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BioMarin Shares Falling as Drug Launch Lags

But the biopharmaceutical company missed on top-line projections.

Updated from Tuesday, Aug. 5.

Shares of biopharmaceutical company


(BMRN) - Get BioMarin Pharmaceutical Inc. Report

fell as the continued launch of its PKU drug Kuvan lagged second quarter expectations.

In response, Wall Street analysts slashed their price targets Wednesday, the morning after BioMarin reported financial results, but stayed positive for the young biotech's prospects. Shares were down 6.2%, to $29.75 in recent trading.

On Tuesday after the market's close, the Novato, Calif.-based company reported a profit of $3.8 million, or 4 cents a share, vs. a loss of $3.9 million or 4 cents a share in the year-ago quarter. On an adjusted, non-GAAP basis, Biomarin said it earned $9.7 million, or 10 cents a share.

Revenue increased 122% vs. the year-ago quarter to $64.2 million. Analysts surveyed by Thomson Reuters had predicted a profit of 3 cents a share on revenue of $66.3 million.

In June shares were knocked down more than 10% after respected phenylketonuria (PKU) expert Dr. Harvey Levy

said he'd seen a light response

to an outbound newsletter to bring PKU patients back into the clinic for clinical trials of Kuvan, BioMarin's drug for the genetic disorder.

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Kuvan registered $12 million in second-quarter sales, falling short of the $14.8 million consensus. "This was not totally unexpected by the Street,

but the slowdown nonetheless was a surprise," wrote Rodman and Renshaw analyst Vernon T. Bernardino in a note to investors on Wednesday.

On a conference call Tuesday night BioMarin's Stephen Aselage, senior vice president of global commercial development, said that the slowdown in the recent quarter may be due to seasonality. Aselage said that because patients are on vacation and clinics are lightly staffed in the summer months, in addition to a hiatus in awareness events like walks and runs, there have been fewer referrals and screenings.

Aselage said that the company has a significant number of events already set up in September, at which time staffing gets back to normal and patients, physicians and caregivers come off vacation.

Still, with its quarterly results, BioMarin scaled back the top end of its guidance for Kuvan revenue, now anticipating between $45 million and $65 million in 2008, down from previous expectations for between $45 million and $70 million.

Cowen and Company analyst Phil Nadeau cut his 2008 and 2009 estimates to $59 million and $150 million, respectively, from $80 million and $200 million, previously.

A bright spot for BioMarin, sales of its Naglazyme rose 68% to $35.1 million, surpassing expectations for $29.7 million.

Also, sales of Aldurazyme rose 38% to $38.7 million, just over the estimate of $37.3 million. BioMarin claimed $13.4 million of the net revenue from Aldurazyme, which is partnered with Genzyme. Analysts were expecting BioMarin's portion to be closer to $19 million -- the company said Tuesday that its share was affected by the timing of inventory transfers.

Looking ahead, Biomarin gave a nice boost to revenue guidance but just nudged profit expectations for the full year. On the top line, Biomarin is now guiding to a range of $288 million to $326 million, up from a prior range of $271 million to $316 million. But it's looking for non-GAAP profit of $54 million to $69 million, up slightly from $52 million to $67 million.

Price targets were under fire Wednesday as analysts adjusted their takes. Bernardino took his to $39 from $45; Jeffries' Adam Walsh, who has a buy rating, took his to $35 from $45; and Citi's Lucy Lu, who has a hold rating, took hers to $30 from $37.

But Cowen and Co.'s Nadeau, Rodman and Renshaw's Bernardino, and Robert W. Baird and Co.'s Chris Raymond all reiterated their outperform ratings for the stock.

"We think that BioMarin stock is still positioned to outperform the market by 15% to 20% over the next 12 months as Naglazyme sales ramp, Kuvan is commercialized and BioMarin joins the select group of profitable biotech companies," wrote Cowen and Co's Nadeau.