia, a genetic disorder that results in dwarfism, is scheduled to read out at the end of this year or the beginning of next year with a potential FDA approval in 2021.