BIOMARIN PHARMACEUTICAL INC

(1)BUSINESS OVERVIEW AND SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

Founded in 1997, BioMarin Pharmaceutical Inc. (the Company or BioMarin) is a global biotechnology company dedicated to transforming lives through genetic discovery. The Company develops and commercializes targeted therapies that address the root cause of genetic conditions. The Company's robust research and development capabilities have resulted in multiple innovative commercial therapies for patients with rare genetic disorders. The Company's distinctive approach to drug discovery has produced a diverse pipeline of commercial, clinical, and pre-clinical candidates that address a significant unmet medical need, have well-understood biology, and provide an opportunity to be first-to-market or offer a substantial benefit over existing treatment options.

Basis of Presentation

These Consolidated Financial Statements have been prepared pursuant to United States generally accepted accounting principles (U.S. GAAP) and the rules and regulations of the Securities and Exchange Commission (the SEC) for Annual Reports on Form 10-K and include the accounts of BioMarin and its wholly owned subsidiaries. All intercompany transactions have been eliminated. Management performed an evaluation of the Company’s activities through the date of filing of this Annual Report on Form 10-K, and has concluded that there were no subsequent events or transactions that occurred subsequent to the balance sheet date and prior to the filing of this Annual Report on Form 10-K.

Use of Estimates

U.S. GAAP requires management to make estimates and assumptions that affect amounts reported on the Company’s Consolidated Financial Statements and accompanying disclosures. Although these estimates are based on management’s best knowledge of current events and actions that the Company may undertake in the future, actual results may be different from those estimates. The Consolidated Financial Statements reflect all adjustments of a normal, recurring nature that are, in the opinion of management, necessary for a fair presentation of results.

Significant Accounting Policies

Cash and Cash Equivalents

The Company treats highly liquid investments, readily convertible to cash, with original maturities of three months or less on the purchase date as cash equivalents.

Marketable and Non-Marketable Securities

Marketable Securities

The Company determines the appropriate classification of its investments in debt and equity securities at the time of purchase and reevaluates such designations at each reporting period. The Company classifies its debt and equity securities with original maturities greater than three months when purchased as either short-term or long-term investments based on each instrument’s underlying contractual maturity date and its availability for use in current operations.

All marketable securities are classified as available-for-sale. Available-for-sale debt securities are measured and recorded at fair market value with unrealized gains and losses included in Accumulated Other Comprehensive Income (AOCI) on the Company’s Consolidated Balance Sheets, with the exception of any declines in fair value below the cost basis that are a result of a credit loss, which, if any, are reported in Other Income (Expense), Net in the current period through an allowance for credit losses. Impairment assessments are made at the individual security level each reporting period. When the fair value of an investment is less than its cost at the balance sheet date, a determination is made as to whether the impairment is related to a credit loss and, if so, an impairment loss is recognized in earnings equal to the difference between the investment’s amortized cost and fair value at such date.

Non-Marketable Equity Securities

The Company records investments in equity securities, other than equity method investments, at fair market value, if fair value is readily determinable. Equity securities with no readily determinable fair values are recorded using the measurement alternative of cost adjusted for observable price changes in orderly transactions for identical or similar investments of the same issuer less impairment, if any. Investments in equity securities are recorded in Other Assets on the Company's Consolidated Balance Sheets. Unrealized gains and losses are reported in Other Income (Expense), Net. The Company regularly reviews its non-marketable equity securities for indicators of impairment.

Inventory

Commercial Inventory

The Company values inventory at the lower of cost and net realizable value and determines the cost of inventory using the average-cost approach on the first-in, first out (FIFO) method. The Company analyzes its inventory levels quarterly for obsolescence and, if required, adjusts inventory to its net realizable value if the cost basis of inventory is in excess of its expected net realizable value, or for quantities in excess of expected demand. If the Company determines cost exceeds its net realizable value, the resulting adjustments are recognized as Cost of Sales in the Consolidated Statements of Operations.

Inventory Produced Prior to Regulatory Approval

When future commercialization for a product candidate is considered probable and management believes that material uncertainties related to the ultimate regulatory approval have been significantly reduced and the Company expects to realize economic benefit in the future, the Company capitalizes pre-launch or pre-qualification manufacturing costs prior to regulatory approval. For inventories that are capitalized in preparation of product launch, a number of factors are taken into consideration based on information available at the time, including the product candidate’s current status in the drug development and regulatory approval process, results from the related pivotal clinical trial, results from meetings with the relevant regulatory authorities prior to the filing of regulatory applications, historical experience, as well as potential impediments to the approval process such as product safety or efficacy, as well as commercialization and market trends. If additional requirements are subsequently presented by the regulatory authorities, prior to their final decision thus extending anticipated regulatory approval timelines resulting in expiration of the product prior to revised demand forecasts, the pre-launch inventory costs are expensed to Cost of Sales. If the marketing application is ultimately rejected by the applicable regulators and the pre-launch inventory cannot be sold for commercial use, the pre-launch inventory costs are expensed to Research and Development (R&D).

Property, Plant and Equipment

Property, plant and equipment are stated at historical cost net of accumulated depreciation. Depreciation is computed using the straight-line method over the related estimated useful lives, as presented in the table below. Significant additions and improvements are capitalized, whereas repairs and maintenance are expensed as incurred. Depreciation of property, plant and equipment are included in Cost of Sales, R&D and Selling, General and Administrative (SG&A), as appropriate, in the Consolidated Statements of Operations. Property and equipment purchased for specific R&D projects with no alternative future uses are expensed as incurred and recorded to R&D in the Consolidated Statements of Operations.

Leases

The Company's lease portfolio primarily consists of leases for properties and equipment for administrative, manufacturing and R&D activities. The Company determines if an arrangement is a lease at contract inception. For leases where the Company is the lessee, Right of Use (ROU) assets represent the Company’s right to use the underlying asset for the term of the lease and the lease liabilities represent the lease payment obligation. ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of the future lease payments over the lease term. The Company uses its incremental borrowing rate based on the information available at the commencement date of the underlying lease arrangement to determine the present value of lease payments. The ROU asset also includes any prepaid lease payments and any lease incentives received. The lease term to calculate the ROU asset and related lease liability includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise the option. The Company’s lease agreements generally do not contain any material variable lease payments, residual value guarantees or restrictive covenants.

Lease expense for operating leases is recognized on a straight-line basis over the lease term as an operating expense while expense for financing leases is recognized as depreciation expense and interest expense using the accelerated interest method of recognition. When an arrangement requires payments for lease and non-lease components, the Company has elected to account for lease and non-lease components separately. Lease expense for leases with a term of twelve months or less is recognized on a straight-line basis and are not included in the recognized ROU assets and lease liabilities.

Goodwill and Intangible Assets

The Company records goodwill in a business combination when the total consideration exceeds the fair value of the assets acquired.

Intangible assets with indefinite useful lives are related to purchased in-process research and development (IPR&D) projects and are measured at their respective fair values as of the acquisition date. Intangible assets related to IPR&D projects are considered to be indefinite-lived until the completion or abandonment of the associated R&D efforts. If and when development is complete, which generally occurs if and when regulatory approval to market a product is obtained, the associated assets are considered finite-lived and are amortized using the straight-line method based on their respective estimated useful lives at that point in time. The amortization of these intangible assets is included in Intangible Asset Amortization and Contingent Consideration in the Consolidated Statements of Operations.

Intangible assets with finite useful lives primarily consist of acquired intellectual property and royalty rights, regulatory approval and first commercial sales milestone payments as well as costs associated with technology transfer to qualify third-party manufacturing facilities for commercial production. Intangible assets are recorded at cost, net of accumulated amortization, and amortize over their estimated useful lives on a straight-line basis. Amortization expense is recorded in Intangible Asset Amortization and Contingent Consideration on the Company's Consolidated Statements of Operations, except for amortization expense related to the technology transfer, which is recorded in Cost of Sales.

