BioMarin Pharmaceutical(BMRN) - 2022 Q4 - Annual Report

Part I Item 1. Business BioMarin Pharmaceutical Inc. is a global biotechnology company focused on developing and commercializing targeted therapies for rare genetic disorders, reporting nearly $2.1 billion in 2022 revenues - BioMarin is a global biotechnology company founded in 1997, specializing in targeted therapies for rare genetic conditions through genetic discovery and a diverse pipeline of commercial, clinical, and preclinical candidates115 774 1111 2022 Total Revenues | Metric | Amount (Millions USD) | | :----------- | :-------------------- | | Total Revenues | 2,096.0 | - Key business developments in 2022 include the conditional approval of ROCTAVIAN in the EU for severe hemophilia A, positive three-year data from ROCTAVIAN's Phase 3 study, FDA acceptance of ROCTAVIAN's BLA resubmission, and VOXZOGO approvals in Australia and Japan for achondroplasia137 775 961 Overview The company is a global biotechnology firm specializing in targeted therapies for rare genetic conditions through genetic discovery and a diverse pipeline - BioMarin Pharmaceutical Inc. is a global biotechnology company focused on genetic discovery to develop and commercialize targeted therapies for rare genetic conditions, with a diverse pipeline of innovative commercial, clinical, and preclinical candidates115 774 1111 Recent Developments BioMarin achieved nearly $2.1 billion in 2022 revenues, driven by VOXZOGO's launch and key pipeline advancements including ROCTAVIAN's EU approval - In 2022, BioMarin achieved nearly $2.1 billion in total revenues, with significant contributions from VOXZOGO's launch and key advancements in its product development pipeline137 775 - Notable developments include the conditional approval of ROCTAVIAN in the EU for severe hemophilia A, positive three-year data from its Phase 3 study, FDA acceptance of ROCTAVIAN's BLA resubmission, and VOXZOGO approvals in Australia and Japan for achondroplasia137 775 Commercial Products This section details BioMarin's commercial product portfolio, including 2022 revenues, regulatory status, and distribution specifics Commercial Products and 2022 Revenues | Product Name | Indication | 2022 Revenues (Millions USD) | | :----------------------- | :------------------ | :--------------------------- | | VIMIZIM (elosulfase alpha) | MPS IVA | 663.8 | | NAGLAZYME (galsulfase) | MPS VI | 443.8 | | PALYNZIQ (pegvaliase-pqpz) | PKU | 255.0 | | KUVAN (sapropterin dihydrochloride) | PKU | 227.6 | | VOXZOGO (vosoritide) | Achondroplasia | 169.1 | | BRINEURA (cerliponase alfa) | CLN2 | 154.3 | | ROCTAVIAN (valoctocogene roxaparvovec) | Severe Hemophilia A | — | | ALDURAZYME (laronidase) | MPS I | 128.4 | - ROCTAVIAN received conditional approval in the EU in Q3 2022, with no sales in 2022, and is undergoing FDA review with a PDUFA target action date of March 31, 2023138 151 598 - VOXZOGO is approved for achondroplasia in various age ranges globally, including ages five and older in the U.S. and two and older in the EU/Australia, and all ages in Japan138 146 598 - PALYNZIQ is distributed in the U.S. through a REMS program to mitigate anaphylaxis risk, requiring certified prescribers, pharmacies, and patient education, along with epinephrine availability142 168 169 Clinical Development Programs The company's clinical pipeline includes ROCTAVIAN, BMN 255 for hyperoxaluria, and BMN 331 for Hereditary Angioedema Clinical Development Programs as of December 31, 2022 | Product Candidate | Target Indication | Stage | | :---------------- | :------------------------ | :-------------------- | | ROCTAVIAN | Severe Hemophilia A | FDA regulatory review | | BMN 255 | Hyperoxaluria | Clinical Phase 1/2 | | BMN 331 | Hereditary Angioedema (HAE) | Clinical Phase 1/2 | - BMN 255, a small-molecule therapy for hyperoxaluria in chronic liver disease, showed a rapid and potent increase in plasma glycolate in its Phase 1/2 study, with an expanded study planned for 2023156 214 800 - BMN 331, a gene therapy for Hereditary Angioedema (HAE), is in Phase 1/2, with the first participant at the 6e13vg/kg dose demonstrating C1-Inhibitor levels approaching the normal range157 186 800 Manufacturing BioMarin manufactures APIs in California and Ireland, adhering to current Good Manufacturing Practices (cGMPs), with a dedicated gene therapy facility for ROCTAVIAN - BioMarin manufactures active pharmaceutical ingredients (API) for ALDURAZYME, NAGLAZYME, PALYNZIQ, and VOXZOGO in Novato, California, and for BRINEURA and VIMIZIM in Shanbally, Cork, Ireland187 215 - The company's facilities and those of third-party manufacturers are subject to periodic