Group 1 - The article discusses the investment opportunities in the biotech sector, particularly focusing on BioMarin and its hemophilia drug Roctavian, which is linked to the Prescription Drug User Fee Act (PDUFA) date [2] - The author emphasizes the importance of catalysts for both novice and experienced biotech investors, providing insights into product sales forecasts and integrated financial statements [2] - The article highlights the expertise of the author, who has over five years of experience in biotech consulting and has prepared detailed reports on more than 1,000 companies [2]

Core Insights - Zacks Premium provides various tools for investors to enhance their stock market engagement and confidence [1][2] Zacks Style Scores - Zacks Style Scores are indicators that assist investors in selecting stocks likely to outperform the market within 30 days, rated from A to F based on value, growth, and momentum characteristics [3] - The Value Score focuses on identifying undervalued stocks using ratios like P/E, PEG, and Price/Sales [4] - The Growth Score emphasizes a company's financial health and future outlook, analyzing projected and historical earnings, sales, and cash flow [5] - The Momentum Score identifies optimal times to invest based on price trends and earnings estimate changes [6] - The VGM Score combines all three styles, providing a comprehensive rating based on value, growth, and momentum [7] Zacks Rank - The Zacks Rank is a proprietary model that leverages earnings estimate revisions to guide investors in portfolio creation [8] - Stocks rated 1 (Strong Buy) have historically produced an average annual return of +25.41% since 1988, significantly outperforming the S&P 500 [9] - There are over 800 stocks rated 1 or 2, which can be overwhelming for investors [10] Investment Strategy - To maximize returns, investors should focus on stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B [11] - Stocks with a 3 (Hold) rank should also have A or B Scores to ensure potential upside [11] - The direction of earnings estimate revisions is crucial; stocks with lower ranks and declining forecasts pose higher risks [12][13] Company Spotlight: BioMarin Pharmaceutical (BMRN) - BioMarin Pharmaceutical Inc. specializes in developing treatments for severe medical conditions, primarily in children [14] - BMRN holds a 3 (Hold) Zacks Rank and a VGM Score of A, with a Value Style Score of B, indicating attractive valuation metrics such as a forward P/E ratio of 19.13 [15] - Recent analyst revisions have increased earnings estimates for fiscal 2024, with the Zacks Consensus Estimate rising by $0.02 to $3.27 per share, alongside an average earnings surprise of 28.7% [15] - With a solid Zacks Rank and strong Value and VGM Style Scores, BMRN is recommended for investors' consideration [16]

Group 1 - BioMarin Pharmaceutical Inc. will present at three upcoming investor conferences, including the UBS Global Healthcare Conference, Jefferies London Healthcare Conference, and the Evercore ISI HealthCONx Conference [2][1] - An audio webcast of the presentations will be available live and archived on the company's website for a limited time [2][3] - BioMarin is a global biotechnology company focused on developing medicines for rare genetic conditions, with a strong pipeline and eight commercial therapies [3]

Core Insights - Zacks Premium provides tools for investors to enhance their stock market strategies and confidence [1] - The Zacks Style Scores serve as complementary indicators to the Zacks Rank, aiding in stock selection [2] Zacks Style Scores Overview - Stocks are rated from A to F based on value, growth, and momentum qualities, with A indicating the highest potential for outperformance [3] - The Style Scores are categorized into four types: Value Score, Growth Score, Momentum Score, and VGM Score [3][4][5] Value Score - Focuses on identifying undervalued stocks using financial ratios such as P/E, PEG, Price/Sales, and Price/Cash Flow [3] Growth Score - Concentrates on a company's financial health and future growth potential, analyzing projected and historical earnings, sales, and cash flow [4] Momentum Score - Targets stocks with upward or downward price trends, utilizing metrics like one-week price change and monthly earnings estimate changes [4] VGM Score - Combines all three Style Scores to identify stocks with the best value, growth