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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 March 31, 2024
Or
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)  
______________________________________
Delaware68-0397820
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
770 Lindaro StreetSan RafaelCalifornia94901
(Address of principal executive offices)(Zip Code)
 
(415506-6700
(Registrant’s telephone number including area code)
______________________________________

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.001BMRNThe 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 FilerAccelerated Filer
Non-accelerated FilerSmaller 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.  


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: 189,879,803 shares of common stock, par value $0.001, outstanding as of April 22, 2024.



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.


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 sales and operations 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.


BIOMARIN PHARMACEUTICAL INC.
TABLE OF CONTENTS
Page
FINANCIAL INFORMATION
Financial Statements
Condensed Consolidated Statements of Comprehensive Income (Unaudited) for the three months ended March 31, 2024 and 2023
Condensed Consolidated Balance Sheets as of March 31, 2024 (Unaudited) and December 31, 2023
Condensed Consolidated Statement of Stockholders’ Equity (Unaudited) for the three months ended March 31, 2024 and 2023
Condensed Consolidated Statements of Cash Flows (Unaudited) for the three months ended March 31, 2024 and 2023
Notes to Condensed Consolidated Financial Statements (Unaudited)
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Quantitative and Qualitative Disclosures about Market Risk
Controls and Procedures
OTHER INFORMATION
Legal Proceedings
Risk Factors
Unregistered Sales of Equity Securities and Use of Proceeds
Defaults Upon Senior Securities
Mine Safety Disclosures
Other Information
Exhibits
SIGNATURES

2


PART I. FINANCIAL INFORMATION
Item 1.    Financial Statements
BIOMARIN PHARMACEUTICAL INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Three Months Ended March 31, 2024 and 2023
(In thousands, except per share amounts)
(unaudited)
 
Three Months Ended
March 31,
 
20242023
REVENUES:
Net product revenues$637,815 $586,426 
Royalty and other revenues11,018 9,989 
Total revenues648,833 596,415 
OPERATING EXPENSES:
Cost of sales 125,180 135,472 
Research and development204,987 171,846 
Selling, general and administrative225,906 211,023 
Intangible asset amortization14,298 15,670 
Gain on sale of nonfinancial assets(10,000) 
Total operating expenses560,371 534,011 
INCOME FROM OPERATIONS88,462 62,404 
Interest income19,365 11,943 
Interest expense(3,547)(3,703)
Other income (expense), net1,267 (13,887)
INCOME BEFORE INCOME TAXES105,547 56,757 
Provision for income taxes16,885 5,905 
NET INCOME$88,662 $50,852 
EARNINGS PER SHARE, BASIC$0.47 $0.27 
EARNINGS PER SHARE, DILUTED$0.46 $0.27 
Weighted average common shares outstanding, basic188,866 186,667 
Weighted average common shares outstanding, diluted199,262 194,363 
COMPREHENSIVE INCOME$116,404 $43,997 
 
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
3


BIOMARIN PHARMACEUTICAL INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, 2024 and December 31, 2023
(In thousands, except share amounts)
March 31, 2024December 31, 2023 ⁽¹⁾
ASSETS(unaudited) 
Current assets:
Cash and cash equivalents$746,996 $755,127 
Short-term investments299,584 318,683 
Accounts receivable, net637,163 633,704 
Inventory1,137,982 1,107,183 
Other current assets163,287 141,391 
Total current assets2,985,012 2,956,088 
Noncurrent assets:
Long-term investments620,551 611,135 
Property, plant and equipment, net1,060,425 1,066,133 
Intangible assets, net279,653 294,701 
Goodwill196,199 196,199 
Deferred tax assets1,546,043 1,545,809 
Other assets184,790 171,538 
Total assets$6,872,673 $6,841,603 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities$593,543 $683,147 
Short-term convertible debt, net494,357 493,877 
Total current liabilities1,087,900 1,177,024 
Noncurrent liabilities:
Long-term convertible debt, net593,605 593,095 
Other long-term liabilities117,352 119,935 
Total liabilities1,798,857 1,890,054 
Stockholders’ equity:
Common stock, $0.001 par value: 500,000,000 shares authorized; 189,776,577 and 188,598,154 shares issued and outstanding, respectively
190 189 
Additional paid-in capital5,619,264 5,611,562 
Company common stock held by the Nonqualified Deferred Compensation Plan(11,700)(9,860)
Accumulated other comprehensive loss(1,046)(28,788)
Accumulated deficit(532,892)(621,554)
Total stockholders’ equity5,073,816 4,951,549 
Total liabilities and stockholders’ equity$6,872,673 $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.
4


BIOMARIN PHARMACEUTICAL INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
Three Months Ended March 31, 2024 and 2023
(In thousands)
(unaudited)
Three Months Ended
March 31,
 20242023
Shares of common stock, beginning balances (1)
188,598 186,251 
Issuances under equity incentive plans1,179 1,350 
Shares of common stock, ending balances189,777 187,601 
Total stockholders' equity, beginning balances (1)
$4,951,549 $4,603,156 
Common stock:
Beginning balances (1)
189 186 
Issuances under equity incentive plans, net of tax1 2 
Ending balances190 188 
Additional paid-in capital:
Beginning balances (1)
5,611,562 5,404,895 
Issuances under equity incentive plans, net of tax(55,669)(42,440)
Stock-based compensation61,531 54,328 
Change in Common stock held by the Nonqualified Deferred Compensation plan (NQDC)
1,840 1,090 
Ending balances5,619,264 5,417,873 
Company common stock held by the NQDC:
Beginning balances (1)
(9,860)(8,859)
Common stock held by the NQDC(1,840)(1,090)
Ending balances(11,700)(9,949)
Accumulated other comprehensive loss:
Beginning balances (1)
(28,788)(3,867)
Other comprehensive income (loss)
27,742 (6,855)
Ending balances(1,046)(10,722)
Accumulated Deficit:
Beginning balances (1)
(621,554)(789,199)
Net income
88,662 50,852 
Ending balances(532,892)(738,347)
Total stockholders' equity, ending balances
$5,073,816 $4,659,043 

(1)The beginning balances for the three-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. 
5


BIOMARIN PHARMACEUTICAL INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended March 31, 2024 and 2023
(In thousands)
(unaudited)
Three Months Ended
March 31,
20242023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income$88,662 $50,852 
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization27,350 26,421 
Non-cash interest expense990 1,029 
Accretion of discount on investments(2,502)(1,970)
Stock-based compensation58,249 53,695 
Gain on sale of nonfinancial assets(10,000) 
Impairment of assets 12,650 
Deferred income taxes285 (6,360)
Unrealized foreign exchange loss (gain)(10,804)6,615 
Other127 (222)
Changes in operating assets and liabilities:
Accounts receivable, net(3,386)(138,796)
Inventory(16,820)(14,098)
Other current assets(17,353)(36,001)
Other assets(12,130)(323)
Accounts payable and other short-term liabilities(59,006)(31,686)
Other long-term liabilities3,309 4,262 
Net cash provided by (used in) operating activities46,971 (73,932)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment(26,104)(24,456)
Maturities and sales of investments131,533 215,118 
Purchases of investments(121,665)(220,364)
Proceeds from sale of nonfinancial assets10,000  
Purchase of intangible assets(8,000)(310)
Net cash used in investing activities(14,236)(30,012)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercises of awards under equity incentive plans7,197 21,169 
Taxes paid related to net share settlement of equity awards(49,948)(51,422)
Payments of contingent consideration (9,475)
Principal repayments of financing leases(42)(1,014)
Net cash used in financing activities(42,793)(40,742)
Effect of exchange rate changes on cash1,927 229 
NET DECREASE IN CASH AND CASH EQUIVALENTS(8,131)(144,457)
Cash and cash equivalents:
Beginning of period$755,127 $724,531 
End of period$746,996 $580,074 
SUPPLEMENTAL CASH FLOW DISCLOSURES:
Cash paid for interest$1,420 $1,437 
Cash paid for income taxes$2,301 $4,364 
SUPPLEMENTAL CASH FLOW DISCLOSURES FOR NON-CASH INVESTING AND FINANCING ACTIVITIES:
Increase (decrease) in accounts payable and accrued liabilities related to fixed assets$8,167 $(8,430)
Decrease in accounts payable and accrued liabilities related to intangible assets$(8,512)$(1,478)

