-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, H89vWJur9g7TPX+jYawz/5YBiJhREE5bL9mYLPlqewHOWW2nTA3wLyQofiHkXK7y g+qTT+UfcHohS4u2uOGV8Q== 0001193125-10-067182.txt : 20100325 0001193125-10-067182.hdr.sgml : 20100325 20100325164153 ACCESSION NUMBER: 0001193125-10-067182 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20091231 FILED AS OF DATE: 20100325 DATE AS OF CHANGE: 20100325 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BIOMARIN PHARMACEUTICAL INC CENTRAL INDEX KEY: 0001048477 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 680397820 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-26727 FILM NUMBER: 10704933 BUSINESS ADDRESS: STREET 1: 105 DIGITAL DRIVE CITY: NOVATO STATE: CA ZIP: 94949 BUSINESS PHONE: 4155066700 MAIL ADDRESS: STREET 1: 105 DIGITAL DRIVE CITY: NOVATO STATE: CA ZIP: 94949 10-K/A 1 d10ka.htm FORM 10-K/A Form 10-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


Form 10-K/A

(Amendment No. 1)


(Mark One)

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

For the fiscal year ended December 31, 2009

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 issuer as specified in its charter)


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

105 Digital Drive,

Novato, California

  94949
(Address of principal executive offices)   (Zip Code)

Registrant’s telephone number, including area code: (415) 506-6700


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

Title of Each Class   Name of Each Exchange on Which Registered
Common Stock, $.001 par value   The NASDAQ Global Select Market
Preferred Share Purchase Rights    

Securities registered under Section 12(g) of the Act:

None


Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  x    No  ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ¨    No  x

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  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).    Yes  ¨    No  ¨

Indicate by check mark if disclosure of delinquent filers in response to Item 405 of Regulation S-K is not contained in this form, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.     ¨

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

Large accelerated filer  x    Accelerated filer  ¨
Non-accelerated filer  ¨    Smaller reporting company  ¨
(Do not check if a smaller reporting company)     

 

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 101,131,358 shares common stock, par value $0.001, outstanding as of February 17, 2010. The aggregate market value of the voting and non-voting stock held by non-affiliates of the registrant as of June 30, 2009 was $758.5 million.

The documents incorporated by reference are as follows:

Portions of the Registrant’s Proxy Statement for the Annual Meeting of Stockholders to be held May 12, 2010, are incorporated by reference into Part III.



Explanatory Notes

 

In accordance with Rule 3-09 of Regulation S-X, BioMarin Pharmaceutical Inc. (“BioMarin” or the “Company”) is required to include in its Annual Report on Form 10-K for the year ended December 31, 2009, audited financial statements of BioMarin/Genzyme LLC, an equity investment in which BioMarin owns 50% of the common equity as of December 31, 2009. BioMarin is filing this Amendment No. 1 (this “Amendment”) to its Annual Report on Form 10-K for the fiscal year ended December 31, 2009 as filed with the Securities and Exchange Commission on February 25, 2010 (the “Annual Report”), solely for the purpose of including the financial statements of BioMarin/Genzyme LLC, which are filed herewith as Exhibit 99.1. In addition, we are including as exhibits to this Amendment the certifications required under Sections 302 and 906 of the Sarbanes-Oxley Act of 2002.

 

No other amendments are being made to the Annual Report. Except as otherwise expressly stated below, this Amendment does not reflect events occurring after the date of the Annual Report nor does it modify or update the disclosure contained in the Annual Report in any way other than as required to reflect the amendment discussed above and reflected below.

 

Item 15. Exhibits, Financial Statement Schedules

 

Exhibit Index

 

  2.1    Asset Purchase Agreement dated as of April 20, 2004, by and among BioMarin Pharmaceutical Inc., Medicis Pharmaceutical Corporation, Ascent Pediatrics, Inc. and BioMarin Pediatrics Inc., previously filed with the Commission on June 2, 2004 as Exhibit 2.1 to the Company’s Current Report on Form 8-K, which is incorporated herein by reference.
  2.2    Securities Purchase Agreement dated as of May 18, 2004, by and among BioMarin Pharmaceutical Inc., Medicis Pharmaceutical Corporation, Ascent Pediatrics, Inc. and BioMarin Pediatrics Inc., previously filed with the Commission on June 2, 2004 as Exhibit 2.2 to the Company’s Current Report on Form 8-K, which is incorporated herein by reference.
  2.3    License Agreement dated as of May 18, 2004, by and among BioMarin Pharmaceutical Inc., Medicis Pharmaceutical Corporation, Ascent Pediatrics, Inc. and BioMarin Pediatrics Inc., previously filed with the Commission on June 2, 2004 as Exhibit 2.3 to the Company’s Current Report on Form 8-K, which is incorporated herein by reference.
  2.4    Settlement Agreement and Mutual Release dated January 12, 2005, by and among BioMarin Pharmaceutical Inc., BioMarin Pediatrics Inc., Medicis Pharmaceutical Corporation and Medicis Pediatrics, Inc. (f/k/a Ascent Pediatrics, Inc.), previously filed with the Commission on March 16, 2005 as Exhibit 2.4 to the Company’s Annual Report on Form 10-K, which is incorporated herein by reference.
  2.5    Amendment to Securities Purchase Agreement dated January 12, 2005, by and among BioMarin Pharmaceutical Inc., BioMarin Pediatrics Inc., Medicis Pharmaceutical Corporation and Medicis Pediatrics, Inc. (f/k/a Ascent Pediatrics, Inc.), previously filed with the Commission on March 16, 2005 as Exhibit 2.5 to the Company’s Annual Report on Form 10-K, which is incorporated herein by reference.
  2.6    Amendment to License Agreement dated January 12, 2005, by and among BioMarin Pharmaceutical Inc., BioMarin Pediatrics Inc., Medicis Pharmaceutical Corporation and Medicis Pediatrics, Inc. (f/k/a Ascent Pediatrics, Inc.), previously filed with the Commission on March 16, 2005 as Exhibit 2.6 to the Company’s Annual Report on Form 10-K, which is incorporated herein by reference.
  3.1    Amended and Restated Certificate of Incorporation, as amended June 12, 2003, previously filed with the Commission on June 23, 2003 as Exhibit 3.1 to the Company’s Current Report on Form 8-K, which is incorporated herein by reference.