forecasts, and momentum [5] Zacks Rank Integration - The Zacks Rank is a proprietary model based on earnings estimate revisions, which helps investors build successful portfolios [6] - Stocks rated 1 (Strong Buy) have historically achieved an average annual return of +25.41%, significantly outperforming the S&P 500 [7] Stock Selection Strategy - Investors should prioritize stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B for optimal success [8] - Stocks with lower ranks but high Style Scores may still carry risks due to downward earnings outlooks [9] Company Spotlight: BioMarin Pharmaceutical (BMRN) - BioMarin focuses on developing treatments for severe medical conditions, particularly in children, and currently holds a 3 (Hold) Zacks Rank with a VGM Score of A [10] - The company has a forward P/E ratio of 20.18, indicating attractive valuation metrics for value investors [10] - Recent analyst revisions have increased the earnings estimate for fiscal 2024 to $3.27 per share, with an average earnings surprise of 28.7% [11]

Core Viewpoint - BioMarin Pharmaceutical (BMRN) has received a Zacks Rank 2 (Buy) upgrade, indicating a positive trend in earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in earnings estimates, which are closely correlated with near-term stock price movements [2][4]. - Institutional investors utilize earnings estimates to determine the fair value of stocks, leading to buying or selling actions that affect stock prices [4]. Business Improvement Indicators - The upgrade in BioMarin's rating reflects an improvement in the company's underlying business, which is expected to drive stock appreciation [5]. - BioMarin is projected to earn $3.27 per share for the fiscal year ending December 2024, representing a year-over-year increase of 57.2% [8]. Earnings Estimate Revisions - Over the past three months, the Zacks Consensus Estimate for BioMarin has increased by 23.6%, indicating a positive trend in earnings estimates [8]. - The Zacks Rank system classifies stocks based on earnings estimate revisions, with only the top 20% of stocks receiving a 'Strong Buy' or 'Buy' rating, suggesting potential for market-beating returns [9][10].

Core Insights - BioMarin Pharmaceutical (BMRN) is currently viewed as a more attractive investment compared to Incyte (INCY) for those seeking undervalued stocks in the Medical - Biomedical and Genetics sector [1] Valuation Metrics - BMRN has a Zacks Rank of 2 (Buy), indicating a positive earnings outlook, while INCY has a Zacks Rank of 3 (Hold) [3] - BMRN's forward P/E ratio is 20.37, significantly lower than INCY's forward P/E of 54.33, suggesting BMRN is more reasonably priced [5] - The PEG ratio for BMRN is 0.50, indicating better value relative to its expected earnings growth compared to INCY's PEG ratio of 2.48 [5] - BMRN's P/B ratio stands at 2.34, while INCY's P/B ratio is 4.62, further supporting BMRN's valuation advantage [6] - Based on these metrics, BMRN has earned a Value grade of B, whereas INCY has a Value grade of C [6] Conclusion - Overall, BMRN is positioned as the superior value option due to its solid earnings outlook and favorable valuation metrics compared to INCY [7]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) The company reported significant Q3 and YTD 2024 revenue and net income growth, with total assets at $6.85 billion and reduced liabilities Condensed Consolidated Statements of Comprehensive Income (Q3 & YTD) | Financial Metric | Q3 2024 (in thousands) | Q3 2023 (in thousands) | YTD 2024 (in thousands) | YTD 2023 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | **$745,740** | **$581,329** | **$2,106,602** | **$1,773,019** | | Income from Operations | $113,893 | $30,525 | $322,807 | $158,495 | | **Net Income** | **$106,080** | **$40,378** | **$301,916** | **$147,270** | | Diluted EPS | $0.55 | $0.21 | $1.56 | $0.77 | Condensed Consolidated Balance Sheet Highlights | Balance Sheet Item | Sept 30, 2024 (in thousands) | Dec 31, 2023 (in thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | $675,448 | $755,127 | | Total Current Assets | $3,056,590 | $2,956,088 | | **Total Assets** | **$6,851,195** | **$6,841,603** | | Total Current Liabilities | $715,658 | $1,177,024 | | **Total Liabilities** | **$1,437,799** | **$1,890,054** | | **Total Stockholders' Equity** | **$5,413,396** | **$4,951,549** | Condensed Consolidated Statements of