BIOMARIN PHARMACEUTICAL INC [BMRN] Filings

10-Q 1 bmrn-20240630.htm 10-Q bmrn-20240630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________________________________

Form 10-Q

______________________________________

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File Number: 000-26727

______________________________________

BioMarin Pharmaceutical Inc.

(Exact name of registrant as specified in its charter)

______________________________________


Delaware			68-0397820
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

770 Lindaro Street	San Rafael	California	94901
(Address of principal executive offices)			(Zip Code)

(415) 506-6700

(Registrant’s telephone number including area code)

______________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.001

BMRN

The Nasdaq Global Select Market

______________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

☒

Accelerated Filer

☐

Non-accelerated Filer

☐

Smaller Reporting Company

☐

Emerging Growth Company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.) Yes ☐ No ☒

Applicable only to corporate issuers:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 190,382,822 shares of common stock, par value $0.001, outstanding as of July 31, 2024.

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Unless the context suggests otherwise, references in this Quarterly Report on Form 10-Q to “BioMarin,” the “Company,” “we,” “us,” and “our” refer to BioMarin Pharmaceutical Inc. and, where appropriate, its wholly owned subsidiaries.

BioMarin®, BRINEURA®, KUVAN®, NAGLAZYME®, PALYNZIQ®, ROCTAVIAN®, VIMIZIM® and VOXZOGO® are our registered trademarks. ALDURAZYME® is a registered trademark of BioMarin/Genzyme LLC. All other brand names and service marks, trademarks and other trade names appearing in this report are the property of their respective owners.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains “forward-looking statements” as defined under securities laws. Many of these statements can be identified by the use of terminology such as “believes,” “expects,” “intends,” “anticipates,” “plans,” “may,” “will,” “could,” “would,” “projects,” “continues,” “estimates,” “potential,” “opportunity” or the negative versions of these terms and other similar expressions. Our actual results or experience could differ significantly from the forward-looking statements. Factors that could cause or contribute to these differences include those discussed in “Risk Factors,” in Part II, Item 1A of this Quarterly Report on Form 10-Q as well as information provided elsewhere in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the Securities and Exchange Commission (the SEC) on February 26, 2024. You should carefully consider that information before you make an investment decision.

You should not place undue reliance on these types of forward-looking statements, which speak only as of the date that they were made. These forward-looking statements are based on the beliefs and assumptions of the Company’s management based on information currently available to management and should be considered in connection with any written or oral forward-looking statements that the Company may issue in the future as well as other cautionary statements the Company has made and may make. Except as required by law, the Company does not undertake any obligation to release publicly any revisions to these forward-looking statements after completion of the filing of this Quarterly Report on Form 10-Q to reflect later events or circumstances or the occurrence of unanticipated events.

The discussion of the Company’s financial condition and results of operations should be read in conjunction with the Company’s Condensed Consolidated Financial Statements and the related Notes thereto included in this Quarterly Report on Form 10-Q.

Risk Factors Summary

The following is a summary of the principal risks that could adversely affect our business, financial condition, operating results, cash flows or stock price. Discussion of the risks listed below, and other risks that we face, are discussed in the section titled “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q.

Business and Operational Risks

•If we fail to obtain and maintain an adequate level of coverage and reimbursement for our products by third-party payers, the sales of our products would be adversely affected or there may be no commercially viable markets for our products.

•As compared to our other, more traditional products, gene therapy products may present additional challenges with respect to the pricing, coverage, reimbursement, and acceptance of the product.

•Because the target patient populations for our products are relatively small, we must achieve significant market share and maintain high per-patient prices for our products to achieve and maintain profitability.

•If we fail to compete successfully with respect to product sales, we may be unable to generate sufficient sales to recover our expenses related to the development of a product program or to justify continued marketing of a product and our revenues could be adversely affected.

•Changes in methods of treatment of disease could reduce demand for our products and adversely affect revenues.

•If we fail to develop new products and product candidates or compete successfully with respect to acquisitions, joint ventures, licenses or other collaboration opportunities, our ability to continue to expand our product pipeline and our growth and development would be impaired.

•The sale of generic versions of KUVAN by generic manufacturers has adversely affected and will continue to adversely affect our revenues and may cause a decline in KUVAN revenues faster than expected.

•If we do not achieve our projected development goals in the timeframes we announce or fail to achieve such goals, the commercialization of our product candidates may be delayed or never occur and the credibility of our management may be adversely affected and, as a result, our stock price may decline.

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Regulatory Risks

•If we fail to obtain regulatory approval to commercially market and sell our product candidates, or if approval of our product candidates is delayed, we will be unable to generate revenues from the sale of these product candidates, our potential for generating positive cash flow will be diminished, and the capital necessary to fund our operations will increase.

•Any product for which we have obtained regulatory approval, or for which we obtain approval in the future, is subject to, or will be subject to, extensive ongoing regulatory requirements by the U.S. Food and Drug Administration (FDA), the European Commission (EC), the European Medicines Agency (EMA) and other comparable international regulatory authorities, and if we fail to comply with regulatory requirements or if we experience unanticipated problems with our products, we may be subject to penalties, we will be unable to generate revenues from the sale of such products, our potential for generating positive cash flow will be diminished, and the capital necessary to fund our operations will be increased.

•To obtain regulatory approval to market our products, preclinical studies and costly and lengthy clinical trials are required and the results of the studies and trials are highly uncertain. Likewise, preliminary, initial or interim data from clinical trials should be considered carefully and with caution because the final data may be materially different from the preliminary, initial or interim data, particularly as more patient data become available.

•Government price controls or other changes in pricing regulation could restrict the amount that we are able to charge for our current and future products, which would adversely affect our revenues and results of operations.

•Government healthcare reform could increase our costs and adversely affect our revenues and results of operations.

Financial and Financing Risks

•If we incur operating losses or are unable to sustain positive cash flows for a period longer than anticipated, we may be unable to continue our operations at planned levels and may be forced to reduce our operations.

Manufacturing Risks

•If we fail to comply with manufacturing regulations, our financial results and financial condition will be adversely affected.

•If we are unable to successfully develop and maintain manufacturing processes for our product candidates to produce sufficient quantities at acceptable costs, we may be unable to support a clinical trial or be forced to terminate a program, or if we are unable to produce sufficient quantities of our products at acceptable costs, we may be unable to meet commercial demand, lose potential revenue, have reduced margins or be forced to terminate a program.

