BIOMARIN PHARMACEUTICAL INC
For the period ended Jun 30, 2024. Filed Aug 5, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 5, 2024
BMRN$56.03-0.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-04-26.
0001048477-24-000070
Item 2. Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-05.
0001048477-24-000126
Item 2. Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 74 previous paragraphs and 88 current paragraphs.
42 unchanged; 28 reworded; 13 added; 4 removed; 0 previous and 5 current paragraphs rearranged.
Tables are not compared: 16 previous and 16 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (13)
Current report
The increase in Net Product Revenues for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023 was primarily attributed to the following:
Current report
•Research and early pipeline: higher spend related to pre-clinical activities for new VOXZOGO indications for idiopathic short stature (ISS) and multiple genetic short stature pathway conditions (PC) and our prioritized pipeline comprised of BMN 333, BMN 349 and BMN 351; and
Current report
•Later-stage clinical programs: higher spend on clinical activities related to VOXZOGO for the treatment of hypochondroplasia.
Current report
•Marketed products: lower spend on ROCTAVIAN and VOXZOGO for achondroplasia as we shift resources to the new VOXZOGO indications and our prioritized pipeline.
Current report
The increase in R&D expense for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023 was primarily due to the following:
Current report
•Research and early pipeline: higher spend related to pre-clinical activities for new VOXZOGO indications for ISS and PC and our prioritized pipeline; and
Current report
•Marketed products: higher spend primarily related to ROCTAVIAN, which was moved to Marketed products following Food and Drug Administration approval in the second quarter of 2023.
Current report
•Later-stage clinical programs: lower spend on ROCTAVIAN, which was moved to Marketed products following Food and Drug Administration approval in the second quarter of 2023, partially offset by higher spend on the new VOXZOGO indication for hypochondroplasia.
Current report
The increase in S&M expense for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023 was primarily attributed to continued global expansion of VOXZOGO for achondroplasia and higher partner distribution fees. The increase in S&M expense for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023 was primarily a result of the continued global expansion of VOXZOGO for achondroplasia.
Current report
The increase in Other Expense, Net for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 was primarily due to a loss on non-marketable securities partially offset by lower foreign currency transaction losses in the comparable period in 2023. The decrease in Other Expense, Net for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 was primarily due to the decrease in loss on non-marketable securities partially offset by lower foreign currency transaction losses.
Current report
Our 2024 Notes matured on August 1, 2024, subsequent to quarter-end. Substantially all holders of the 2024 Notes were repaid with cash, totaling approximately $495.0 million in cash. No gain or loss was incurred upon the extinguishment.
Current report
As of June 30, 2024, we were subject to contingent payments considered reasonably possible of $495.6 million, of this amount we may pay up to $10.9 million over the next 12 months if certain contingencies are met. See Note 12 to our accompanying Condensed Consolidated Financial Statements for additional discussion on our contingent obligations.
Removed paragraphs (4)
Previous report
The increase in S&M expense for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 was primarily a result of the continued support of the global VOXZOGO market expansion, partially offset by lower costs related to our enzyme products.
Previous report
The increase in Other Income (Expense), Net for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 was primarily due to a $12.6 million impairment loss on an equity investment in the first quarter of 2023. There were no impairment charges in the first quarter of 2024.
Reworded paragraphs (28)
Previous wording
•PALYNZIQ: higher sales volume, primarily in the U.S.; partially offset by
Current wording
•PALYNZIQ: higher sales volume due to new patients initiating therapy, primarily in the U.S.
Previous wording
•NAGLAZYME: lower sales volume due to timing of orders in countries that place large government orders, particularly in the Middle East; and
Current wording
•NAGLAZYME: higher sales volume due to timing of orders in countries that place large government orders, particularly in the Middle East and Europe.
Previous wording
See also the risk factor “The sale of generic versions of KUVAN by generic manufacturers has adversely affected and will continue to adversely affect our revenues and may cause a decline in KUVAN revenues faster than expected” in “Risk Factors” included in Part II, Item 1Aof this Quarterly Report for additional information on risks we face.
