BioMarin Pharmaceutical Inc. (BMRN, Financial) filed Quarterly Report for the period ended 2010-03-31.
Biomarin Pharmaceutical Inc. has a market cap of $2.37 billion; its shares were traded at around $23.37 with a P/E ratio of 194.75 and P/S ratio of 7.31. BMRN is in the portfolios of Richard Aster Jr of Meridian Fund, PRIMECAP Management, RS Investment Management, Louis Moore Bacon of Moore Capital Management, LP, George Soros of Soros Fund Management LLC, Chuck Royce of Royce& Associates, Steven Cohen of SAC Capital Advisors.
Net product revenue for Kuvan during the first quarter of 2010 was $21.2 million, compared to $15.5 million during the same period in 2009. With the commercial launch of Kuvan in the EU during the first half of 2009, we began receiving a royalty of approximately 4% on net sales of Kuvan from Merck Serono. During the first quarter of 2010, we earned $0.2 million in royalties from Merck Serono on net sales of $4.8 million. Royalties earned from Merck Serono during the first quarter of 2009 were insignificant. Gross profit from Kuvan in the first quarter of 2010 was approximately $17.7 million, representing gross margins of approximately 84%, compared to the first quarter of 2009 when gross profit totaled $13.1 million, representing gross margins of approximately 84%. Both 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.
Selling, general and administrative expenses increased by $5.4 million to $34.0 million for the three months ended March 31, 2010, from $28.6 million for the three months ended March 31, 2009. The components of the change for the three months ended March 31, 2010 was primarily include the following (in millions):
Intangible asset amortization and contingent consideration expense for the first quarter of 2010 was $0.7 million, compared to $1.1 million in the first quarter of 2009. Intangible asset amortization and contingent consideration expense during the first quarter of 2010 was comprised of the change in fair value of the contingent consideration payable to the former shareholders of Huxley Pharmaceuticals, Inc. (See Note 15 of the accompanying unaudited consolidated financial statements for additional discussion). Amortization of intangible assets for the first quarter of 2009 included three months of amortization expense related to the intangible assets acquired in the Ascent Pediatrics transaction in May 2004, including the Orapred developed and core technology. In June 2009, we completed the purchase of all of the outstanding shares of capital stock of BioMarin Pediatrics II (formerly known as Ascent Pediatrics, Inc. and Medicis Pediatrics, Inc.), a wholly-owned subsidiary of Medicis Pharmaceutical Corporation (Medicis) as required by the original transaction agreement of 2004 for $70.6 million. Medicis sole substantive asset was the intellectual property related to the Orapred franchise. Subsequently, we transferred the exclusive intellectual property rights to our sublicense in July 2009.
From December 31, 2009 to March 31, 2010, our cash, cash equivalents, and short-term and long-term investments decreased by $18.1 million, primarily as a result the acquisition of LEAD Therapeutics, Inc. and capital expenditures, offset by cash flows from operating activities and proceeds from ESPP contributions and stock option exercises. Our accounts receivable increased by $9.1 million due to increased sales of Naglazyme and Kuvan and receivables from Genzyme for Aldurazyme product transfer and royalty revenues. Our net property, plant and equipment increased by approximately $4.8 million from December 31, 2009 to March 31, 2010, primarily as a result of continued expansion and improvements to our facilities during the period. Intangible assets, goodwill and other long-term liabilities increased by approximately $36.4 million, $16.7 million and $25.5 million primarily as a result of the LEAD acquisition. Due to several ongoing facility improvement projects substantially completed in 2009, we expect depreciation expense to increase as the assets are placed into service.
As of March 31, 2010, our combined cash, cash equivalents, short-term and long-term investments totaled $452.4 million, a decrease of $18.1 million from $470.5 million at December 31, 2009.
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Biomarin Pharmaceutical Inc. has a market cap of $2.37 billion; its shares were traded at around $23.37 with a P/E ratio of 194.75 and P/S ratio of 7.31. BMRN is in the portfolios of Richard Aster Jr of Meridian Fund, PRIMECAP Management, RS Investment Management, Louis Moore Bacon of Moore Capital Management, LP, George Soros of Soros Fund Management LLC, Chuck Royce of Royce& Associates, Steven Cohen of SAC Capital Advisors.
Highlight of Business Operations:
Our net income for the three months ended March 31, 2010 was $1.2 million compared to net loss of $13.2 million for the three months ended March 31, 2009, representing a change of $14.4 million. The change of $14.4 million was primarily a result of the following (in millions):Net product revenue for Kuvan during the first quarter of 2010 was $21.2 million, compared to $15.5 million during the same period in 2009. With the commercial launch of Kuvan in the EU during the first half of 2009, we began receiving a royalty of approximately 4% on net sales of Kuvan from Merck Serono. During the first quarter of 2010, we earned $0.2 million in royalties from Merck Serono on net sales of $4.8 million. Royalties earned from Merck Serono during the first quarter of 2009 were insignificant. Gross profit from Kuvan in the first quarter of 2010 was approximately $17.7 million, representing gross margins of approximately 84%, compared to the first quarter of 2009 when gross profit totaled $13.1 million, representing gross margins of approximately 84%. Both 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.
Selling, general and administrative expenses increased by $5.4 million to $34.0 million for the three months ended March 31, 2010, from $28.6 million for the three months ended March 31, 2009. The components of the change for the three months ended March 31, 2010 was primarily include the following (in millions):
Intangible asset amortization and contingent consideration expense for the first quarter of 2010 was $0.7 million, compared to $1.1 million in the first quarter of 2009. Intangible asset amortization and contingent consideration expense during the first quarter of 2010 was comprised of the change in fair value of the contingent consideration payable to the former shareholders of Huxley Pharmaceuticals, Inc. (See Note 15 of the accompanying unaudited consolidated financial statements for additional discussion). Amortization of intangible assets for the first quarter of 2009 included three months of amortization expense related to the intangible assets acquired in the Ascent Pediatrics transaction in May 2004, including the Orapred developed and core technology. In June 2009, we completed the purchase of all of the outstanding shares of capital stock of BioMarin Pediatrics II (formerly known as Ascent Pediatrics, Inc. and Medicis Pediatrics, Inc.), a wholly-owned subsidiary of Medicis Pharmaceutical Corporation (Medicis) as required by the original transaction agreement of 2004 for $70.6 million. Medicis sole substantive asset was the intellectual property related to the Orapred franchise. Subsequently, we transferred the exclusive intellectual property rights to our sublicense in July 2009.
From December 31, 2009 to March 31, 2010, our cash, cash equivalents, and short-term and long-term investments decreased by $18.1 million, primarily as a result the acquisition of LEAD Therapeutics, Inc. and capital expenditures, offset by cash flows from operating activities and proceeds from ESPP contributions and stock option exercises. Our accounts receivable increased by $9.1 million due to increased sales of Naglazyme and Kuvan and receivables from Genzyme for Aldurazyme product transfer and royalty revenues. Our net property, plant and equipment increased by approximately $4.8 million from December 31, 2009 to March 31, 2010, primarily as a result of continued expansion and improvements to our facilities during the period. Intangible assets, goodwill and other long-term liabilities increased by approximately $36.4 million, $16.7 million and $25.5 million primarily as a result of the LEAD acquisition. Due to several ongoing facility improvement projects substantially completed in 2009, we expect depreciation expense to increase as the assets are placed into service.
As of March 31, 2010, our combined cash, cash equivalents, short-term and long-term investments totaled $452.4 million, a decrease of $18.1 million from $470.5 million at December 31, 2009.
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