•Supply interruptions may disrupt our inventory levels and the availability of our products and product candidates and cause delays in obtaining regulatory approval for our product candidates, or harm our business by reducing our revenues.

Risks Related to International Operations

•We conduct a significant amount of our operations and generate a significant percentage of our sales outside of the U.S., which subjects us to additional business risks that could adversely affect our revenues and results of operations.

•A significant portion of our international sales are made based on special access programs, and changes to these programs could adversely affect our product sales and revenues in these countries.

•Our international operations pose currency risks, which may adversely affect our operating results and net income.

Intellectual Property Risks

•If we are unable to protect our intellectual property, we may not be able to compete effectively or preserve our market shares.

•Competitors and other third parties may have developed intellectual property that could limit our ability to market and commercialize our products and product candidates, if approved.

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BIOMARIN PHARMACEUTICAL INC.

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		Page
PART I.	FINANCIAL INFORMATION	3
Item 1.	Financial Statements	3
	Condensed Consolidated Statements of Comprehensive Income (Unaudited) for the three and six months ended June 30, 2024 and 2023	3
	Condensed Consolidated Balance Sheets as of June 30, 2024 (Unaudited) and December 31, 2023	4
	Condensed Consolidated Statement of Stockholders’ Equity (Unaudited) for the three and six months ended June 30, 2024 and 2023	5
	Condensed Consolidated Statements of Cash Flows (Unaudited) for the six months ended June 30, 2024 and 2023	6
	Notes to Condensed Consolidated Financial Statements (Unaudited)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	30
Item 4.	Controls and Procedures	30

PART II.	OTHER INFORMATION	31
Item 1.	Legal Proceedings	31
Item 1A.	Risk Factors	31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	59
Item 3.	Defaults Upon Senior Securities	59
Item 4.	Mine Safety Disclosures	59
Item 5.	Other Information	59
Item 6.	Exhibits	61

SIGNATURES		63

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

BIOMARIN PHARMACEUTICAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three and Six Months Ended June 30, 2024 and 2023

(In thousands, except per share amounts)

(unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
REVENUES:
Net product revenues	$	702,129	$	584,698	$	1,339,944	$	1,171,124
Royalty and other revenues	9,900		10,577		20,918		20,566
Total revenues	712,029		595,275		1,360,862		1,191,690
OPERATING EXPENSES:
Cost of sales	130,459		130,619		255,639		266,091
Research and development	183,787		177,363		388,774		349,209
Selling, general and administrative	263,032		206,103		488,938		417,126
Intangible asset amortization	14,299		15,624		28,597		31,294
Gain on sale of nonfinancial assets	—		—		(10,000)		—
Total operating expenses	591,577		529,709		1,151,948		1,063,720
INCOME FROM OPERATIONS	120,452		65,566		208,914		127,970

Interest income	19,785		12,612		39,150		24,555
Interest expense	(3,574)		(3,755)		(7,121)		(7,458)
Other expense, net	(4,527)		(3,613)		(3,260)		(17,500)
INCOME BEFORE INCOME TAXES	132,136		70,810		237,683		127,567
Provision for income taxes	24,962		14,770		41,847		20,675
NET INCOME	$	107,174	$	56,040	$	195,836	$	106,892
EARNINGS PER SHARE, BASIC	$	0.56	$	0.30	$	1.03	$	0.57
EARNINGS PER SHARE, DILUTED	$	0.55	$	0.29	$	1.01	$	0.56
Weighted average common shares outstanding, basic	190,114		187,948		189,490		187,311
Weighted average common shares outstanding, diluted	200,505		194,998		200,137		194,756

COMPREHENSIVE INCOME	$	135,019	$	48,145	$	251,423	$	92,142

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

BIOMARIN PHARMACEUTICAL INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

June 30, 2024 and December 31, 2023

(In thousands, except share amounts)


	June 30, 2024		December 31, 2023 ⁽¹⁾
ASSETS	(unaudited)
Current assets:
Cash and cash equivalents	$	972,150	$	755,127
Short-term investments	252,201		318,683
Accounts receivable, net	691,232		633,704
Inventory	1,183,621		1,107,183
Other current assets	160,426		141,391
Total current assets	3,259,630		2,956,088
Noncurrent assets:
Long-term investments	557,083		611,135
Property, plant and equipment, net	1,052,898		1,066,133
Intangible assets, net	265,533		294,701
Goodwill	196,199		196,199
Deferred tax assets	1,545,006		1,545,809
Other assets	190,772		171,538
Total assets	$	7,067,121	$	6,841,603
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	572,500	$	683,147
Short-term convertible debt, net	494,837		493,877

Total current liabilities	1,067,337		1,177,024
Noncurrent liabilities:
Long-term convertible debt, net	594,116		593,095

Other long-term liabilities	119,369		119,935
Total liabilities	1,780,822		1,890,054
Stockholders’ equity:
Common stock, $0.001 par value: 500,000,000 shares authorized; 190,355,517 and 188,598,154 shares issued and outstanding, respectively	190		189
Additional paid-in capital	5,696,701		5,611,562
Company common stock held by the Nonqualified Deferred Compensation Plan	(11,673)		(9,860)
Accumulated other comprehensive income (loss)	26,799		(28,788)
Accumulated deficit	(425,718)		(621,554)
Total stockholders’ equity	5,286,299		4,951,549
Total liabilities and stockholders’ equity	$	7,067,121	$	6,841,603

(1)December 31, 2023 balances were derived from the audited Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 26, 2024.

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

BIOMARIN PHARMACEUTICAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Three and Six Months Ended June 30, 2024 and 2023

(In thousands)

(unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023

Shares of common stock, beginning balances (1)	189,777		187,601		188,598		186,251
Issuances under equity incentive plans	579		551		1,758		1,901
Shares of common stock, ending balances	190,356		188,152		190,356		188,152