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
6

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 months ended March 31, 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 during the three months ended March 31, 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 Income (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 impact of the change in presentation resulted in an increase of $8.9 million to Cost of Sales, a decrease of $12.0 million to SG&A, a decrease of $3.1 million to Total Operating Expenses, and an increase of $3.1 million to Other Income (Expense), Net for the three months ended March 31, 2023. The change in presentation had no impact to Net Income, Total Stockholders’ Equity or earnings per share for the three months ended March 31, 2023.
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 and has concluded that there were no subsequent events or transactions that occurred subsequent to the balance sheet date prior to filing this Quarterly Report on Form 10-Q that would require recognition or disclosure in the Condensed Consolidated Financial Statements.
Significant Accounting Policies
There have been no material changes to the Company’s significant accounting policies during the three months ended March 31, 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.
7

BIOMARIN PHARMACEUTICAL INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands of U.S. Dollars, except per share amounts or as otherwise disclosed)
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 three months ended March 31, 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 March 31, 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:
March 31, 2024
Amortized CostGross
Unrealized
Gains
Gross
Unrealized
Losses
Aggregate Fair ValueCash and Cash Equivalents
Short-term
Marketable
Securities (1)
Long-term
Marketable
Securities (2)
Level 1:
Cash$402,091 $— $— $402,091 $402,091 $— $— 
Level 2:
Money market instruments313,928   313,928 313,928   
Corporate debt securities609,615 1,533 (1,552)609,596  177,583 432,013 
U.S. government agency securities218,811 107 (1,165)217,753 14,982 115,568 87,203 
Commercial paper22,005   22,005 15,995 6,010  
Asset-backed securities101,806 147 (195)101,758  423 101,335 
Subtotal1,266,165 1,787 (2,912)1,265,040 344,905 299,584 620,551 
Total$1,668,256 $1,787 $(2,912)$1,667,131 $746,996 $299,584 $620,551 
8

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 CostGross
Unrealized
Gains
Gross
Unrealized
Losses
Aggregate Fair ValueCash 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 instruments499,483   499,483 499,483   
Corporate debt securities587,896 3,476 (1,996)589,376  193,251 396,125 
U.S. government agency securities251,952 556 (1,140)251,368 19,976 111,343 120,049 
Commercial paper20,076 5  20,081 5,992 14,089  
Asset-backed securities94,744 351 (134)94,961   94,961 
Subtotal1,454,151 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 March 31, 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 March 31, 2024 and December 31, 2023, the fair value of the Company’s strategic investments was $11.3 million in each period. These investments were recorded to Other Assets in the Company’s Condensed Consolidated Balance Sheets. In the first quarter of 2023, based on new developments, the Company concluded that factors existed indicating it would no longer realize a $12.6 million equity investment in its non-marketable securities. The loss on the equity investment due to impairment was recorded to Other Income (Expense), Net on the Company’s Condensed Consolidated Statements of Comprehensive Income. 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:
March 31,
2024
December 31,
2023
Raw materials$148,140 $155,704 
Work-in-process599,462 571,107 
Finished goods390,380 380,372 
Total inventory$1,137,982 $1,107,183 
Property, Plant and Equipment, Net consisted of the following:
9

BIOMARIN PHARMACEUTICAL INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands of U.S. Dollars, except per share amounts or as otherwise disclosed)
March 31,
2024
December 31,
2023
Property, plant and equipment, gross$1,948,434 $1,933,222 
Accumulated depreciation(888,009)(867,089)
Total property, plant and equipment, net$1,060,425 $1,066,133 
Depreciation expense, net of amounts capitalized into inventory, for the three months ended March 31, 2024 and 2023 was $12.6 million and $10.3 million, respectively.
Intangible Assets, Net consisted of the following:
March 31,
2024
December 31,
2023
Finite-lived intangible assets$709,730 $710,011 
Accumulated amortization(430,077)(415,310)
Net carrying value$279,653 $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:
March 31,
2024
December 31,
2023
Accounts payable and accrued operating expenses$292,238 $315,509 
Accrued compensation expense148,479 201,067 
Accrued rebates payable101,599 96,179 
Foreign currency exchange forward contracts13,676 33,853 
Accrued royalties payable10,188 14,299 
Lease liability8,574 8,779 
Accrued income taxes 6,071 2,651 
Deferred revenue5,151 4,620 
Other7,567 6,190 
Total accounts payable and accrued liabilities$593,543 $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.
The following tables present the classification within the fair value hierarchy of financial assets and liabilities not disclosed elsewhere in these Condensed Consolidated Financial Statements that are remeasured on a recurring basis as of March 31, 2024 and December 31, 2023. Other than the Company’s fixed-rate convertible debt disclosed in Note 6Debt, there were no financial assets or liabilities that were remeasured using quoted prices in active markets for identical assets (Level 1) as of March 31, 2024
10

BIOMARIN PHARMACEUTICAL INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (continued)
(In thousands of U.S. Dollars, except per share amounts or as otherwise disclosed)
or 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 March 31, 2024 or December 31, 2023.
Fair Value Measurements as of March 31, 2024
Significant Other
Observable
Inputs
(Level 2)
Assets:
Other current assets:
NQDC Plan assets$2,487 
Other assets:
NQDC Plan assets31,993 
Restricted investments (1)
2,405 
Total other assets34,398 
Total assets$36,885 
Liabilities:
Current liabilities:
NQDC Plan liability$2,487 
Other long-term liabilities:
NQDC Plan liability31,993 
Total liabilities$34,480 
Fair Value Measurements as of December 31, 2023
Significant Other
Observable
Inputs
(Level 2)
Assets:
Other current assets:
NQDC Plan assets$2,026 
Other assets:
NQDC Plan assets28,119 
Restricted investments (1)
2,393 
Total other assets30,512 
Total assets$32,538 
Liabilities:
Current liabilities:
NQDC Plan liability$2,026 
Other long-term liabilities:
NQDC Plan liability28,119 
Total liabilities$30,145 
(1)    The restricted investments as of March 31, 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 months ended March 31, 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
11

BIOMARIN PHARMACEUTICAL INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (continued)
(In thousands of U.S. Dollars, except per share amounts or as otherwise disclosed)
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 21 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 ContractsMarch 31,
2024
December 31,
2023
Derivatives designated as hedging instruments:
Sell$1,019,379 $1,249,662 
Purchase$157,832 $198,408 
Derivatives not designated as hedging instruments:
Sell$318,213 $350,269 
Purchase$10,955 $90,102 
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 LocationMarch 31,
2024
December 31,
2023
Derivatives designated as hedging instruments:
Asset Derivatives
Other current assets$11,937 $6,663 
Other assets2,489 1,855 
Subtotal$14,426 $8,518 
Liability Derivatives
Accounts payable and accrued liabilities$11,883 $30,005 
Other long-term liabilities2,512 8,171 
Subtotal$14,395 $38,176 
Derivatives not designated as hedging instruments:
Asset Derivatives
Other current assets$930 $547 
Liability Derivatives
Accounts payable and accrued liabilities$1,793 $3,848 
Total Derivatives Assets$15,356 $9,065 
Total Derivatives Liabilities$16,188 $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.
12

