BioMarin Pharmaceutical Inc. (BMRN, Financial) filed Quarterly Report for the period ended 2010-06-30.
Biomarin Pharmaceutical Inc. has a market cap of $2.18 billion; its shares were traded at around $21.49 with a P/E ratio of 179.1 and P/S ratio of 6.7. BMRN is in the portfolios of Richard Aster Jr of Meridian Fund, Columbia Wanger of Columbia Wanger Asset Management, PRIMECAP Management, RS Investment Management, Bruce Kovner of Caxton Associates, Pioneer Investments, George Soros of Soros Fund Management LLC, Chuck Royce of Royce& Associates.
Kuvan was granted marketing approval in the U.S. and EU in December 2007 and December 2008, respectively. Kuvan net product revenues for the second quarter and first six months of 2010 totaled $24.7 million and $45.9 million, respectively, compared to $17.0 million and $32.5 million in the second quarter and first six months of 2009, respectively.
Net product revenue for Kuvan during the second quarter and first six months of 2010 was $24.7 million and $45.9 million, respectively, compared to $17.0 million and $32.5 million during the second quarter and first six months of 2009. With the commercial launch of Kuvan in the EU during the first six months of 2009, we began receiving a royalty of approximately 4% on net sales of Kuvan from Merck Serono. During the second quarter and first six months of 2010, we earned $0.2 million and $0.4 million in royalties from Merck Serono on net sales of $5.8 million and $10.6 million, respectively. Royalties earned from Merck Serono during both the second quarter and first six months of 2009 were insignificant. Gross profit from Kuvan in the second quarter and first six months of 2010 was approximately $20.4 million and $38.1 million, respectively, representing gross margins of approximately 83% in both periods, compared to the second quarter and first six months of 2009 when gross profit totaled $13.7 million and $26.7 million, respectively, representing gross margins of approximately 81% and 82%, respectively. All periods reflect royalties paid to third parties of 11%. In accordance with our inventory accounting policy, we began capitalizing Kuvan inventory production costs after U.S. regulatory approval was obtained in December 2007. We expect U.S. gross margins for Kuvan for the foreseeable future to be in the lower 80% range as the pre-approval inventory has been mostly depleted.
Total cost of sales in the second quarter and first six months of 2010 was $14.4 million and $31.8 million, respectively, compared to $19.8 million and $34.2 million in the second quarter and first six months of 2009, respectively. The decrease in cost of sales in the second quarter of 2010 compared to the second quarter of 2009 is attributed to improved manufacturing yields for Naglazyme and the $2.1 million Aldurazyme write-off during the first quarter of 2010 discussed above. The increase in cost of sales in the first half of 2010 compared to the same periods in 2009 is primarily attributed to the increase in Naglazyme, Kuvan product sales and Aldurazyme product transfer revenues.
Collaborative agreement revenue in the second quarter and first six months of 2010 were $0.2 million and $0.4 million, respectively, compared to $0.9 million and $1.4 million, respectively. In all periods collaborative agreement revenue was comprised solely of reimbursable Kuvan development costs.
Research and development expense increased by $9.3 million and $5.0 million, to $35.6 million and $65.7 million during the second quarter and first six months of 2010, respectively, from $26.3 million and $60.7 million in the second quarter and first six months of 2009, respectively. The change in research and development expense for the three and six months ended June 30, 2010 was primarily a result of the following (in millions):
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Biomarin Pharmaceutical Inc. has a market cap of $2.18 billion; its shares were traded at around $21.49 with a P/E ratio of 179.1 and P/S ratio of 6.7. BMRN is in the portfolios of Richard Aster Jr of Meridian Fund, Columbia Wanger of Columbia Wanger Asset Management, PRIMECAP Management, RS Investment Management, Bruce Kovner of Caxton Associates, Pioneer Investments, George Soros of Soros Fund Management LLC, Chuck Royce of Royce& Associates.
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Aldurazyme, which was developed in collaboration with Genzyme Corporation (Genzyme), has been approved for marketing in the U.S., EU and other countries. Pursuant to our arrangement with Genzyme, Genzyme sells Aldurazyme to third parties and we recognize royalty revenue on net sales by Genzyme. We recognize a portion of the royalty as product transfer revenue when product is released to Genzyme because all obligations related to the transfer have been fulfilled at that point and title to, and risk of loss for, the product has been transferred to Genzyme. The product transfer revenue represents the fixed amount per unit of Aldurazyme that Genzyme is required to pay us if the product is unsold by Genzyme. The amount of product transfer revenue will eventually be deducted from the calculated royalties earned when the product is sold by Genzyme. Aldurazyme net product revenues for the second quarter and first six months of 2010 were $17.5 million and $31.7 million, respectively, compared to $21.6 million and $38.7 million in the second quarters and first six months of 2009, respectively.Kuvan was granted marketing approval in the U.S. and EU in December 2007 and December 2008, respectively. Kuvan net product revenues for the second quarter and first six months of 2010 totaled $24.7 million and $45.9 million, respectively, compared to $17.0 million and $32.5 million in the second quarter and first six months of 2009, respectively.
Net product revenue for Kuvan during the second quarter and first six months of 2010 was $24.7 million and $45.9 million, respectively, compared to $17.0 million and $32.5 million during the second quarter and first six months of 2009. With the commercial launch of Kuvan in the EU during the first six months of 2009, we began receiving a royalty of approximately 4% on net sales of Kuvan from Merck Serono. During the second quarter and first six months of 2010, we earned $0.2 million and $0.4 million in royalties from Merck Serono on net sales of $5.8 million and $10.6 million, respectively. Royalties earned from Merck Serono during both the second quarter and first six months of 2009 were insignificant. Gross profit from Kuvan in the second quarter and first six months of 2010 was approximately $20.4 million and $38.1 million, respectively, representing gross margins of approximately 83% in both periods, compared to the second quarter and first six months of 2009 when gross profit totaled $13.7 million and $26.7 million, respectively, representing gross margins of approximately 81% and 82%, respectively. All periods reflect royalties paid to third parties of 11%. In accordance with our inventory accounting policy, we began capitalizing Kuvan inventory production costs after U.S. regulatory approval was obtained in December 2007. We expect U.S. gross margins for Kuvan for the foreseeable future to be in the lower 80% range as the pre-approval inventory has been mostly depleted.
Total cost of sales in the second quarter and first six months of 2010 was $14.4 million and $31.8 million, respectively, compared to $19.8 million and $34.2 million in the second quarter and first six months of 2009, respectively. The decrease in cost of sales in the second quarter of 2010 compared to the second quarter of 2009 is attributed to improved manufacturing yields for Naglazyme and the $2.1 million Aldurazyme write-off during the first quarter of 2010 discussed above. The increase in cost of sales in the first half of 2010 compared to the same periods in 2009 is primarily attributed to the increase in Naglazyme, Kuvan product sales and Aldurazyme product transfer revenues.
Collaborative agreement revenue in the second quarter and first six months of 2010 were $0.2 million and $0.4 million, respectively, compared to $0.9 million and $1.4 million, respectively. In all periods collaborative agreement revenue was comprised solely of reimbursable Kuvan development costs.
Research and development expense increased by $9.3 million and $5.0 million, to $35.6 million and $65.7 million during the second quarter and first six months of 2010, respectively, from $26.3 million and $60.7 million in the second quarter and first six months of 2009, respectively. The change in research and development expense for the three and six months ended June 30, 2010 was primarily a result of the following (in millions):
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