BioMarin Earnings: Roctavian’s Launch Still Slow but Countered by Voxzogo Strength

BioMarin Pharmaceutical BMRN reported solid third-quarter top-line growth of 15%, relatively in line with our estimates, and we’re not changing our $96 fair value estimate. We think this puts the firm in a good position to meet our revenue forecast of roughly $2.4 billion for the full year, as ongoing launches of achondroplasia drug Voxzogo and hemophilia A gene therapy Roctavian provide support to the firm’s narrow moat. BioMarin also announced that 18-year CEO Jean-Jacques Bienaimé will step down at the start of December, but we’re confident that his replacement, Alexander Hardy (current CEO of Genentech), has the qualifications to lead the firm’s future growth.

Management significantly lowered 2023 guidance for Roctavian from $50 million-$150 million to under $10 million, which is a surprising reduction in magnitude and shows a continuation of launch difficulties over the past year. BioMarin has navigated a lengthy path to reimbursement in Europe this year and successfully treated one patient in the second quarter in Germany at a price of roughly $800,000. A second patient has since been treated, and many patients are awaiting therapy. In the United States, BioMarin has secured solid reimbursement for Roctavian, but hemophilia treatment centers are still preparing to test patients for eligibility and offer treatment. We reduced our sales to fit 2023 guidance and also slowed our assumed sales trajectory for the drug in coming years, although we still see the gene therapy approaching $1 billion annually in the long run.

Conversely, Voxzogo’s launch in achondroplasia continues to progress well, and the recent Food and Drug Administration label expansion to all children (previously ages 5 and up) as well as a similar label expansion in Europe should accelerate uptake, which fits with management’s decision to raise 2023 Voxzogo guidance. We raised our forecast to $458 million from $435 million, slightly above the high end of new guidance of $435 million-$455 million.