 

2


  3.2    Certificate of Correction to Certificate of Amendment to the Amended and Restated Certificate of Incorporation of BioMarin Pharmaceutical Inc., previously filed with the Commission on April 4, 2005 as Exhibit 3.2 to the Company’s Current Report on Form 8-K, which is incorporated herein by reference.
  3.3    Amended and Restated By-Laws of BioMarin Pharmaceutical Inc., previously filed with the Commission on February 27, 2009 as Exhibit 3.3 to the Company’s Annual Report on Form 10-K, which is incorporated herein by reference.
  4.1    Amended and Restated Rights Agreement, dated as of February 27, 2009, between BioMarin Pharmaceutical Inc. and Mellon Investor Services LLC, as Rights Agent, previously filed with the Commission on February 27, 2009 as Exhibit 4.1 to the Company’s Annual Report on Form 10-K, which is incorporated herein by reference.
  4.2    Indenture dated June 23, 2003, by and between BioMarin Pharmaceutical Inc. and Wilmington Trust Company, previously filed with the Commission on August 12, 2003 as Exhibit 4.1 to the Company’s Quarterly report on Form 10-Q, which is incorporated herein by reference.
  4.3    Indenture dated March 29, 2006, by and between BioMarin Pharmaceutical Inc. and Wilmington Trust Company, previously filed with the Commission on March 29, 2006 as Exhibit 4.1 to the Company’s Current Report on Form 8-K, which is incorporated herein by reference.
  4.4    First Supplemental Indenture dated March 29, 2006, by and between BioMarin Pharmaceutical Inc. and Wilmington Trust Company, previously filed with the Commission on March 29, 2006 as Exhibit 4.2 to the Company’s Current Report on Form 8-K, which is incorporated herein by reference.
  4.5    Form of 2.5% Senior Subordinated Convertible Notes due 2013, previously filed with the Commission on March 29, 2006 as Exhibit 4.2 to the Company’s Current Report on Form 8-K, which is incorporated herein by reference.
10.1
   Form of Indemnification Agreement for Directors and Officers, previously filed with the Commission on May 4, 1999 as Exhibit 10.1 to the Company’s Registration Statement on Form S-1 (Registration No. 333-77701), which is incorporated herein by reference.
10.2
   Amended and Restated Severance Plan and Summary Plan Description as originally adopted on January 27, 2004 and amended and restated on May 12, 2009, previously filed with the Commission on July 31, 2009 as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q, which is incorporated by reference herein.
10.3
   Amendment to 1997 Stock Plan, as amended, as adopted March 20, 2002, previously filed with the Commission on March 21, 2002 as Exhibit 99.1 to the Company’s Current Report on Form 8-K, which is incorporated herein by reference.
10.4
   Amendment No. 2 to 1997 Stock Plan, as adopted May 5, 2004, previously filed with the Commission on August 9, 2004 as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q, which is incorporated herein by reference.
10.5
   Amended and Restated BioMarin Pharmaceutical Inc. 2006 Share Incentive Plan, as adopted on June 21, 2006, previously filed with the Commission on June 16, 2006 as Exhibit 99.1 to the Company’s Current Report on Form 8-K, which is incorporated herein by reference.
10.6
   1998 Director Option Plan and forms of agreements thereunder, previously filed with the Commission on May 4, 1999 as Exhibit 10.3 to the Company’s Registration Statement on Form S-1 (Registration No. 333-77701), which is incorporated herein by reference.
10.7
   Amendment to 1998 Director Plan as adopted March 26, 2003 previously filed with the Commission on May 15, 2003 as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q, which is incorporated herein by reference.

 