Impairment

The Company assesses goodwill and indefinite-lived intangible assets for impairment annually in the fourth quarter, or more frequently as warranted by events or changes in circumstances that indicate that the carrying amount may not be recoverable.

Goodwill is assessed for impairment by comparing the fair value of the Company’s reporting unit with its carrying amount. If the carrying value of the reporting unit exceeds its fair value, an impairment loss equal to the difference would be recorded.

Indefinite-lived intangible assets are assessed for impairment first by performing a qualitative assessment. If the qualitative assessment indicates that it is more likely than not that the fair value of an indefinite-lived intangible asset is less than its carrying amount, then the Company will perform a quantitative assessment and record an impairment loss.

Long-lived Asset Impairment

The Company’s long-lived assets consist of property, plant and equipment, leased ROU assets and finite-lived intangible assets, which includes costs associated with technology transfer to qualify manufacturing facilities for commercial production. Should there be an indication of impairment, the Company tests for recoverability by comparing the estimated undiscounted future cash flows expected to result from the use of the asset or asset group and its eventual disposition to the carrying amount of the asset or asset group. Any excess of the carrying value of the asset or asset group over its estimated fair value is recognized as an impairment loss. Impairment charges related to property, plant or equipment that are not material are recorded to depreciation expense and presented in SG&A in the Consolidated Statements of Operations. Impairment charges for finite-lived intangible assets associated with technology transfer costs that are not material are recorded to Cost of Sales in the Consolidated Statements of Operations. Impairment charges related to all other finite-lived intangible assets that are not material are recorded to Intangible Asset Amortization and Contingent Consideration in the Consolidated Statements of Operations.

Capitalized Software

The Company capitalizes software development costs associated with internal use software, including external direct costs of materials and services and payroll costs for employees devoting time to a software project. Costs incurred during the preliminary project stage, as well as costs for maintenance and training, are expensed as incurred. When placed in service, implementation costs are subsequently amortized on a straight-line basis over the expected useful life of the asset. As of

December 31, 2023, $30.6 million of capitalized costs associated with cloud computing arrangements were included in Other Assets on the Company’s Consolidated Balance Sheets.

Revenue Recognition

The Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. To determine revenue recognition for contracts with customers, the Company performs the following five steps:

(i)identification of the promised goods or services in the contract;

(ii)determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract;

(iii)measurement of the transaction price, including the constraint on variable consideration;

(iv)allocation of the transaction price to the performance obligations based on estimated selling prices; and

(v)recognition of revenue when (or as) the Company satisfies each performance obligation. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account.

Net Product Revenues

In the U.S., the Company’s commercial products, except for PALYNZIQ and ALDURAZYME, are generally sold to specialty pharmacies or end-users, such as hospitals, which act as retailers. PALYNZIQ is distributed in the U.S. through certain certified specialty pharmacies under the PALYNZIQ Risk Evaluation and Mitigation Strategy (REMS) and ALDURAZYME is marketed world-wide by Sanofi. Outside the U.S., the Company’s commercial products are sold to its authorized distributors or directly to government purchasers or hospitals, which act as the end-users. Revenues from product sales are recognized when the customer obtains control of the Company’s product, which occurs at a point in time, typically upon shipment to the customer. The Company's payment terms vary by customer, jurisdiction or, in some instances, by product. With the exception of Sanofi and certain outcomes-based contracts, most of the Company's payment terms are based on customary commercial terms and are generally less thanone year after the customer obtains control. The Company does not adjust revenue for the effects of a significant financing component for contracts if the period between the transfer of control and corresponding payment is expected to beone year or less. Amounts collected from customers and remitted to governmental authorities, which primarily consist of value-added taxes related to product sales in foreign jurisdictions, are presented on a net basis on the Company’s Consolidated Statements of Operations, in that taxes billed to customers are not included as a component of Net Product Revenues.

For ALDURAZYME revenues, the Company receives a payment ranging from 39.5% to 50% on worldwide net ALDURAZYME sales by Sanofi depending on sales volume, which is included in Net Product Revenues on the Company’s Consolidated Statements of Operations. The Company recognizes its best estimate of the revenue it expects to earn when the product is released and control is transferred to Sanofi. The Company records ALDURAZYME net product revenues based on the estimated variable consideration payable when the product is sold through by Sanofi. Actual amounts of consideration ultimately received may differ from the Company’s estimates. Differences between the estimated variable consideration to be received from Sanofi and actual payments received are not expected to be material. If actual results vary from the Company’s estimates, the Company will make adjustments, which would affect Net Product Revenues and earnings in the period such variances become known.

Revenue Reserves

Revenues from product sales are recorded at the net sales price (transaction price), which includes estimates of variable consideration for which reserves are established and which result from government and commercial rebates, chargebacks, sales returns, and other incentives that are offered within contracts between the Company and its customers, such as specialty pharmacies, hospitals, authorized distributors and government purchasers. These reserves are based on the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable (if the amount is payable to the customer) or a current liability (if the amount is payable to a party other than a customer). Where appropriate, these estimates take into consideration a range of possible outcomes that are probability-weighted for relevant factors such as the Company’s historical experience, current contractual and statutory requirements, specific known market events and trends, patient outcomes, industry data and forecasted customer buying and payment patterns. Overall, these reserves reflect the Company’s best estimates of the amount of consideration to which it is entitled based on the terms of the contract. The amount of variable consideration that is included in the transaction price may be constrained and is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. Actual amounts of consideration ultimately received may differ from the Company’s estimates, however the Company does not expect any such difference to be material. If actual results in the future vary from the Company’s estimates, the Company will adjust its estimates, which would affect net product revenue and earnings in the period such variances become known.

Government and Commercial Rebates: The Company records reserves for rebates payable under government programs, such as Medicaid, and commercial arrangements, such as managed care rebates, as a reduction of revenue at the time product revenues are recorded. The Company’s reserve calculations require estimates, including estimates of customer mix and patient outcomes, to determine which sales will be subject to rebates and the amount of such rebates. The Company updates its estimates and assumptions on a quarterly basis and records any necessary adjustments to its reserves.

Sales Returns: The Company records allowances for product returns, if appropriate, as a reduction of revenue at the time product sales are recorded. Several factors are considered in determining whether an allowance for product returns is required, including market exclusivity of the products based on their orphan drug status, the patient population, the customers’ limited return rights and the Company’s historical experience with returns. Because of the pricing of the Company’s commercial products, the limited number of patients and the customers’ limited return rights, most customers and retailers carry a limited inventory. The Company relies on historical return rates to estimate a reserve for returns. Based on these factors and the fact that the Company has not experienced significant product returns to date, return allowances are not material.

Other Incentives: Other incentives include fees paid to the Company’s distributors and discounts for prompt payment. The Company also offers a branded co-pay assistance program for eligible patients with commercial insurance in the U.S. who are on an eligible BioMarin product. The branded co-pay assistance programs assist commercially insured patients who have coverage for an eligible BioMarin product and are intended to reduce each participating patient’s portion of the financial responsibility of the purchase price up to a specified dollar amount of assistance. The Company records fees paid to distributors, cash discounts and amounts paid under the brand specific co-pay assistance program for each patient as a reduction of revenue.

Royalty and Other Revenues

Royalties: For arrangements that include the receipt of sales-based royalties, including milestone payments based on the level of sales when the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (a) when the related sales occur, or (b) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).

Licenses of intellectual property: If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues from non-refundable, up-front fees allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. For licenses that are bundled with other promises, the Company uses judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, up-front fees. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition.