inspections to ensure compliance with current Good Manufacturing Practices (cGMPs) by regulatory authorities like the FDA and EC158 187 215 - A commercial-scale gene therapy manufacturing facility in Novato, California, commissioned in July 2017, supports cGMP production of ROCTAVIAN for commercial sales in Europe and clinical development activities for BMN 331159 Raw Materials Raw materials are sourced from single suppliers, with risks mitigated through inventory and multiple sourcing strategies - Raw materials and supplies for product production are sourced from single or sole suppliers in some instances, with policies adopted to minimize supply risks through inventory maintenance and multiple sourcing strategies for critical materials189 217 Sales and Marketing BioMarin markets products directly and through distributors, utilizing third-party logistics and vendors for support - BioMarin markets its products (excluding ALDURAZYME) directly through commercial teams in the U.S., Europe, South America, and other key markets, and through distributors in other selected markets161 218 - The company utilizes third-party logistics for storage and distribution and third-party vendors for advertising, market research, and sales support219 Customers Customers include specialty pharmacies and hospitals, with three customers generating 37% of net product revenue in 2022 - Customers for BioMarin's products (excluding ALDURAZYME) include specialty pharmacies, hospitals, and non-U.S. government agencies, with sales also made to authorized distributors and large pharmaceutical wholesalers88 191 - In 2022, three customers generated 37% of net product revenue, and Sanofi is the sole customer for ALDURAZYME, responsible for its global marketing and sales192 844 Competition The biopharmaceutical industry is highly competitive, with KUVAN facing generic competition and other products facing various rivals - The biopharmaceutical industry is highly competitive, with numerous public and private companies, universities, and non-profit organizations developing treatments for the same indications as BioMarin's products and candidates193 221 - KUVAN faces generic competition globally, including multiple generic versions in the U.S. and EU, which has adversely affected and is expected to continue affecting its revenues89 172 221 - ROCTAVIAN, a gene therapy for severe hemophilia A, faces competition from marketed recombinant factor VIII therapies, a novel bispecific antibody, and clinical-stage gene therapy and non-factor replacement candidates226 - VOXZOGO for achondroplasia, BMN 255 for hyperoxaluria, and BMN 331 for HAE also face potential competition from various clinical and preclinical stage products from other companies196 198 199 224 227 Patents, Proprietary Rights and Regulatory Exclusivity BioMarin relies on its intellectual property, including patents and regulatory exclusivity, to protect its revenue streams - BioMarin's success relies on its intellectual property portfolio, which includes patents, trade secrets, and trademarks, to support revenue streams and create barriers to competitors228 - U.S. and most foreign patents are generally effective for 20 years from the earliest filing date, with potential extensions for regulatory review periods (up to five years in the U.S. and EU)200 Regulatory Exclusivity for Commercial Products | Commercial Products | United States Orphan Drug Exclusivity Expiration | United States Biologic Exclusivity Expiration | European Union Orphan Drug Exclusivity Expiration | | :------------------ | :----------------------------------------------- | :-------------------------------------------- | :------------------------------------------------ | | BRINEURA | 2024 | 2029 | 2027 | | PALYNZIQ | 2025 | 2030 | 2029 | | ROCTAVIAN | Pending | Pending | 2032 | | VIMIZIM | Expired | 2026 | 2024 | | VOXZOGO | 2028 | Not Applicable | 2031 | Government Regulation BioMarin's products are subject to extensive government regulations covering development, manufacturing, and commercialization - BioMarin's products are subject to extensive federal, state, local, and non-U.S. regulations governing development, manufacture, commercialization, pricing, and reimbursement, requiring approvals from agencies like the FDA and EMA205 233 Human Capital BioMarin had 3,082 global employees in 2022, undergoing a reorganization, and committed to diversity, equity, and inclusion (DEI) Global Full-Time Employees as of December 31, 2022 | Department | Number of Employees | | :--------------------- | :------------------ | | Operations | 1,343 | | Research & Development | 736 | | Sales & Marketing | 495 | | Administration | 508 | | Total Worldwide | 3,082 | | U.S. and Canada | 2,066 | | Other non-U.S. | 1,016 | - In October 2022, BioMarin announced a reorganization plan, including a reduction of approximately 120 employees (4% of its global workforce), primarily from U.S. operations, incurring $23.0 million in severance and termination benefits565 617 964 - As of December 31, 2022, 47% of U.S. employees were racial and ethnic minorities, and 50% of the global workforce and 47% of director-level and above positions were held by women, reflecting the company's commitment to diversity, equity, and inclusion (DEI)330 Other Information BioMarin was incorporated in 1996, with its SEC filings and annual reports available on its website and the SEC's - BioMarin Pharmaceutical Inc. was incorporated in Delaware in October 1996, with principal executive offices in San Rafael, California305 335 - Annual reports on Form 10-K, quarterly reports on Form 10-Q, proxy statements, current reports on Form 8-K, and amendments are available free of charge on the company's website (www.bmrn.com) and the SEC's website (www.sec.gov)[305](index=305&type=chunk)335 Item 1A. Risk Factors Investing in BioMarin's securities involves significant risks due to the dynamic and rapidly changing biopharmaceutical industry, including challenges in product coverage, intense competition, and regulatory uncertainties - An investment in BioMarin's securities involves a high degree of risk due to the dynamic and rapidly changing biopharmaceutical industry306 337 - The company faces risks related to obtaining and maintaining adequate coverage and reimbursement for its expensive products, especially given small target patient populations requiring high per-patient prices for profitability307 338 341 - Generic versions of KUVAN are adversely affecting and will continue to affect revenues, with potential for faster decline if patent challenges are successful or new generic versions are introduced346 367 Business and Operational Risks Profitability relies on market share and high prices, with risks from changing treatments and failure to expand the pipeline - The company's profitability depends on achieving significant market share and maintaining high per-patient prices for its products, especially for those targeting small patient populations like BRINEURA, NAGLAZYME, and VIMIZIM341 342 - Changes in disease treatment methods, such as the widespread adoption of gene therapy over enzyme replacement therapy, could reduce demand for BioMarin's products and adversely affect revenues313 343 - Failure to successfully develop new products, or compete effectively for acquisitions, joint ventures, and licensing opportunities, could impair the expansion of BioMarin's product pipeline and overall growth314 365 366 Regulatory Risks Regulatory approvals are lengthy and uncertain, with ongoing compliance risks, potential price controls, and orphan drug exclusivity challenges - Obtaining regulatory approval for product candidates is a lengthy, expensive, and uncertain process, with no guarantee of approval or that approval in one region ensures approval in others348 370 - Approved products are subject to extensive ongoing regulatory requirements, and non-compliance or unanticipated problems can lead to penalties, restrictions, or withdrawal of products from the market354 376 380 - Government price controls, healthcare reforms (like the IRA and PPACA), and cost-containment measures in the U.S. and internationally could restrict product pricing, reduce reimbursement, and adversely affect revenues and profitability360 413 416 - Failure to obtain or maintain orphan drug exclusivity for eligible products could lead to competition from similar drugs, reducing revenues, especially for products with limited patent protection389 417 Risks Related to Our Gene Therapy Programs Gene therapies like ROCTAVIAN face unique development, manufacturing, regulatory, and commercialization risks, including data access limitations - Gene therapy products, like ROCTAVIAN and BMN 331, are based on novel technology, presenting unique development, manufacturing, regulatory, and treatment risks, including uncertainty about durability of effect, potential for side effects, and manufacturing complexities394 395 396 423 425 426 - Commercialization of gene therapies faces uncertainty regarding pricing, coverage, and reimbursement due to their novelty and high cost, with BioMarin entering outcomes-based agreements for ROCTAVIAN that involve potential repayments397 398 427 - Data access plans for ROCTAVIAN's main clinical trials restrict management's review of emerging efficacy data, which could adversely