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 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 March 31,
20242023
Derivatives Designated as Cash Flow Hedging InstrumentsCash Flow Hedging Gains (Losses)
Reclassified into Earnings
Cash Flow Hedging Gains (Losses)
Reclassified into Earnings
Net product revenues$(1,119)$3,470 
Operating expenses$504 $(456)
Derivatives Not Designated as Hedging InstrumentsGains (Losses) Recognized in EarningsGains (Losses) Recognized in Earnings
Operating expenses$7,728 $(4,163)
As of March 31, 2024, the amounts expected to be reclassified from Accumulated Other Comprehensive Income (AOCI) to earnings as the forecasted revenues and operating expense transactions occur over the next twelve months, were not material. For additional discussion of balances in AOCI see Note 7Accumulated Other Comprehensive Income.
(6) DEBT
Convertible Notes
As of March 31, 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:
March 31,
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(643)(1,123)
2024 Notes, net (1)
494,357 493,877 
1.25% senior subordinated convertible notes due in May 2027 (the 2027 Notes)
600,000 600,000 
Unamortized discount net of deferred offering costs(6,395)(6,905)
2027 Notes, net
593,605 593,095 
Total convertible debt, net$1,087,962 $1,086,972 
Fair value of fixed-rate convertible debt (2):
2024 Notes
$487,055 $488,288 
2027 Notes
596,622 619,260 
Total fair value of fixed-rate convertible debt$1,083,677 $1,107,548 
(1)    As the 2024 Notes mature in August 2024, the outstanding principal of the 2024 Notes is classified as a current liability as of March 31, 2024.
(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.
13

BIOMARIN PHARMACEUTICAL INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (continued)
(In thousands of U.S. Dollars, except per share amounts or as otherwise disclosed)
Interest expense on the Company’s convertible debt consisted of the following: 
Three Months Ended
March 31,
20242023
Coupon interest expense$2,616 $2,616 
Accretion of discount on convertible notes841 839 
Amortization of debt issuance costs149 148 
Total interest expense on convertible debt$3,606 $3,603 
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.
Three Months Ended March 31, 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
28,860 (2,242)26,618 
Less: gain (loss) reclassified from AOCI(615) (615)
Tax effect 509 509 
Net current-period other comprehensive income (loss)29,475 (1,733)27,742 
AOCI balance as of March 31, 2024
$(183)$(863)$(1,046)
Three Months Ended March 31, 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
(7,859)5,247 (2,612)
Less: gain (loss) reclassified from AOCI3,014  3,014 
Tax effect (1,229)(1,229)
Net current-period other comprehensive income (loss)(10,873)4,018 (6,855)
AOCI balance as of March 31, 2023
$(2,647)$(8,075)$(10,722)
For additional discussion of reclassifications from AOCI see Note 5 Derivative Instruments and Hedging Strategies.
14

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
March 31,
20242023
VIMIZIM$192,520 $189,192 
VOXZOGO152,889 87,836 
NAGLAZYME105,629 123,021 
PALYNZIQ75,709 62,352 
BRINEURA39,047 39,144 
KUVAN35,910 50,478 
ALDURAZYME35,262 34,403 
ROCTAVIAN849  
Total net product revenues637,815 586,426 
Royalty and other revenues11,018 9,989 
Total revenues$648,833 $596,415 
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
March 31,
20242023
United States$192,999 $166,761 
Europe195,748 160,692 
Latin America78,594 67,748 
Middle East57,075 91,642 
Rest of world78,137 65,180 
Total net product revenues marketed by the Company602,553 552,023 
ALDURAZYME net product revenues marketed by Sanofi35,262 34,403 
Total net product revenues$637,815 $586,426 
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
March 31,
20242023
Customer A14 %14 %
Customer B11 %10 %
Total25 %24 %
15

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, two customers accounted for 15% and 11% of the Company’s March 31, 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 March 31, 2024, and December 31, 2023, the accounts receivable balance for Sanofi included $63.1 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 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
March 31,
20242023
Cost of sales$3,244 $4,331 
Research and development20,677 19,828 
Selling, general and administrative34,328 29,536 
Total stock-based compensation expense$58,249 $53,695 
(10) 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.
16

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 following table sets forth the computation of basic and diluted earnings per common share (common shares in thousands):
Three Months Ended
March 31,
20242023
Numerator:
Net Income, basic
$88,662 $50,852 
Add: Interest expense, net of tax, on the Company's convertible debt2,769 937 
Net Income, diluted
$91,431 $51,789 
Denominator:
Weighted-average common shares outstanding, basic188,866 186,667 
Effect of dilutive securities:
Common stock issuable under the Company's equity incentive plans2,061 3,726 
Common stock issuable under the Company’s convertible debt(1)
8,335 3,970 
Weighted-average common shares outstanding, diluted199,262 194,363 
Earnings per common share, basic
$0.47 $0.27 
Earnings per common share, diluted
$0.46 $0.27 
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
March 31,
20242023
Common stock issuable under the Company's equity incentive plans10,947 8,610 
Common stock issuable under the Company’s convertible debt (1)
 4,365 
Total number of potentially issuable shares10,947 12,975 
(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.
(11) 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.
17

BIOMARIN PHARMACEUTICAL INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands of U.S. Dollars, except per share amounts or as otherwise disclosed)
The Company recently 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 March 31, 2024, the Company was subject to contingent payments, primarily comprised of development, regulatory and commercial milestones. Those considered reasonably possible totaled $738.6 million, of this amount the Company may pay up to $16.4 million in the next year if certain contingencies are met. $576.5 million of the total balance related to early-stage development programs licensed from two third parties.
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. As of March 31, 2024, such commitments were estimated at $386.7 million, of which $340.6 million is expected to be paid during the remainder of 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. The amount also includes hosting fees and other enterprise resource planning (ERP) system implementation costs for which the Company is committed.
18

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).

19

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 March 31, 2024, is provided below:
Commercial ProductsIndication
VIMIZIM (elosulfase alpha)
Mucopolysaccharidosis (MPS) IVA
VOXZOGO (vosoritide)
Achondroplasia
NAGLAZYME (galsulfase)
MPS VI
PALYNZIQ (pegvaliase-pqpz)
Phenylketonuria (PKU)
BRINEURA (cerliponase alfa)
Neuronal ceroid lipofuscinosis type 2 (CLN2)
KUVAN (sapropterin dihydrochloride)PKU
ALDURAZYME (laronidase)
MPS I
ROCTAVIAN (valoctocogene roxaparvovec)
Severe Hemophilia A

20

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
(In millions, except as otherwise disclosed)
Financial Highlights
Key components of our results of operations include the following:
Three Months Ended
March 31,
20242023
Total revenues$648.8 $596.4 
Cost of sales$125.2 $135.5 
Research and development (R&D)$205.0 $171.8 
Selling, general and administrative (SG&A)$225.9 $211.0 
Provision for income taxes$16.9 $5.9 
Net income$88.7 $50.9 
See “Results of Operations” below for discussion of our results for the periods presented.
Uncertainty Relating to Macroeconomic Environment
Conditions in the current macroeconomic environment, such as inflation, changes in interest and foreign currency exchange rates, natural disasters, and supply chain disruptions, could impact our global revenue sources and our overall business operations. The extent and duration of such effects remain uncertain and difficult to predict. We are actively monitoring and managing our response and assessing actual and potential impacts to our operating results and financial condition, as well as developments in our business, which could further impact the developments, trends and expectations described below. See the risk factor, “Our business is affected by macroeconomic conditions.” described in “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q.
Recent Developments
We continued to grow our commercial business and advance our product candidate pipeline during 2024. We believe that the combination of our internal research programs and partnerships will allow us to continue to develop and commercialize innovative therapies for people with serious and life-threatening rare diseases and medical conditions.
In the first quarter of 2024, we focused on value creation through working to accelerate growth, optimize efficiencies and drive operational excellence, and in April 2024, we announced our progress in executing on key strategic priorities first outlined in January 2024. During the quarter, we completed a strategic portfolio assessment of R&D 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 will be accelerated that met the highest bar for advancement. In addition, as a result of the assessment, certain programs will be discontinued. None of the programs were discontinued due to safety signals. See the risk factor, “Our success depends on our ability to manage our growth.” described in “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q.
Change in Presentation
In the first quarter of 2024, we changed our presentation of foreign currency transaction gains and losses resulting from remeasurement and idle plant costs within our Condensed Consolidated Statements of Comprehensive Income. See Note 1 to our accompanying Condensed Consolidated Financial Statements for additional details.
21