Cash Flows (YTD) | Cash Flow Activity | Nine Months Ended Sept 30, 2024 (in thousands) | Nine Months Ended Sept 30, 2023 (in thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $387,214 | $131,776 | | Net cash provided by (used in) investing activities | $60,087 | $(46,281) | | Net cash used in financing activities | $(529,306) | $(29,567) | | **Net (Decrease) in Cash** | **$(79,679)** | **$60,883** | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, debt repayment, revenue recognition, a 2024 restructuring plan, and a DOJ subpoena - Effective January 1, 2024, the company **changed its accounting presentation** for foreign currency transaction gains/losses and idle plant costs, revising prior periods for comparability[31](index=31&type=chunk)[32](index=32&type=chunk) Net Product Revenues by Product (YTD) | Product | YTD 2024 (in thousands) | YTD 2023 (in thousands) | | :--- | :--- | :--- | | VOXZOGO | $526,597 | $324,146 | | VIMIZIM | $548,694 | $525,453 | | NAGLAZYME | $369,584 | $322,040 | | PALYNZIQ | $254,634 | $216,105 | | ALDURAZYME | $144,849 | $88,533 | | KUVAN | $92,576 | $144,047 | | ROCTAVIAN | $15,516 | $822 | - The company repaid its **$495.0 million** 0.599% convertible notes due August 1, 2024, while **$600.0 million** of 1.25% notes remain outstanding[62](index=62&type=chunk) - A 2024 restructuring plan reduced the global workforce by approximately **395 employees**, incurring **$86.0 million** in charges for severance and asset impairments[80](index=80&type=chunk)[83](index=83&type=chunk)[101](index=101&type=chunk) - The company is cooperating with a U.S. **Department of Justice (DOJ) subpoena** regarding sponsored testing programs for VIMIZIM and NAGLAZYME, with unknown outcome[89](index=89&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=23&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Strong financial performance driven by VOXZOGO sales and strategic portfolio review, with increased operating expenses due to restructuring and strong liquidity despite debt repayment - The company is executing a strategic realignment focused on maximizing **VOXZOGO growth**, establishing **ROCTAVIAN opportunity**, and advancing high-potential R&D assets like BMN 333, BMN 349, and BMN 351[100](index=100&type=chunk)[101](index=101&type=chunk) - As part of its strategic review, the company committed to reducing its global workforce by approximately **395 employees** in Q2 and Q3 2024[101](index=101&type=chunk) Key Financial Metrics (MD&A) | Metric | Q3 2024 (in millions) | Q3 2023 (in millions) | YTD 2024 (in millions) | YTD 2023 (in millions) | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $745.7 | $581.3 | $2,106.6 | $1,773.0 | | R&D Expense | $184.9 | $191.3 | $573.7 | $540.5 | | SG&A Expense | $253.5 | $215.8 | $742.4 | $632.9 | | Net Income | $106.1 | $40.4 | $301.9 | $147.3 | [Results of Operations](index=25&type=section&id=Results%20of%20Operations) Net product revenues increased due to VOXZOGO, ALDURAZYME, and NAGLAZYME, while gross margin slightly decreased in Q3, and SG&A rose significantly from restructuring charges Net Product Revenue Changes (Q3 2024 vs Q3 2023) | Product | Q3 2024 Revenue (in millions) | Change from Q3 2023 (in millions) | | :--- | :--- | :--- | | VOXZOGO | $189.9 | +$66.8 | | VIMIZIM | $178.2 | +$19.3 | | NAGLAZYME | $131.9 | +$23.0 | | ALDURAZYME | $71.0 | +$57.2 | | KUVAN | $28.1 | -$14.8 | - G&A expense increased by **$50.7 million** in Q3 2024 and **$113.6 million** YTD, primarily due to severance and restructuring costs from the 2024 organizational redesign[124](index=124&type=chunk)[126](index=126&type=chunk) - R&D expense for the nine months ended Sep 30, 2024, increased by **$33.2 million** YoY, driven by higher spending on pre-clinical activities for new VOXZOGO indications and prioritized pipeline[120](index=120&type=chunk)[121](index=121&type=chunk)[122](index=122&type=chunk) [Financial Condition, Liquidity and Capital Resources](index=31&type=section&id=Financial%20Condition%2C%20Liquidity%20and%20Capital%20Resources) Cash and investments totaled $1.49 billion, decreasing due to $495.0 million convertible note repayment, while operating cash flow significantly increased, and a new $600.0 million credit facility was established Cash, Cash Equivalents, and Investments | Category | Sept 30, 2024 (in millions) | Dec 31, 2023 (in millions) | | :--- | :--- | :--- | | Cash