impact trial outcomes as adjustments cannot be made based on real-time results401 430 Financial and Financing Risks BioMarin's profitability is uncertain, requiring substantial capital for operations and debt repayment, with significant indebtedness impacting flexibility - BioMarin has historically operated at a net loss and its future profitability is uncertain, requiring substantial capital for operations, product development, and debt repayment402 458 Cash, Cash Equivalents, and Investments (as of December 31, 2022) | Category | Amount (Billions USD) | | :------------------------------------- | :-------------------- | | Cash, cash equivalents and investments | 1.6 | | Debt obligations (undiscounted) | 1.1 | - The company's substantial indebtedness, including convertible notes due in 2024 and 2027, may limit its financial flexibility, access to capital, and increase borrowing costs, potentially impacting operations and financial results408 434 462 Manufacturing Risks Manufacturing risks include current Good Manufacturing Practices (cGMPs) non-compliance, production complexities, reliance on single suppliers, and potential termination of the Sanofi agreement - Failure to comply with manufacturing regulations (cGMPs) by BioMarin or its third-party manufacturers could lead to delayed approvals, fines, product recalls, or suspension of production, adversely affecting financial results438 439 466 - The complexity of manufacturing processes for products and candidates means the company may be unable to produce sufficient quantities at acceptable costs, potentially delaying or terminating development programs or impacting commercial demand and margins440 467 468 - Reliance on single-source suppliers for critical raw materials and a limited number of manufacturing facilities creates risks of supply interruptions due to various factors, which could disrupt inventory and reduce revenues445 472 473 - Termination of the Manufacturing, Marketing and Sales Agreement with Sanofi for ALDURAZYME could prevent BioMarin from commercializing the product or significantly delay/diminish its ability to do so, with potential financial implications449 450 474 476 Risks Related to International Operations International operations face risks from complexity, intellectual property protection, tax changes, political instability, currency fluctuations, and export controls - Significant international sales and operations expose BioMarin to risks including increased complexity and costs, difficulty in management, diminished intellectual property protection, negative tax law changes, and political/economic instability (e.g., Russia's invasion of Ukraine)451 477 478 505 - Reliance on special access programs for initial international sales of newly launched products (e.g., VOXZOGO) poses risks, as changes or elimination of these programs could adversely affect product sales and revenues454 480 507 - Exposure to foreign currency exchange rate fluctuations, particularly the Euro, can impact revenues and expenses, with a stronger USD adversely affecting results despite hedging strategies481 508 509 - Compliance with U.S. export control laws and economic sanctions (e.g., against Russia and Belarus) is critical; non-compliance or changes in these laws could hinder sales, operations, and lead to substantial penalties6 456 482 510 Intellectual Property Risks IP risks include patent uncertainty, trade secret protection challenges, potential infringement claims, and public disclosure of proprietary data - The patent positions of biopharmaceutical products are complex and uncertain, especially for products with publicly available key information, potentially preventing BioMarin from obtaining or enforcing strong patent protection10 486 514 - Trade secrets may not be adequately protected, with risks of unintentional or willful disclosure by employees/contractors and the expense/difficulty of enforcing claims, especially outside the U.S11 - Competitors may claim infringement of their intellectual property, leading to lawsuits, substantial damages, injunctions, or the need for expensive and potentially unavailable licenses, which could adversely affect business490 517 518 - Public disclosure of clinical trial data and proprietary information by regulatory authorities (e.g., EMA) could adversely affect BioMarin's business by revealing confidential methodologies and enabling competitors515 516 Risks Related to Ownership of Our Securities Stock price volatility, dilution from convertible notes, and Anti-takeover provisions pose risks to security ownership - BioMarin's stock price has been and may remain volatile, influenced by factors such as