Milestone payments: At the inception of each arrangement that includes developmental, regulatory or commercial milestone payments, the Company evaluates whether achieving the milestones is considered probable and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the value of the associated milestone (such as a regulatory submission by the Company) is included in the transaction price. Milestone payments that are not within the control of the Company, such as approvals from regulators or where attainment of the specified event is dependent on the development activities of a third party, are not considered probable of being achieved until those approvals are received or the specified event occurs. Revenue is recognized from the satisfaction of performance obligations in the amount billable to the customer.

Research and Development

R&D costs are generally expensed as incurred. These expenses include contract R&D services provided by third parties, preclinical and clinical studies, raw materials costs associated with manufacturing clinical product, quality control and assurance, other R&D activities, facilities and regulatory costs and R&D-related personnel costs including salaries, benefits and stock-based compensation. Upfront and milestone payments made to third parties in connection with licensed intellectual property, which does not have an alternative future use or does not reach technological feasibility, are expensed as incurred up to the point of regulatory approval. Advance payments for goods or services for use in research and development activities are capitalized and recorded in other current assets, and then expensed as the related goods are delivered or the services are performed.

Advertising Expenses

The costs of advertising are presented in SG&A in the Consolidated Statements of Operations and are expensed as incurred. Advertising expenses were $27.8 million, $25.2 million and $30.2 million in 2023, 2022 and 2021, respectively.

Earnings (Loss) Per Common Share

Basic earnings (loss) per share is calculated by dividing Net Income (Loss) by the weighted average shares of common stock outstanding during the period. Diluted earnings (loss) per share reflects the potential dilution that would occur if securities or other contracts to issue common stock were exercised or converted into common stock; however, potential common equivalent shares are excluded if their effect is anti-dilutive.

Stock-Based Compensation

The Company has equity incentive plans under which various types of equity-based awards may be granted to employees. Stock-based compensation expense is recognized on a straight-line basis over the requisite service period, which is generally the vesting period required to obtain full vesting, and is classified as Cost of Sales, R&D or SG&A, as appropriate, in the Consolidated Statements of Operations. The Company accounts for forfeitures as they occur.

Restricted Stock Units

The fair value of restricted stock units (RSUs) with service-based vesting conditions and RSUs with performance conditions is determined to be the fair market value of the Company’s underlying common stock on the date of grant. The stock-based compensation expense for RSUs with service-based vesting is recognized over the period during which the vesting restrictions lapse. Stock-based compensation expense for RSUs with performance conditions is recognized beginning in the period the Company determines it is probable that the performance condition will be achieved. Management expectations related to the achievement of performance goals associated with RSUs with performance conditions are assessed regularly to determine whether such grants are expected to vest. The fair value for RSUs with market conditions is estimated using the Monte Carlo valuation model, utilizing expected volatility rates derived from those of the Company and the members of the referenced peer group. Related stock-based compensation is recognized, beginning on the grant date, on a straight-line basis regardless of whether the market condition is met unless the required service is not performed.

Stock Options and Purchase Rights

The fair value of each stock option award and purchase rights under the Company’s Employee Stock Purchase Plan (ESPP) are estimated on the date of grant using the Black-Scholes valuation model and the following assumptions: expected term, expected volatility, risk-free interest rate and expected dividend yield. The dividend yield reflects that the Company has not paid any cash dividends since inception and does not intend to pay any cash dividends in the foreseeable future. The expected term of stock options is based on observed historical exercise patterns. In estimating the life of stock options, the Company has identified two employee groups with distinctly different historical exercise patterns: executive and non-executive. The executive employee group has a history of holding stock options for longer periods than non-executive employees. The expected term of purchase rights for ESPP is based on each tranche of an offering period, which isfour tranches in atwenty-four-month period.

The determination of the fair value of stock-based payment awards using an option-pricing model is affected by the Company’s stock price and may use assumptions regarding a number of complex and subjective variables.

The Company calculates and provides for income taxes in each of the tax jurisdictions in which it operates. Deferred tax assets and liabilities, measured using enacted tax rates, are recognized for the future tax consequences of temporary differences between the tax and financial statement basis of assets and liabilities. A valuation allowance reduces the deferred tax assets to the amount that is more likely than not to be realized. The Company establishes liabilities or reduces assets for uncertain tax positions when the Company believes certain tax positions are not more likely than not of being sustained if challenged. Each quarter, the

Company evaluates these uncertain tax positions and adjusts the related tax assets and liabilities in light of changing facts and circumstances.

The Company uses financial projections to support its net deferred tax assets, which contain significant assumptions and estimates of future operations. If such assumptions were to differ significantly, it may have a material impact on the Company’s ability to realize its deferred tax assets. At the end of each period, the Company will reassess the ability to realize its deferred tax benefits. If it is more likely than not that the Company would not realize the deferred tax benefits, a valuation allowance may need to be established against all or a portion of the deferred tax assets, which will result in a charge to tax expense.

Foreign Currency

For the Company and its subsidiaries, the functional currency has been determined to be the U.S. Dollar (USD). Assets and liabilities denominated in foreign currency are remeasured at period-end exchange rates for monetary assets and liabilities. Non-monetary assets and liabilities denominated in foreign currencies are remeasured at historical rates. Foreign currency transaction losses resulting from remeasurement recognized in SG&A in the Consolidated Statements of Operations totaled $27.7 million, $11.4 million and $11.7 million in 2023, 2022 and 2021, respectively.

Derivatives and Hedging Activities

The Company uses foreign currency exchange forward contracts (forward contracts) to hedge certain operational exposures resulting from potential changes in foreign currency exchange rates. Such exposures result from portions of the Company’s forecasted revenues and operating expenses being denominated in currencies other than the USD, primarily the Euro. The Company designates certain of these forward contracts as hedging instruments and also enters into forward contracts that are considered to be economic hedges that are not designated as hedging instruments. Whether designated or undesignated, these forward contracts protect against the reduction in value of forecasted foreign currency cash flows resulting from gross product revenues, operating expenses and monetary asset or liability positions designated in currencies other than the USD. To receive hedge accounting treatment, cash flow hedges must be highly effective in offsetting changes to expected future cash flows on hedged transactions. The Company does not hold or issue derivative instruments for trading or speculative purposes.

The Company is exposed to counterparty credit risk on its derivatives. The Company has established and maintains strict counterparty credit guidelines and enters into hedging agreements with financial institutions that are investment grade or better to minimize the Company’s exposure to potential defaults. The Company is not required to pledge collateral under these agreements.

The Company accounts for its derivative instruments as either assets or liabilities on its Consolidated Balance Sheets and measures them at fair value, which is estimated using current exchange and interest rates and takes into consideration the current creditworthiness of the counterparties or the Company, as applicable. For derivatives designated as hedging instruments, the entire change in the fair value of qualifying derivative instruments is recorded in AOCI and amounts deferred in AOCI are reclassified to earnings in the same line item in which the earnings effect of the hedged item is reported. Derivatives not designated as hedging instruments are adjusted to fair value through earnings in SG&A in the Consolidated Statements of Operations.

Fair Value of Financial Instruments

The Company applies fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities that are required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurements or assumptions that market participants would use to price the asset or liability, such as risks inherent in valuation techniques, transfer restrictions and credit risk. When estimating fair value, depending on the nature and complexity of the asset or liability, the Company may use the following techniques:

•Income approach, which is based on the present value of a future stream of net cash flows

•Market approach, which is based on market prices and other information from market transactions involving identical or comparable assets or liabilities.

