BioMarin Pharmaceutical's CEO Discusses Q4 2011 Earning Results - Earnings Call Transcript

BioMarin Pharmaceutical Inc. (

BMRN

)

Q4 2011 Earnings Call

February 16, 2012 17:00 am ET

Executives

Eugenia Shen - IR

JJ Bienaimè - CEO

Jeff Cooper - SVP & CFO

Hank Fuchs - EVP & CMO

Steve Aselage - EVP & CBO

Analysts

Robyn Karnauskas - Deutsche Bank

Cory Kasimov - JPMorgan

Michael Yee - RBC Capital Markets

Phil Nadeau - Cowen & Company

Tim Lugo - William Blair

Laura Ekas - Collins Stewart

Christ Raymond - Robert W. Baird

Ian Somaiya - Piper Jaffray

Liana Moussatos - Wedbush Securities

Carol Werther - Summer Street

Brian Abrahams - Wells Fargo Securities

Presentation

Operator

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Good day ladies and gentlemen and welcome to the fourth quarter 2011 BioMarin Pharmaceutical earnings conference call. My name is Jeremy and I will be your operator for today. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session. (Operator Instructions).

I would now like to turn the conference over to your host for today Ms. Eugenia Shen with Investor Relations. Please proceed.

Eugenia Shen

Thank you. On the call today is JJ Bienaimè, BioMarin’s Chief Executive Officer; Jeff Cooper, Chief Financial Officer; Hank Fuchs, Chief Medical Officer; and Stephen Aselage, Chief Business Officer.

This non-confidential presentation contains forward-looking statements about the business prospects of BioMarin Pharmaceutical including expectations regarding Biomarin’s financial performance, commercial products and potential future products in different areas of therapeutic research and development. Results may differ materially depending on the progress of BioMarine’s product programs, actions of regulatory authorities, availability of capital, future actions in the pharmaceutical market and developments by competitors and those factors detailed in BioMarin’s filings with the Securities and Exchange Commission such as 10-Q, 10-K and 8-K report. Now I would like to turn the call over to JJ, BioMarin’s CEO.

JJ Bienaimè

Thank you Eugenia. Good afternoon and thank you for joining us on today's call. I have a few introductory comments before Jeff reviews the financials for the fourth quarter and full-year 2011 and then Hank will provide an update on our R&D programs and Steve will then provide more details on our commercial portfolio before we open the call for questions.

So we’re pleased with progress we’ve made in 2011 and are off to a good start in 2012. Turning to our commercial portfolio. In 2011 there was a year-over-year increase in BioMarin product revenues of 18% to $438 million. Our cash flows were $290 million at the end of the year, down from $370 million at the end of the third quarter of 2011. The decline in the cash balance is due to a payment of $81 million for the purchase of the Naglazyme royalty rights from the Adelaide Health Authority in the fourth quarter of last year.

Our R&D pipeline remains our top priority for 2012. We continue to be focused on developing therapies that make a meaningful impact in the life of patients with conditions that are often underserved or ignored. This year we had several major (inaudible) including results from the pivotal Phase 3 trial for GALNS and MPS IV, the Phase 2 trial for PEG-PAL in PKU and the Phase 1/2 trial for BMN-701 for Pompe Disease and Phase 1/2 trial for BMN-673 in solid tumours.

Looking at beyond 2012, we believe that we are well positioned for long-term growth. We have four growing commercial products with no visible competition in the short term. They are funding the majority of our R&D expenses, that we have a cool pipeline including (inaudible) for our next Phase 3 program (inaudible), strong manufacturing capabilities, a global commercial infrastructure to support future product launches and no need to raise money.

We have sufficient funds to get into the market and we expect some in the quarter to achieving sustainable profitability at some time in 2014 if guidance is successful.

Now I would like to turn the call over to Jeff Cooper who will review the financial results for the fourth quarter and the full year of 2011.

Jeff

Cooper

Thanks JJ. I will start by reviewing product revenues for the fourth quarter of 2011 and then follow a more in-depth look at our operating expenses and financial results. Beginning with Naglazyme, net product revenue was $48.1 million for the fourth quarter of 2011, an increase of 6.7% as compared to $45.1 million in the fourth quarter of 2010. Changes in foreign currency rates, net of hedges had a negative $1.3 million impact in the fourth quarter of 2011.

Net sales of Aldurazyme by Genzyme were $48.8 million for the fourth quarter of 2011, an increase of 14.8% as compared to net sales of $42.5 million for the fourth quarter of 2010. Foreign currency exchange rate has caused a decrease to total Aldurazyme sales of $600,000 for the fourth quarter of 2011. Net product revenue of BioMarin related to Aldurazyme was $23.8 million for the fourth quarter of 2011 compared to net product revenue of BioMarin of $23.1 million for the fourth quarter of 2010. During the fourth quarter of 2011 there was a positive $2.8 million impact from inventory transfer revenue compared to a positive $5.3 million impact in the fourth quarter of 2010.

Net product revenue for Kuvan of $30.8 million for the fourth quarter of 2011 increased 12.8% as compared to $27.3 million in the fourth quarter of 2010. Finally net product revenue for Firdapse was $3.3 million for the fourth quarter of 2011 as compared to $3 million in the fourth quarter of 2010.

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