product sales, generic competition, regulatory actions, patent disputes, negative publicity, and broad market fluctuations492 493 520 521 - Conversion of the company's convertible notes will dilute existing stockholders' ownership interests and could depress the common stock price, potentially encouraging short selling19 494 - Anti-takeover provisions in Delaware law and BioMarin's charter documents, such as restrictions on calling stockholder meetings and the board's authority to issue preferred stock, may make a change in control more difficult21 496 General Risk Factors General risks include talent retention, tax laws and regulations changes, healthcare laws and data privacy laws compliance failures, information technology systems disruptions, natural disasters, and macroeconomic impacts - BioMarin's success depends heavily on its ability to attract and retain qualified scientific, technical, and managerial personnel, with intense competition for talent potentially harming business operations if recruitment and retention efforts are unsuccessful499 527 - New or modified tax laws and regulations, including international initiatives like BEPS 2.0, could adversely affect BioMarin's business and financial condition by increasing tax expenses or creating tax uncertainty51 500 528 529 - Non-compliance with healthcare laws (e.g., Anti-Kickback Statute, False Claims Act) and data privacy laws (e.g., GDPR, CCPA, CPRA) could result in significant penalties, regulatory scrutiny, and reputational harm501 502 503 530 532 - Significant reliance on information technology systems means any failure, inadequacy, interruption, or cybersecurity incident could harm business operations, reputation, financial condition, and results31 535 - Natural disasters (e.g., earthquakes, fires) or other unforeseen events could damage facilities or those of third-party manufacturers/suppliers, impairing production and commercialization efforts34 538 - Macroeconomic factors like inflation, interest rates, foreign currency exchange rates, and global public health threats (e.g., COVID-19) could adversely affect business, financial results, and the ability of customers/distributors to purchase products35 539 541 869 Item 1B. Unresolved Staff Comments As of the reporting date, there are no unresolved staff comments from the SEC - There are no unresolved staff comments as of the reporting date542 Item 2. Properties BioMarin's significant owned and leased properties as of December 31, 2022, include corporate headquarters, manufacturing, laboratory, and office facilities in California and Ireland, which are deemed adequate for foreseeable operations Significant Owned and Leased Properties (as of December 31, 2022) | Location | Approximate Square Feet | Use | Lease Expiration Date | | :-------------------------------------- | :---------------------- | :--------------------------------------------------------------- | :-------------------- | | San Rafael facility, San Rafael, California | 407,300 | Corporate headquarters, laboratory and office | Owned property | | Several facilities in Novato, California | 293,300 | Clinical and commercial manufacturing, laboratory and office | Owned property | | Several leased facilities in Novato, California | 164,000 | Office and warehouse | 2023 | | Shanbally facility, Cork, Ireland | 260,700 | Manufacturing, laboratory and office | Owned property | - These properties, along with other smaller leased office facilities globally, are expected to be adequate for BioMarin's operations for the foreseeable future66 Item 3. Legal Proceedings BioMarin is involved in several legal proceedings, including shareholder class actions regarding ROCTAVIAN and BMN 307, and a derivative action related to ROCTAVIAN - A shareholder class action lawsuit was filed in September 2020, alleging BioMarin made materially false or misleading statements regarding ROCTAVIAN's clinical trials and BLA, specifically concerning the durability of effect and FDA approval without additional data544 - In October 2021, another purported securities class action was filed, alleging false or misleading statements about BMN 307's safety profile and overstating its clinical and commercial prospects; this complaint was dismissed with prejudice in February 2023, but plaintiffs plan to appeal67 - In January 2023, a shareholder derivative action was filed against certain officers and directors, asserting breach of fiduciary duty claims arising from the facts underlying the ROCTAVIAN securities class action39 - BioMarin believes all claims in these lawsuits have no merit and intends to vigorously defend these actions39 67 544 Item 4. Mine Safety