Executive Summary / Key Takeaways

• BioMarin is executing a strategic transformation focused on innovation, growth, and value commitment, evidenced by strong Q1 2025 results with 15% revenue growth and 59% non-GAAP EPS growth, significantly outpacing top-line expansion.
• VOXZOGO for achondroplasia continues to be a primary growth driver, with Q1 2025 revenues up 40% year-over-year, supported by global expansion, penetration in the infant population, and a robust clinical data package demonstrating benefits beyond height.
• The Enzyme Therapies business unit remains a stable and growing contributor, with 8% revenue growth in Q1 2025, driven by strong performance from PALYNZIQ (+22% YOY) and ongoing initiatives to identify new patients and enhance adherence globally.
• BioMarin has reaffirmed its full-year 2025 guidance, projecting total revenues between $3.1 billion and $3.2 billion (10% growth at midpoint), non-GAAP operating margin of 32% to 33% (3.9 pp expansion), and non-GAAP EPS of $4.20 to $4.40 (2x top-line growth), signaling continued profitability acceleration.
• The company's pipeline, focused on prioritized assets like BMN 333 (long-acting CNP), BMN 351 (next-gen DMD), and BMN 349 (oral AATD), along with expansion opportunities for VOXZOGO and PALYNZIQ, represents significant future growth potential, underpinned by a strong balance sheet and increasing operating cash flow.

BioMarin: A Rare Disease Leader's Strategic Evolution

BioMarin Pharmaceutical Inc. has built a legacy over more than two decades, dedicated to transforming the lives of patients with serious and life-threatening rare genetic conditions. Founded in 1997, the company has grown through a blend of internal innovation and strategic collaborations, bringing eight commercial therapies to market. This journey has positioned BioMarin as a leader in the rare disease space, characterized by a deep understanding of genetic disorders and the complexities of developing and commercializing therapies for small, often geographically dispersed patient populations.

In the past year, BioMarin embarked on a significant strategic transformation, reorganizing its operations around dedicated business units for Skeletal Conditions, Enzyme Therapies, and ROCTAVIAN. This shift, coupled with an ongoing cost transformation program, is designed to sharpen focus, enhance accountability, and accelerate profitability growth beyond historical rates. The company's established global footprint, spanning approximately 80 countries, is a critical asset, providing broad market access and deep insights into the unique needs of rare disease communities worldwide.

Technological Foundation and Pipeline Potential

BioMarin's core strength lies in its differentiated technological platforms, particularly in enzyme replacement therapies and the modulation of the C-type natriuretic peptide (CNP) pathway. Enzyme replacement therapies, such as VIMIZIM and NAGLAZYME, address lysosomal storage disorders by providing functional enzymes that patients lack. PALYNZIQ, an enzyme substitute therapy for PKU, offers potent and durable phenylalanine reduction, enabling the potential for an unrestricted diet, a significant benefit for patients.

The CNP pathway is central to bone growth, and VOXZOGO, a CNP analog, represents a breakthrough therapy for achondroplasia. Clinical data for VOXZOGO demonstrate not only improvements in annualized growth velocity but also benefits beyond height, including gains in health-related quality of life and maintained bone strength while increasing bone length. Studies show consistent positive effects on linear growth and proportionality, supported by over 6,000 patient years of safety and efficacy data. Building on this, BioMarin is advancing BMN 333, a long-acting CNP, aiming to leverage potential for greater exposure to deliver superior efficacy and potentially improved convenience, envisioning a comparative study against VOXZOGO seeking superiority.

The pipeline extends to other promising modalities. BMN 351 is a next-generation oligonucleotide for Duchenne Muscular Dystrophy, engineered to achieve dramatically higher dystrophin levels in muscle than other molecules in the space, targeting 10% or higher dystrophin at steady state. BMN 349 is an oral therapeutic for Alpha-1 antitrypsin deficiency associated liver disease, designed to bind to the misfolding Z protein with high selectivity (100-150-fold differential), potentially offering a differentiated approach to address the liver pathology. These programs, along with the expansion of VOXZOGO into hypochondroplasia and other growth disorders, and PALYNZIQ into the adolescent population, represent key catalysts for future value creation.

