BIOMARIN PHARMACEUTICAL INC

Net Product Revenues

Net Product Revenues consisted of the following:

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 and six months ended June 30, 2025 as compared to the three and six months ended June 30, 2024 was primarily attributed to the following:

•VOXZOGO: higher sales volume from new patients initiating therapy across all regions;

•VIMIZIM: higher sales volume from new patients initiating therapy across all regions and timing of orders in countries that place large government orders, primarily in Latin America;

•PALYNZIQ: higher sales volume from new patients initiating therapy, primarily in the U.S.;

•ALDURAZYME: higher sales volume due to timing of order fulfillment to Sanofi; and

•ROCTAVIAN: higher sales volume from new patients in the U.S. and Europe.

These increases were partially offset by the following:

•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.

With respect to KUVAN, see also the risk factor “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.” in “Risk Factors” included in Part II, Item 1Aof this Quarterly Report for additional information on risks we face.

With respect to VOXZOGO, see also the risk factor “Our success depends on our ability to manage our growth and execute our corporate strategy.” in "Risk Factors" in Part II, Item 1A of this Quarterly Report for additional information on risk factors that could impact our business and operations.

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. Certain currencies are not included in our hedging program, such as the Argentine Peso. With respect to the risks posed by fluctuations of both hedged and unhedged currencies against the U.S. dollar, see the risk factor “Our international operations pose currency risks, which may adversely affect our operating results and net income” in “Risk Factors” included in Part II, Item 1Aof this Quarterly Report for additional information. The following table shows our Net Product Revenues denominated in USD and foreign currencies:

The unfavorable impact for the three and six months ended June 30, 2025 was primarily driven by weakening of the Argentine Peso, Brazilian Real and Mexican Peso. The unfavorable impact for the three and six months ended June 30, 2024 was primarily driven by weakening of Argentine Peso and Japanese Yen, partially offset by strengthening of the Euro.

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:

Cost of Sales increased in the three and six months ended June 30, 2025 as compared to the three and six months ended June 30, 2024, primarily from higher sales volume.

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:

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 expense consisted of the following:

The decrease in R&D expense for the three and six months ended June 30, 2025 as compared to the three and six months ended June 30, 2024 was primarily due to lower spend on ROCTAVIAN and the Research and early pipeline programs that were discontinued in 2024. The decrease was partially offset by increased spend on Later-stage clinical programs due to continued progression of VOXZOGO indication for hypochondroplasia.

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.

SG&A expense consisted of the following:

S&M expense consisted of the following:

The decrease in S&M expense for the three and six months ended June 30, 2025 as compared to the three and six months ended June 30, 2024 was primarily due to reduced activities related to ROCTAVIAN as we focused commercial efforts in the U.S., Germany and Italy to align with our updated ROCTAVIAN strategy announced during the second half of 2024. The decrease in S&M expense for the six months ended June 30, 2025 as compared to the six months ended June 30, 2025 was also attributable to lower spend on Enzyme Therapies following the organizational redesign announced in 2024. These increases were partially offset by increased spending related to global expansion of VOXZOGO for achondroplasia and pre-launch activities of VOXZOGO for hypochondroplasia.

The decrease in G&A expense for the three and six months ended June 30, 2025 as compared to the three and six months ended June 30, 2024 was primarily due to severance and restructuring costs incurred in 2024 associated with our portfolio strategy review and the associated organizational redesign efforts announced in 2024. The decrease was partially offset by incremental administrative costs related to ongoing support of business initiatives.

Intangible Asset Amortization and Gain on Sale of Nonfinancial Assets

Intangible Asset Amortization and Gain on Sale of Nonfinancial Assets were as follows:

The decrease in Amortization of Intangible Assets for the three and six months ended June 30, 2025 as compared to the three and six months ended June 30, 2024 was due to the increase in the estimated useful life of an intangible asset as a result of the extension of a patent during the second half of 2024 and an intangible asset becoming fully amortized during the fourth quarter of 2024.

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.

The change in Interest Income for the three and six months ended June 30, 2025 as compared to the three and six months ended June 30, 2024 was relatively flat.

Interest Expense

We incur interest expense primarily on our convertible debt. Interest Expense for the periods presented was as follows:

The change in Interest Expense for the three and six months ended June 30, 2025 as compared to the three and six months ended June 30, 2024 was relatively flat. 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:

The increase in Other Income (Expense), Net for the three and six months ended June 30, 2025 as compared to the three and six months ended June 30, 2024 was primarily due to higher foreign currency transaction gains and decrease in impairment loss on non-marketable equity securities.

Provision for Income Taxes

The Provision for Income Taxes for the periods presented was as follows:

The increase in Provision for Income Taxes for the three and six months ended June 30, 2025 as compared to the three and six months ended June 30, 2024 was primarily due to higher pre-tax income and tax expense related to expiration of unexercised options in 2025.

On July 4, 2025, the One Big Beautiful Bill (OBBB) Act, which includes a broad range of tax reform provisions, was signed into law in the United States. The Company is currently assessing the impact of the OBBB Act on the Company’s Consolidated Financial Statements.

Financial Condition, Liquidity and Capital Resources

Our cash, cash equivalents, and investments as of June 30, 2025 and December 31, 2024 were as follows:

We believe 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 due in 2027, 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, geopolitical instability, impact of new or increased tariffs and escalating trade tensions, 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 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:

The increase in net cash provided by operating activities in the six months ended June 30, 2025 compared to June 30, 2024 was primarily attributed to an increase in net income and timing of payments to vendors, partially offset by the timing of cash receipts from our customers.

The decrease in net cash provided by investing activities in the six months ended June 30, 2025 compared to June 30, 2024 was primarily attributable to lower net maturities of available-for-sale securities and absence of proceeds received in 2024 related to a sale of nonfinancial asset. The decrease was partially offset by fewer purchases of fixed assets and intangible assets.

The increase in net cash used in financing activities in the six months ended June 30, 2025 compared to June 30, 2024 was primarily due to decreased proceeds from exercises of equity awards offset by lower tax payments related to net share settlement of equity awards.

Financing

Our $600.0 million (undiscounted) of convertible debt as of June 30, 2025 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 June 30, 2025, our indebtedness consisted of 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 May 2027. 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, 2024.

In August 2024, we entered into an unsecured revolving credit facility providing for $600.0 million in revolving loan commitments. The credit facility is intended to finance ongoing working capital needs and for other general corporate purposes. The credit facility contains financial covenants including a maximum total net leverage ratio and a minimum interest coverage ratio. The credit facility matures in August 2029. As of June 30, 2025, there were no amounts outstanding under the credit facility and we were in compliance with all covenants.

Material Cash Requirements

Purchase Obligations

As of June 30, 2025, we had obligations of approximately $585.7 million, of which $236.5 million is expected to be paid in 2025. 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

As of June 30, 2025, we were subject to contingent payments considered reasonably possible of $229.1 million, of this amount we may pay up to $2.1 million over the next 12 months if certain contingencies are met. See Note 11 to our accompanying Condensed Consolidated Financial Statements for additional discussion on our contingent obligations.

Our lease commitments and unrecognized tax benefits as of June 30, 2025 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, 2024.

See Note 11 to our accompanying Condensed Consolidated Financial Statements for additional information on our commitments.

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 six months ended June 30, 2025, 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, 2024, filed with the SEC on February 24, 2025.

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.