Disclosures The company has no disclosures to report regarding mine safety - Not applicable546 Part II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities BioMarin's common stock is listed on the Nasdaq Global Select Market under "BMRN", with 186,528,784 outstanding shares held by 35 holders of record as of February 16, 2023 - BioMarin's common stock is listed under the symbol "BMRN" on the Nasdaq Global Select Market42 70 - As of February 16, 2023, there were 35 holders of record of 186,528,784 outstanding shares of common stock549 - The company has never paid cash dividends on its common stock and does not anticipate paying them in the foreseeable future548 - No unregistered securities were sold during the year ended December 31, 2022, and there were no issuer purchases of equity securities43 70 549 Comparative Stock Performance (Indexed to $100) | Index | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | | :--------------------------- | :----- | :----- | :----- | :----- | :----- | :----- | | BioMarin Pharmaceutical Inc. | $100.00 | $95.49 | $94.82 | $98.34 | $99.08 | $116.06 | | Nasdaq Composite Index | $100.00 | $97.16 | $132.81 | $192.47 | $235.15 | $158.65 | | Nasdaq Biotechnology | $100.00 | $91.14 | $114.02 | $144.15 | $144.18 | $129.59 | | SPDR S&P Biotech ETF | $100.00 | $84.72 | $112.31 | $166.59 | $132.53 | $98.25 | Item 6. [Reserved] This item is reserved and contains no information - This item is reserved73 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides an overview of BioMarin's financial performance, liquidity, and capital resources, highlighting 2022 financial results, business developments, and critical accounting estimates - BioMarin is a global biotechnology company focused on developing and commercializing targeted therapies for rare genetic conditions, with a diverse pipeline of commercial, clinical, and preclinical candidates59 774 958 Key Financial Highlights (Millions USD) | Metric | 2022 | 2021 | 2020 | | :----------------------------------- | :-------- | :-------- | :-------- | | Total revenues | $2,096.0 | $1,846.3 | $1,860.5 | | Cost of sales | $483.7 | $470.5 | $524.3 | | Research and development (R&D) expense | $649.6 | $628.8 | $628.1 | | Selling, general and administrative (SG&A) expense | $854.0 | $759.4 | $737.7 | | Gain on sale of nonfinancial assets, net | $(108.0) | — | $(52.8) | | Provision for (benefit from) income taxes | $8.0 | $(11.3) | $(903.0) | | Net income (loss) | $141.6 | $(64.1) | $854.0 | - The company expects continued growth in Net Product Revenues, excluding KUVAN due to generic competition, and plans to invest in its R&D pipeline and commercial infrastructure for 2023566 965 Overview BioMarin is a global biotechnology company focused on developing and commercializing targeted therapies for rare genetic conditions - BioMarin is a global biotechnology company focused on genetic discovery to develop and commercialize targeted therapies for rare genetic conditions, with a diverse pipeline of innovative commercial, clinical, and preclinical candidates59 774 937 2022 Financial Highlights This section presents key financial metrics for 2022, 2021, and 2020, including revenues, expenses, and net income Key Financial Highlights (Millions USD) | Metric | 2022 | 2021 | 2020 | | :----------------------------------- | :-------- | :-------- | :-------- | | Total revenues | $2,096.0 | $1,846.3 | $1,860.5 | | Cost of sales | $483.7 | $470.5 | $524.3 | | Research and development (R&D) expense | $649.6 | $628.8 | $628.1 | | Selling, general and administrative (SG&A) expense | $854.0 | $759.4 | $737.7 | | Gain on sale of nonfinancial assets, net | $(108.0) | — | $(52.8) | | Provision for (benefit from) income taxes | $8.0 | $(11.3) | $(903.0) | | Net income (loss) | $141.6 | $(64.1) | $854.0 | Business Developments BioMarin advanced its commercial business and product pipeline in 2022, focusing on innovative rare disease therapies - BioMarin continued to grow its commercial business and advance its product candidate pipeline in 2022, aiming to develop and commercialize innovative therapies for rare diseases through internal research, acquisitions, and partnerships775 961 Reorganization Plan BioMarin announced a reorganization in October 2022, reducing approximately 120 employees and incurring $23.0 million in severance costs - On October 6, 2022, BioMarin announced a reorganization plan to simplify its organizational design, focusing resources on R&D pipeline advancement, maximizing commercial launch success, preparing for ROCTAVIAN's EU and potential U.S. launch, and optimizing core infrastructure565 617 964 - The reorganization resulted in a