Navigating the Competitive Arena

The rare disease landscape is intensely competitive, featuring large pharmaceutical companies and specialized biotechs. BioMarin competes directly and indirectly with players like Sarepta Therapeutics (SRPT), Vertex Pharmaceuticals (VRTX), Novartis (NVS), and Sanofi (SNY), each bringing distinct strengths.

Compared to Sarepta, which focuses heavily on gene therapies for neuromuscular diseases like DMD, BioMarin offers a more diversified portfolio spanning enzyme replacement and CNP pathway modulation. While Sarepta has shown rapid innovation in gene therapy speed, BioMarin's enzyme therapies demonstrate high efficiency in enzyme delivery and potentially lower manufacturing costs per unit due to proprietary processes. BioMarin's global commercial footprint provides a broader reach than Sarepta's more U.S.-centric approach, offering potential market share advantages in international territories, though exposing BioMarin to currency risks. Financially, BioMarin's operating and net margins (20.51% and 17.83% TTM, respectively) are generally stronger than Sarepta's (11% and 12% TTM), reflecting better operational efficiency, while its debt-to-equity ratio (0.10 TTM) is significantly lower than Sarepta's (0.88 TTM).

Against Vertex, a leader in cystic fibrosis and expanding into gene editing, BioMarin competes in areas like PKU and emerging gene therapy targets. BioMarin's PALYNZIQ offers differentiated efficacy in phenylalanine reduction with optimized delivery. While Vertex excels in R&D efficiency and scale, BioMarin's strategic focus on niche rare metabolic diseases and operational transformation aims to drive cost leadership and capture market share in underserved segments. Vertex's gross margins (86% TTM) and operating margins (-2% TTM) are influenced by its scale and R&D investment, while BioMarin maintains solid gross margins (78.86% TTM) and positive operating margins, indicating a different profitability profile.

Competition from large players like Novartis and Sanofi, with their extensive global scale and distribution networks, presents challenges. However, BioMarin's targeted approach and specialized expertise in specific rare diseases, coupled with its efficient R&D and manufacturing processes, allow it to compete effectively. While these larger companies may have broader market reach, BioMarin's deep understanding of specific patient communities and established commercial infrastructure in rare diseases provide a competitive moat. The company's strategic response involves leveraging its global capabilities and focusing on developing therapies with differentiated profiles, while also actively defending its intellectual property.

Commercial Momentum and Financial Strength

BioMarin's strategic focus is translating into tangible financial performance. In the first quarter of 2025, total revenues reached $745.1 million, a 15% increase year-over-year. This growth was significantly driven by VOXZOGO, which saw revenues climb 40% to $213.7 million, reflecting strong global demand and successful penetration into the infant population following label expansion. The Enzyme Therapies business unit also contributed meaningfully, growing 8% year-over-year to $484 million, with PALYNZIQ standing out with 22% growth.

This top-line expansion, combined with the benefits of the cost transformation program, is accelerating profitability. Q1 2025 non-GAAP operating margin expanded by 11.9 percentage points year-over-year to 35.7%, and non-GAAP diluted earnings per share increased by 59% to $1.13, demonstrating significant operating leverage. Full-year 2024 results also showcased this trend, with 18% revenue growth and 69% non-GAAP EPS growth, leading to a 9.2 percentage point expansion in non-GAAP operating margin to 28.6%.

The company's financial health is robust. As of March 31, 2025, BioMarin held $1.78 billion in cash, cash equivalents, and investments. Operating cash flow generation is strong and increasing, reaching $174.4 million in Q1 2025, a 271% increase from the prior year period. This strong cash position and growing cash flow provide the flexibility to fund ongoing operations, invest in the pipeline, pursue business development opportunities (targeting at least one deal in 2025), and manage debt obligations, including the $600 million convertible notes due in May 2027. The company successfully settled $495 million of convertible debt in cash in Q3 2024, demonstrating its ability to manage its capital structure effectively.

