When a company treats rare diseases, with very few
patients, revenue can be pretty
wonkyfrom quarter to quarter as inventory levels can have
a major effect on revenue. Still,
BioMarin Pharmaceutical (Nasdaq: BMRN) is
looking pretty healthy when you dig a little deeper.
For instance, one of its drugs, Aldurazyme, is sold by
Genzyme (Nasdaq: GENZ), which recorded a
year-over-year sales increase of 5.5%. BioMarin, which
manufactures the drug, actually recorded lower year-over-year
revenue from Aldurazyme because it transferred less inventory
to Genzyme. The key number, though, is the volume of the drug
that was dispensed, which increased 11.6% year over year.
It's the opposite story with Kuvan, albeit with one less
middleman. Sales increased 28.4% between the second and third
quarters of this year, but dispensing of the drug increased
8.5% quarter over quarter as specialty pharmacies built back
up inventory.
Growth in revenue from individual drugs will probably
always be choppy, but the volatility of total revenue might
decrease a little as the company continues to launch new
drugs. Earlier this week, BioMarin
boughta company with an almost-approved drug, and it also
has two drugs in midstage development. Normally that would
mean they're still years away from approval, but because of
the
orphan-drug
status, it's likely that BioMarin should be able to get
phase 3 trials done relatively quickly if the phase 2 trials
are a success next year.
BioMarin is also working on a monitor for patients who
have phenylketonuria (PKU), the disease that Kuvan treats.
The monitor uses some of the same technology that glucose
monitors from
Abbott Labs (NYSE: ABT) and
Johnson & Johnson (NYSE: JNJ) use, but
monitors phenylalanine levels which are too high in PKU
patients. In addition to supplying revenue, the monitor
should increase sales of Kuvan, as it'll make it easier for
patients to stay on the drug.
Revenue could also increase through acquisitions, as
management mentioned that other deals are in the works. But
it's not likely that BioMarin is going to overpay. CEO J.J.
Bienaime said: "If the price gets out of control, we
generally stop bidding, and we have done that in the past,"
letting competitors overpay for those assets.
I'm sure BioMarin's investors are pretty happy it did.
This article was originally published as
Small and Volatile, but Not for Longon
Fool.com
Copyright © 2009 The Motley Fool, LLC. All rights
reserved.
|