3


10.8    Amendment No. 2 to 1998 Director Option Plan, as adopted June 12, 2003 and July 21, 2003, previously filed with the Commission on August 12, 2003 as Exhibit 10.1 to the Company’s Quarterly report on Form 10-Q, which is incorporated herein by reference.
10.9    Amendment No. 3 to 1998 Director Option Plan, as adopted May 5, 2004, previously filed with the Commission on August 9, 2004 as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q, which is incorporated herein by reference.
10.10
   Amended and Restated 2006 Employee Stock Purchase Plan, as adopted on June 21, 2006, previously filed with the Commission on August 3, 2006 as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q, which is incorporated herein by reference.
10.11
   Amended and Restated BioMarin Pharmaceutical Inc. Nonqualified Deferred Compensation Plan, as adopted on December 1, 2005 and as amended and restated on January 1, 2009, previously filed with the Commission on December 23, 2008 as Exhibit 10.8 to the Company’s Current Report on Form 8-K, which is incorporated herein by reference.
10.12
   Amended and Restated Employment Agreement with Jean-Jacques Bienaimé dated January 1, 2009 previously filed with the Commission on December 23, 2008, as Exhibit 10.1 to the Company’s Current Report on Form 8-K, which is incorporated herein by reference.
10.13
   Amended and Restated Employment Agreement with Stephen Aselage dated January 1, 2009 previously filed with the Commission on December 23, 2008 as Exhibit 10.2 to the Company’s Current Report on Form 8-K, which is incorporated herein by reference.
10.14
   Amended and Restated Employment Agreement with Robert A. Baffi dated January 1, 2009 previously filed with the Commission on December 23, 2008, as Exhibit 10.3 to the Company’s Current Report on Form 8-K, which is incorporated herein by reference.
10.15
   Amended and Restated Employment Agreement with Emil D. Kakkis, M.D., Ph.D. dated January 1, 2009 previously filed with the Commission on December 23, 2008 as Exhibit 10.4 to the Company’s Current Report on Form 8-K, which is incorporated herein by reference.
10.16
   Severance Agreement with Dr. Emil D. Kakkis, dated May 28, 2009, previously filed with the SEC on June 3, 2009 as Exhibit 10.1 to the Company’s Current Report on Form 8-K, which is incorporated herein by reference.
10.17
   Consulting Agreement between the Company and Dr. Emil D. Kakkis, dated July 1, 2009 previously filed with the SEC on June 3, 2009 as Exhibit 10.2 to the Company’s Current Report on Form 8-K, which is incorporated herein by reference.
10.18
   Amended and Restated Employment Agreement with Jeffrey H. Cooper dated January 1, 2009 previously filed with the Commission on December 23, 2008 as Exhibit 10.5 to the Company’s Current Report on Form 8-K, which is incorporated herein by reference.
10.19
   Amended and Restated Employment Agreement with G. Eric Davis dated January 1, 2009, previously filed with the Commission on December 23, 2005 as Exhibit 10.6 to the Company’s Current Report on Form 8-K, which is incorporated herein by reference.
10.20
   Amended and Restated Employment Agreement with Mark Wood dated January 1, 2009 previously filed with the Commission on December 23, 2008 as Exhibit 10.7 to the Company’s Current Report on Form 8-K, which is incorporated herein by reference.
10.21
   Employment Agreement with Stuart J. Swiedler, M.D., Ph.D., dated April 9, 2007, previously filed with the Commission on May 3, 2007 as Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q, which is incorporated herein by reference.
10.22
   Employment Agreement with Henry Fuchs, dated March 18, 2009, previously filed with the Commission on March 23, 2009 as Exhibit 10.1 to the Company’s Current Report on Form 8-K, which is incorporated herein by reference.

 

4


10.23    Grant Terms and Conditions Agreement between BioMarin Pharmaceutical Inc. and Harbor-UCLA Research and Education Institute dated April 1, 1997, as amended, previously filed with the Commission on July 21, 1999 as Exhibit 10.17 to the Company’s Amendment No. 3 to Registration Statement on Form S-1 (Registration No. 333-77701), which is incorporated herein by reference. Portions of this document have been redacted pursuant to a request for confidential treatment filed pursuant to the Freedom of Information Act.
10.24    License Agreement dated July 30, 2004, between BioMarin Pharmaceutical Inc. and Daiichi Suntory Pharma Co., Ltd., as amended by Amendment No. 1 to License Agreement dated November 19, 2004, previously filed with the Commission on March 16, 2005 as Exhibit 10.25 to the Company’s Annual Report on Form 10-K, which is incorporated herein by reference. Portions of this document have been redacted pursuant to a request for confidential treatment filed pursuant to the Freedom of Information Act.
10.25    Development, License and Commercialization Agreement dated May 13, 2005, between BioMarin Pharmaceutical Inc. and Ares Trading S.A., previously filed with the Commission on July 6, 2005 as Exhibit 10.1 to the Company’s Current Report on Form 8-K/A, which is incorporated herein by reference. Portions of this document have been redacted pursuant to a Request for Confidential Treatment filed pursuant to the Freedom of Information Act.
10.26    Operating Agreement with Genzyme Corporation, previously filed with the Commission on July 21, 1999 as Exhibit 10.30 to the Company’s Amendment No. 2 to Registration Statement on Form S-1 (Registration No. 333-77701), which is incorporated herein by reference.
10.27
   2009 Technical Amendments to BioMarin Pharmaceutical Inc. 2006 Share Incentive Plan, effective January 1, 2009, previously filed with the Commission on December 23, 2008, as Exhibit 10.9 to the Company’s Current Report on Form 8-K, which is incorporated herein by reference.
10.28    Amended and Restated License Agreement between BioMarin Pharmaceutical Inc. and Women’s and Children’s Hospital dated February 7, 2007, previously filed with the Commission on May 3, 2007 as Exhibit 10.7 to the Company’s Quarterly Report on Form 10-Q, which is incorporated herein by reference. Portions of this document have been redacted pursuant to a Request for Confidential Treatment filed pursuant to the Freedom of Information Act.
10.29    Manufacturing, Marketing and Sales Agreement dated as of January 1, 2008, by and among BioMarin Pharmaceutical Inc., Genzyme Corporation and BioMarin/Genzyme LLC previously filed with the Commission on February 27, 2008 as Exhibit 10.30 to the Company’s 2007 Annual Report on Form 10-K, which is incorporated herein by reference. Portions of this document have been redacted pursuant to a Request for Confidential Treatment filed pursuant to the Freedom of Information Act.
10.30    Amended and Restated Collaboration Agreement dated as of January 1, 2008, by and among BioMarin Pharmaceutical Inc., Genzyme Corporation and BioMarin/Genzyme LLC previously filed with the Commission on February 27, 2007 as Exhibit 10.31 to the Company’s 2007 Annual Report on Form 10-K, which is incorporated herein by reference. Portions of this document have been redacted pursuant to a Request for Confidential Treatment filed pursuant to the Freedom of Information Act.
10.31    Members Agreement dated as of January 1, 2008 by and among BioMarin Pharmaceutical Inc., Genzyme Corporation, BioMarin Genetics Inc., and BioMarin/Genzyme LLC previously filed with the Commission on February 27, 2007 as Exhibit 10.32 to the Company’s 2007 Annual Report on Form 10-K, which is incorporated herein by reference. Portions of this document have been redacted pursuant to a request for confidential treatment filed pursuant to the Freedom of Information Act.
10.32    Development and Commercialization Agreement dated as of January 4, 2009 by and between BioMarin CF Limited and La Jolla Pharmaceutical Company, previously filed with the Commission on February 27, 2009 as Exhibit 10.29 to the Company’s Annual Report on Form 10-K, which is incorporated herein by reference. Portions of this document have been redacted pursuant to a request for confidential treatment filed pursuant to the Freedom of Information Act.