Total stockholders' equity, beginning balances (1)	$	5,073,816	$	4,659,043	$	4,951,549	$	4,603,156
Common stock:
Beginning balances (1)	190		188		189		186
Issuances under equity incentive plans, net of tax	—		—		1		2
Ending balances	190		188		190		188
Additional paid-in capital:
Beginning balances (1)	5,619,264		5,417,873		5,611,562		5,404,895
Issuances under equity incentive plans, net of tax	25,326		24,489		(30,343)		(17,951)
Stock-based compensation	52,138		51,150		113,669		105,478
Change in Common stock held by the Nonqualified Deferred Compensation plan (NQDC)	(27)		444		1,813		1,534
Ending balances	5,696,701		5,493,956		5,696,701		5,493,956
Company common stock held by the NQDC:
Beginning balances (1)	(11,700)		(9,949)		(9,860)		(8,859)
Common stock held by the NQDC	27		(444)		(1,813)		(1,534)
Ending balances	(11,673)		(10,393)		(11,673)		(10,393)
Accumulated other comprehensive income (loss):
Beginning balances (1)	(1,046)		(10,722)		(28,788)		(3,867)
Other comprehensive income (loss)	27,845		(7,895)		55,587		(14,750)
Ending balances	26,799		(18,617)		26,799		(18,617)
Accumulated Deficit:
Beginning balances (1)	(532,892)		(738,347)		(621,554)		(789,199)
Net income	107,174		56,040		195,836		106,892
Ending balances	(425,718)		(682,307)		(425,718)		(682,307)
Total stockholders' equity, ending balances	$	5,286,299	$	4,782,827	$	5,286,299	$	4,782,827

(1)The beginning balances for the six-month periods were derived from the audited Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 26, 2024.

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

BIOMARIN PHARMACEUTICAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended June 30, 2024 and 2023

(In thousands)

(unaudited)


	Six Months Ended June 30,
	2024		2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	195,836	$	106,892
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization	53,813		51,840
Non-cash interest expense	1,981		2,058
Accretion of discount on investments	(4,678)		(4,533)
Stock-based compensation	106,163		103,857
Gain on sale of nonfinancial assets	(10,000)		—
Impairment of assets and other non-cash adjustments	14,204		12,650
Deferred income taxes	1,537		(5,108)
Unrealized foreign exchange loss (gain)	(19,958)		7,455

Other	(858)		361
Changes in operating assets and liabilities:
Accounts receivable, net	(56,081)		(145,831)
Inventory	(47,409)		(56,476)
Other current assets	1,615		(53,430)
Other assets	(22,880)		(5,616)
Accounts payable and other short-term liabilities	(54,261)		(25,093)
Other long-term liabilities	6,709		7,104
Net cash provided by (used in) operating activities	165,733		(3,870)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment	(47,431)		(46,039)
Maturities and sales of investments	317,649		491,063
Purchases of investments	(195,462)		(444,049)
Proceeds from sale of nonfinancial assets	10,000		—
Purchase of intangible assets	(8,512)		(1,457)

Net cash provided by (used in) investing activities	76,244		(482)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercises of awards under equity incentive plans	36,618		50,193
Taxes paid related to net share settlement of equity awards	(66,739)		(67,862)
Payments of contingent consideration	—		(9,475)



Principal repayments of financing leases	(60)		(1,635)

Net cash used in financing activities	(30,181)		(28,779)
Effect of exchange rate changes on cash	5,227		2,981
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	217,023		(30,150)
Cash and cash equivalents:
Beginning of period	$	755,127	$	724,531
End of period	$	972,150	$	694,381
SUPPLEMENTAL CASH FLOW DISCLOSURES:
Cash paid for interest	$	5,126	$	5,175
Cash paid for income taxes	$	22,884	$	28,183
SUPPLEMENTAL CASH FLOW DISCLOSURES FOR NON-CASH INVESTING AND FINANCING ACTIVITIES:
Increase in accounts payable and accrued liabilities related to fixed assets	$	11,941	$	8,669
Decrease in accounts payable and accrued liabilities related to intangible assets	$	8,290	$	2,344

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

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BIOMARIN PHARMACEUTICAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of U.S. Dollars, except per share amounts or as otherwise disclosed)

(1) BUSINESS OVERVIEW AND SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

Founded in 1997, BioMarin Pharmaceutical Inc. (the Company or BioMarin) is a global biotechnology company dedicated to transforming lives through genetic discovery. The Company develops and commercializes targeted therapies that address the root cause of genetic conditions. The Company's robust research and development (R&D) capabilities have resulted in multiple innovative commercial therapies for patients with rare genetic disorders. The Company's distinctive approach to drug discovery has produced a diverse pipeline of commercial, clinical, and pre-clinical candidates that address a significant unmet medical need, have well-understood biology, and provide an opportunity to be first-to-market or offer a substantial benefit over existing treatment options.

Basis of Presentation

These Condensed Consolidated Financial Statements have been prepared pursuant to U.S. generally accepted accounting principles (U.S. GAAP) and the rules and regulations of the SEC for Quarterly Reports on Form 10-Q and do not include all of the information and note disclosures required by U.S. GAAP for complete financial statements, although management believes that the disclosures herein are adequate to ensure that the information presented is not misleading. The Condensed Consolidated Financial Statements should therefore be read in conjunction with the Consolidated Financial Statements and Notes thereto for the fiscal year ended December 31, 2023 included in the Company’s Annual Report on Form 10-K. The Condensed Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions have been eliminated. The results of operations for the three and six months ended June 30, 2024 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2024 or any other period.

Change in Presentation

Effective January 1, 2024, the Company changed its presentation for foreign currency transaction gains and losses resulting from remeasurement and idle plant costs within its Condensed Consolidated Statements of Comprehensive Income. Effective with this change in presentation, foreign currency transaction gains and losses resulting from remeasurement are presented in Other Expense, Net and idle plant costs are presented in Cost of Sales. Prior to this change in presentation, both foreign currency transaction gains and losses resulting from remeasurement and idle plant costs were presented in Selling, General and Administrative (SG&A) expense. The Company believes that this change in presentation is preferable because the revised presentation is more consistent with how management measures the Company’s operating performance.

Prior period amounts were revised to conform to current period presentation. The following table reflects the impacts of the change in presentation for the prior periods presented. The change in presentation had no impact to Net Income, Total Stockholders’ Equity or earnings per share for the three and six months ended June 30, 2023.


	Three Months ended June 30, 2023		Six Months ended June 30, 2023
Cost of sales	$	2,537	$	11,460
SG&A	$	(9,233)	$	(21,213)
Total operating expenses	$	(6,696)	$	(9,753)
Other expense, net	$	6,696	$	9,753

Use of Estimates

U.S. GAAP requires management to make estimates and assumptions that affect amounts reported in the Condensed Consolidated Financial Statements and accompanying disclosures. Although these estimates are based on management’s best knowledge of current events and actions that the Company may undertake in the future, actual results may be different from those estimates. The Condensed Consolidated Financial Statements reflect all adjustments of a normal, recurring nature that are, in the opinion of management, necessary for a fair presentation of results for these interim periods.

