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Novato’s BioMarin has banner quarter, sees growth ahead

NOVATO – After years of losses, BioMarin Pharmaceutical made the leap to profitability and announced banner second-quarter net product revenues.

“It’s good news,” said CEO Jean-Jacques Bienaime. “We expect our trajectory will carry us forward through the year and beyond.” The 10-year-old biotech took steep losses as its first two products made their way through the lengthy FDA-approval process.

But during the past few years, with two and then three products approved for the U.S. market, BioMarin’s losses have been steadily shrinking.

“We’ve come a long way in 10 years. We have a track record for getting drugs approved, in an average of just four years. Some drugs take much longer to reach the market,” said Mr. Bienaime, who joined BioMarin as CEO in 2005.

Aldurazyme and Naglazyme are enzyme-replacement therapies for variations of the rare condition mucopolysacharidosis, an inherited, often life-threatening growth disorder that affects one in 25,000 babies born in the U.S.

The FDA granted them both ultra orphan status because they serve patient populations of 3,000 to 5,000. Orphan status is given to drugs that serve patient populations under 200,000.

Naglazyme did particularly well during the second quarter, netting $35.1 million in revenue, a jump of 67.9 percent over the second quarter of 2007. Aldurazyme brought in $38.7 million, 33 percent above second-quarter sales the previous year and expected by analysts to earn even more in the third quarter, when inventory issues are settled.

Kuvan Tablets, a relatively new product for the treatment of the enzyme-deficiency phenylketonuria, had sales of $12 million, more than doubling sales for the first quarter of 2008. Despite not quite meeting analysts’ expectations, Kuvan’s first year on the market shows great potential, said Mr. Bienaime. Its patient population is slightly larger than that of BioMarin’s first two products. About 50,000 people suffer from the disease worldwide.

“We already have three – next year four – new products in the clinical pipeline, each of them orphan drugs,” said Mr. Bienaime.

In Phase II testing is a therapy with both cardiovascular and Sickle Cell Disease indications. Another product in Phase I addresses severe phenylketonuria.

Also in the pipeline are potential therapies for kidney-damaging Berger’s Disease and muscular dystrophy.

“Genzyme has a therapy for muscular dystrophy, but I believe ours is better,” said Mr. Bienaime.

Wall Street is happy with BioMarin’s performance.

“Jean-Jacques Bienaime is doing a great job,” said Liana Moussatos, an analyst for Pacific Growth Equities in San Francisco.

“We’re giving BioMarin stock a strong ‘buy’ recommendation; and our year-end fair value estimation, based on BioMarin products with proof-of-concept data, is about $48 share, nearly 50 percent above current levels,” she said.

BioMarin employs over 600 in its 155,000-square-foot campus in Novato’s Bell Marin Business Park.

The company has a market cap of $3.6

billion, making it currently the third-largest publicly traded biotech company in the greater Bay Area, according to Mr. Bienaime.

“We’re certainly the largest in the North Bay, which is a point of pride,” he said.

BioMarin shares (BMRN: Nasdaq) closed Thursday at $28.09.