 

5


10.33    Securities Purchase Agreement dated as of January 4, 2009 by and between BioMarin Pharmaceutical Inc. and La Jolla Pharmaceutical Company, previously filed with the Commission on February 27, 2009 as Exhibit 10.30 to the Company’s Annual Report on Form 10-K, which is incorporated herein by reference. Portions of this document have been redacted pursuant to a request for confidential treatment filed pursuant to the Freedom of Information Act.
10.34    Amendment No. 1 to the Development and Commercialization Agreement dated as of January 16, 2009 by and between BioMarin CF Limited and La Jolla Pharmaceutical Company, previously filed with the Commission on February 27, 2009 as Exhibit 10.31 to the Company’s Annual Report on Form 10-K, which is incorporated herein by reference.
10.35    Amendment No. 1 to the Securities Purchase Agreement dated as of January 16, 2009 by and between BioMarin Pharmaceutical Inc. and La Jolla Pharmaceutical Company, previously filed with the Commission on February 27, 2009 as Exhibit 10.32 to the Company’s Annual Report on Form 10-K, which is incorporated herein by reference.
10.36    Summary of Bonus Plan, previously filed with the Commission on February 27, 2009 as Exhibit 10.33 to the Company’s Annual Report on Form 10-K, which is incorporated herein by reference.
10.37#    Stock Purchase Agreement by and between BioMarin Pharmaceutical Inc., Huxley Pharmaceuticals, Inc., and the stockholders of Huxley Pharmaceuticals, Inc., dated October 20, 2009, previously filed with the Commission on February 26, 2010 as Exhibit 10.36 to the Company’s Annual Report on Form 10-K, which is incorporated herein by reference. Portions of this document have been redacted pursuant to a request for confidential treatment filed pursuant to the Freedom of Information Act.
21.1    Subsidiaries of BioMarin Pharmaceutical Inc., previously filed with the Commission on February 26, 2010 as Exhibit 21.1 to the Company’s Annual Report on Form 10-K, which is incorporated herein by reference.
23.1    Consent of KPMG LLP, Independent Registered Public Accounting Firm for BioMarin Pharmaceutical Inc., previously filed with the Commission on February 26, 2010 as Exhibit 23.1 to the Company’s Annual Report on Form 10-K, which is incorporated herein by reference.
23.2*    Consent of PricewaterhouseCoopers, LLP, Independent Registered Public Accounting Firm for BioMarin/Genzyme LLC.
24.1    Power of Attorney (Included in Signature Page), previously filed with the Commission on February 26, 2010 as Exhibit 24.1 to the Company’s Annual Report on Form 10-K, which is incorporated herein by reference.
31.1*    Certification of Chief Executive Officer pursuant to Rules 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended.
31.2*    Certification of Chief Financial Officer pursuant to Rules 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended.
32.1*    Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. This Certification accompanies this report and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed for purposes of §18 of the Securities Exchange Act of 1934, as amended.
99.1*    BioMarin/Genzyme LLC Consolidated Financial Statements as of December 31, 2008 and 2009 and for the years ended December 31, 2009, 2008 and 2007.

* Filed herewith
Management contract or compensatory plan or arrangement
# Confidential treatment requested for a portion of this agreement

 

6


SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

   

BIOMARIN PHARMACEUTICAL INC.

Dated: March 25, 2010  

By:

 

/s/    JEFFREY H. COOPER        


        Jeffrey H. Cooper
        Senior Vice President, Chief Financial Officer

 

7

EX-23.2 2 dex232.htm CONSENT OF PRICEWATERHOUSECOOPERS, LLP Consent of PricewaterhouseCoopers, LLP

Exhibit 23.2

 

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333-136963, 333-85368, 333-84787) of BioMarin Pharmaceutical Inc. of our report dated March 25, 2010 relating to the financial statements of BioMarin/Genzyme LLC, which appears in this Form 10-K/A.

 

/s/ PricewaterhouseCoopers LLP

 

Boston, Massachusetts

March 25, 2010

EX-31.1 3 dex311.htm CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO RULES 13A-14(A)/15D-14(A) Certification of Chief Executive Officer pursuant to Rules 13a-14(a)/15d-14(a)

Exhibit 31.1

 

CERTIFICATION

 

I, Jean-Jacques Bienaimé, certify that:

 

1. I have reviewed this Annual Report on Form 10-K/A of BioMarin Pharmaceutical Inc.;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

  b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

  c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

  d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

  b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: March 25, 2010

 

/s/ JEAN-JACQUES BIENAIMÉ

Jean-Jacques Bienaimé

Chief Executive Officer

EX-31.2 4 dex312.htm CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO RULES 13A-14(A)/15D-14(A) Certification of Chief Financial Officer pursuant to Rules 13a-14(a)/15d-14(a)

Exhibit 31.2

 

CERTIFICATION

 

I, Jeffrey H. Cooper, certify that:

 

1. I have reviewed this Annual Report on Form 10-K/A of BioMarin Pharmaceutical Inc.;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  (a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

  (b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

  (c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

  (d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  (a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