and cash equivalents | $675.4 | $755.1 | | Short-term investments | $255.0 | $318.7 | | Long-term investments | $562.0 | $611.1 | | **Total** | **$1,492.4** | **$1,684.9** | - Net cash used in financing activities increased to **$529.3 million**, primarily due to the **$495.0 million** settlement of the 2024 Notes that matured in August 2024[140](index=140&type=chunk)[142](index=142&type=chunk) - As of September 30, 2024, purchase obligations totaled approximately **$474.1 million**, with **$269.8 million** expected to be paid in 2024, mainly for APIs and R&D services[146](index=146&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's market risks have not materially changed from those disclosed in its 2023 Annual Report on Form 10-K - No material changes to the company's market risks occurred during the nine months ended September 30, 2024[154](index=154&type=chunk) [Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls were effective as of September 30, 2024, with no material changes in internal control, though a new ERP system implementation will lead to process changes - The CEO and CFO concluded that disclosure controls and procedures were **effective** as of September 30, 2024[156](index=156&type=chunk) - The company is implementing a new global ERP system in phases through 2025, which will result in changes to processes and internal controls[158](index=158&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=35&type=section&id=Item%201.%20Legal%20Proceedings) Shareholder derivative actions related to ROCTAVIAN settlement were not approved, and a stockholder class action was dismissed after Elliott waived challenged provisions - A proposed settlement in two shareholder derivative lawsuits concerning ROCTAVIAN was **not approved** by the Delaware Court of Chancery in July 2024[160](index=160&type=chunk) - A stockholder class action regarding the Cooperation Agreement with Elliott Investment Management was **dismissed as moot** after Elliott waived the challenged provisions[161](index=161&type=chunk) [Risk Factors](index=35&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks in gene therapy commercialization, supply chain, regulatory compliance, manufacturing complexity, substantial indebtedness, and management changes - Gene therapy products like ROCTAVIAN face unique commercial challenges, including uncertainty in pricing, coverage, reimbursement for high-cost treatments, and potential outcomes-based repayment obligations[171](index=171&type=chunk)[172](index=172&type=chunk)[173](index=173&type=chunk) - The company's growth management, especially for products like VOXZOGO, is critical, as strong demand has previously led to supply challenges[333](index=333&type=chunk) - Recent changes in senior management, including a new CEO, CCO, Chief R&D Officer, and Chief Business Officer, pose potential retention, morale, and operational risks[331](index=331&type=chunk) - The company's substantial indebtedness of **$600.0 million** may decrease business flexibility, supplemented by a new **$600.0 million** revolving credit facility established in August 2024[249](index=249&type=chunk)[250](index=250&type=chunk) - Significant risks arise from macroeconomic conditions, including inflation, geopolitical instability (Russia/Ukraine, Middle East), and economic volatility in product markets[369](index=369&type=chunk)[370](index=370&type=chunk) [Other Information](index=65&type=section&id=Item%205.%20Other%20Information) Two executives adopted Rule 10b5-1 trading plans in Q3 2024 for future sales of company securities Adoption of Rule 10b5-1 Trading Plans (Q3 2024) | Name | Position | Adoption Date | Total Shares to be Sold | | :--- | :--- | :--- | :--- | | Brian R. Mueller | EVP and CFO | Sep 13, 2024 | up to 39,314 | | Cristin M. Hubbard | EVP and CCO | Sep 13, 2024 | up to 6,022 and all ESPP shares to be acquired |

BioMarin Pharmaceutical (BMRN) reported adjusted earnings per share of 91 cents in third-quarter 2024, beating the Zacks Consensus Estimate of 78 cents. Quarterly earnings rose 98% year over year, driven by higher sales, partially offset by rising operating expenses. Total revenues were $746 million in the reported quarter, up 28% year over year on a reported basis and 32% on a constant-currency basis. Strong sales of Voxzogo drove this upside. The top line beat the Zacks Consensus Estimate of $707 million. ...