Current wording
With respect to KUVAN, see also the risk factor “The sale of generic versions of KUVAN by generic manufacturers has adversely affected and will continue to adversely affect our revenues and may cause a decline in KUVAN revenues faster than expected” in “Risk Factors” included in Part II, Item 1Aof this Quarterly Report for additional information on risks we face.
Previous wording
Strong demand for VOXZOGO in certain markets has outpaced our projections in recent quarters, and we expect to face challenges meeting our current estimates of VOXZOGO demand through the first half of 2024. These challenges will result in modest reduction of our revenue growth for VOXZOGO during the supply-constrained period. The projected temporary supply constraint could result in postponement of planned entry into additional markets or delayed clinical development activities until VOXZOGO inventory levels increase. When the expected increases in supply become available during 2024, while overall inventory and ability to supply the market will increase, if actual demand continues to exceed our estimates, the supply constraint could be prolonged. We are working to increase fill-finish capacity to meet this increased demand while also implementing actions to manage growth and minimize patient impact. For example, in 2023 we secured increased supply commitments beginning in mid-2024. We do not expect a material impact on our revenues if we successfully execute our manufacturing plans. See "Risk Factors" in Part II, Item 1A of this Quarterly Report for additional information on risk factors that could impact our business and operations.
Current wording
Strong demand for VOXZOGO in certain markets had outpaced our projections in recent quarters and we anticipated challenges meeting our estimated VOXZOGO demand during the first half of 2024. We have recently increased fill-finish capacity to meet this demand and continue to implement actions to manage growth and minimize patient impact. While supply constraints have eased in the second quarter of 2024 and we expect to have the ability to meet estimated demand and support ongoing clinical programs, if actual demand continues to exceed estimates, the supply constraint could be prolonged. We do not expect a material impact on our revenues if we successfully execute our manufacturing plans. See "Risk Factors" in Part II, Item 1A of this Quarterly Report for additional information on risk factors that could impact our business and operations.
Previous wording
We face exposure to movements in foreign currency exchange rates, which we expect to continue in future periods. We use foreign currency exchange forward contracts to hedge a percentage of our foreign currency exposure, primarily the Euro. The following table shows our Net Product Revenues denominated in USD and foreign currencies:
Current wording
We face exposure to movements in foreign currency exchange rates, which we expect to continue in future periods. We use foreign currency exchange forward contracts to hedge a percentage of our foreign currency exposure, primarily the Euro. Certain currencies are not included in our hedging program, such as the Argentine Peso. With respect to the risks posed by fluctuations of both hedged and unhedged currencies against the U.S. dollar, see the risk factor “Our international operations pose currency risks, which may adversely affect our operating results and net income” in “Risk Factors” included in Part II, Item 1Aof this Quarterly Report for additional information. The following table shows our Net Product Revenues denominated in USD and foreign currencies:
Previous wording
The unfavorable impact for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 was primarily driven by weakening of Argentine Peso, partially offset by strengthening of the Euro.
Current wording
The unfavorable impact for the three and six months ended June 30, 2024 as compared to the three and six months ended June 30, 2023 was primarily driven by weakening of Argentine Peso and Japanese Yen, partially offset by strengthening of the Euro.
Previous wording
Royalty and Other Revenues include royalties earned on net sales of products sold by third parties, up-front licensing fees, milestones achieved by licensees or sublicensees.
Current wording
Royalty and Other Revenues include royalties earned on net sales of products sold by third parties, up-front licensing fees and milestones achieved by licensees or sublicensees.
Previous wording
The change in Royalty and Other Revenues for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 was relatively flat. We expect to continue to earn royalties from third parties in the future.
Current wording
The change in Royalty and Other Revenues for the three and six months ended June 30, 2024 as compared to the three and six months ended June 30, 2023 was relatively flat. We expect to continue to earn royalties from third parties in the future.
Previous wording
Cost of Sales and gross margin both benefited in the three months ended March 31, 2024 as compared to the three months ended March 31, 2023, primarily from lower per-unit manufacturing costs and lower third-party royalties. Partially offsetting the benefits to Cost of Sales was the impact of higher sales volumes in the current quarter as compared to the first quarter of 2023. Gross margin also benefited in the current quarter from higher sales volumes for products with higher margin.
