BioMarin Pharmaceutical(BMRN) - 2020 Q4 - Annual Report

Financial Performance - Total revenues for 2020 were $1,860.5 million, an increase of 9.2% from $1,704.0 million in 2019[435] - Net income for 2020 was $859.1 million, compared to a net loss of $23.8 million in 2019, representing a significant turnaround[435] - Total costs and expenses increased to $1,897.2 million in 2020 from $1,804.5 million in 2019, reflecting a rise of 5.1%[435] - The increase in total stockholders' equity to $4,106.0 million in 2020 from $3,122.4 million in 2019 reflects strong financial health and investor confidence[435] - The income tax benefit recognized by the company was $901.4 million in 2020, compared to $71.0 million in 2019 and $65.5 million in 2018[529] Cash and Liquidity - Cash, cash equivalents, and investments rose to $1,350.9 million in 2020, up from $1,165.8 million in 2019, indicating improved liquidity[435] - As of December 31, 2020, the company had $1.4 billion in cash, cash equivalents, and investments, including net proceeds of $535.8 million from a convertible debt offering[530] - Total convertible debt as of December 31, 2020, was $1.1 billion, impacting liquidity due to semiannual cash interest payments[543] - The company may require additional financing to fund future operations and product commercialization[530] Research and Development - Research and development expenses are managed by prioritizing activities based on scientific data and market potential, ensuring efficient allocation of resources[503] - Total R&D expense decreased to $628.1 million in 2020 from $715.0 million in 2019, a decline of $86.9 million or 12.2%[505] - The decrease in R&D expense was primarily due to lower clinical activity spend for valoctocogene roxaparvovec and a decrease in costs related to tralesinidase alfa, which was licensed to a third party[506] - The company expects R&D expenses to increase in future periods due to heightened spending on preclinical activities and ongoing development of later-stage programs[507] - R&D expenses for key programs since inception as of December 31, 2020, include Palynziq at $739.9 million, Valoctocogene roxaparvovec at $710.0 million, and Vosoritide at $570.7 million[547] Operating Expenses - SG&A expenses increased to $737.7 million in 2020 from $680.9 million in 2019, an increase of $56.8 million or 8.3%[511] - The increase in SG&A expense was driven by higher pre-commercial activities for valoctocogene roxaparvovec and vosoritide, along with increased employee-related expenses[512] Interest and Debt - Interest income decreased to $16.6 million in 2020 from $22.7 million in 2019, a decline of $6.1 million or 26.9% due to lower interest rates[522] - Total interest expense increased to $29.3 million in 2020 from $23.5 million in 2019, an increase of $5.8 million or 24.6% primarily due to the issuance of new convertible notes[526] - Interest income is expected to be lower over the next 12 months due to continued low interest rates and yields on cash equivalents[523] - Interest expense is projected to decrease over the next 12 months following the maturity of the 2020 Notes[528] Assets and Obligations - Total assets increased to $5,848.0 million in 2020, compared to $4,690.0 million in 2019, showing a growth of 24.6%[435] - Total contractual obligations as of December 31, 2020, amount to $1,364.8 million, including $506.9 million due within one year[552] - Contingent payments totaling approximately $662.8 million are due upon achieving certain development and regulatory milestones[552] Foreign Currency and Interest Rate Exposure - Approximately 41% of net product sales and 21% of operating expenses were denominated in foreign currencies during 2020[558] - The company has outstanding $495.0 million of the 2024 Notes and $600.0 million of the 2027 Notes, with fixed interest rates mitigating exposure to rising interest rates[564] - A hypothetical 100 basis point increase in interest rates could result in a potential loss in fair value of the investment portfolio of approximately $5.9 million[567] - The average interest rate for available-for-sale debt securities as of December 31, 2020, is 0.3%[568] Risk Management - As of December 31, 2020, the company had open forward contracts with net notional amounts of $678.9 million, with a potential loss of $70.9 million from a hypothetical 10% adverse movement in foreign currency exchange rates[560] - The liability for unrecognized tax benefits was $182.6 million as of December 31, 2020[554]