Management performed an evaluation of the Company’s activities through the date of filing of this Quarterly Report on Form 10-Q to determine if there were any subsequent events that occurred subsequent to the balance sheet date and prior to filing this Quarterly Report on Form 10-Q, that would require recognition or disclosure in the Condensed Consolidated Financial Statements. Further to this evaluation, the Company has included a subsequent event noted relating to the maturity and settlement of the Company’s convertible notes due in August 2024 that is discussed in Note 6 - Deb t.

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BIOMARIN PHARMACEUTICAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of U.S. Dollars, except per share amounts or as otherwise disclosed)

Significant Accounting Policies

There have been no material changes to the Company’s significant accounting policies during the six months ended June 30, 2024, as compared to the significant accounting policies disclosed in Note 1 – Business Overview and Significant Accounting Policies to the Company’s Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

Recent Accounting Pronouncements

There have been no new accounting pronouncements adopted by the Company or new accounting pronouncements issued by the Financial Accounting Standards Board (FASB) during the six months ended June 30, 2024, as compared to the recent accounting pronouncements described in Note 1 to the Company’s Consolidated Financial Statements of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, that the Company believes are of significance or potential significance to the Company. The following paragraphs discuss new accounting pronouncements issued by the FASB, but not yet adopted by the Company.

In November 2023, the FASB issued Accounting Standards Update (ASU) 2023-07, Segment Reporting Topic 280, Improvements to Reportable Segment Disclosures, to improve reportable segment disclosure requirements through enhanced disclosures about significant segment expenses. ASU 2023-07 expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items and interim disclosures of a reportable segment’s profit or loss and assets. The effective date for the update is for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024 and should be applied on a retrospective basis to all periods presented. The Company is currently evaluating the effect of adopting the update on its related disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes Topic 740, Improvements to Income Tax Disclosures. The guidance requires disclosure of disaggregated information about the Company’s effective tax rate reconciliation as well as information on income taxes paid. The disclosure requirements will be applied on a prospective basis, with the option to apply it retrospectively. The effective date for the update is for fiscal years beginning after December 15, 2024. The Company is currently evaluating the effect of the update on its related disclosures.

(2) FINANCIAL INSTRUMENTS

All marketable securities were classified as available-for-sale as of June 30, 2024 and December 31, 2023.

The following tables show the Company’s cash, cash equivalents and available-for-sale securities by significant investment category for each period presented:


	June 30, 2024
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Aggregate Fair Value		Cash and Cash Equivalents		Short-term Marketable Securities (1)		Long-term Marketable Securities (2)
Level 1:
Cash	$	285,666	$	—	$	—	$	285,666	$	285,666	$	—	$	—

Level 2:
Money market instruments	676,505		—		—		676,505		676,505		—		—
Corporate debt securities	537,626		670		(1,460)		536,836		—		162,959		373,877
U.S. government agency securities	184,487		39		(966)		183,560		9,979		88,310		85,271

Asset-backed securities	98,958		105		(196)		98,867				932		97,935

Subtotal	1,497,576		814		(2,622)		1,495,768		686,484		252,201		557,083
Total	$	1,783,242	$	814	$	(2,622)	$	1,781,434	$	972,150	$	252,201	$	557,083

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BIOMARIN PHARMACEUTICAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (continued)

(In thousands of U.S. Dollars, except per share amounts or as otherwise disclosed)


	December 31, 2023
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Aggregate Fair Value		Cash and Cash Equivalents		Short-term Marketable Securities (1)		Long-term Marketable Securities (2)
Level 1:
Cash	$	229,676	$	—	$	—	$	229,676	$	229,676	$	—	$	—

Level 2:
Money market instruments	499,483		—		—		499,483		499,483		—		—
Corporate debt securities	587,896		3,476		(1,996)		589,376		—		193,251		396,125
U.S. government agency securities	251,952		556		(1,140)		251,368		19,976		111,343		120,049
Commercial paper	20,076		5		—		20,081		5,992		14,089		—
Asset-backed securities	94,744		351		(134)		94,961		—		—		94,961

Subtotal	1,454,151		4,388		(3,270)		1,455,269		525,451		318,683		611,135
Total	$	1,683,827	$	4,388	$	(3,270)	$	1,684,945	$	755,127	$	318,683	$	611,135

(1) The Company’s short-term marketable securities mature in one year or less.

(2) The Company’s long-term marketable securities mature between one and five years.

As of June 30, 2024, the Company had the ability and intent to hold all investments that were in an unrealized loss position until maturity. The Company considered its intent and ability to hold the securities until recovery of amortized cost basis, the extent to which fair value is less than amortized cost basis, conditions specifically related to the security’s industry and geography, payment structure and history and changes to the ratings (if any) in determining that the decline in fair value compared to carrying value is not related to a credit loss.

The Company has certain investments in non-marketable equity securities, measured using unobservable valuation inputs and remeasured on a nonrecurring basis, which are collectively considered strategic investments. As of June 30, 2024 and December 31, 2023, the fair value of the Company’s strategic investments was $6.7 million and $11.3 million, respectively. These investments were recorded to Other Assets in the Company’s Condensed Consolidated Balance Sheets. In the second quarter of 2024, based on new developments, the Company became aware of factors that indicated a $4.5 million decline in the fair value of one of its strategic investments. In the first quarter of 2023, the Company concluded that factors existed indicating it would no longer realize a $12.6 million equity investment in its non-marketable securities. The losses on the Company’s non-marketable equity investments were recorded to Other Expense, Net on the Company’s Condensed Consolidated Statements of Comprehensive Income for the respective periods. See Note 1 - Business Overview and Significant Accounting Policies included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 for additional information related to the Company’s non-marketable securities policy.

(3) SUPPLEMENTAL FINANCIAL STATEMENTS INFORMATION

Supplemental Balance Sheet Information

Inventory consisted of the following:


	June 30, 2024		December 31, 2023
Raw materials	$	154,153	$	155,704
Work-in-process	605,770		571,107
Finished goods	423,698		380,372
Total inventory	$	1,183,621	$	1,107,183

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BIOMARIN PHARMACEUTICAL INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of U.S. Dollars, except per share amounts or as otherwise disclosed)

Property, Plant and Equipment, Net consisted of the following:


	June 30, 2024		December 31, 2023
Property, plant and equipment, gross	$	1,962,948	$	1,933,222
Accumulated depreciation	(910,050)		(867,089)
Total property, plant and equipment, net	$	1,052,898	$	1,066,133

Depreciation expense, net of amounts capitalized into inventory, for the three and six months ended June 30, 2024 was $11.5 million and $24.1 million, respectively. Depreciation expense, net of amounts capitalized into inventory, for the three and six months ended June 30, 2023 was $9.4 million and $19.7 million, respectively.