Current wording
Cost of Sales decreased in the three and six months ended June 30, 2024 as compared to the three and six months ended June 30, 2023, primarily from lower per-unit manufacturing costs partially offset by higher sales volumes. Gross margin increased in the current three and six month period due to higher sales volumes for products with higher margin, driven by VOXZOGO sales volume.
Previous wording
We expect gross margin to increase modestly compared to 2023 as the product mix is expected to shift to reflect an increase of sales volumes for higher margin commercial products.
Current wording
We expect gross margin to increase modestly as our product mix is expected to shift, with increasing sales volumes for our higher margin commercial products.
Previous wording
The increase in R&D expense for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 was primarily due to higher spend in research and early pipeline attributable to increased pre-clinical activities, including studies for planned clinical trial application submissions. Lower spend in later-stage clinical programs was mostly offset by higher spend for our marketed products as spend related to ROCTAVIAN moved from late-stage to marketed products following Food and Drug Administration approval in mid-2023.
Current wording
The increase in R&D expense for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023 was primarily due to the following:
Previous wording
We expect R&D expense to increase in future periods compared to 2023, primarily due to increased spending on research and early development programs.
Current wording
We expect R&D expense to increase in future periods, primarily due to increased spending for the new VOXZOGO indications and research and early pipeline programs.
Previous wording
The increase in G&A expense for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 was primarily due to higher employee-related costs and incremental administrative costs in the quarter, including external legal and consulting fees.
Current wording
The increase in G&A expense for the three and six months ended June 30, 2024 as compared to the three and six months ended June 30, 2023 was primarily due to severance and restructuring costs associated with our portfolio strategy review and the associated organizational redesign efforts announced in the second quarter of 2024. The increase in G&A expense for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023 also included incremental administrative costs, including consulting and legal fees.
Previous wording
We expect SG&A expense to increase in future periods as a result of corporate matters and ongoing initiatives and the continued market expansion of our commercial products
Current wording
We expect SG&A expense to increase in future periods as a result of ongoing corporate initiatives and the continued market expansion of our commercial products.
Previous wording
Amortization of intangible assets – the expense for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 was relatively flat.
Current wording
Amortization of intangible assets – the decrease in expense for the three and six months ended June 30, 2024 as compared to the three and six months ended June 30, 2023 was due to an intangible asset becoming fully amortized during the fourth quarter of 2023.
Previous wording
The increase in Interest Income for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 was primarily due to higher yields on our cash equivalents and investment portfolio. We expect Interest Income to increase moderately over the next 12 months as compared to 2023 due to anticipated interest rates and yields on our cash equivalents and investments.
Current wording
The increase in Interest Income for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023 was primarily due to higher balances and higher yields on our cash equivalents and investment portfolio. We expect Interest Income to increase moderately over the next 12 months due to anticipated higher overall returns on our cash equivalents and investments.
Previous wording
Interest Expense for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 was relatively flat. We expect Interest Expense to decrease over the next 12 months due to the settlement of our convertible debt that matures in August 2024. See Note 6 to our accompanying Condensed Consolidated Financial Statements for additional information regarding our debt.
Current wording
Interest Expense for the three and six months ended June 30, 2024 as compared to the three and six months ended June 30, 2023 was relatively flat. We expect Interest Expense to decrease over the next 12 months due to the settlement of our convertible debt that matured on August 1, 2024. See Note 6 to our accompanying Condensed Consolidated Financial Statements for additional information regarding our debt.
Previous wording
Other Income (Expense), Net for the periods presented was as follows:
Current wording
Other Expense, Net for the periods presented was as follows:
Previous wording
The increase in Provision for Income Taxes for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 was primarily due to higher pre-tax income and a lower tax benefit related to stock option exercises in the first quarter of 2024 compared to the first quarter of 2023. There was no material impact of the adoption of Pillar Two of the Organisation for Economic Co-operation and Development (OECD) Base Erosion and Profit Shifting Project on our financial statements.