  (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: March 25, 2010

 

/s/ JEFFREY H. COOPER

Jeffrey H. Cooper

Chief Financial Officer

EX-32.1 5 dex321.htm CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER Certification of Chief Executive Officer and Chief Financial Officer

Exhibit 32.1

 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Annual Report on Form 10-K/A of BioMarin Pharmaceutical Inc. (the “Company”) for the year ended December 31, 2009, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, Jean-Jacques Bienaimé, and Jeffrey H. Cooper, hereby certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

 

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2) the information contained in such Form 10-K fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

/s/ JEAN-JACQUES BIENAIMÉ

Jean-Jacques Bienaimé

Chief Executive Officer

March 25, 2010

/s/ JEFFREY H. COOPER

Jeffrey H. Cooper

Chief Financial Officer

March 25, 2010

EX-99.1 6 dex991.htm BIOMARIN/GENZYME LLC CONSOLIDATED FINANCIAL STATEMENTS BioMarin/Genzyme LLC Consolidated Financial Statements

Exhibit 99.1

 

BioMarin/Genzyme LLC

 

Index to Consolidated Financial Statements

 

     Page(s)

Report of Independent Registered Public Accounting Firm

   1

Consolidated Balance Sheets as of December 31, 2009 and 2008 (unaudited)

   2

Consolidated Statements of Operations for the Years Ended December 31, 2009, 2008 (unaudited) and 2007

   3

Consolidated Statements of Cash Flows for the Years Ended December 31, 2009, 2008 (unaudited) and 2007

   4

Consolidated Statements of Changes in Venturers’ Capital for each of the Years Ended December 31, 2007, 2008 (unaudited) and 2009

   5

Notes to Consolidated Financial Statements

   6 -11


Report of Independent Registered Public Accounting Firm

 

To the Steering Committee of BioMarin/Genzyme LLC:

 

In our opinion, the accompanying consolidated balance sheet and the related consolidated statement of operations, of cash flows and of changes of venturers’ capital present fairly, in all material respects, the financial position of BioMarin/Genzyme LLC and its subsidiaries (the “Joint Venture”) at December 31, 2009 and the results of their operations and their cash flows for the years ended December 31, 2009 and December 31, 2007 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Joint Venture’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

 

/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
    March 25, 2010

 

1


BioMarin/Genzyme LLC

 

Consolidated Balance Sheets

(Amounts in thousands)

 

     December 31,

     2009

   2008

     (Unaudited)     
ASSETS              

Current assets:

             

Cash and cash equivalents

   $ 2,088    $ 2,991
    

  

Total assets

   $ 2,088    $ 2,991
    

  

LIABILITIES AND VENTURERS’ CAPITAL              

Current liabilities:

             

Due to BioMarin Companies

   $ 123    $ 257

Due to Genzyme Corporation

     1,051      988
    

  

Total liabilities

     1,174      1,245
    

  

Commitments and contingencies (Note F)

     —        —  

Venturers’ capital:

             

Venturers’ capital—BioMarin Companies

     457      873

Venturers’ capital—Genzyme Corporation

     457      873
    

  

Total Venturers’ capital

     914      1,746
    

  

Total liabilities and Venturers’ capital

   $ 2,088    $ 2,991
    

  

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

2


BioMarin/Genzyme LLC

 

Consolidated Statements of Operations

(Amounts in thousands)

 

     For the Years Ended December 31,

     2009

    2008

    2007

     (Unaudited)            

Revenues:

                      

Net product sales

   $ —        $ —        $ 123,671
    


 


 

Operating costs and expenses:

                      

Cost of products sold

     —          —          27,110

Selling, general and administrative

     —          180        24,682

Research and development

     5,079        4,452        11,825
    


 


 

Total operating costs and expenses

     5,079        4,632        63,617
    


 


 

Income (loss) from operations

     (5,079     (4,632     60,054

Interest income

     7        198        766
    


 


 

Net income (loss)

   $ (5,072   $ (4,434   $ 60,820
    


 


 

Net income (loss) attributable to each Venturer:

                      

BioMarin Companies

   $ (2,536   $ (2,217   $ 30,410
    


 


 

Genzyme Corporation

   $ (2,536   $ (2,217   $ 30,410
    


 


 

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

3


BioMarin/Genzyme LLC

 

Consolidated Statements of Cash Flows

(Amounts in thousands)

 

     For the Years Ended December 31,

 
     2009

    2008

    2007

 
     (Unaudited)              

Cash Flows from Operating Activities:

                        

Net income (loss)

   $ (5,072   $ (4,434   $ 60,820   

Reconciliation of net income (loss) to net cash provided by (used in) operating activities:

                        

Amortization expense

     —          —          73   

Charge for impaired assets

     —          138        —     

Increase (decrease) in cash from working capital changes:

                        

Accounts receivable

     —          —          (7,147

Inventories

     —          —          (1,417

Prepaid expenses and other current assets

     —          42        (602

Due from (to) BioMarin Companies

     (134     257        491   

Due from (to) Genzyme Corporation

     63        988        (3,079

Accrued expenses

     —          —          (200

Deferred revenue

     —          —          8   
    


 


 


Cash flows from operating activities

     (5,143     (3,009     48,947   

Cash Flows from Investing Activities:

                        

Change in restricted cash

     —          —          340   
    


 


 


Cash flows from investing activities

     —          —          340   
    


 


 


Cash Flows from Financing Activities:

                        

Capital distribution to BioMarin Companies

     —          (18,770     (17,100

Capital distribution to Genzyme Corporation

     —          (6,595     (17,100

Capital contribution from BioMarin Companies

     2,120        1,750        —     

Capital contribution from Genzyme Corporation

     2,120        1,750        —     
    


 


 


Cash flows from financing activities

     4,240        (21,865     (34,200
    


 


 


Increase (decrease) in cash and cash equivalents

     (903     (24,874     15,087   

Cash and cash equivalents at beginning of period

     2,991        27,865        12,778   
    


 


 


Cash and cash equivalents at end of period

   $ 2,088      $ 2,991      $ 27,865   
    


 


 


 

The accompanying notes are an integral part of these consolidated financial statements.