Intangible Assets, Net consisted of the following:


	June 30, 2024		December 31, 2023
Finite-lived intangible assets	$	710,533	$	710,011
Accumulated amortization	(445,000)		(415,310)
Net carrying value	$	265,533	$	294,701

In the first quarter of 2024, the Company received $10.0 million due to the achievement of a regulatory approval milestone by a third party related to previously sold intangible assets, which the Company recorded as a Gain on Sale of Nonfinancial Assets in the Condensed Consolidated Statements of Comprehensive Income.

Accounts Payable and Accrued Liabilities consisted of the following:


	June 30, 2024		December 31, 2023
Accounts payable and accrued operating expenses	$	257,412	$	315,509
Accrued compensation expense	147,737		201,067
Accrued rebates payable	113,432		96,179
Accrued income taxes	18,864		2,651
Lease liability	10,689		8,779
Foreign currency exchange forward contracts	7,684		33,853
Accrued royalties payable	7,667		14,299

Deferred revenue	1,912		4,620
Other	7,103		6,190
Total accounts payable and accrued liabilities	$	572,500	$	683,147

(4) FAIR VALUE MEASUREMENTS

The Company measures certain financial assets and liabilities at fair value in accordance with the policy described in Note 1 – Business Overview and Significant Accounting Policies to the Company’s Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

Other than the Company’s fixed-rate convertible debt disclosed in Note 6 – Debt, there were no financial assets or liabilities that were remeasured using quoted prices in active markets for identical assets (Level 1) as of June 30, 2024 or

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BIOMARIN PHARMACEUTICAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (continued)

(In thousands of U.S. Dollars, except per share amounts or as otherwise disclosed)

December 31, 2023. The Company had no financial assets or liabilities that are remeasured on a recurring basis using unobservable inputs that reflect estimates and assumptions (Level 3) as of June 30, 2024 or December 31, 2023.

Level 2 assets and liabilities that are remeasured using significant observable inputs consisted of the following:


	June 30, 2024		December 31, 2023
Assets:
Other current assets:
NQDC Plan assets	$	2,649	$	2,026
Other assets:
NQDC Plan assets	33,112		28,119
Restricted investments (1)	2,419		2,393
Total other assets	35,531		30,512
Total assets	$	38,180	$	32,538
Liabilities:
Current liabilities:
NQDC Plan liability	$	2,649	$	2,026


Other long-term liabilities:
NQDC Plan liability	33,112		28,119


Total liabilities	$	35,761	$	30,145

(1) The restricted investments as of June 30, 2024 and December 31, 2023 secure the Company's irrevocable standby letters of credit obtained in connection with certain commercial agreements.

There were no transfers between levels during the three and six months ended June 30, 2024.

(5) DERIVATIVE INSTRUMENTS AND HEDGING STRATEGIES

The Company uses foreign currency exchange forward contracts (forward contracts) to protect against the impact of changes in the value of forecasted foreign currency cash flows resulting from revenues and operating expenses denominated in currencies other than the U.S. Dollar (USD), primarily the Euro. Certain of these forward contracts are designated as cash flow hedges and have maturities of up to 24 months. The Company also enters into forward contracts to manage foreign exchange risk related to asset or liability positions denominated in currencies other than USD. Such forward contracts are considered to be economic hedges, are not designated as hedging instruments and have maturities of up to three months. The Company does not use derivative instruments for speculative trading purposes. The Company is exposed to counterparty credit risk on its derivatives. The Company has established and maintains strict counterparty credit guidelines and enters into hedging agreements with financial institutions that are investment grade or better to minimize the Company’s exposure to potential defaults. The Company is not required to pledge collateral under these agreements.

The following table summarizes the aggregate notional amounts for the Company’s derivatives outstanding as of the periods presented.


Forward Contracts	June 30, 2024		December 31, 2023
Derivatives designated as hedging instruments:
Sell	$	1,086,980	$	1,249,662
Purchase	$	192,162	$	198,408

Derivatives not designated as hedging instruments:
Sell	$	281,438	$	350,269
Purchase	$	28,824	$	90,102

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BIOMARIN PHARMACEUTICAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (continued)

(In thousands of U.S. Dollars, except per share amounts or as otherwise disclosed)

The fair value carrying amounts of the Company’s derivatives, which are classified as Level 2 within the fair value hierarchy, were as follows:


Balance Sheet Location	June 30, 2024		December 31, 2023
Derivatives designated as hedging instruments:
Asset Derivatives
Other current assets	$	27,599	$	6,663
Other assets	8,236		1,855
Subtotal	$	35,835	$	8,518

Liability Derivatives
Accounts payable and accrued liabilities	$	6,407	$	30,005
Other long-term liabilities	1,257		8,171
Subtotal	$	7,664	$	38,176

Derivatives not designated as hedging instruments:
Asset Derivatives
Other current assets	$	2,352	$	547



Liability Derivatives
Accounts payable and accrued liabilities	$	1,277	$	3,848



Total Derivatives Assets	$	38,187	$	9,065
Total Derivatives Liabilities	$	8,941	$	42,024

For additional discussion of fair value measurements, see Note 1 – Business Overview and Significant Accounting Policies to the Company’s Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

The following tables summarize the impact of gains and losses from the Company's derivatives on its Condensed Consolidated Statements of Comprehensive Income for the periods presented.


	Three Months Ended				Six Months Ended June 30,
	2024		2023		2024		2023
Derivatives Designated as Cash Flow Hedging Instruments	Cash Flow Hedging Gains (Losses) Reclassified into Earnings		Cash Flow Hedging Gains (Losses) Reclassified into Earnings		Cash Flow Hedging Gains (Losses) Reclassified into Earnings		Cash Flow Hedging Gains (Losses) Reclassified into Earnings

Net product revenues	$	3,371	$	677	$	2,252	$	4,147
Operating expenses	$	(190)	$	(26)	$	314	$	(482)

Derivatives Not Designated as Hedging Instruments	Gains (Losses) Recognized in Earnings		Gains (Losses) Recognized in Earnings		Gains (Losses) Recognized in Earnings		Gains (Losses) Recognized in Earnings
Operating expenses	$	13,812	$	769	$	21,541	$	(3,394)

As of June 30, 2024, the Company expects to reclassify unrealized gains of $21.2 million from Accumulated Other Comprehensive Income (Loss) (AOCI) to earnings as the forecasted revenues and operating expense transactions occur over the next twelve months. For additional discussion of balances in AOCI see Note 7 – Accumulated Other Comprehensive Income.