Current wording
The increase in Provision for Income Taxes for the three and six months ended June 30, 2024 as compared to the three and six months ended June 30, 2023 was primarily due to higher pre-tax income and a lower tax benefit related to stock option exercises.
Previous wording
We believe our cash generated from sales of our commercial products, in addition to our cash, cash equivalents and short-term investments will be sufficient to satisfy our liquidity requirements for at least the next 12 months. We believe we will meet longer-term expected future cash requirements and obligations through a combination of cash flows from operating activities and available cash and long-term investment balances. We will need to raise additional funds by issuing equity, debt or convertible securities, taking loans or entering into collaborative or other agreements if we are unable to satisfy our liquidity requirements. For example, we may require additional financing to fund the repayment of our convertible debt, future milestone payments and our future operations, including the commercialization of our products and product candidates currently under development, preclinical studies and clinical trials, and potential licenses and acquisitions. The timing and mix of our funding alternatives could change depending on many factors, including how much we elect to spend on our development programs, potential licenses and acquisitions of complementary technologies, products and companies or if we settle our convertible debt in cash.
Current wording
We believe cash generated from sales of our commercial products, in addition to our cash, cash equivalents and short-term investments will be sufficient to satisfy our liquidity requirements for at least the next 12 months. We believe we will meet longer-term expected future cash requirements and obligations through a combination of cash flows from operating activities and available cash and long-term investment balances. We will need to raise additional funds by issuing equity, debt or convertible securities, taking loans or entering into collaborative or other agreements if we are unable to satisfy our liquidity requirements. For example, we may require additional financing to fund the repayment of our convertible debt due in 2027, future milestone payments and our future operations, including the commercialization of our products and product candidates currently under development, preclinical studies and clinical trials, and potential licenses and acquisitions. The timing and mix of our funding alternatives could change depending on many factors, including how much we elect to spend on our development programs, potential licenses and acquisitions of complementary technologies, products and companies or if we settle our convertible debt in cash.
Previous wording
We are 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 our ability to achieve our goals. In addition, we sell our products in certain countries that face economic volatility and weakness. Although we have historically collected receivables from customers in such countries, sustained weakness or further deterioration of the local economies and currencies may cause customers in those countries to be unable to pay for our products. We will continue to monitor these conditions and will attempt to adjust our business processes, as appropriate, to mitigate macroeconomic risks to our business.
Current wording
We are mindful that conditions in the current macroeconomic environment, such as inflation, changes in interest and foreign currency exchange rates, natural disasters, geopolitical instability, and supply chain disruptions could affect our ability to achieve our goals. In addition, we sell our products in certain countries that face economic volatility and weakness. Although we have historically collected receivables from customers in such countries, sustained weakness or further deterioration of the local economies and currencies may cause customers in those countries to be unable to pay for our products. We will continue to monitor these conditions and will attempt to adjust our business processes, as appropriate, to mitigate macroeconomic risks to our business.
Previous wording
The increase in net cash provided by operating activities in the three months ended March 31, 2024 compared to March 31, 2023 was primarily attributed to the timing of cash receipts from our customers, partially offset by the timing of payments to vendors.
Current wording
The increase in net cash provided by operating activities in the six months ended June 30, 2024 compared to June 30, 2023 was primarily attributed to the improved operating performance and timing of cash receipts from our customers, partially offset by the timing of payments to vendors and payments of income taxes.
Previous wording
The decrease in net cash used in investing activities in the three months ended March 31, 2024 compared to March 31, 2023 was primarily attributable to lower purchases of available-for-sale debt securities net of maturities, $10.0 million in proceeds from the sale of previously sold intangible assets, partially offset by an increase in purchases of intangible assets.
Current wording
The increase in net cash provided by investing activities in the six months ended June 30, 2024 compared to June 30, 2023 was primarily attributable to lower purchases of available-for-sale debt securities net of maturities and a $10.0 million milestone received in connection with the sale of previously sold intangible assets, partially offset by an increase in purchases of intangible assets.