 

4


BioMarin/Genzyme LLC

 

Consolidated Statements of Changes in Venturers’ Capital

(Amounts in thousands)

 

     Venturers’ Capital

    Total
Venturers’
Capital


 
     BioMarin
Companies


    Genzyme
Corporation


   

Balance at December 31, 2006

   $ 31,695      $ 31,694      $ 63,389   

2007 capital distributions

     (17,100     (17,100     (34,200

2007 net income

     30,410        30,410        60,820   
    


 


 


Balance at December 31, 2007

     45,005        45,004        90,009   

2008 capital distributions (unaudited)

     (43,665     (43,664     (87,329

2008 capital contributions (unaudited)

     1,750        1,750        3,500   

2008 net loss (unaudited)

     (2,217     (2,217     (4,434
    


 


 


Balance at December 31, 2008 (unaudited)

     873        873        1,746   

2009 capital contributions

     2,120        2,120        4,240   

2009 net loss

     (2,536     (2,536     (5,072
    


 


 


Balance at December 31, 2009

   $ 457      $ 457      $ 914   
    


 


 


 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

5


BioMarin/Genzyme LLC

 

Notes to Consolidated Financial Statements

 

A. Nature of Business and Organization

 

BioMarin/Genzyme LLC, or the Joint Venture, is a limited liability company organized under the laws of the State of Delaware. The Joint Venture is owned:

 

   

50% by BioMarin Pharmaceutical Inc., which is referred to as BioMarin, and BioMarin Genetics, Inc., a wholly-owned subsidiary of BioMarin. BioMarin and its subsidiary are referred to as the BioMarin Companies; and

 

   

50% by Genzyme Corporation, which is referred to as Genzyme.

 

The BioMarin Companies and Genzyme are collectively referred to as the Venturers and individually as a Venturer. The Joint Venture was organized in September 1998 to develop and commercialize Aldurazyme®, a recombinant form of the human enzyme alpha-L-iduronidase, used to treat a lysosomal storage disorder known as mucopolysaccharidosis I, or MPS I. The Joint Venture commenced operations as of September 4, 1998.

 

The Joint Venture, BioMarin Companies and Genzyme entered into a Collaboration Agreement dated as of September 4, 1998. Under the terms of the Collaboration Agreement, Genzyme and the BioMarin Companies granted to the Joint Venture a world-wide, exclusive, irrevocable, royalty-free right and license or sublicense to develop, manufacture and market Aldurazyme for the treatment of MPS I and other alpha-L-iduronidase deficiencies. All program-related costs are equally funded by BioMarin, on behalf of the BioMarin Companies, and Genzyme. BioMarin and Genzyme are required to make monthly capital contributions to the Joint Venture to fund budgeted operating costs, as necessary. If either BioMarin or Genzyme fails to make two or more of the monthly capital contributions, and the other party does not exercise its right to terminate the Collaboration Agreement or compel performance of the funding obligation, the defaulting party’s (or, in the case of default by BioMarin, the BioMarin Companies’) percentage interest in the Joint Venture and future funding responsibility will be adjusted proportionately. In 2008, both Venturers contributed $1.8 million and in 2009, both Venturers contributed $2.1 million to the Joint Venture. No contributions were made in 2007 because the Joint Venture was profitable.

 

The Steering Committee of the Joint Venture serves as the governing body of the Joint Venture and is responsible for determining the overall strategy for the program, coordinating activities of the Venturers as well as performing other such functions as appropriate. The Steering Committee is comprised of an equal number of representatives of each Venturer.

 

On April 30, 2003, the United States Food and Drug Administration, commonly referred to as the FDA, granted marketing approval for Aldurazyme as an enzyme replacement therapy for patients with the Hurler and Hurler-Scheie forms of MPS I, and Scheie patients with moderate to severe symptoms. Aldurazyme has been granted orphan drug status in the United States, which generally provides seven years of market exclusivity. On June 11, 2003, the European Commission granted marketing approval for Aldurazyme to treat the non-neurological manifestations of MPS I in patients with a confirmed diagnosis of the disease. Aldurazyme has been granted orphan drug status in the European Union, which generally provides ten years of market exclusivity. In October 2006, Japan’s Health, Labor and Welfare Ministry granted marketing approval for Aldurazyme, the first specific treatment approved in Japan for patients with MPS I. Aldurazyme has been granted orphan drug status in Japan, which generally provides ten years of market exclusivity. To date, Aldurazyme has received marketing approval in over fifty countries. Aldurazyme is sold directly to physicians, hospitals, treatment centers, pharmacies and government agencies through a specalized sales force, as well as through distributors or wholesalers.

 

6


BioMarin/Genzyme LLC

 

Notes to Consolidated Financial Statements—(Continued)

A. Nature of Business and Organization (Continued)

 

On January 1, 2008, the BioMarin Companies and Genzyme restructured the Joint Venture. Instead of sharing all costs and profits equally, Genzyme will record sales of Aldurazyme and will pay BioMarin a tiered payment ranging from approximately 39.5% to 50% of worldwide net product sales, which will also be recorded by BioMarin as product revenue. Certain research and development activities related to Aldurazyme and intellectual property will continue to be managed by the Joint Venture on an equal basis.