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BIOMARIN PHARMACEUTICAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (continued)

(In thousands of U.S. Dollars, except per share amounts or as otherwise disclosed)

(6) DEBT

Convertible Notes

As of June 30, 2024, the Company had outstanding fixed-rate notes with varying maturities for an undiscounted aggregate principal amount of $1.1 billion (collectively, the Notes). The Notes are senior subordinated convertible obligations, and interest is payable in arrears, semi-annually. The following table summarizes information regarding the Company’s convertible debt:


	June 30, 2024		December 31, 2023
0.599% senior subordinated convertible notes due in August 2024 (the 2024 Notes)	$	495,000	$	495,000
Unamortized discount net of deferred offering costs	(163)		(1,123)
2024 Notes, net (1)	494,837		493,877

1.25% senior subordinated convertible notes due in May 2027 (the 2027 Notes)	600,000		600,000
Unamortized discount net of deferred offering costs	(5,884)		(6,905)
2027 Notes, net	594,116		593,095

Total convertible debt, net	$	1,088,953	$	1,086,972

Fair value of fixed-rate convertible debt (2):
2024 Notes	$	492,447	$	488,288
2027 Notes	576,102		619,260
Total fair value of fixed-rate convertible debt	$	1,068,549	$	1,107,548

(1) The Company’s convertible notes due in 2024 matured on August 1, 2024, subsequent to quarter-end. Substantially all holders of the 2024 Notes were repaid with cash, totaling approximately $495.0 million. No gain or loss was incurred upon the extinguishment.

(2) The fair value of the Company’s fixed-rate convertible debt is based on open-market trades and is classified as Level 1 in the fair value hierarchy. For additional discussion of fair value measurements, see Note 1 – Business Overview and Significant Accounting Policies to the Company’s Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

Interest expense on the Company’s convertible debt consisted of the following:


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Coupon interest expense	$	2,617	$	2,617	$	5,233	$	5,233
Accretion of discount on convertible notes	843		834		1,684		1,673
Amortization of debt issuance costs	148		149		297		297
Total interest expense on convertible debt	$	3,608	$	3,600	$	7,214	$	7,203

See Note 10 - Debt to the Company’s Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 for additional information related to the Company’s convertible debt.

(7) ACCUMULATED OTHER COMPREHENSIVE INCOME

The following tables summarize changes in the accumulated balances for each component of AOCI, including current-period other comprehensive income and reclassifications out of AOCI, for the periods presented.

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BIOMARIN PHARMACEUTICAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (continued)

(In thousands of U.S. Dollars, except per share amounts or as otherwise disclosed)


	Three Months Ended June 30, 2024
	Unrealized Gains (Losses) on Cash Flow Hedges		Unrealized Gains (Losses) on Available-for-Sale Debt Securities		Total
AOCI balance as of March 31, 2024	$	(183)	$	(863)	$	(1,046)
Other comprehensive income (loss) before reclassifications	31,551		(684)		30,867
Less: gain (loss) reclassified from AOCI	3,181		—		3,181
Tax effect	—		159		159
Net current-period other comprehensive income (loss)	28,370		(525)		27,845
AOCI balance as of June 30, 2024	$	28,187	$	(1,388)	$	26,799


	Three Months Ended June 30, 2023
	Unrealized Gains (Losses) on Cash Flow Hedges		Unrealized Gains (Losses) on Available-for-Sale Debt Securities		Total
AOCI balance as of March 31, 2023	$	(2,647)	$	(8,075)	$	(10,722)
Other comprehensive income (loss) before reclassifications	(6,737)		(661)		(7,398)
Less: gain (loss) reclassified from AOCI	651		—		651
Tax effect	—		154		154
Net current-period other comprehensive income (loss)	(7,388)		(507)		(7,895)
AOCI balance as of June 30, 2023	$	(10,035)	$	(8,582)	$	(18,617)


	Six Months Ended June 30, 2024
	Unrealized Gains (Losses) on Cash Flow Hedges		Unrealized Gains (Losses) on Available-for-Sale Debt Securities		Total
AOCI balance as of December 31, 2023	$	(29,658)	$	870	$	(28,788)
Other comprehensive income (loss) before reclassifications	60,411		(2,926)		57,485
Less: gain (loss) reclassified from AOCI	2,566		—		2,566
Tax effect	—		668		668
Net current-period other comprehensive income (loss)	57,845		(2,258)		55,587
AOCI balance as of June 30, 2024	$	28,187	$	(1,388)	$	26,799


	Six Months Ended June 30, 2023
	Unrealized Gains (Losses) on Cash Flow Hedges		Unrealized Gains (Losses) on Available-for-Sale Debt Securities		Total
AOCI balance as of December 31, 2022	$	8,226	$	(12,093)	$	(3,867)
Other comprehensive income (loss) before reclassifications	(14,596)		4,586		(10,010)
Less: gain (loss) reclassified from AOCI	3,665		—		3,665
Tax effect	—		(1,075)		(1,075)
Net current-period other comprehensive income (loss)	(18,261)		3,511		(14,750)
AOCI balance as of June 30, 2023	$	(10,035)	$	(8,582)	$	(18,617)

For additional discussion of reclassifications from AOCI see Note 5 – Derivative Instruments and Hedging Strategies.

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BIOMARIN PHARMACEUTICAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (continued)

(In thousands of U.S. Dollars, except per share amounts or as otherwise disclosed)

(8) REVENUE, CREDIT CONCENTRATIONS AND GEOGRAPHIC INFORMATION

The Company operates in one business segment, which focuses on the development and commercialization of innovative therapies for people with serious and life-threatening rare diseases and medical conditions.

The following table presents Total Revenues and disaggregates Net Product Revenues by product.