planned reduction of approximately 120 employees (4% of its global workforce), mostly from U.S. operations, incurring $23.0 million in pre-tax severance and employee termination benefit charges in 2022565 617 964 2023 Outlook BioMarin expects to achieve 2023 operating objectives through pipeline investment and commercialization, anticipating net product revenue growth - BioMarin expects to achieve its 2023 operating objectives through product pipeline investments and commercial infrastructure support, including ongoing clinical studies for commercial products and early-stage candidates, and global commercialization of VOXZOGO and ROCTAVIAN in the EU965 - The company anticipates growth in Net Product Revenues, excluding KUVAN due to market exclusivity loss, but continues to monitor macroeconomic conditions, reimbursement changes, market competition, and generic competitors566 966 Uncertainty Relating to Macroeconomic Environment Macroeconomic conditions like inflation, interest rates, and supply chain disruptions could impact BioMarin's operations and revenues - Macroeconomic conditions, including inflation, changes in interest and foreign currency exchange rates, natural disasters, ongoing COVID-19 effects, and supply chain disruptions, could impact BioMarin's global revenue sources and business operations561 941 - The company is actively monitoring and managing its response to these conditions, assessing potential impacts on operating results and financial condition, and adjusting business processes to mitigate risks941 Critical Accounting Estimates BioMarin's financial statements rely on significant accounting estimates and judgments, regularly evaluated with the Audit Committee - BioMarin's Consolidated Financial Statements rely on significant assumptions, judgments, and estimates that can impact net income/loss and reported amounts of assets, liabilities, revenue, and expenses947 - Critical accounting policies and estimates are regularly evaluated and discussed with the Audit Committee, with historical assumptions generally not differing materially from actual results947 Results of Operations This section provides a detailed analysis of BioMarin's total revenues for 2022, 2021, and 2020, including year-over-year changes Total Revenues (Millions USD) | Metric | 2022 | 2021 | 2020 | 2022 vs. 2021 Change | 2021 vs. 2020 Change | | :------------- | :-------- | :-------- | :-------- | :------------------- | :------------------- | | Total revenues | $2,096.0 | $1,846.3 | $1,860.5 | $249.7 | $(14.2) | Financial Condition, Liquidity and Capital Resources BioMarin expects sufficient liquidity for 12 months from cash and sales, managing $1.1 billion in convertible debt - BioMarin believes its cash generated from product sales, along with existing cash, cash equivalents, and investments, will be sufficient to meet liquidity requirements for at least the next 12 months649 Cash, Cash Equivalents and Investments (Millions USD) | Category | Dec 31, 2022 | Dec 31, 2021 | Change | | :----------------------------------- | :----------- | :----------- | :------- | | Cash and cash equivalents | $724.5 | $587.3 | $137.2 | | Short-term investments | $567.0 | $426.6 | $140.4 | | Long-term investments | $333.9 | $507.8 | $(173.9) | | Total cash, cash equivalents and investments | $1,625.4 | $1,521.7 | $103.7 | Net Cash Flows (Millions USD) | Activity | 2022 | 2021 | 2022 vs. 2021 Change | | :-------------------------------- | :-------- | :-------- | :------------------- | | Net cash provided by operating activities | $175.9 | $304.5 | $(128.6) | | Net cash used in investing activities | $(20.0) | $(366.3) | $346.3 | | Net cash used in financing activities | $(18.7) | — | $(18.7) | - The company has $1.1 billion (undiscounted) in total convertible debt as of December 31, 2022, which impacts liquidity through semi-annual cash interest payments and principal repayment if not converted1016 Item 7A. Quantitative and Qualitative Disclosure About Market Risk BioMarin is exposed to market risks from foreign currency exchange rates, interest rates, and credit risks, mitigated by hedging and investment strategies - BioMarin is exposed to market risks from changes in foreign currency exchange rates, interest rates, and credit risks, which are mitigated through foreign currency derivative hedging, investment guidelines, and trade receivable monitoring1020 1045 - Approximately 51% of net product sales and 19% of operating expenses (excluding Cost of Sales) in 2022 were denominated in foreign currencies, primarily the Euro, making the company sensitive to USD fluctuations626 1046 - A hypothetical 10% adverse movement in foreign