 

B. Summary of Significant Accounting Policies

 

Basis of Presentation

 

The Joint Venture is considered a partnership for federal and state income tax purposes. As such, items of income, loss, deductions and credits flow through to the Venturers. The Venturers have responsibility for the payment of any income taxes on their proportionate share of the taxable income of the Joint Venture.

 

The consolidated financial statements for the years ended December 31, 2007 and December 31, 2009 have been audited.

 

Accounting Method

 

The consolidated financial statements have been prepared under the accrual method of accounting in conformity with accounting principles generally accepted in the United States of America.

 

Fiscal Year End

 

The Venturers have determined that the fiscal year end of the Joint Venture is December 31.

 

Use of Estimates

 

Under accounting principles generally accepted in the United States of America, the Joint Venture is required to make certain estimates and assumptions that affect reported amounts of assets, liabilities, revenues, expenses, and disclosure of contingent assets and liabilities in its consolidated financial statements. The Joint Venture’s actual results could differ from these estimates.

 

Cash and Cash Equivalents

 

Cash and cash equivalents, consisting principally of money market funds with initial maturities of three months or less, are valued at cost plus accrued interest, which the Joint Venture believes approximates their fair market value. Money market funds are typically classified as Level 1 investments as these products do not require a significant degree of judgment. All of the Joint Venture’s cash is held on deposit at one financial institution.

 

Inventories

 

Prior to January 1, 2008, inventories were valued at cost or, if lower, fair value. The Venturers determined the cost of raw materials using the average cost method and the cost of work in process and finished goods using the specific identification method. The Venturers analyzed the Joint Venture’s inventory levels quarterly and wrote down to its net realizable value:

 

   

inventory that had become obsolete;

 

7


BioMarin/Genzyme LLC

 

Notes to Consolidated Financial Statements—(Continued)

 

B. Summary of Significant Accounting Policies (Continued)

 

   

inventory that had a cost basis in excess of its expected net realizable value;

 

   

inventory in excess of expected requirements; and

 

   

expired inventory.

 

In January 2008, all inventory was distributed to the BioMarin Companies and is described in Note E., “Venturers’ Capital”.

 

Comprehensive Income

 

The Joint Venture reports comprehensive income in accordance with Financial Accounting Standards Board Accounting Standards Codification, or ASC, 220, “Comprehensive Income.” Comprehensive income for the years ended December 31, 2009, 2008 and 2007 does not differ from the reported net income.

 

Transactions with Affiliates

 

Prior to January 1, 2008, Genzyme commercialized Aldurazyme in the United States, Canada, the European Union, Latin America and the Asia Pacific regions and, as a result, conducted sales and collected cash from product sales in those territories on behalf of the Joint Venture. The majority of the Joint Venture’s operating expenses consist of project expenses incurred by the Venturers, either for internal operating costs or for third-party obligations incurred by the Venturers on behalf of the Joint Venture which are then charged to the Joint Venture. All charges to the Joint Venture are subject to approval by the Steering Committee. The determination of the amount of internal operating costs incurred by each Venturer on behalf of the Joint Venture requires significant judgment by each Venturer. As a result, the consolidated financial statements for the Joint Venture may not be indicative of the results that would have occurred had the Joint Venture obtained all of its manufacturing, commercialization and research and development services from third-party entities. The Joint Venture owed Genzyme Corporation $1.1 million at December 31, 2009 and $1.0 million at December 31, 2008 for project expenses incurred on behalf of the Joint Venture. The Joint Venture owed BioMarin Companies $0.1 million at December 31, 2009 and $0.3 million at December 31, 2008 for project expenses incurred on behalf of the Joint Venture.

 

Translation of Foreign Currencies

 

Prior to January 1, 2008, the Joint Venture translated the financial transactions performed by Genzyme’s foreign subsidiaries on behalf of the Joint Venture from local currency into U.S. dollars using the average exchange rate prevailing during each period. The Joint Venture included any gains and losses on these transactions in selling, general and administrative expenses in its results of operations. Under the updated agreement only project expenses incurred by the Venturers are charged to the Joint Venture. In 2008 and 2009 all expenses incurred on behalf of the Joint Venture were in U.S. dollars and no foreign currency transaction gains or losses were incurred. Selling, general and administrative expenses include foreign currency transaction net gains of $2.0 million in 2007.

 

Derivative Instruments

 

Prior to January 1, 2008, in accordance with ASC 815, “Derivatives and Hedging,” the Joint Venture recognized all derivative instruments as either assets or liabilities in its balance sheet and measured those instruments at fair value. Subsequent changes in fair value were reflected in current earnings or other

 

8


BioMarin/Genzyme LLC

 

Notes to Consolidated Financial Statements—(Continued)

 

B. Summary of Significant Accounting Policies (Continued)

 

comprehensive income, depending on whether the derivative instrument was designated as part of a hedge relationship and, if it was, the type of hedge relationship.

 

Revenue Recognition

 

Prior to January 1, 2008, the Joint Venture recognized revenue from product sales when persuasive evidence of an arrangement existed, the product had been delivered to the customer, title and risk of loss had passed to the customer, the price to the buyer was fixed or determinable and collection from the customer was reasonably assured. Revenue transactions were evidenced by customer purchase orders, customer contracts in certain instances, invoices and related shipping documents.

 

ASC 605, “Revenue Recognition,” specifies that cash consideration (including a sales incentive) given by a vendor to a customer is presumed to be a reduction of the selling prices of the vendor’s products or services and, therefore, should be characterized as a reduction of revenue. That presumption is overcome and the consideration should be characterized as a cost incurred if, and to the extent that, both of the following conditions are met:

 

   

the vendor receives, or will receive, an identifiable benefit (goods or services) in exchange for the consideration; and

 

   

the vendor can reasonably estimate the fair value of the benefit received.