Previous wording
The change in net cash used in financing activities in the three months ended March 31, 2024 compared to March 31, 2023 was relatively flat but was comprised of lower proceeds from stock option exercises, partially offset by the absence of milestone payments to third parties.
Current wording
The increase in net cash used in financing activities in the six months ended June 30, 2024 compared to June 30, 2023 was primarily due to lower proceeds from stock option exercises, partially offset by the absence of milestone payments to third parties.
Previous wording
Our $1.1 billion (undiscounted) of total convertible debt as of March 31, 2024 will impact our liquidity due to the semi-annual cash interest payments as well as the repayment of the principal amount, if not converted. As of March 31, 2024, our indebtedness consisted of our 0.599% senior subordinated convertible notes due in 2024 and our 1.25% senior subordinated convertible notes due in 2027, which, if not converted, will be required to be repaid in cash at maturity in August 2024 and May 2027, respectively. We have reclassified the outstanding principal of the 2024 Notes as a current liability as there are less than twelve months remaining until maturity. If our common stock price remains below the conversion price of approximately $124.67 per share, we expect to settle the 2024 Notes in cash. If our common stock price meets or exceeds the conversion price, we intend to repurchase the equivalent shares to neutralize any dilutive impact of share settlement.
Current wording
Our $1.1 billion (undiscounted) of total convertible debt as of June 30, 2024 will impact our liquidity due to the semi-annual cash interest payments as well as the repayment of the principal amount, if not converted. As of June 30, 2024, our indebtedness consisted of our 0.599% senior subordinated convertible notes due in 2024 and our 1.25% senior subordinated convertible notes due in 2027, which, if not converted, will be required to be repaid in cash at maturity in August 2024 and May 2027, respectively. As of June 30, 2024, the outstanding principal of our convertible notes due in 2024 (2024 Notes) was classified as a current liability.
Previous wording
As of March 31, 2024, we had obligations of approximately $386.7 million, of which $340.6 million is expected to be paid during the remainder of 2024. Our purchase obligations are primarily related to firm purchase commitments entered into in the normal course of business to procure active pharmaceutical ingredients, certain inventory-related items, certain third-party R&D services, production services and facility construction services. The amount also includes hosting fees and other enterprise resource planning (ERP) system implementation costs for which we are committed.
Current wording
As of June 30, 2024, we had obligations of approximately $473.0 million, of which $291.1 million is expected to be paid in 2024. Our purchase obligations are primarily related to firm purchase commitments entered into in the normal course of business to procure active pharmaceutical ingredients, certain inventory-related items, certain third-party R&D services, production services and facility construction services. The amount also includes hosting fees and other enterprise resource planning (ERP) system implementation costs for which we are committed.
Previous wording
Our lease, contingent obligations and unrecognized tax benefits as of March 31, 2024 have not materially changed from those discussed in “Financial Condition, Liquidity and Capital Resources” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023.
Current wording
Our lease and unrecognized tax benefits as of June 30, 2024 have not materially changed from those discussed in “Financial Condition, Liquidity and Capital Resources” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023.
Previous wording
There have been no significant changes to our critical accounting estimates during the three months ended March 31, 2024, compared to those disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 26, 2024.
Current wording
There have been no significant changes to our critical accounting estimates during the six months ended June 30, 2024, compared to those disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 26, 2024.
Rearranged current paragraphs (5)
Current report — wording carried from elsewhere
•NAGLAZYME: higher sales volume due to timing of orders in countries that place large government orders, particularly in the Middle East, Europe and Latin America; and
Current report — wording carried from elsewhere
•VOXZOGO: higher sales volume from new patients initiating therapy across all regions;
Current report — wording carried from elsewhere
•PALYNZIQ: higher sales volume from new patients initiating therapy, primarily in the U.S.; and
Current report — wording carried from elsewhere
•KUVAN: lower product revenues attributed to increasing generic competition as a result of the loss of market exclusivity.
Current report — wording carried from elsewhere
There was no material impact resulting from the adoption of Pillar Two of the Organisation for Economic Co-operation and Development (OECD) Base Erosion and Profit Shifting Project on our financial statements.