currency exchange rates could reduce the value of outstanding forward contracts by approximately $83.2 million657 - The company's investment portfolio primarily consists of high-credit quality debt securities, and its convertible debt (2024 and 2027 Notes) has fixed interest rates, limiting exposure to rising interest rates1022 1048 Item 8. Financial Statements and Supplementary Data This section refers to the location of the audited consolidated financial statements and supplementary data within the Annual Report on Form 10-K - The financial statements and supplementary data are included in Part IV, Item 15 of this Annual Report on Form 10-K1025 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure There are no changes in or disagreements with accountants on accounting and financial disclosure to report - There are no changes in or disagreements with accountants on accounting and financial disclosure1027 Item 9A. Controls and Procedures BioMarin's management concluded its disclosure controls and internal control over financial reporting were effective as of December 31, 2022, based on the COSO 2013 Framework - BioMarin's management, including the CEO and CFO, concluded that its disclosure controls and procedures were effective as of December 31, 20221026 - The company's internal control over financial reporting was assessed as effective at the reasonable assurance level as of December 31, 2022, based on the COSO 2013 Framework631 1052 - No material changes in internal control over financial reporting occurred during the most recently completed quarter663 1028 Item 9B. Other Information No other information is required to be disclosed in this item - No other information is required to be disclosed in this item1030 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections There are no disclosures regarding foreign jurisdictions that prevent inspections - Not applicable1030 Part III Item 10. Directors, Executive Officers and Corporate Governance Information regarding directors, executive officers, and corporate governance is incorporated by reference from the company's 2023 annual meeting of stockholders proxy statement - Information on directors, executive officers, and corporate governance is incorporated by reference from the proxy statement for the 2023 annual meeting of stockholders665 1031 Item 11. Executive Compensation Information regarding executive compensation is incorporated by reference from the company's 2023 annual meeting of stockholders proxy statement - Information on executive compensation is incorporated by reference from the proxy statement for the 2023 annual meeting of stockholders666 1091 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Information regarding security ownership of certain beneficial owners, management, and related stockholder matters is incorporated by reference from the company's 2023 annual meeting of stockholders proxy statement - Information on security ownership of certain beneficial owners, management, and related stockholder matters is incorporated by reference from the proxy statement for the 2023 annual meeting of stockholders636 1032 Item 13. Certain Relationships and Related Transactions and Director Independence Information regarding certain relationships, related transactions, and director independence is incorporated by reference from the company's 2023 annual meeting of stockholders proxy statement - Information on certain relationships, related transactions, and director independence is incorporated by reference from the proxy statement for the 2023 annual meeting of stockholders637 1058 Item 14. Principal Accounting Fees and Services Information regarding principal accounting fees and services is incorporated by reference from the company's 2023 annual meeting of stockholders proxy statement - Information on principal accounting fees and services is incorporated by reference from the proxy statement for the 2023 annual meeting of stockholders667 1033 Part IV Item 15. Exhibits, Financial Statement Schedules This section lists all exhibits and financial statement schedules filed as part of the Annual Report on Form 10-K, including the Exhibit Index, Consolidated Financial Statements, and XBRL documents - This item includes the Exhibit Index, Financial Statements, and XBRL Instance Document, Taxonomy Extension Schema, Calculation, Definition, Labels, and Presentation Link Documents638 641 1034 1037 Item 16. Form 10-K Summary This item indicates that the Form 10-K Summary is not applicable or not provided as a separate section - This item is typically a summary of the Form 10-K, but the content provided does not contain a summary671 1063