The Company’s fair value methodologies depend on the following types of inputs:

•Quoted prices for identical assets or liabilities in active markets (Level 1 inputs)

•Quoted prices for similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities that are not active, or inputs other than quoted process that are directly or indirectly observable, or inputs that are derived principally from, or corroborated by, observable market data by correlation or other means (Level 2 inputs)

•Unobservable inputs that reflect estimates and assumptions (Level 3 inputs)

The Company’s Level 2 instruments are valued using third-party pricing sources. The pricing services utilize industry standard valuation models, including both income and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include reported trades of and broker/dealer quotes on the same or similar securities, issuer credit spreads, benchmark securities, prepayment/default projections based on historical data and other observable inputs. The Company validates the prices provided by its third-party pricing services by understanding the models used, obtaining market values from other pricing sources, analyzing pricing data in certain instances and confirming those securities traded in active markets.

The Company’s Level 3 financial assets and liabilities include acquired intangible assets and contingent consideration resulting from business acquisitions. The estimated fair value of acquired finite-lived and indefinite-lived intangible assets and contingent consideration are measured by applying a probability-based income approach utilizing an appropriate discount rate as of the acquisition date. Key assumptions used by management to estimate the fair value of contingent consideration include estimated probabilities, the estimated timing of when a milestone may be attained and assumed discount periods and rates. Changes in the fair value of contingent consideration can result from changes to one or more inputs, including the estimated probability with respect to regulatory approval, changes in the assumed timing of when milestones are likely to be achieved and changes in assumed discount periods and rates. Contingent consideration is remeasured on a recurring basis and resulting changes in the fair value, due to the revision of key assumptions, are recorded in Intangible Asset Amortization and Contingent Consideration on the Company’s Consolidated Statements of Operations.

See Notes 2,7,8, and 10 to these Consolidated Financial Statements for further information on the nature of these financial instruments.

Segment Information

The Company currently operates inone segment focused on the development and commercialization of innovative therapies for people with serious and life-threatening rare diseases and medical conditions. A single management team reports to the chief operating decision maker who comprehensively manages the entire business. All products are included inone operating segment because the majority of the Company’s products have similar economic and other characteristics, including the nature of the products and production processes, type of customers, distribution methods and regulatory environment. The Company is not organized by market and is managed and operated asone business. The Company does not operate any separate lines of business or separate business entities with respect to its products. Accordingly, the Company does not accumulate discrete financial information with respect to separate products, other than revenues, cost of sales and certain other operating expenses.

Recent Accounting Pronouncements

There have been no new accounting pronouncements adopted by the Company during 2023. The following paragraphs discuss new accounting pronouncements issued by the Financial Accounting Standards Board (FASB), but not yet adopted by the Company.

Segment Reporting

In November 2023, the FASB issued Accounting Standards Update (ASU) 2023-07, Segment Reporting Topic 280, Improvements to Reportable Segment Disclosures, to improve reportable segment disclosure requirements through enhanced disclosures about significant segment expenses. ASU 2023-07 expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items and interim disclosures of a reportable segment’s profit or loss and assets. The effective date for the update is for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024 and should be applied on a retrospective basis to all periods presented. The Company is currently evaluating the effect of adopting the update on the Company's disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes Topic 740, Improvements to Income Tax Disclosures. The guidance requires disclosure of disaggregated information about the Company’s effective tax rate reconciliation as well as information on income taxes paid. The disclosure requirements will be applied on a prospective basis, with the option to apply it retrospectively. The effective date for the update is for fiscal years beginning after December 15, 2024. The Company is currently evaluating the effect of the update on the Company's related disclosures.

(2)FINANCIAL INSTRUMENTS

The following tables show the Company’s cash, cash equivalents and available-for-sale securities by significant investment category as of December 31, 2023 and 2022, respectively:

(1)The Company’s short-term marketable securities mature inone year or less.

(2)The Company’s long-term marketable securities mature betweenone andfive years.

As of December 31, 2023, the Company had the ability and intent to hold all investments that were in an unrealized loss position until maturity. The Company considered its intent and ability to hold the securities until recovery of amortized cost basis, the extent to which fair value is less than amortized cost basis, conditions specifically related to the security’s industry and geography, payment structure and history and changes to the ratings (if any) in determining that the decline in fair value compared to carrying value is not related to a credit loss.

The Company has certain investments in non-marketable equity securities, measured using unobservable valuation inputs and remeasured on a nonrecurring basis, which are collectively considered strategic investments. As of December 31, 2023 and December 31, 2022, the fair value of the Company’s strategic investments was $11.3 million and $23.9 million, respectively. These investments were recorded in Other Assets on the Company’s Consolidated Balance Sheets. In 2023, based on new developments, the Company concluded that factors existed indicating it would no longer realize a $12.6 million equity investment in its non-marketable securities. The loss on the equity investment due to impairment was recorded to Other Income (Expense), Net on the Company’s Consolidated Statements of Operations.

See Note 1 to these Consolidated Financial Statements for additional discussion regarding the Company’s fair value measurements.

(3)INTANGIBLE ASSETS

Intangible Assets, Net consisted of the following:

The following table summarizes the carrying value and estimated remaining life of the Company’s finite-lived intangible assets as of December 31, 2023:

(1)Certain technology transfer assets have not yet been placed into service. The average remaining life presented is only for those placed into service.

(2)License payments include finite-lived intangible assets due to the Company's achievement in 2023 of first commercial sale milestones related to ROCTAVIAN.

As of December 31, 2023, the estimated future amortization expense associated with the Company’s finite-lived intangible assets that have been placed into service, was as follows:

(4)PROPERTY, PLANT AND EQUIPMENT

Property, Plant and Equipment, Net, consisted of the following:

(1)In the fourth quarter of 2023, the Company decided to cease development of the first generation VOXZOGO pen device and impaired $14.0 million of capitalized tooling and fixed assets that had not been placed in service.

Depreciation expense, net of amounts capitalized into inventory, was $40.3 million, $38.6 million and $46.1 million for the years ended December 31, 2023, 2022 and 2021, respectively.

(5)INVENTORY

Inventory consisted of the following:

(6)SUPPLEMENTAL FINANCIAL STATEMENT INFORMATION

Accounts Payable and Accrued Liabilities consisted of the following:

Reorganization Plan Costs

On October 6, 2022, the Company announced a plan to simplify its organizational design, which included a planned reduction in headcount. The Company recorded costs of $23.0 million in 2022 and negligible adjustments in 2023 related to one-time termination severance and employee termination benefits within SG&A expense. As of December 31, 2022,$11.1 million was included in Accounts Payable and Accrued Liabilities on the Company’s Consolidated Balance Sheet. As of December 31, 2023, all accrued costs have been paid.

Significant Revenue Rebates and Reserves for Cash Discounts

The roll forward of significant estimated accrued rebates and reserve for cash discounts for the years ended December 31, 2023, 2022 and 2021, were as follows:

(7)FAIR VALUE MEASUREMENTS

The Company measures certain financial assets and liabilities at fair value in accordance with the policy described in Note 1 to these Consolidated Financial Statements.

The following tables present the classification within the fair value hierarchy of financial assets and liabilities not disclosed elsewhere in these Consolidated Financial Statements that are remeasured on a recurring basis as of December 31, 2023 and 2022. Other than the Company’s fixed-rate convertible debt disclosed in Note 10 to these Consolidated Financial Statements, there wereno financial assets or liabilities that were remeasured using a quoted price in active markets for identical assets (Level 1) as of December 31, 2023 and 2022. Refer to Notes 2 and 8 to these Consolidated Financial Statements for other financial assets and liabilities measured at fair value.

(1)The restricted investments as of December 31, 2023 and 2022 secure the Company’s irrevocable standby letters of credit obtained in connection with certain commercial agreements.