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
(In millions of U.S. dollars, except as otherwise disclosed)
Results of Operations
Net Product Revenues
Net Product Revenues consisted of the following:
Three Months Ended
March 31,
20242023Change
VIMIZIM$192.6 $189.2 $3.4 
VOXZOGO152.9 87.8 65.1 
NAGLAZYME105.6 123.0 (17.4)
PALYNZIQ75.7 62.4 13.3 
BRINEURA39.0 39.1 (0.1)
KUVAN35.9 50.5 (14.6)
ALDURAZYME35.3 34.4 0.9 
ROCTAVIAN0.8 — 0.8 
Total net product revenues$637.8 $586.4 $51.4 
Net Product Revenues include revenues generated from our commercial products. In the U.S., our commercial products, except for PALYNZIQ and ALDURAZYME, are generally sold to specialty pharmacies or end-users, such as hospitals, which act as retailers. PALYNZIQ is distributed in the U.S. through certain certified specialty pharmacies under the PALYNZIQ Risk Evaluation and Mitigation Strategy program, and ALDURAZYME is marketed worldwide by Sanofi. Outside the U.S., our commercial products are sold to authorized distributors or directly to government purchasers or hospitals, which act as the end users.
The increase in Net Product Revenues for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 was primarily attributed to the following:
VOXZOGO: higher sales volume from new patients initiating therapy across all regions;
PALYNZIQ: higher sales volume, primarily in the U.S.; partially offset by
NAGLAZYME: lower sales volume due to timing of orders in countries that place large government orders, particularly in the Middle East; and
KUVAN: lower product revenues attributed to increasing generic competition as a result of the loss of market exclusivity.
In certain countries, governments place large periodic orders for our products. We expect that the timing of these large government orders will continue to be inconsistent, which has created in the past and may continue to create significant period to period variation in our revenues.
Strong demand for VOXZOGO in certain markets has outpaced our projections in recent quarters, and we expect to face challenges meeting our current estimates of VOXZOGO demand through the first half of 2024. These challenges will result in modest reduction of our revenue growth for VOXZOGO during the supply-constrained period. The projected temporary supply constraint could result in postponement of planned entry into additional markets or delayed clinical development activities until VOXZOGO inventory levels increase. When the expected increases in supply become available during 2024, while overall inventory and ability to supply the market will increase, if actual demand continues to exceed our estimates, the supply constraint could be prolonged. We are working to increase fill-finish capacity to meet this increased demand while also implementing actions to manage growth and minimize patient impact. For example, in 2023 we secured increased supply commitments beginning in mid-2024. We do not expect a material impact on our revenues if we successfully execute our manufacturing plans. See "Risk Factors" in Part II, Item 1A of this Quarterly Report for additional information on risk factors that could impact our business and operations.
See also the risk factor “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” in “Risk Factors” included in Part II, Item 1A of this Quarterly Report for additional information on risks we face.
22

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
(In millions of U.S. dollars, except as otherwise disclosed)
We face exposure to movements in foreign currency exchange rates, which we expect to continue in future periods. We use foreign currency exchange forward contracts to hedge a percentage of our foreign currency exposure, primarily the Euro. The following table shows our Net Product Revenues denominated in USD and foreign currencies:
Three Months Ended
March 31,
20242023Change
Sales denominated in USD$307.9 $297.6 $10.3 
Sales denominated in foreign currencies329.9 288.8 41.1 
Total net product revenues$637.8 $586.4 $51.4 
Three Months Ended
March 31,
20242023Change
Unfavorable impact of foreign currency exchange rates on product sales denominated in currencies other than USD$(22.7)$(28.3)$5.6 
The unfavorable impact for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 was primarily driven by weakening of Argentine Peso, partially offset by strengthening of the Euro.
Royalty and Other Revenues
Royalty and Other Revenues include royalties earned on net sales of products sold by third parties, up-front licensing fees, milestones achieved by licensees or sublicensees.
Three Months Ended
March 31,
20242023Change
Royalty and other revenues$11.0 $10.0 $1.0 
The change in Royalty and Other Revenues for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 was relatively flat. We expect to continue to earn royalties from third parties in the future.
Cost of Sales and Gross Margin
Cost of Sales includes raw materials, personnel and facility and other costs associated with manufacturing our commercial products. These costs include production materials, production costs at our manufacturing facilities, third-party manufacturing costs, amortization of technology transfer intangible assets and internal and external final formulation and packaging costs. Cost of Sales also includes royalties payable to third parties based on sales of our products, idle plant costs and charges for inventory valuation reserves.
The following table summarizes our Cost of Sales and gross margin:
Three Months Ended
March 31,
20242023Change
Total revenues$648.8 $596.4 $52.4 
Cost of sales$125.2 $135.5 $(10.3)
Gross margin80.7 %77.3 %3.4 %
Cost of Sales and gross margin both benefited in the three months ended March 31, 2024 as compared to the three months ended March 31, 2023, primarily from lower per-unit manufacturing costs and lower third-party royalties. Partially offsetting the benefits to Cost of Sales was the impact of higher sales volumes in the current quarter as compared to the first quarter of 2023. Gross margin also benefited in the current quarter from higher sales volumes for products with higher margin.
23

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
(In millions of U.S. dollars, except as otherwise disclosed)
We expect gross margin to increase modestly compared to 2023 as the product mix is expected to shift to reflect an increase of sales volumes for higher margin commercial products.
Research and Development
R&D expense includes costs associated with the research and development of product candidates and post-marketing research commitments related to our commercial products. R&D expense primarily includes preclinical and clinical studies, personnel and raw materials costs associated with manufacturing clinical product, quality control and assurance, other R&D activities, R&D facilities and regulatory costs.
We group all of our R&D activities and related expense into three categories: (i) research and early pipeline, (ii) later-stage clinical programs and (iii) marketed products as follows:
CategoryDescription
Research and early pipeline
R&D expense incurred in activities substantially in support of early research through the completion of phase 2 clinical trials, including drug discovery, toxicology, pharmacokinetics and drug metabolism and process development.
Later-stage clinical programs
R&D expense incurred in or related to phase 3 clinical programs intended to result in registration of a new product or a new indication for an existing product primarily in the U.S. or the EU.
Marketed products
R&D expense incurred in support of our marketed products that are authorized to be sold primarily in the U.S. or the EU. Includes clinical trials designed to gather information on product safety (certain of which may be required by regulatory authorities) and their product characteristics after regulatory approval has been obtained, as well as the costs of obtaining regulatory approval of a product in a new market after approval in either the U.S. or EU has been obtained.
We manage our R&D expense by identifying the R&D activities we anticipate will be performed during a given period and then prioritizing efforts based on scientific data, probability of successful development, market potential, available human and capital resources and other similar considerations. We continually review our product pipeline and the development status of product candidates and, as necessary, reallocate resources among the research and development portfolio that we believe will best support the future growth of our business.
R&D consisted of the following:
Three Months Ended
March 31,
20242023Change
Research and early pipeline$120.4 $86.2 $34.2 
Later-stage clinical programs— 30.7 (30.7)
Marketed Products84.6 54.9 29.7 
Total R&D
$205.0 $171.8 $33.2 
The increase in R&D expense for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 was primarily due to higher spend in research and early pipeline attributable to increased pre-clinical activities, including studies for planned clinical trial application submissions. Lower spend in later-stage clinical programs was mostly offset by higher spend for our marketed products as spend related to ROCTAVIAN moved from late-stage to marketed products following Food and Drug Administration approval in mid-2023.
We expect R&D expense to increase in future periods compared to 2023, primarily due to increased spending on research and early development programs.
Selling, General and Administrative
Sales and marketing (S&M) expense primarily consisted of employee-related expenses for our sales group, brand marketing, patient support groups and pre-commercialization expenses related to our product candidates. General and administrative (G&A) expense primarily consisted of corporate support and other administrative expenses, including employee-related expenses.
24