Financial Data and Key Metrics Changes - BioMarin reported record financial results with revenues reaching $746 million, a 28% increase compared to the same period in 2023 [5][19] - Non-GAAP diluted earnings per share increased nearly double compared to Q3 2023, totaling $0.91, while GAAP diluted earnings per share increased 162% to $0.55 [25][26] - Operating cash flows totaled $221 million in Q3, an increase of 63% compared to the same quarter last year [26][27] Business Line Data and Key Metrics Changes - VOXZOGO revenue grew 54% year-over-year, reaching $190 million in Q3, driven by new patient starts and expanded indications [8][19] - Enzyme Therapies portfolio generated $509 million in revenue, representing a 27% year-over-year increase, with ALDURAZYME being a significant contributor [20][13] - NAGLAZYME experienced a 21% year-over-year growth, while PALYNZIQ revenues increased 15% year-over-year [21][78] Market Data and Key Metrics Changes - The U.S. and EU markets comprise approximately 32% of the global total addressable patient population for achondroplasia, with 68% insulated from mid-term competitive threats [11][12] - BioMarin aims to expand VOXZOGO into more than 20 additional markets by 2027, with approximately 90% of the global achondroplasia patient population outside the U.S. [34] Company Strategy and Development Direction - The company is implementing a new corporate strategy focused on innovation, growth, and value commitment, structuring around new business units [6][30] - BioMarin is targeting approximately $4 billion in total revenues by 2027 and aims for a mid-teen compound annual growth rate for total revenues through 2034 [15][30] - The company plans to vigorously defend its intellectual property and leverage its global capabilities to maintain market leadership [12][62] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the sustained leadership across the Skeletal Conditions franchise and the long-term growth potential of the Enzyme Therapies portfolio [9][13] - The company reaffirmed its long-term guidance despite increased competition, indicating that its initial guidance was not conservative [71][72] Other Important Information - BioMarin settled $495 million of convertible debt maturity in cash during Q3, retiring approximately 4 million potentially dilutive shares [27] - The company has a strong balance sheet with total cash and investments of approximately $1.5 billion at the end of Q3 2024 [27] Q&A Session Summary Question: What phase of development would be ideal for BioMarin at this stage in the pipeline's maturity? - Management indicated a focus on transactions less than $1.5 billion, leveraging their scientific capabilities and identifying earlier transactions to bolster research efforts [52][55] Question: Can you walk through the development strategy for BMN 333? - Management expressed excitement about BMN 333, highlighting its potential to increase pharmacokinetic exposure and efficacy in treating genetic skeletal disorders [58][60] Question: What is driving the increase in the ERT business growth? - The growth is primarily driven by PALYNZIQ, with strong patient uptake in the U.S. and new initiatives aimed at high-yield patient finding and geographic expansion [76][78] Question: Can you provide more color on the competitive positioning of PALYNZIQ? - Management believes the addition of new agents in the PKU space will benefit patients by providing more treatment options, and they are developing a next-generation PALYNZIQ [92][94] Question: What is the status of the transition to full approval for VOXZOGO? - Management is committed to measuring final adult height on patients from the pivotal study and is focused on converting to full approval [90][91]

BioMarin Pharmaceutical (BMRN) reported $745.74 million in revenue for the quarter ended September 2024, representing a year-over-year increase of 28.3%. EPS of $0.91 for the same period compares to $0.46 a year ago. The reported revenue compares to the Zacks Consensus Estimate of $706.95 million, representing a surprise of +5.49%. The company delivered an EPS surprise of +16.67%, with the consensus EPS estimate being $0.78. While investors scrutinize revenue and earnings changes year-over-year and how they ...