There were no transfers between levels during the periods presented.

Liabilities measured at fair value using Level 3 inputs consisted of contingent consideration. The following tables represent a roll-forward of contingent consideration.

(8)DERIVATIVE INSTRUMENTS AND HEDGING STRATEGIES

The Company's forward contracts designated as hedging instruments have maturities up totwo years. The Company's forward contracts that are considered to be economic hedges that are not designated as hedging instruments have maturities up tothree months.

The following table summarizes the aggregate notional amounts for the Company’s derivatives outstanding as of the periods presented.

The fair value carrying amounts of the Company’s derivatives, as classified within the fair value hierarchy, were as follows:

(1) Refer to Note 1 to these Consolidated Financial Statements for additional information related to the Company’s fair value measurements.

The following tables summarize the impact of gains and losses from the Company's derivatives on its Consolidated Statements of Operations for the periods presented.

As of December 31, 2023, the Company expects to reclassify unrealized losses of $23.3 million from AOCI to earnings as the forecasted revenue and operating expense transactions occur over the next twelve months. For additional discussion of balances in AOCI see Note 11 to these Consolidated Financial Statements.

(9)LEASES

The following table presents the Company’s ROU assets and lease liabilities for the periods presented.

Maturities of lease liabilities as of December 31, 2023 by fiscal year were as follows:

Lease costs associated with payments under the Company’s leases for the periods presented were as follows:

(1) Includes short-term leases and variable lease costs, both of which were not material in the periods presented.

The following table includes the weighted average remaining lease terms and the weighted average discount rate used to calculate the present value of the Company’s lease liabilities:

As of December 31, 2023, noleases were expected to commence that would create significant rights and obligations for the Company.

(10)DEBT

Convertible Notes

As of December 31, 2023, the Company had outstanding fixed-rate notes with varying maturities for an undiscounted aggregate principal amount of $1.1 billion (collectively the Notes). The Notes are senior subordinated convertible obligations, and interest is payable in arrears, semi-annually. The following table summarizes information regarding the Company’s convertible debt:

(1)As the 2024 Notes mature in August 2024, the outstanding principal of the 2024 Notes is classified as a current liability as of December 31, 2023.

(2)The fair value of the Company’s fixed-rate convertible debt is based on open market trades and is classified as Level 1 in the fair value hierarchy. See Note 1 to these Consolidated Financial Statements for additional discussion of fair value measurements.

Interest expense on the Company’s fixed-rate convertible debt consisted of the following:

2024 Notes

In August 2017, the Company issued $495.0 million in aggregate principal amount of senior subordinated convertible notes with a maturity date of August 1, 2024. The 2024 Notes were issued to the public at 98% of face value and bear interest at the rate of 0.599% per annum. Interest is payable semi-annually in cash in arrears on February 1 and August 1 of each year, beginning February 1, 2018. The 2024 Notes are convertible, at the option of the holder into shares of the Company’s common stock. The initial conversion rate for the 2024 Notes is 8.0212 shares per $1,000 principal amount of the 2024 Notes, which represents a conversion price of approximately $124.67 per share, subject to adjustment under certain conditions. Following certain corporate transactions, the Company will, in certain circumstances, increase the conversion rate for a holder that elects to convert its 2024 Notes in connection with such corporate transactions by a number of additional shares of the Company’s common stock. A holder may convert fewer than all of such holder’s 2024 Notes so long as the amount of the 2024 Notes converted is an integral multiple of $1,000 principal amount. Net proceeds from the offering were $481.7 million. In connection with the issuance of the 2024 Notes, the Company recorded a discount on the 2024 Notes of $9.9 million, which will be accreted and recorded as additional interest expense over the life of the 2024 Notes.

The 2024 Notes are senior subordinated, unsecured obligations, and rank (i) subordinated in right of payment to the prior payment in full of any of the Company’s existing and future senior debt, (ii) equal in right of payment to any of the Company’s existing and future senior subordinated debt, (iii) senior in right of payment to any of the Company’s existing and future indebtedness that is expressly subordinated in right of payment to the 2024 Notes, and (iv) effectively subordinated to any of the Company’s existing and future secured indebtedness, to the extent of the value of the collateral securing that indebtedness and structurally subordinated to all existing and future indebtedness and other liabilities, including trade payables, and (to the extent the Company is not a holder thereof) preferred equity, if any, of the Company’s subsidiaries. Upon the occurrence of a “fundamental change,” as defined in the indenture governing the 2024 Notes, the holders may require the Company to repurchase all or a portion of such holder’s 2024 Notes for cash at 100% of the principal amount of the 2024 Notes being purchased, plus any accrued and unpaid interest.

2027 Notes

In May 2020, the Company issued $600.0 million in aggregate principal amount of senior subordinated unsecured convertible notes with a maturity date of May 15, 2027. The 2027 Notes were issued to the public at par value and bear interest at the rate of 1.25% per annum. Interest is payable semi-annually in cash in arrears on May 15 and November 15 of each year, beginning November 15, 2020. The 2027 Notes are convertible, at the option of the holder into shares of the Company’s common stock. The initial conversion rate for the 2027 Notes is 7.2743 shares per $1,000 principal amount of the 2027 Notes, which represents a conversion price of approximately $137.47 per share, subject to adjustment under certain conditions. Following certain corporate transactions, the Company will, in certain circumstances, increase the conversion rate for a holder that elects to convert its 2027 Notes in connection with such corporate transactions by a number of additional shares of the Company’s common stock. A holder may convert fewer than all of such holder’s 2027 Notes so long as the amount of the 2027 Notes converted is an integral multiple of $1,000 principal amount. Net proceeds from the offering were $585.8 million. In connection with the issuance of the 2027 Notes, the Company recorded a discount on the 2027 Notes of $13.5 million, which will be accreted and recorded as additional interest expense over the life of the 2027 Notes.

The 2027 Notes are senior subordinated, unsecured obligations, and rank (i) subordinated in right of payment to the prior payment in full of all of the Company’s existing and future senior debt, (ii) equal in right of payment with the Company’s existing and future senior subordinated debt, (iii) senior in right of payment to the Company’s existing and future indebtedness that is expressly subordinated in right of payment to the notes, (vi) effectively subordinated to the Company’s existing and future secured indebtedness, to the extent of the value of the collateral securing that indebtedness, and (v) structurally subordinated to all existing and future indebtedness and other liabilities, including trade payables, and (to the extent the Company is not a holder thereof) preferred equity, if any, of the Company’s subsidiaries. Upon the occurrence of a “fundamental change,” as defined in the indenture governing the 2027 Notes, the holders may require the Company to repurchase all or a portion of such holder’s 2027 Notes for cash at 100% of the principal amount of the 2027 Notes being purchased, plus any accrued and unpaid interest.

The offer and sale of the 2027 Notes and the shares of the Company’s common stock issuable upon conversion of the 2027 Notes have not been registered under the Securities Act or any state securities laws and the 2027 Notes were offered only to qualified institutional buyers as defined in Rule 144A under the Securities Act.

See Note 16 to these Consolidated Financial Statements for further discussion of the effect of conversion of the Company's convertible debt on earnings (loss) per common share.

Revolving Credit Facility

In October 2018, the Company entered into an unsecured revolving credit facility of up to $200.0 million, which included a letter of credit subfacility and a swingline loan subfacility. The credit facility was intended to finance ongoing working capital needs and for other general corporate purposes. In May 2021, the credit facility was amended to extend the original maturity date from October 19, 2021 to May 28, 2024. The credit facility was terminated on August 4, 2023 and there wereno amounts outstanding under the credit facility as of December 31, 2023.

(11)ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following table summarizes changes in the accumulated balances for each component of AOCI, including current period other comprehensive income (loss) and reclassifications out of AOCI, for the periods presented.