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
(In millions of U.S. dollars, except as otherwise disclosed)
SG&A consisted of the following:
Three Months Ended
March 31,
20242023Change
S&M
$119.4 $117.7 $1.7 
G&A
106.5 93.3 13.2 
Total SG&A
$225.9 $211.0 $14.9 

S&M consisted of the following:
Three Months Ended
March 31,
20242023Change
Enzyme Products$55.2 $59.0 $(3.8)
VOXZOGO30.7 24.7 6.0 
ROCTAVIAN23.9 23.5 0.4 
Other9.6 10.5 (0.9)
Total S&M
$119.4 $117.7 $1.7 
The increase in S&M expense for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 was primarily a result of the continued support of the global VOXZOGO market expansion, partially offset by lower costs related to our enzyme products.
The increase in G&A expense for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 was primarily due to higher employee-related costs and incremental administrative costs in the quarter, including external legal and consulting fees.
We expect SG&A expense to increase in future periods as a result of corporate matters and ongoing initiatives and the continued market expansion of our commercial products
25

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
(In millions of U.S. dollars, except as otherwise disclosed)
Intangible Asset Amortization and Gain on Sale of Nonfinancial Assets
Intangible Asset Amortization and Gain on Sale of Nonfinancial Assets were as follows:
Three Months Ended
March 31,
20242023Change
Amortization of intangible assets$14.3 $15.7 $(1.4)
Gain on sale of nonfinancial assets
$10.0 $— $10.0 
Amortization of intangible assets – the expense for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 was relatively flat.
Gain on Sale of Nonfinancial Assets – in the first quarter of 2024, we recognized a gain of $10.0 million due to a third party’s achievement of a regulatory approval milestone related to previously sold intangible assets.
Interest Income
We invest our cash equivalents and investments in U.S. government securities and other high credit quality debt securities in order to limit default and market risk.
Three Months Ended
March 31,
20242023Change
Interest income$19.4 $11.9 $7.5 
The increase in Interest Income for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 was primarily due to higher yields on our cash equivalents and investment portfolio. We expect Interest Income to increase moderately over the next 12 months as compared to 2023 due to anticipated interest rates and yields on our cash equivalents and investments.
Interest Expense
We incur interest expense primarily on our convertible debt. Interest Expense for the periods presented was as follows:
Three Months Ended
March 31,
20242023Change
Interest expense$3.5 $3.7 $(0.2)
Interest Expense for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 was relatively flat. We expect Interest Expense to decrease over the next 12 months due to the settlement of our convertible debt that matures in August 2024. See Note 6 to our accompanying Condensed Consolidated Financial Statements for additional information regarding our debt.
Other Income (Expense), Net
Other Income (Expense), Net for the periods presented was as follows:
Three Months Ended
March 31,
20242023Change
Other income (expense), net$1.3 $(13.9)$15.2 
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Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
(In millions of U.S. dollars, except as otherwise disclosed)
The increase in Other Income (Expense), Net for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 was primarily due to a $12.6 million impairment loss on an equity investment in the first quarter of 2023. There were no impairment charges in the first quarter of 2024.
Provision for Income Taxes
The Provision for Income Taxes for the periods presented was as follows:
Three Months Ended
March 31,
20242023Change
Provision for income taxes
$16.9 $5.9 $11.0 
The increase in Provision for Income Taxes for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 was primarily due to higher pre-tax income and a lower tax benefit related to stock option exercises in the first quarter of 2024 compared to the first quarter of 2023. There was no material impact of the adoption of Pillar Two of the Organisation for Economic Co-operation and Development (OECD) Base Erosion and Profit Shifting Project on our financial statements.

Financial Condition, Liquidity and Capital Resources
Our cash, cash equivalents, and investments as of March 31, 2024 and December 31, 2023 were as follows:
March 31, 2024December 31, 2023Change
Cash and cash equivalents$747.0 $755.1 $(8.1)
Short-term investments299.6 318.7 (19.1)
Long-term investments620.5 611.1 9.4 
Cash, cash equivalents and investments$1,667.1 $1,684.9 $(17.8)
We believe our cash generated from sales of our commercial products, in addition to our cash, cash equivalents and short-term investments will be sufficient to satisfy our liquidity requirements for at least the next 12 months. We believe we will meet longer-term expected future cash requirements and obligations through a combination of cash flows from operating activities and available cash and long-term investment balances. We will need to raise additional funds by issuing equity, debt or convertible securities, taking loans or entering into collaborative or other agreements if we are unable to satisfy our liquidity requirements. For example, we may require additional financing to fund the repayment of our convertible debt, future milestone payments and our future operations, including the commercialization of our products and product candidates currently under development, preclinical studies and clinical trials, and potential licenses and acquisitions. The timing and mix of our funding alternatives could change depending on many factors, including how much we elect to spend on our development programs, potential licenses and acquisitions of complementary technologies, products and companies or if we settle our convertible debt in cash.
We are mindful that conditions in the current macroeconomic environment, such as inflation, changes in interest and foreign currency exchange rates, natural disasters, and supply chain disruptions could affect our ability to achieve our goals. In addition, we sell our products in certain countries that face economic volatility and weakness. Although we have historically collected receivables from customers in such countries, sustained weakness or further deterioration of the local economies and
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Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
(In millions of U.S. dollars, except as otherwise disclosed)
currencies may cause customers in those countries to be unable to pay for our products. We will continue to monitor these conditions and will attempt to adjust our business processes, as appropriate, to mitigate macroeconomic risks to our business.
Our cash flows are summarized as follows:
Three Months Ended March 31,
20242023Change
Net cash provided by (used in) operating activities$47.0 $(73.9)$120.9 
Net cash used in investing activities$(14.2)$(30.0)$15.8 
Net cash used in financing activities$(42.8)$(40.7)$(2.1)
The increase in net cash provided by operating activities in the three months ended March 31, 2024 compared to March 31, 2023 was primarily attributed to the timing of cash receipts from our customers, partially offset by the timing of payments to vendors.
The decrease in net cash used in investing activities in the three months ended March 31, 2024 compared to March 31, 2023 was primarily attributable to lower purchases of available-for-sale debt securities net of maturities, $10.0 million in proceeds from the sale of previously sold intangible assets, partially offset by an increase in purchases of intangible assets.
The change in net cash used in financing activities in the three months ended March 31, 2024 compared to March 31, 2023 was relatively flat but was comprised of lower proceeds from stock option exercises, partially offset by the absence of milestone payments to third parties.
Financing
Our $1.1 billion (undiscounted) of total convertible debt as of March 31, 2024 will impact our liquidity due to the semi-annual cash interest payments as well as the repayment of the principal amount, if not converted. As of March 31, 2024, our indebtedness consisted of our 0.599% senior subordinated convertible notes due in 2024 and our 1.25% senior subordinated convertible notes due in 2027, which, if not converted, will be required to be repaid in cash at maturity in August 2024 and May 2027, respectively. We have reclassified the outstanding principal of the 2024 Notes as a current liability as there are less than twelve months remaining until maturity. If our common stock price remains below the conversion price of approximately $124.67 per share, we expect to settle the 2024 Notes in cash. If our common stock price meets or exceeds the conversion price, we intend to repurchase the equivalent shares to neutralize any dilutive impact of share settlement.
For additional information related to our convertible debt, see Note 6 to our accompanying Condensed Consolidated Financial Statements and Note 10 - Debt to the Consolidated Financial Statements accompanying our Annual Report on Form 10-K for the year ended December 31, 2023.
Material Cash Requirements
Purchase Obligations
As of March 31, 2024, we had obligations of approximately $386.7 million, of which $340.6 million is expected to be paid during the remainder of 2024. Our purchase obligations are primarily related to firm purchase commitments entered into in the normal course of business to procure active pharmaceutical ingredients, certain inventory-related items, certain third-party R&D services, production services and facility construction services. The amount also includes hosting fees and other enterprise resource planning (ERP) system implementation costs for which we are committed.
Other Obligations
Our lease, contingent obligations and unrecognized tax benefits as of March 31, 2024 have not materially changed from those discussed in “Financial Condition, Liquidity and Capital Resources” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023.
See Note 11 to our accompanying Condensed Consolidated Financial Statements for additional information on our commitments.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
(In millions of U.S. dollars, except as otherwise disclosed)
Critical Accounting Estimates
In preparing our Condensed Consolidated Financial Statements in accordance with U.S. GAAP and pursuant to the rules and regulations promulgated by the Securities and Exchange Commission (the SEC), we make assumptions, judgments and estimates that can have a significant impact on our net income/loss and affect the reported amounts of certain assets, liabilities, revenues and expenses, and related disclosures. On an ongoing basis, we evaluate our estimates and discuss our critical accounting policies and estimates with the Audit Committee of our Board of Directors. We base our estimates on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ materially from these estimates under different assumptions or conditions. Historically, our assumptions, judgments and estimates relative to our critical accounting estimates have not differed materially from actual results.
There have been no significant changes to our critical accounting estimates during the three months ended March 31, 2024, compared to those disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 26, 2024.
Recent Accounting Pronouncements
See Note 1 to our accompanying Condensed Consolidated Financial Statements for a description of recent accounting pronouncements, if any, and our expectation of their impact on our results of operations and financial condition.
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Item 3.    Quantitative and Qualitative Disclosures About Market Risk
Our market risks during the three months ended March 31, 2024 have not materially changed from those discussed in Part II, Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2023.