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023

VOXZOGO	$	183,923	$	113,337	$	336,812	$	201,173
VIMIZIM	178,016		177,392		370,536		366,584
NAGLAZYME	132,049		90,103		237,678		213,124
PALYNZIQ	88,291		74,868		164,000		137,220
BRINEURA	45,309		38,058		84,356		77,202

ALDURAZYME	38,558		40,318		73,820		74,721
KUVAN	28,551		50,622		64,461		101,100
ROCTAVIAN	7,432		—		8,281		—
Total net product revenues	702,129		584,698		1,339,944		1,171,124
Royalty and other revenues	9,900		10,577		20,918		20,566
Total revenues	$	712,029	$	595,275	$	1,360,862	$	1,191,690

The Company considers there to be revenue concentration risks for regions where Net Product Revenues exceed 10% of consolidated Net Product Revenues. The concentration of the Company’s Net Product Revenues within the regions below may have a material adverse effect on the Company’s revenues and results of operations if sales in the respective regions experience difficulties. The table below disaggregates total Net Product Revenues by geographic region, which is based on patient location for the Company's commercial products sold directly by the Company, except for ALDURAZYME, which is marketed and sold exclusively by Sanofi worldwide.


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
United States	$	227,449	$	191,655	$	420,448	$	358,439
Europe	220,990		183,434		416,738		344,126
Latin America	84,418		75,444		163,012		143,192
Middle East	49,701		25,630		106,776		117,272
Rest of world	81,013		68,217		159,150		133,374
Total net product revenues marketed by the Company	$	663,571	$	544,380	$	1,266,124	$	1,096,403
ALDURAZYME net product revenues marketed by Sanofi	38,558		40,318		73,820		74,721
Total net product revenues	$	702,129	$	584,698	$	1,339,944	$	1,171,124

The following table illustrates the percentage of the Company’s total Net Product Revenues attributed to the Company’s largest customers for the periods presented.


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Customer A	14	%	15	%	14	%	15	%
Customer B	11	%	12	%	11	%	11	%
Customer C	10	%	10	%	9	%	9	%

Total	35	%	37	%	34	%	35	%

Table of Contents

BIOMARIN PHARMACEUTICAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (continued)

(In thousands of U.S. Dollars, except per share amounts or as otherwise disclosed)

On a consolidated basis, three customers accounted for 15%, 12%, and 10% of the Company’s June 30, 2024 accounts receivable balance, respectively, compared to December 31, 2023, when two customers accounted for 15% and 12% of the accounts receivable balance, respectively. As of June 30, 2024, and December 31, 2023, the accounts receivable balance for Sanofi included $67.1 million and $63.4 million, respectively, of unbilled accounts receivable, which becomes payable to the Company when the product is sold through by Sanofi. The Company does not require collateral from its customers, but does perform periodic credit evaluations of its customers’ financial condition and requires prepayments in certain circumstances.

The Company is mindful that conditions in the current macroeconomic environment, such as inflation, changes in interest and foreign currency exchange rates, natural disasters, geopolitical instability, and supply chain disruptions, could affect the Company’s ability to achieve its goals. In addition, the Company sells its products in countries that face economic volatility and weakness. Although the Company has historically collected receivables from customers in certain countries, sustained weakness or further deterioration of the local economies and currencies may cause customers in those countries to delay payment or be unable to pay for the Company’s products. The Company believes that the allowances for doubtful accounts related to these countries, if any, are adequate based on its analysis of the specific business circumstances and expectations of collection for each of the underlying accounts in these countries. The Company will continue to monitor these conditions and will attempt to adjust its business processes, as appropriate, to mitigate macroeconomic risks to its business.

(9) STOCK-BASED COMPENSATION

The Company has stockholder-approved equity incentive plans that provide for the granting of restricted stock units (RSUs) and stock options as well as other forms of equity compensation to its employees, officers and non-employee directors. The Company also has an Employee Stock Purchase Plan (ESPP). Compensation expense included in the Company’s Condensed Consolidated Statements of Comprehensive Income for all stock-based compensation arrangements was as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Cost of sales	$	3,774	$	4,721	$	7,018	$	9,052
Research and development	12,935		15,055		33,612		34,883
Selling, general and administrative	31,205		30,386		65,533		59,922
Total stock-based compensation expense	$	47,914	$	50,162	$	106,163	$	103,857

(10) RESTRUCTURING

During the first half of 2024, the Company completed a strategic portfolio assessment of its research and development programs to determine which have the most transformative potential for patients and value creation for shareholders. With the combined focus on patient impact and commercial opportunity, certain programs that met the highest bar for advancement have been prioritized. As a result of the assessment, certain programs have been discontinued.

During the second quarter of 2024, in connection with the discontinuation of certain research and development programs, the Company committed to a plan to reduce its global workforce by approximately 170 employees (representing approximately 5% of the Company’s global workforce). Workforce reductions are expected to be substantially completed by end of 2024.

The restructuring plan includes severance and employee-related costs, asset impairments, and other costs. The asset impairment charges were for abandoned assets-in-progress and a Right-of-Use asset (ROU Asset) related to leased office space the Company decided to exit and sub-lease. The Company utilized the discounted cash flow approach to determine the fair value of the ROU Asset. The ROU Asset impairment is the difference between the existing lease terms and rates and the expected sub-lease terms and rates available in the market. The Other category includes restructuring-related costs, which are expensed as incurred, as well as other obligations related to the leased office space that will be satisfied over the remainder of the lease term.

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BIOMARIN PHARMACEUTICAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (continued)

(In thousands of U.S. Dollars, except per share amounts or as otherwise disclosed)

The restructuring charges and adjustments were included in Selling, General, and Administrative in the Condensed Consolidated Statements of Comprehensive Income. Restructuring expenses consisted of the following:


	Three Months Ended June 30,		Six Months Ended June 30,
	2024		2024
Severance and one-time employee benefits	$	23,837	$	25,275
Asset Impairments	9,671		9,671
Other	5,519		7,519
	$	39,027	$	42,465

The following unpaid balance as of June 30, 2024 was recorded to Accounts Payable and Accrued Liabilities on the Condensed Consolidated Balance Sheet:


	Severance and related costs		Other		Total
Balance as of December 31, 2023	$	—	$	—	$	—
Charges and Adjustments	25,275		7,519		$	32,793
Payments	(4,321)		(2,000)		$	(6,321)
Balance as of June 30, 2024	$	20,954	$	5,519	$	26,472

(11) EARNINGS PER COMMON SHARE

Potentially issuable shares of common stock include shares issuable upon the exercise of outstanding employee stock option awards, common stock issuable under the ESPP, unvested RSUs and contingent issuances of common stock related to the Company’s convertible debt.