 

Prior to January 1, 2008, the Joint Venture recorded certain fees paid to its distributors for services as operating expenses where the criteria set forth above were met. In 2009 and 2008, no fees were incurred. In 2007 fees incurred for these services were $0.7 million.

 

Research and Development

 

Research and development costs are expensed in the period incurred. These costs are primarily comprised of development efforts performed by the Venturers or payments to third parties made by the Venturers, both on behalf of the Joint Venture, during the respective periods.

 

Income Taxes

 

The Joint Venture is organized as a pass-through entity and accordingly, the consolidated financial statements do not include a provision for income taxes. Taxes, if any, are the liability of the BioMarin Companies and Genzyme, as Venturers.

 

C. Accounts Receivable

 

Prior to January 1, 2008, the Joint Venture’s trade receivables primarily represented amounts due from distributors and healthcare service providers. The Joint Venture stated accounts receivable at fair value, after reflecting an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make payments. The Joint Venture believed that its credit risk associated with trade receivables was mitigated by the following factors:

 

   

the product was sold to a number of customers over a broad geographic range;

 

   

the Joint Venture performed credit evaluations of its customers on an ongoing basis; and

 

   

the Joint Venture performed a detailed, monthly review of the receivable aging and specific customer balances.

 

9


BioMarin/Genzyme LLC

 

Notes to Consolidated Financial Statements—(Continued)

C. Accounts Receivable (Continued)

 

The Joint Venture has not written off any accounts receivables nor found it necessary to record an allowance for doubtful accounts. In January 2008, all accounts receivable was distributed to Genzyme and is described in Note E., “Venturers’ Capital”.

 

D. Technology License Fees

 

In 2005, the Joint Venture paid $0.4 million for technology license fees. In 2008, as a result of the restructuring, the license fees which had a book value of $138,000 were written off. Total amortization expense for the Joint Venture’s technology license fees was approximately $73,000 for the year ended December 31, 2007.

 

E. Venturers’ Capital

 

Venturers’ capital is comprised of capital contributions made by the Venturers to fund expenses of the Joint Venture in accordance with the Collaboration Agreement, and income (losses) allocated to the Venturers, net of cash distributions to the Venturers. All funding is shared equally by the two Venturers. As of December 31, 2009, the BioMarin Companies and Genzyme have each provided a total of $71.2 million of funding to the Joint Venture, net of $39.9 million of cash distributed by the Joint Venture to each Venturer.

 

On January 1, 2008 as part of the restructuring, the Joint Venture distributed the majority of its net assets to the Venturers. The BioMarin Companies received $24.9 million in net assets and $18.8 million in cash. Genzyme received $37.1 million in net assets and $6.6 million in cash. During 2007, the Joint Venture distributed $17.1 million of cash to each Venturer in accordance with the terms of the Collaboration Agreement. The Venturers did not make any capital contributions to the Joint Venture in 2007 because the Joint Venture had sufficient cash to meet its financial obligations. In 2008 and 2009, each Venturer contributed $1.8 million and $2.1 million respectively, to cover the operating expenses.

 

F. Commitments and Contingencies

 

Legal Proceedings

 

Under the Joint Venture’s operation agreement, the Joint Venture indemnifies its affiliates for acts performed under the agreement on behalf of the Joint Venture, including amounts paid by affiliates in connection with legal proceedings related to the Joint Venture or its operations.

 

There have been several lawsuits filed in Brazil alleging that an affiliate of a member of the Joint Venture is contractually obligated to provide drugs at no cost to several patients. The affiliate is vigorously defending against these actions. Management of the Joint Venture is not able to predict the outcome of these cases or estimate with certainty the amount or range of any possible loss the Joint Venture might incur if the affiliate does not prevail in the final, non-appealable determination of any or all of these matters and the Joint Venture has to indemnify the affiliate for amounts paid related to settlement of any of these lawsuits.

 

The Joint Venture periodically becomes subject to legal proceedings and claims arising in connection with its business. The Joint Venture is not able to predict the outcome of any legal proceedings, to which it may become subject in the normal course of business, or estimate the amount or range of any reasonably possible loss the Joint Venture might incur if it does not prevail in the final, non-appealable determinations of such matters. Therefore, the Joint Venture has no current accruals for these potential contingencies. The Joint Venture cannot provide you with assurance that legal proceedings will not have a material adverse impact on its financial condition or results of operations.

 

10


BioMarin/Genzyme LLC

 

Notes to Consolidated Financial Statements—(Continued)

 

G. Segment Information

 

The Joint Venture operates in one business segment—human therapeutics. Disclosures about revenues by geographic area and revenues from major customers are presented below.

 

The following table contains revenue information by geographic area (amounts in thousands):

 

     For the Years Ended December 31,

     2007

Revenues:

      

U.S.

   $ 28,994

Europe

     69,335

Other

     25,342
    

Total

   $ 123,671
    

 

Prior to January 1, 2008, the Joint Venture’s results of operations were solely dependent on sales of Aldurazyme. BioMarin manufactures Aldurazyme at a single manufacturing facility in Novato, California and outsources the fill-finish process. The percentage of sales of Aldurazyme to distributors, as compared to total revenues in 2007 were as follows:

 

     % of Total Revenues

 
     2007

 

Sales to Distributors:

      

U.S. distributors

   9

European distributors

   7

Other distributors

   3
    

Total sales to distributors

   19
    

 

The percentage of sales of Aldurazyme to two U.S. distributors, as compared to total revenues in 2007 were as follows:

 

     % of Total Revenues

 
     2007

 

Sales to U.S. Distributors:

      

Distributor A

   3

Distributor B

   6
    

Total sales to U.S. distributors

   9
    

 

11

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