Item 4.    Controls and Procedures
(a) Controls and Procedures
An evaluation was carried out, under the supervision of and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)), as of the end of the period covered by this report.
Based on the evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures were effective, at the reasonable assurance level, as of March 31, 2024.
In designing and evaluating our disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and our management must apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Accordingly, our disclosure controls and procedures are designed to provide reasonable, not absolute, assurance that the objectives of our disclosure controls system are met.
(b) Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during our most recently completed quarter that have materially affected or are reasonably likely to materially affect our internal control over financial reporting. We continue to utilize the Committee of Sponsoring Organizations of the Treadway Commission (COSO) 2013 Framework on internal control. We rely extensively on information systems and technology to manage our business, including integrated supply chain operations, and global consolidated financial results. We are currently preparing to implement a new global enterprise resource planning (ERP) system, which will replace existing operating and financial systems. The ERP system is designed to accurately maintain our financial records, support integrated supply chain and other operational functionality, and provide timely information to our management team related to the operation of the business. We are currently implementing in phases through 2025, with post-implementation activities following thereafter. As the implementation and post-implementation activities take place, we will have changes to certain of our processes and procedures, and we will evaluate quarterly whether the changes materially affect our internal control over financial reporting.
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PART II. OTHER INFORMATION
Item 1.    Legal Proceedings
On October 22, 2021, a purported securities class action lawsuit was filed against us, our prior Chief Executive Officer, our current and prior Chief Financial Officers, and our President of Worldwide Research & Development in the United States District Court for the Northern District of California, alleging violations under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (the Exchange Act). The complaint alleges that we made materially false or misleading statements regarding BMN 307 by purportedly failing to disclose information about BMN 307’s safety profile, and by purportedly overstating BMN 307’s clinical and commercial prospects. The complaint seeks an unspecified amount of damages, pre-judgment and post-judgment interest, attorneys’ fees, expert fees, and other costs. The Court appointed lead plaintiffs and lead counsel on January 10, 2022. Lead plaintiffs filed an amended complaint on March 25, 2022. We filed a motion to dismiss the amended complaint on May 25, 2022. On January 19, 2023, the Court granted our motion to dismiss the complaint without prejudice. On February 21, 2023, the court dismissed the complaint with prejudice at plaintiffs’ request. Plaintiffs appealed the court’s January 19, 2023 order to the United State Court of Appeals for the Ninth Circuit and filed their opening brief on June 23, 2023. We filed our answering brief on August 23, 2023. Plaintiffs filed their reply brief on October 13, 2023. On February 15, 2024, the United States Court of Appeals for the Ninth Circuit affirmed the district court's dismissal.
On January 19, 2023 and May 30, 2023, certain of our officers and directors were named as defendants in two shareholder derivative actions filed in the Delaware Court of Chancery. The complaints assert, inter alia, breach of fiduciary duty claims arising from the facts underlying the securities class action related to ROCTAVIAN. The complaints seek unspecified monetary damages, internal governance reforms by the Company, attorneys’ fees and costs, and any other relief the court may deem just and proper. The parties in the derivative lawsuits have entered into a stipulation of settlement, that, subject to final approval by the Court of Chancery, will resolve the derivative lawsuits.
On April 4, 2024, a purported stockholder class action was filed against us and our Board of Directors in the Delaware Court of Chancery. The complaint also named as defendants Elliott Investment Management L.P., Elliott Associates, L.P., and Elliott International, L.P., which are parties to the Cooperation Agreement with the Company. The complaint asserted a claim for declaratory judgment, seeking an order that certain provisions of the Cooperation Agreement are invalid, and, on April 4, 2024, the plaintiff moved for expedited proceedings as to the claim for declaratory judgment. In addition, the complaint asserted a claim for breach of fiduciary duty against certain directors in connection with approval of the Cooperation Agreement, as well as a claim against the Elliott parties for aiding and abetting the directors’ alleged breaches of fiduciary duty. On April 11, 2024, the Elliott parties executed a waiver of the challenged provisions in the Cooperation Agreement. In light of that waiver, on April 16, 2024, the plaintiff filed a stipulation and proposed order to dismiss the action as moot, with the court to retain jurisdiction to determine plaintiff’s counsel’s application for an award of attorneys’ fees and expenses. Also on April 16, 2024, the Court granted the order, dismissing all claims with prejudice, as to the named plaintiff only.

Item 1A.     Risk Factors
An investment in our securities involves a high degree of risk. We operate in a dynamic and rapidly changing industry that involves numerous risks and uncertainties. The risks and uncertainties described below are not the only ones we face. Other risks and uncertainties, including those that we do not currently consider material, may impair our business. If any of the risks discussed below actually occur, our business, financial condition, operating results or cash flows could be materially adversely affected. This could cause the value of our securities to decline, and you may lose all or part of your investment.
We have marked with an asterisk (*) those risk factors below that include a substantive change from or update to the risk factors included in our Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the SEC on February 26, 2024.