(12)REVENUE, CREDIT CONCENTRATIONS AND GEOGRAPHIC INFORMATION

The following table presents Total Revenues and disaggregates Net Product Revenues by product.

The Company considers there to be revenue concentration risks for regions where Net Product Revenues exceed 10% of consolidated Net Product Revenues. The concentration of the Company’s Net Product Revenues within the regions below may have a material adverse effect on the Company’s revenues and results of operations if sales in the respective regions experience difficulties. The table below disaggregates total Net Product Revenues by geographic region, which is based on patient location for Company's commercial products sold directly by the Company, except for ALDURAZYME, which is distributed, marketed and sold exclusively by Sanofi worldwide.

The following table illustrates the percentage of the Company’s total Net Product Revenues attributed to the Company’s largest customers for the periods presented.

On a consolidated basis, two customers accounted for 15% and 12% of the Company’s December 31, 2023 accounts receivable balance, respectively, compared to December 31, 2022 when two customers accounted for 22% and 15% of the accounts receivable balance, respectively. As of December 31, 2023 and 2022, the accounts receivable balance for Sanofi included $63.4 million and $68.8 million, respectively, of unbilled accounts receivable, which becomes payable to the Company when the product is sold through by Sanofi. The Company does not require collateral from its customers, but does perform periodic credit evaluations of its customers’ financial condition and requires prepayments in certain circumstances.

The Company is mindful that conditions in the current macroeconomic environment, such as inflation, changes in interest and foreign currency exchange rates, natural disasters and supply chain disruptions, could affect the Company’s ability to achieve its goals. In addition, the Company sells its products in countries that face economic volatility and weakness. Although the Company has historically collected receivables from customers in certain countries, sustained weakness or further deterioration of the local economies and currencies may cause customers in those countries to delay payment or be unable to pay for the Company’s products. The Company believes that the allowances for doubtful accounts related to these countries, if any, are adequate based on its analysis of the specific business circumstances and expectations of collection for each of the underlying accounts in these countries. The Company will continue to monitor these conditions and will attempt to adjust its business processes, as appropriate, to mitigate macroeconomic risks to its business.

Long-lived assets, which consist of net property, plant and equipment and ROU assets are summarized by geographic region in the following table.

(13)EQUITY COMPENSATION PLANS AND STOCK-BASED COMPENSATION

Equity Compensation Plans

Shares Available Under Equity Compensation Plans

As of December 31, 2023, an aggregate of approximately 52.3 million unissued shares were authorized for future issuance under the Company’s stock plans, which primarily includes shares issuable under the 2017 Equity Incentive Plan (2017 EIP) and the ESPP. Under the 2017 EIP, shares issued and outstanding under the Amended and Restated 2006 Share Incentive Plan (the 2006 Share Incentive Plan) and the 2017 EIP that expire or are forfeited generally become available for future issuance under the 2017 EIP. No additional awards will be granted under the 2006 Share Incentive Plan; however, there are vested and unvested awards outstanding under the 2006 Share Incentive Plan. The Company’s stock-based compensation plans are administered by the Company’s Board of Directors (the Board), or designated Committee thereof, which selects persons to receive awards and determines the number of shares subject to each award and the terms, conditions, performance measures and other provisions of the awards. See Note 1 to these Consolidated Financial Statements for discussion regarding the valuation of equity awards.

2017 Equity Incentive Plan

The 2017 EIP provides for awards of RSUs and stock options as well as other forms of equity compensation. RSUs granted to employees generally vest annually over a straight-line four-year period after the grant date. RSUs with Performance-based Vesting Conditions (PRSUs) generally vest over athree-year period on a cliff basis three years after the grant date. Stock option awards granted to employees generally vest over afour-year period on a cliff basis 12 months after the grant date and then monthly thereafter. The contractual term of stock option awards is generally 10 years from the grant date. As of December 31, 2023, approximately 39.5 million shares were authorized and reserved for future issuance under the 2017 EIP.

Employee Stock Purchase Plan

The ESPP was initially approved in June 2006, replacing the Company’s previous plan, and was most recently amended in June 2019. Under BioMarin’s ESPP, employees meeting specific employment qualifications are eligible to participate and can purchase shares on established dates (each purchase date) semi-annually through payroll deductions at the lower of 85% of the fair market value of the stock at the commencement of the offering period or each purchase date of the offering period. Each offering period will span up totwo years. The ESPP permits eligible employees to purchase common stock through payroll deductions for up to 10% of qualified compensation, up to an annual limit of $25,000. The ESPP is intended to qualify as an “employee stock purchase plan” under Section 423 of the Internal Revenue Code. During the year ended December 31, 2023, the Company issued 0.3 million shares under the ESPP. As of December 31, 2023, approximately 7.0 million shares were authorized and 2.5 million shares reserved for future issuance under the ESPP.

Board of Director Grants

On the date of the Company’s annual meeting of stockholders for a given year, each re-elected Independent Director receives an RSU grant valued at $400,000, with the number of RSUs to be granted calculated based on thethirty-day trailing average closing price of the Company’s common stock on the Nasdaq Global Select Market. The annual RSU grant for a director who has served for less than a year is prorated to the nearest quarter of the calendar year. The RSUs subject to the annual award vest in full on theone-year anniversary of the grant date, subject to each respective Director providing service to the Company through such vesting date. Upon election or appointment, a new Independent Director will receive an RSU grant on the same terms as the annual award, pro-rated for amount and vesting to the nearest quarter for the time such new Independent Director will serve prior to the Company’s next annual meeting of stockholders.

Stock-based Compensation

Stock-based compensation expense included on the Company’s Consolidated Statements of Operations for all stock-based compensation arrangements was as follows:

Stock-based compensation of $21.7 million, $21.3 million and $20.0 million was capitalized into inventory for the years ended December 31, 2023, 2022 and 2021, respectively. Capitalized stock-based compensation is recognized in Cost of Sales when the related product is sold.

Restricted Stock Units

Restricted Stock Unit Awards with Service-Based Vesting Conditions

Below is a summary of activity related to RSUs with service-based vesting conditions for the year ended December 31, 2023:

The weighted-average grant date fair values per share of RSUs with service-based vesting granted during the years ended December 31, 2023, 2022 and 2021, was $88.96, $79.43 and $78.46, respectively. The total intrinsic values of restricted stock that vested and released in the years ended December 31, 2023, 2022 and 2021, was $149.8 million, $130.1 million and $117.2 million respectively.

As of December 31, 2023, total unrecognized compensation cost related to unvested RSUs with service-based vesting conditions of $274.7 million was expected to be recognized over a weighted average period of 2.6 years.

Restricted Stock Unit Awards with Performance-based Vesting Conditions

Below is a summary of activity related to RSUs with vesting conditions based on performance targets for the year ended December 31, 2023:

The weighted-average grant date fair value of the PRSUs for the years ended December 31, 2023, 2022 and 2021, was $89.22, $78.27 and$78.09, respectively.

Non-vested PRSUs included grants with vesting contingent upon the achievement ofthree-year performance targets for strategic goals, Non-GAAP income or other internal financial measures and a regulatory milestone. The awarded PRSUs generally vest over athree-year service period on a cliff basis. The Company evaluated the targets in the context of its current long-range financial plan, its product candidate development pipeline and planned regulatory activity to determine when attainment of each grant target was probable for accounting purposes. The number of shares that may be earned range between 50% and 200% of the base PRSUs granted.

As of December 31, 2023, total unrecognized compensation expense related to non-vested PRSUs of $10.9 million was expected to be recognized over a weighted average period of 1.3 years.