The following table sets forth the computation of basic and diluted earnings per common share (common shares in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Numerator:
Net Income, basic	$	107,174	$	56,040	$	195,836	$	106,892
Add: Interest expense, net of tax, on the Company's convertible debt	2,769		937		5,538		1,873
Net Income, diluted	$	109,943	$	56,977	$	201,374	$	108,765
Denominator:
Weighted-average common shares outstanding, basic	190,114		187,948		189,490		187,311
Effect of dilutive securities:
Common stock issuable under the Company's equity incentive plans	2,056		3,080		2,312		3,475
Common stock issuable under the Company’s convertible debt(1)	8,335		3,970		8,335		3,970
Weighted-average common shares outstanding, diluted	200,505		194,998		200,137		194,756
Earnings per common share, basic	$	0.56	$	0.30	$	1.03	$	0.57
Earnings per common share, diluted	$	0.55	$	0.29	$	1.01	$	0.56

Table of Contents

BIOMARIN PHARMACEUTICAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (continued)

(In thousands of U.S. Dollars, except per share amounts or as otherwise disclosed)

In addition to the equity instruments included in the table above, the table below presents potential shares of common stock that were excluded from the computation of diluted earnings per common share as they were anti-dilutive (in thousands):


	Three Months Ended June 30,		Six Months Ended June 30,
	2024	2023	2024	2023
Common stock issuable under the Company's equity incentive plans	10,362	8,716	10,106	8,321
Common stock issuable under the Company’s convertible debt (1)	—	4,365	—	4,365
Total number of potentially issuable shares	10,362	13,081	10,106	12,686

(1) If converted, the Company would issue 4.0 million shares under the 2024 Notes and 4.4 million shares under the 2027 Notes. For additional discussion of the Company’s convertible debt, see Note 6 - Debt.

(12) COMMITMENTS AND CONTINGENCIES

Contingencies

From time to time the Company is involved in legal actions arising in the normal course of its business. The process of resolving matters through litigation or other means is inherently uncertain and it is possible that an unfavorable resolution of these matters could adversely affect the Company, its results of operations, financial condition or cash flows. The Company’s general practice is to expense legal fees as services are rendered in connection with legal matters, and to accrue for liabilities when losses are probable and reasonably estimable based on existing information. The Company accrues for the best estimate of a loss within a range; however, if no estimate in the range is better than any other, then the minimum amount in the range is accrued. Liabilities are evaluated and refined each reporting period as additional information is known. Any receivables for insurance recoveries for these liability claims are recorded as assets when it is probable that a recovery will be realized.

As previously disclosed, the Company received a subpoena from the U.S. Department of Justice (DOJ) requesting that the Company produce certain documents regarding sponsored testing programs relating to VIMIZIM and NAGLAZYME. The Company has produced the requested documents in response to the subpoena and is cooperating fully. The Company is unable to make any assurances regarding the outcome of the investigation by the DOJ, or the impact, if any, that such investigation may have on the Company’s business, Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Comprehensive Income or Condensed Consolidated Statements of Cash Flows.

Contingent Payments

As of June 30, 2024, the Company was subject to contingent payments, primarily comprised of development, regulatory and commercial milestones. Those considered reasonably possible totaled $495.6 million, of this amount the Company may pay up to $10.9 million over the next 12 months if certain contingencies are met.

Other Commitments

The Company uses experts and laboratories at universities and other institutions to perform certain R&D activities. These amounts are recorded as R&D expense as services are provided. In the normal course of business, the Company enters into various firm purchase commitments primarily to procure active pharmaceutical ingredients, certain inventory-related items and certain third-party R&D services, production services and facility construction services. The Company also has commitments related to enterprise resource planning (ERP) system implementation costs for which the Company is committed. As of June 30, 2024, such commitments were estimated at $473.0 million, of which $291.1 million is expected to be paid in 2024 as underlying goods and services are received. The Company has also licensed technology from third parties, for which it is required to pay royalties upon future sales, subject to certain annual minimums.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion of our financial condition and results of operations should be read in conjunction with our Condensed Consolidated Financial Statements and the related Notes thereto included in this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements that involve risks and uncertainties. When reviewing the discussion below, you should keep in mind the substantial risks and uncertainties that could impact our business. In particular, we encourage you to review the risks and uncertainties described in “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q. These risks and uncertainties could cause actual results to differ significantly from those projected in forward-looking statements contained in this report or implied by past results and trends. Forward-looking statements are statements that attempt to forecast or anticipate future developments in our business, financial condition or results of operations. See the section titled “Forward-Looking Statements” that appears at the beginning of this Quarterly Report on Form 10-Q. These statements, like all statements in this report, speak only as of the date of this Quarterly Report on Form 10-Q (unless another date is indicated), and, except as required by law, we undertake no obligation to update or revise these statements in light of future developments. Our Condensed Consolidated Financial Statements have been prepared in accordance with United States (U.S.) generally accepted accounting principles (U.S. GAAP) and are presented in U.S. Dollars (USD).

Table of Contents

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

(In millions, except as otherwise disclosed)

Overview

Founded in 1997, we are a global biotechnology company dedicated to transforming lives through genetic discovery. We develop and commercialize targeted therapies that address the root cause of genetic conditions. Our robust research and development capabilities have resulted in multiple innovative commercial therapies for patients with rare genetic disorders. Our distinctive approach to drug discovery has produced a diverse pipeline of commercial, clinical, and pre-clinical candidates that address a significant unmet medical need, have well-understood biology, and provide an opportunity to be first-to-market or offer a substantial benefit over existing treatment options. A summary of our commercial products, as of June 30, 2024, is provided below:

Commercial Products

Indication

VOXZOGO (vosoritide)

Achondroplasia

VIMIZIM (elosulfase alpha)

Mucopolysaccharidosis (MPS) IVA

NAGLAZYME (galsulfase)

MPS VI

PALYNZIQ (pegvaliase-pqpz)

Phenylketonuria (PKU)

BRINEURA (cerliponase alfa)

Neuronal ceroid lipofuscinosis type 2 (CLN2)

ALDURAZYME (laronidase)

MPS I

KUVAN (sapropterin dihydrochloride)

PKU

ROCTAVIAN (valoctocogene roxaparvovec)

Severe Hemophilia A

Financial Highlights

Key components of our results of operations include the following:


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Total revenues	$	712.0	$	595.3	$	1,360.9	$	1,191.7
Cost of sales	$	130.5	$	130.6	$	255.6	$	266.1
Research and development (R&D)	$	183.8	$	177.4	$	388.8	$	349.2
Selling, general and administrative (SG&A)	$	263.0	$	206.1	$	488.9	$	417.1