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.
The course of treatment for patients using our products is expensive. For all our products except ROCTAVIAN, we expect patients to need treatment for extended periods, and for some products throughout the lifetimes of the patients. We expect that most families of patients will not be capable of paying for this treatment themselves. There will be no commercially viable market for our products without coverage and reimbursement from third-party payers. Additionally, even if there is a commercially viable market, if the level of reimbursement is below our expectations, our revenues and gross margin will be adversely affected.
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Third-party payers, such as government or private healthcare insurers, carefully review and increasingly challenge the prices charged for drugs. Reimbursement rates from private companies vary depending on the third-party payer, the insurance plan and other factors. Obtaining coverage and adequate reimbursement for our products may be particularly difficult because of the higher prices often associated with drugs administered under the supervision of a physician. Reimbursement systems in international markets vary significantly by country and by region, and reimbursement approvals must be obtained on a country-by-country basis.
Government authorities and other third-party payers are developing increasingly sophisticated methods of controlling healthcare costs, such as by limiting coverage and the amount of reimbursement for particular medications. Increasingly, third-party payers are requiring that drug companies provide them with predetermined discounts from list prices as a condition of coverage, are using restrictive formularies and preferred drug lists to leverage greater discounts in competitive classes, and are challenging the prices charged for medical products. Further, no uniform policy requirement for coverage and reimbursement for drug products exists among third-party payers in the U.S. Therefore, coverage and reimbursement for drug products can differ significantly from payer to payer. As a result, the coverage determination process is often a time-consuming and costly process that will require us to provide scientific and clinical support for the use of our products to each payer separately, with no assurance that coverage and adequate reimbursement will be applied consistently or obtained in the first instance.
We cannot be sure that coverage and reimbursement will be available for any product that we commercialize or will continue to be available for any product that we have commercialized and, if reimbursement is available, what the level of reimbursement will be. Even if favorable coverage and reimbursement status is attained for one or more products for which we receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future based on new legislation, the availability of alternative therapies and their pricing, coverage and reimbursement decisions by third-party payers, or other factors. Coverage and reimbursement may impact the demand for, or the price of, any product candidate for which we obtain marketing approval. If coverage and reimbursement are not available or reimbursement is available only to limited levels, we may not successfully commercialize any product candidate for which we obtain marketing approval or continue to market any product that has already been commercialized.
Reimbursement in the European Union (EU) and many other territories must be negotiated on a country-by-country basis and in many countries the product cannot be commercially launched until pricing and/or reimbursement is approved. The timing to complete the negotiation process in each country is highly uncertain, and in some countries, we expect that it will exceed 12 months. Even after a price is negotiated, countries frequently request or require reductions to the price and other concessions over time.
For our future products, we will not know what the reimbursement rates will be until we are ready to market the product and we actually negotiate the rates. If we are unable to obtain sufficiently high reimbursement rates for our products, they may not be commercially viable or our future revenues and gross margin may be adversely affected.
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.
In addition to the risks set forth in this Risk Factors section associated with commercializing more traditional pharmaceutical drugs, there are additional, unique commercial risks associated with gene therapy products like ROCTAVIAN. Due to the relative novelty of gene therapy and the potential to provide extended duration therapeutic treatment with a one-time administration, we face uncertainty with respect to the pricing, coverage and reimbursement of these products. In order to recover our research and development costs and commercialize one-time treatments on a profitable basis, the cost of a single administration of ROCTAVIAN is substantial, and it is likely other gene therapy products would also require relatively high prices. Therefore, coverage and reimbursement by governments and other third-party payers is essential for the vast majority of patients to be able to afford ROCTAVIAN or other gene therapy products that we may commercialize in the future. Accordingly, sales of our gene therapy products will depend substantially on the extent to which its cost will be paid by third-party payers. Even if coverage is provided, the reimbursement amounts approved by third-party payers may not be high enough to allow us to realize sufficient revenues from our investment in the development of our gene therapy products.
With respect to ROCTAVIAN specifically, we have entered into, and plan to enter into additional, outcomes-based agreements for the product with third-party payers to assist with realizing the value and sharing the risk of a one-time treatment, which make us subject to potential repayments if a patient does not respond to therapy or the therapeutic effect of the drug falls below specified thresholds. Although we will record reserves for potential refunds under the outcomes-based agreements for ROCTAVIAN in the same period as sales, our revenues and financial results could be adversely affected if our assumptions underlying our refund reserves differ from actual experience or otherwise underestimate refund obligations. Additionally, the novelty and increased complexity of reimbursement with outcomes-based arrangements heightens the risk that our price reporting may be inaccurate or delayed, which may result in fines and liability.
We also face uncertainty as to whether gene therapy will gain the acceptance of the public or the medical community. The commercial success of ROCTAVIAN or any other gene therapy product candidate that may be approved in the future will depend,
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in part, on the acceptance of physicians, patients and third-party payers of gene therapy products in general, and our product in particular, as medically necessary, cost-effective and safe. In particular, our success will depend upon physicians prescribing our product in lieu of existing treatments they are already familiar with and for which greater clinical data may be available. Moreover, physicians and patients may delay acceptance of one of our gene therapy treatments until the product has been on the market for a certain amount of time. Although administration of a gene therapy product like ROCTAVIAN is intended to correct an inborn genetic defect for at least several years, there is a risk that the therapeutic effect will not be durable and production of the desired protein or ribonucleic acid will decrease more quickly or cease entirely earlier than expected. If the therapeutic effect decreases significantly or ceases entirely, it is uncertain whether redosing is possible or would be effective. Furthermore, because gene therapy treatment is irreversible, there may be challenges in managing side effects, particularly those caused by potential overproduction of the desired protein. Adverse effects would not be able to be reversed or relieved by stopping dosing, and we may have to develop additional clinical safety procedures. Additionally, because the new gene copies are designed to reside permanently in a patient, there is a risk that they will disrupt other normal biological molecules and processes, including other healthy genes, and we may not learn the nature and magnitude of these side effects until long after clinical trials have been completed. Negative public opinion or more restrictive government regulations could have a negative effect on our business and financial condition and may delay or impair the successful commercialization of, and demand for, ROCTAVIAN or future gene therapy products.
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.
All of our products target diseases with relatively small patient populations. Our two newest products, VOXZOGO and ROCTAVIAN, address potentially larger patient populations than most of our other products; however, their market sizes are considerably smaller than many drugs marketed by other pharmaceutical and biotechnology companies. As a result, our per-patient prices must be relatively high in order to recover our development and manufacturing costs and achieve and maintain profitability. For BRINEURA, NAGLAZYME and VIMIZIM in particular, we must market worldwide to achieve significant market penetration of the product. In addition, because the number of potential patients in each disease population is small, it is not only important to find patients who begin therapy to achieve significant market penetration of the product, but we also need to be able to maintain these patients on therapy for an extended period of time. Due to the expected costs of treatment for our products, we may be unable to maintain or obtain sufficient market share at a price high enough to justify our product development efforts and manufacturing expenses.
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.
Our competitors may develop, manufacture and market products that are more effective or less expensive than ours. They may also obtain regulatory approvals for their products faster than we can obtain them (including those products with orphan drug designation, which may prevent us from marketing our product entirely for seven years, along with other regulatory exclusivities that could block approval) or commercialize their products before we do. With respect to ROCTAVIAN, we face a highly developed and competitive market for hemophilia A treatments. As we commercialize ROCTAVIAN, we may face intense competition from large pharmaceutical companies with extensive resources and established relationships in the hemophilia A community. If we do not compete successfully, our revenues would be adversely affected, and 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.
Changes in methods of treatment of disease could reduce demand for our products and adversely affect revenues.
Even if our product candidates are approved, if doctors elect a course of treatment which does not include our products, this decision would reduce demand for our products and adversely affect revenues. For example, if gene therapy becomes widely used as a treatment of genetic diseases, the use of enzyme replacement therapy, such as ALDURAZYME, NAGLAZYME, and VIMIZIM in MPS diseases, could be greatly reduced. Changes in treatment method can be caused by the introduction of other companies’ products or the development of new technologies or surgical procedures which may not directly compete with ours, but which have the effect of changing how doctors decide to treat a disease.
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.
Our future growth and development depend in part on our ability to successfully develop new products from our development activities. The development of biopharmaceutical products is very expensive and time intensive and involves a great degree of risk. The outcomes of research and development programs, especially for innovative biopharmaceuticals like gene therapy products, are inherently uncertain and may not result in the commercialization of any products.