Restricted Stock Unit Awards with Market-based Vesting Conditions

The Compensation Committee and Board may grant RSUs with market-based vesting conditions (base TSR-RSUs) to certain executives. These base TSR-RSUs vest, if at all, in full following athree-year service period only if certain total shareholder return (TSR) results relative to the Nasdaq Biotechnology Index comparative companies are achieved. The number of shares that may be earned range between zero percent and 200% of the base TSR-RSUs with a ceiling achievement level of 100% of the base TSR-RSUs in the event the Company’s TSR is above the 50 th percentile but negative on an absolute basis.

Below is a summary of activity related to RSUs with market-based vesting conditions for the year ended December 31, 2023:

The grant date fair values and assumptions used to determine the fair value of TSR-RSUs on grant date during the periods presented were as follows:

As of December 31, 2023, total unrecognized compensation expense of $18.0 million related to base TSR-RSUs was expected to be recognized over a weighted average period of 1.4 years.

Stock Options and Purchase Rights

Stock Options

The following table summarizes activity under the Company’s stock option plans for the year ended December 31, 2023. All stock option grants presented in the table had exercise prices not less than the fair value of the underlying common stock on the grant date:

(1)The aggregate intrinsic value for outstanding options is calculated as the difference between the exercise price of the underlying awards and the quoted price of the Company’s common stock on the Nasdaq Global Select Market as of the last trading day for the respective year. The aggregate intrinsic value of options outstanding and exercisable includes options with an exercise price below $96.42, the closing price of the Company’s common stock on the Nasdaq Global Select Market on December 29, 2023.

The weighted-average fair values per stock options granted in the years ended December 31, 2023, 2022 and 2021, were $39.30, $32.45 and $31.61, respectively. The total intrinsic values of options exercised during the years ended December 31, 2023, 2022 and 2021, were $25.9 million, $32.1 million and $40.7 million, respectively, determined as of the date of option exercise. Upon the exercise of the options, the Company issues new common stock from its authorized shares.

The assumptions used to estimate the per share fair value of stock options granted during the periods presented were as follows:

As of December 31, 2023, total unrecognized compensation cost related to unvested stock options of $36.5 million was expected to be recognized over a weighted average period of 2.7 years. The net tax benefit from stock options exercised during the year ended December 31, 2023 was $2.3 million.

Stock Purchase Rights

The assumptions used to estimate the per share fair value of stock purchase rights granted under the ESPP were as follows:

As of December 31, 2023, total unrecognized compensation cost related to unvested stock purchase rights under the ESPP of $14.2 million was expected to be recognized over a weighted average period of 1.4 years.

(14)OTHER EMPLOYEE BENEFITS

401(k) Plan

The Company sponsors the BioMarin Retirement Savings Plan (the 401(k) Plan) for eligible U.S. employees. The Company pays the direct expenses of the 401(k) Plan and matches 100% of each participating employee’s eligible contributions, up to a maximum of the lesser of 6% of the employee’s annual compensation or the annual statutory contribution limit. The Company’s matching contribution vests immediately and was approximately $32.7 million, $30.8 million and $31.6 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Deferred Compensation Plan

The Company maintains the NQDC under which eligible directors and key employees may defer compensation. The NQDC prohibits the diversification of deferrals of Company stock. Company stock issued and held by the NQDC is accounted for similarly to treasury stock in that the fair value of the employer stock was determined on the grant date and the shares are issued into the NQDC when the restricted stock vests. The corresponding deferred compensation obligation is classified as equity with no changes in the fair value of Company stock held in the NQDC recognized in earnings. Other contributions held in the NQDC are classified as trading securities, recorded at fair value with the corresponding deferred compensation obligation classified as a liability and subsequent changes in the fair value of these non-BioMarin investments are recognized in earnings in the period they occur.

See Note 7 to these Consolidated Financial Statements for additional discussion on the fair value and presentation of the NQDC assets and liabilities.

(15)INCOME TAXES

The Provision for (Benefit from) Income Taxes was based on Income (Loss) before Income Taxes as follows:

The U.S. and foreign components of the Provision for (Benefit from) Income Taxes were as follows:

The following is a reconciliation of the statutory federal income tax benefit to the Company’s effective tax rate:

(1)For the year ended December 31, 2023, the foreign rate differential included foreign local tax expense which was at an effective rate lower than the U.S. statutory rate. For the year ended December 31, 2022, the foreign rate differential included foreign local tax expense which was at an effective rate lower than the U.S. statutory rate and was offset by the income from the sale of a priority review voucher that was taxed at a higher tax rate. For the year ended December 31, 2021, the foreign rate differential included foreign local tax expense which was at an effective rate lower than the U.S. statutory rate and includes the recognition of the valuation allowance against a portion of the deferred tax assets of the Company’s Dutch subsidiary of $9.3 million.

The significant components of the Company’s net deferred tax assets were as follows:

The increase in net deferred tax assets is primarily related to capitalization of research and development expenses offset by a decrease in intangible assets and tax credits utilized.

Valuation allowances are provided to reduce the amounts of the Company's deferred tax assets to an amount that is more likely than not to be realized based on an assessment of positive and negative evidence, including estimates of future taxable income necessary to realize future deductible amounts. At the end of each period, the Company will reassess the ability to realize its deferred tax benefits. If it is more likely than not that the Company would not realize the deferred tax benefits, a valuation allowance may need to be established against all or a portion of the deferred tax assets, which will result in a charge to tax expense.

In the third quarter of 2023, the Company determined that it is more likely than not that the deferred tax assets related to a future royalty stream will be realized. In making this determination, the Company analyzed both the consistent historical royalty earnings and the forecast of future royalty earnings and reached the conclusion that it was appropriate to release the valuation allowance reserve. The release is offset by an increase due to the Company’s expectation that state R&D credits generated will not be utilized.

As of December 31, 2023, the Company had the following net operating loss and tax credit carryforwards, which if not utilized, will expire as follows:

Not included in the table above are $169.6 million of state research credit carryovers that will carry forward indefinitely.

The Company’s net operating losses and credits could be subject to annual limitations due to ownership change limitations provided by Internal Revenue Code Section 382 and similar state provisions. An annual limitation could result in the expiration of net operating losses and tax credit carryforward before utilization. There are limitations on the tax attributes of acquired entities however, the Company does not believe the limitations will have a material impact on the utilization of the net operating losses or tax credits.

The financial statement recognition of the benefit for a tax position is dependent upon the benefit being more likely than not to be sustainable upon audit by the applicable taxing authority. If this threshold is met, the tax benefit is then measured and recognized at the largest amount that is greater than 50% likely of being realized upon ultimate settlement.

A reconciliation of the beginning and ending amount of unrecognized tax benefits for the years ended December 31, 2023 and 2022, is as follows:

Included in the balance of unrecognized tax benefits as of December 31, 2023 were potential benefits of $266.5 million that, if recognized, would affect the effective tax rate. The Company’s policy for classifying interest and penalties associated with unrecognized income tax benefits is to include such items in the income tax expense. The total amount of accrued interest and penalties was not significant as of December 31, 2023. The Company believes it will not have any material decreases in its previously unrecognized tax benefits within the next twelve months.

The Company files income tax returns in the U.S., Ireland and various foreign jurisdictions. The U.S. and foreign jurisdictions have statute of limitations ranging from three tofive years. However, carryforward tax attributes that were generated in 2020 and earlier may still be adjusted upon examination by tax authorities.

U.S. income and foreign withholding taxes have not been recognized on the excess of the amount for financial reporting over the tax basis of investments in foreign subsidiaries that are essentially permanent in duration. This excess totaled approximately $15.1 million as of December 31, 2023, which will be indefinitely reinvested; deferred income taxes have not been provided on such foreign earnings.