Outlook and Path Forward

BioMarin has reaffirmed its full-year 2025 guidance, projecting continued strong performance. Total revenues are expected to be between $3.1 billion and $3.2 billion, representing 10% growth at the midpoint. VOXZOGO is anticipated to contribute significantly, with projected revenues between $900 million and $950 million, a 26% increase at the midpoint. The company expects revenue growth to be weighted towards the second half of the year due to anticipated order timing dynamics and commercial initiatives.

Profitability is set to accelerate further, with non-GAAP operating margin guided to 32% to 33% for the full year, a 3.9 percentage point expansion. Non-GAAP diluted EPS is projected between $4.20 and $4.40, implying double-digit growth and continued leverage. While quarterly operating margins and EPS may fluctuate due to the timing of investments in R&D and SG&A throughout the year, the full-year guidance reflects confidence in the overall trajectory.

Looking beyond 2025, BioMarin has set ambitious mid- and long-term targets, including achieving $4 billion in total revenues by 2027, reaching a non-GAAP operating margin of 40% starting in 2026 and expanding further, and generating over $1.25 billion in operating cash flow annually from 2027. The company targets a mid-teen compound annual growth rate for total revenues through 2034, driven by the expansion of its Skeletal Conditions franchise (estimated at a greater than $5 billion opportunity with modest penetration) and sustained growth in Enzyme Therapies. Key pipeline catalysts in the near term include early clinical results for BMN 351 and BMN 333 in the second half of 2025, regulatory submissions for PALYNZIQ in adolescents in the second half of 2025, and the initiation of a registration study for BMN 333 in 2026. The recent acquisition of Inozyme Pharma, adding a Phase 3 candidate for ENPP1 Deficiency with potential launch in 2027, further strengthens the Enzyme Therapy pipeline.

Risks to the Thesis

Despite the positive momentum and strategic clarity, BioMarin faces inherent risks. Execution risk remains as the company implements its strategic transformation, including integrating new business units and realizing the full benefits of the cost program. The ability to successfully launch and expand new indications for VOXZOGO and PALYNZIQ, and advance prioritized pipeline assets like BMN 333 and BMN 351, is crucial but subject to clinical trial outcomes, regulatory approvals, and market acceptance.

Competition is a persistent challenge, particularly from generic erosion for KUVAN and potential new entrants or pipeline advancements from rivals like Sarepta and Vertex in areas like achondroplasia and DMD. Maintaining and defending intellectual property is critical to preserving market exclusivity and competitive positioning.

Macroeconomic factors, including foreign currency fluctuations, inflation, geopolitical instability, and potential changes in trade policies or tariffs, could impact global revenues and operating costs. Furthermore, the evolving healthcare policy landscape, including government pricing controls and reimbursement pressures (like those from the IRA and HTA regulations), could constrain pricing power and market access, potentially impacting revenue and profitability targets. While BioMarin believes its rare disease focus and payer mix offer some insulation, these risks warrant careful monitoring.

Conclusion

BioMarin is undergoing a significant strategic transformation, aiming to leverage its established leadership in rare diseases, diversified portfolio, and global capabilities to drive accelerated growth and profitability. The strong performance in Q1 2025, marked by robust revenue growth and substantial margin expansion, provides tangible evidence that this strategy is yielding results and positions the company well to achieve its reaffirmed full-year guidance.

The core investment thesis centers on the continued expansion of key commercial assets like VOXZOGO, the stable and growing Enzyme Therapies franchise, and the potential of a focused pipeline targeting high-impact opportunities. BioMarin's technological expertise in enzyme replacement and the CNP pathway, coupled with its strategic focus on operational efficiency and global market access, provides a competitive foundation. While risks related to competition, market access, and pipeline execution persist, the company's increasing financial strength, disciplined capital allocation, and clear strategic direction underscore its potential for sustained value creation in the rare disease market.