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Our competitors compete with us to attract organizations for acquisitions, joint ventures, licensing arrangements or other collaborations. To date, several of our former and current product programs have been acquired through acquisitions and several of our former and current product programs have been developed through licensing or collaborative arrangements, such as ALDURAZYME, KUVAN and NAGLAZYME. These collaborations include licensing proprietary technology from, and other relationships with, academic research institutions. Our future success will depend, in part, on our ability to identify additional opportunities and to successfully enter into partnering or acquisition agreements for those opportunities. If our competitors successfully enter into partnering arrangements or license agreements with academic research institutions, we will then be precluded from pursuing those specific opportunities. Because each of these opportunities is unique, we may not be able to find a substitute. Several pharmaceutical and biotechnology companies have already established themselves in the field of genetic diseases. These companies have already begun many drug development programs, some of which target diseases that we are also targeting or may target in the future, and have already entered into partnering and licensing arrangements with academic research institutions, reducing the pool of available opportunities.
Universities and public and private research institutions also compete with us. While these organizations primarily have educational or basic research objectives, they may develop proprietary technology and acquire patents that we may need for the development of our product candidates. We will attempt to license this proprietary technology, if available. These licenses may not be available to us on acceptable terms, if at all. If we are unable to compete successfully with respect to acquisitions, joint venture and other collaboration opportunities, we may be limited in our ability to develop new products and to continue to expand our product pipeline.
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.
Generic versions of KUVAN are available in several countries around the world, including multiple generic versions in the U.S. and the EU. This generic competition has adversely affected and will continue to adversely affect our revenues from KUVAN, and we cannot accurately predict the rate of decline of KUVAN revenues in these countries. We are also aware that manufacturers are challenging our patent portfolio related to KUVAN in several jurisdictions, and several generic versions of KUVAN have been approved either centrally by the European Commission (EC) or on a country-by-country basis throughout the EU. If these patent challenges are successful, or if a manufacturer chooses to offer a generic version of KUVAN, notwithstanding our existing patents, our revenues from KUVAN may decline 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.
For planning purposes, we estimate the timing of the accomplishment of various scientific, clinical, regulatory and other product development goals, which we sometimes refer to as milestones. These milestones may include the commencement or completion of scientific studies and clinical trials and the submission of regulatory filings. From time to time, we publicly announce the expected timing of some of these milestones. All of these milestones are based on a variety of assumptions. The actual timing of these milestones can vary dramatically compared to our estimates or the milestones may never be achieved, in many cases for reasons beyond our control. For example, in 2021 and early 2022, we announced that we planned to resubmit our Biologics License Application (BLA) for ROCTAVIAN to the Food and Drug Administration (FDA) in the first half of 2022; however, we did not file the BLA until the third quarter of 2022 due to the additional time we needed to include supplemental information and analyses of data requested by the FDA. If we do not meet development milestones as publicly announced, the commercialization of our products 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.
We have in the past and may in the future enter into licensing arrangements, and we may not realize the benefits of such licensing arrangements.
We have in the past and may in the future enter into licensing arrangements with third parties. It is possible that we may not achieve financial or strategic benefits that justify a specific license, or we may otherwise not realize the benefits of such licensing arrangement. Further, licensing arrangements impose various diligence, milestone and royalty payment and other obligations on us. If we fail to comply with our obligations under any current or future licenses, our licensors may have the right to terminate these license agreements, which could harm our business prospects, financial condition and results of operations. Additionally, counterparties to our license agreements have in the past alleged and may in the future allege that we have breached a license agreement, which can result in litigation or other disputes that can divert management’s attention away from our business and require us to expend resources, as well as potentially having to negotiate new or reinstated licenses with less favorable terms. Any such situation could adversely affect our business, financial condition, and results of operations.
Activist investor actions threatened or commenced against us have and could in the future cause us to incur substantial costs, divert management's attention and resources, cause uncertainty about the strategic direction of our business and adversely affect our business, financial position and results of operations.
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We have been, and may in the future be, subject to activities initiated by activist investors. In December 2023, we entered into a Cooperation Agreement with Elliott Investment Management L.P., Elliott Associates, L.P. and Elliott International, L.P. (collectively, Elliott). We may not be successful in engaging constructively with one or more investors in the future despite our efforts to maintain constructive and ongoing communications with all investors, including Elliott. Resulting actions taken by activist investors from time to time have and could in the future conflict with our strategic direction, divert the attention of our Board of Directors, management, and employees, be costly and time-consuming, and disrupt the momentum in our business and operations, as well as our ability to execute our strategic plan. These types of actions may also create perceived uncertainties as to the future direction of our business or strategy, which may be exploited by our competitors and may make it more difficult to attract and retain qualified personnel, and may impact our relationships with investors, vendors, customers and other third parties. These types of actions could also impact the market price and the volatility of our common stock. In addition, we may choose to initiate, or may become subject to, litigation as a result of activist investor actions, which would serve as a further distraction to our Board of Directors, senior management and employees and could require us to incur significant additional costs.
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.
We must obtain regulatory approval to market and sell our product candidates. For example, in the U.S., we must obtain FDA approval for each product candidate that we intend to commercialize, and in the EU, we must obtain approval from the EC, based on the opinion of the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA). The FDA and EC approval processes are typically lengthy and expensive, and approval is never certain. To obtain regulatory approval, we must first show that our product candidates are safe and effective for target indications through preclinical studies and clinical trials. Preclinical studies and clinical development are long, expensive and uncertain processes. Completion of clinical trials may take several years, and failure may occur at any stage of development. The length of time required varies substantially according to the type, complexity, novelty and intended use of a product candidate. Interim results of a preclinical test or clinical trial do not necessarily predict final results, and acceptable results in early clinical trials may not be repeated in later clinical trials. Accordingly, there are no assurances that we will obtain regulatory approval for any of our product candidates. Furthermore, there can be no assurance that approval of one of our product candidates by one regulatory authority will mean that other authorities will also approve the same product candidate. Similarly, in the EU, a positive CHMP opinion for approval of a product candidate does not guarantee that the EC will approve the product candidate. Moreover, regulatory authorities may approve a product candidate for fewer or more limited indications than requested. In addition, regulatory authorities may not approve the labeling claims that are necessary or desirable for the successful commercialization of our product candidates.
We have had fewer interactions with regulatory authorities outside the U.S. and the EU as compared to our interactions with the FDA, the EC and the EMA. The approval procedures vary among countries and can involve additional clinical testing, and the time required to obtain approval may differ from that required to obtain FDA or EC approval. Moreover, clinical trials conducted in one country may not be accepted by regulatory authorities in other countries. Approval by the FDA or EC does not ensure approval by regulatory authorities in other countries, and approval by one or more non-U.S. regulatory authorities does not ensure approval by regulatory authorities in other non-U.S. countries or by the FDA or EC. However, a failure or delay in obtaining regulatory approval in one country may have a negative effect on the regulatory process in others. The non-U.S. regulatory approval process may include all of the risks associated with obtaining FDA or EC approval. We may not obtain non-U.S. regulatory approvals on a timely basis, if at all. We may not be able to file for regulatory approvals and even if we file, we may not receive necessary approvals to commercialize our product candidates in any market.
We also rely on independent third-party Contract Research Organizations (CROs) to file some of our non-U.S. marketing applications, and while we keep a close oversight on the activities we delegate to CROs, important aspects of the services performed for us by the CROs are out of our direct control. If we fail to adequately manage our CROs, if the CRO elects to prioritize work on our projects below other projects or if there is any dispute or disruption in our relationship with our CROs, the filing of our applications may be delayed.
Although the FDA, the EC and the EMA have programs to facilitate expedited development and accelerated approval processes, the timelines agreed under legislative goals or mandated by regulations are subject to the possibility of substantial delays. Accordingly, even if any of our applications receives a designation to facilitate expedited development and accelerated approval processes, these designations may not result in faster review or approval for our product candidates compared to product candidates considered for approval under conventional procedures and, in any event, do not assure ultimate approval of our product candidates by regulatory authorities. In addition, the FDA, the EC, the EMA and other comparable international regulatory authorities have substantial discretion over the approval process for pharmaceutical products. These regulatory authorities may not agree that we have demonstrated the requisite level of product safety and efficacy to warrant approval and may require, and in the past have required, additional data. If we fail to obtain regulatory approval for our product candidates, we will be unable to market and sell those product candidates, which would have a negative effect on our business and financial condition.
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Regulatory authorities and the new requirements and guidelines they promulgate may lengthen the regulatory review process, require us to perform additional or larger studies, increase our development costs, lead to changes in regulatory positions and interpretations, delay or prevent approval and commercialization of our product candidates or lead to sign