More than 140 Marin staff suffered cuts at BioMarin.
By Bill Meagher
Downsize. Layoffs. Sacking. Call it what you want but 5% of BioMarin’s (BRMN) 3,400 employees are now former employees.
In a filing in May, the company served notice to its investors, Wall Street and the Securities and Exchange Commission that it was shaving its staff roster of 170 souls, 141 of them in Marin. It had already let the State of California in on the shrinking of the biotech’s payroll, as required by law.
If you are going to write about business for a living, you are going to write stories like this. At my first daily paper, the Oroville Mercury-Register, I caught an assignment about a large local company laying off lots of folks and the editor told me to head down and interview those carrying boxes to their car. After asking a number of folks in tears to talk to me, one gent threatened to give me some free dental work.
I suggested I buy him a beer instead. Though it wasn’t noon yet, he agreed. After a couple rounds, he began breaking down and I knew the story wasn’t about numbers. It was about people, and families and heartbreak. The story was forgettable, but I never forgot the look in his eyes nor the sound of his voice when he asked, “What do I tell my wife?”
I sure didn’t have an answer.
As a journalist, I’ve carried boxes to the car as well. As a card-carrying member of the media, I have watched my chosen profession do its level best to kill itself. Of the folks I went to J-School with, I’m hard pressed to name another who is still in this racket. Most of them had the good judgement to take no for an answer and found honest work.
I said these stories are never about numbers, here are some anyway. BioMarin said streeting 170 people “will incur aggregate pre-tax charges of approximately $15 – $20 million during the second quarter of 2024, representing one-time cash expenditures for severance and other employee termination benefits.”
More numbers. For the most recent quarter, the company increased revenue by $52 million from the same quarter one year ago. Its operating expenses increased by $26 million. Its earnings per share increased from 27 cents to 46.
So BioMarin is making more money, but still felt that cutting back its workforce was the path to take because it did a “strategic portfolio assessment of research and development programs.” After that review focused on “patient impact and commercial opportunity,” certain programs were discontinued and those working on them were told their services were no longer required.
Essentially the company looked at four different drugs that were in the R&D pipeline and decided the cost of exploring the candidates didn’t match up to possible upside. And the company would be better served pursuing candidates to treat AATD-associated liver disease, another to treat Duchenne muscular dystrophy and one treating multiple growth disorders.
BioMarin has made a name for itself treating rare or orphan diseases and conditions, disorders that have few if any treatments and smaller patient populations. The Food and Drug Administrations reward companies pursuing treatments with smaller patient populations to encourage life science companies to explore treatments.
The company has been hurt by the limited success of Roctavian, the first-ever gene therapy to treat hemophilia. BioMarin estimated the drug would produce revenues as high as $150 million a year, but last year totaled just $3.5 million. Piper Sandler analyst Christopher Raymond called the drug a commercial flop and said it might end up simply being a distraction to the company.
Wall Street still likes the company, as analysts at 18 different banks rate the stock as a buy, with nine more calling it a hold.
BioMarin is also mindful of some other recent developments. In its year end (10-K) filing, the company revealed that the U.S. Justice Department is having a look into the sponsored testing program of a pair of its therapies. The company said it was served with a subpoena for certain documents and it was cooperating with the inquiry. No other public statements have been made about the DOJ’s interest in the biotech’s testing programs.
Last year BioMarin handed a trio of seats on its board of directors to activist investor Elliott Investment Management to settle a legal action after Elliott increased its holdings in the company to $1 billion.
The company also replaced its CEO last November with Genentech veteran Alexander Hardy after Jean-Jacques Bienaimé took his leave. Hardy in turn replaced BioMarin’s Chief Commercial Officer Jeffrey Ajer.
As it turns out Ajer was simply given a preview of coming events.