(16)EARNINGS (LOSS) PER COMMON SHARE

Potentially issuable shares of common stock include shares issuable upon the exercise of outstanding employee stock option awards, common stock issuable under the Company’s ESPP, unvested RSUs and contingent issuances of common stock related to the Company's convertible debt.

The following table sets forth the computation of basic and diluted earnings (loss) per common share (common shares in thousands):

In addition to the equity instruments included in the table above, the table below presents potential shares of common stock that were excluded from the computation of diluted earnings (loss) per common share as they were anti-dilutive (in thousands):

(1) If converted, the Company would issue 4.0 million shares under the 2024 Notes and 4.4 million shares under the 2027 Notes. For additional discussion of our convertible debt, see Note 10 to these Consolidated Financial Statements.

(17)LICENSE AND COLLABORATION AGREEMENTS

In October 2019, the Company entered into a worldwide, exclusive licensing agreement with a third party for tralesinidase alfa (formerly referred to as BMN 250), an investigational enzyme replacement therapy to treat Sanfilippo Syndrome Type B. In consideration, the Company received an upfront payment of $3.0 million, a minority 15% equity ownership interest in the licensee, and is entitled to receive royalties on net sales of tralesinidase alfa and milestone payments if certain development, regulatory and sales milestones are met by the licensee. Subsequently, the third party licensee raised additional funding and issued the Company incremental shares to maintain its 15% minority interest. As of December 31, 2022, the balance of the equity investment included in Other Assets on the Company’s Consolidated Balance Sheets was $12.6 million, which was fully impaired in 2023 based on new developments that lead the Company to conclude that factors existed indicating this non-marketable strategic investment was no longer realizable. The loss on the equity investment due to impairment was recorded to Other Income (Expense), Net on the Company’s Consolidated Statements of Operations.

In July 2017, the Company executed a license agreement with Sarepta Therapeutics (Sarepta) that provides Sarepta with global exclusive rights to the Company’s Duchenne muscular dystrophy (DMD) patent estate for EXONDYS 51 and all future exon-skipping products. Under the license agreement, Sarepta pays the Company royalties and may pay the Company certain milestone payments for exons 51, 45, 53 and possibly other exon-skipping products. In 2021, the Company and Sarepta amended the license agreement to, among other things, make the license co-exclusive at a future date and reduce future royalty rates.

On October 1, 2015, the Company entered into an agreement with Ares Trading S.A. (Merck Serono) under which the Company acquired all global rights to KUVAN and PALYNZIQ from Merck Serono, with the exception of KUVAN in Japan. Previously, the Company had exclusive rights to KUVAN in the U.S. and Canada and PALYNZIQ in the U.S. and Japan. Pursuant to the amended and restated KUVAN Agreement, if future sales milestones were met, the Company was obligated to pay Merck Serono up to a maximum of €60.0 million, all of which were met and paid as of December 31, 2023. Pursuant to the Pegvaliase

Agreement, the Company also paid Merck Serono €125.0 million in cash when the PALYNZIQ development milestones were achieved.

In October 2012, the Company licensed to Catalyst Pharmaceutical Partners, Inc. (Catalyst) the North American rights to develop and market FIRDAPSE, the Company's former commercial product for the treatment of Lambert-Eaton myasthenic syndrome. In exchange for the North American rights to FIRDAPSE, commencing in the first quarter of 2019 the Company receives royalties of 7% to 10% on net product sales of FIRDAPSE in North America.

The Company is engaged in R&D collaborations with various other entities. These provide for sponsorship of R&D by the Company and may also provide for exclusive royalty-bearing intellectual property licenses or rights of first negotiation regarding licenses to intellectual property development under the collaborations. Typically, these agreements can be terminated for cause by either party upon written notice.

In 2020, the Company entered into a research and collaboration agreement with a third party and received a convertible note, which was recorded in Other Assets on the Company's Consolidated Balance Sheets. In 2023, the Company recorded a $11.9 million impairment loss on the convertible note as it was deemed unrecoverable based on new information. The impairment loss was recorded to Other Income (Expense), Net on the Company's Consolidated Statements of Operations.

(18)COMMITMENTS AND CONTINGENCIES

Contingencies

From time to time the Company is involved in legal actions arising in the normal course of its business. The process of resolving matters through litigation or other means is inherently uncertain and it is possible that an unfavorable resolution of these matters could adversely affect the Company, its results of operations, financial condition or cash flows. The Company’s general practice is to expense legal fees as services are rendered in connection with legal matters, and to accrue for liabilities when losses are probable and reasonably estimable based on existing information. The Company accrues for the best estimate of a loss within a range; however, if no estimate in the range is better than any other, then the minimum amount in the range is accrued. Liabilities are evaluated and refined each reporting period as additional information is known. Any receivables for insurance recoveries for these liability claims are recorded as assets when it is probable that a recovery will be realized.

The Company was involved in a purported shareholder class action lawsuit filed against the Company and certain officers and directors alleging violations under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 as amended (the Exchange Act) for making materially false or misleading statements regarding the clinical trials and Biologics License Application (BLA) for ROCTAVIAN (formerly known as valoctocogene roxaparvovec) by purportedly failing to disclose that differences between the Company’s Phase 1/2 and Phase 3 clinical studies limited the ability of the Phase 1/2 study to support ROCTAVIAN’s durability of effect and, as a result, that it was foreseeable that the FDA would not approve the BLA without additional data. On March 21, 2023, the Court entered an order staying all proceedings and vacating all deadlines because the parties agreed to settle the case through a binding term sheet. The Court preliminarily approved the settlement on June 8, 2023. On November 14, 2023, the court granted final approval of the settlement and entered final judgment. The Company maintains directors and officers liability insurance that covers exposure related to this class action lawsuit. As of December 31, 2022, the Company had recorded an estimated long-term loss contingency of $13.0 million on the Company’s Consolidated Balance Sheets. The same amount was recorded for expected insurance recoveries. During 2023, the amount recorded on the Company's Consolidated Balance Sheets increased to $39.0 million based on the final settlement and was reclassified to short term. As of December 31, 2023, the $39.0 million settlement liability and related receivable have been released following the final judgment. There was a net zero impact on the Company's Consolidated Statements of Cash Flows and Consolidated Statement of Operations in the years presented.

The Company recently received a subpoena from the U.S. Department of Justice (DOJ) requesting that the Company produce certain documents regarding sponsored testing programs relating to VIMIZIM and NAGLAZYME. The Company has produced the requested documents in response to the subpoena and is cooperating fully. The Company is unable to make any assurances regarding the outcome of the investigation by the DOJ, or the impact, if any, that such investigation may have on the Company’s business, Consolidated Balance Sheets, Statements of Operations or Statements of Cash Flows.

Contingent Payments

As of December 31, 2023, the Company was subject to contingent payments, primarily comprised of development, regulatory and commercial milestones. Those considered reasonably possible totaled $763.3 million, of this amount the Company may pay up to $30.1 million in 2024 if certain contingencies are met. $591.5 million of the total balance related to early-stage development programs licensed fromtwo third parties.

Other Commitments

The Company uses experts and laboratories at universities and other institutions to perform certain R&D activities. These amounts are included as R&D expense as services are provided. In the normal course of business, the Company enters into various firm purchase commitments primarily to procure active pharmaceutical ingredients, certain inventory-related items and certain third-party R&D services, production services and facility construction services. The Company also has commitments related to enterprise resource planning system implementation costs. As of December 31, 2023, such commitments were estimated at $354.1 million, of which $325.9 million is expected to be paid in 2024 as underlying goods and services are received. The Company has also licensed technology from third parties, for which it is required to pay royalties upon future sales, subject to certain annual minimums.