BioMarin Pharmaceutical BMRN is set to report second-quarter 2020 results on Aug 4, after market close. In the last reported quarter, the company delivered an earnings surprise of 90.91%.

BioMarin’s shares have risen 43.9% this year so far, outperforming the industry’s increase of 5%.

The company’s earnings performance has been mixed. Its earnings beat expectations in three of the last four quarters and missed in one, with the surprise being 22.34%, on average.

Factors to Consider

The negative impact of disruptions of day-to-day operations of clinics and hospitals is expected to have been more acute in the second quarter than the first. The pandemic is expected to have caused demand interruptions such as missed patient infusions and disruption in new patient starts of some of BioMarin’s drugs in the second quarter.

Sales of Kuvan are likely to have been driven by patient growth in North America. However, Naglazyme and Vimzim revenues vary on a quarterly basis, primarily due to the timing of central government orders from some countries, mainly Brazil. Sales of both the drugs had increased in the first quarter. It remains to be seen if the trend has reversed in the second quarter. The respective Zacks Consensus Estimate for Kuvan, Naglazyme and Vimzim is $114 million, $86 million and $119 million.

In new medicine, Palynziq injection, a seasonal slowing of new patient enrollments and patient starts had hurt sales in the first quarter. It remains to be seen if the trend reversed in the second quarter. The Zacks Consensus Estimate for Palynziq is $35.4 million.

We expect management to provide a thorough update on its pipeline. BioMarin’s regulatory applications for Roctavian/valoctocogene roxaparvovec (valrox), a gene therapy for severe hemophilia A, are under review in the United States (PDUFA Date: Aug 21) and Europe with potential approval and launch in the United States in the second half of 2020.

Another important candidate in its pipeline is vosoritide, which has been developed to treat achondroplasia, the most common form of dwarfism. The company filed a regulatory application for vosoritide in the EU in July and expects to file the same in the United States in the third quarter of 2020.

Meanwhile, investors will also look for any changes to its financial guidance for 2020 on the second-quarter conference call.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for BioMarin this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here.

Earnings ESP: Its Earnings ESP is 0.00% as both the Zacks Consensus Estimate as well as the Most Accurate Estimate is pegged at 16 cents per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: BioMarin currently carries a Zacks Rank #1.

Stock to Consider

Here are two biotech stocks you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in their upcoming release.

Incyte Corporation INCY has an Earnings ESP of +4.62% and a Zacks Rank #3.

Arena Pharmaceuticals. ARNA has an Earnings ESP of +12.88% and a Zacks Rank #3.

bluebird bio BLUE has an Earnings ESP of +69.18% and a Zacks Rank #3.

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