Intrinsic value of BioMarin Pharmaceutical - BMRN

Previous Close

$102.73

  Intrinsic Value

$3.01

stock screener

  Rating & Target

str. sell

-97%

Previous close

$102.73

 
Intrinsic value

$3.01

 
Up/down potential

-97%

 
Rating

str. sell

We calculate the intrinsic value of BMRN stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2017), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 17.9

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  17.60
  16.34
  15.21
  14.19
  13.27
  12.44
  11.70
  11.03
  10.42
  9.88
  9.39
  8.95
  8.56
  8.20
  7.88
  7.59
  7.33
  7.10
  6.89
  6.70
  6.53
  6.38
  6.24
  6.12
  6.01
  5.90
  5.81
  5.73
  5.66
  5.59
Revenue, $m
  1,545
  1,798
  2,071
  2,365
  2,679
  3,012
  3,364
  3,735
  4,124
  4,532
  4,958
  5,402
  5,864
  6,345
  6,845
  7,365
  7,905
  8,467
  9,050
  9,657
  10,287
  10,943
  11,626
  12,338
  13,078
  13,851
  14,656
  15,496
  16,373
  17,289
Variable operating expenses, $m
  2,645
  3,066
  3,521
  4,010
  4,533
  5,088
  5,675
  6,293
  6,941
  7,620
  8,258
  8,997
  9,767
  10,568
  11,401
  12,267
  13,167
  14,102
  15,074
  16,084
  17,134
  18,227
  19,365
  20,549
  21,783
  23,070
  24,411
  25,810
  27,271
  28,796
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  2,645
  3,066
  3,521
  4,010
  4,533
  5,088
  5,675
  6,293
  6,941
  7,620
  8,258
  8,997
  9,767
  10,568
  11,401
  12,267
  13,167
  14,102
  15,074
  16,084
  17,134
  18,227
  19,365
  20,549
  21,783
  23,070
  24,411
  25,810
  27,271
  28,796
Operating income, $m
  -1,100
  -1,268
  -1,450
  -1,646
  -1,854
  -2,076
  -2,311
  -2,558
  -2,817
  -3,088
  -3,300
  -3,595
  -3,903
  -4,223
  -4,556
  -4,902
  -5,262
  -5,635
  -6,024
  -6,427
  -6,847
  -7,284
  -7,738
  -8,212
  -8,705
  -9,219
  -9,755
  -10,314
  -10,898
  -11,507
EBITDA, $m
  -843
  -980
  -1,129
  -1,290
  -1,461
  -1,642
  -1,834
  -2,037
  -2,249
  -2,471
  -2,703
  -2,945
  -3,198
  -3,460
  -3,733
  -4,016
  -4,311
  -4,617
  -4,935
  -5,266
  -5,610
  -5,967
  -6,340
  -6,728
  -7,132
  -7,553
  -7,992
  -8,450
  -8,928
  -9,427
Interest expense (income), $m
  9
  44
  58
  73
  90
  107
  126
  146
  167
  190
  213
  238
  263
  290
  318
  347
  377
  408
  441
  474
  509
  546
  584
  623
  664
  707
  752
  798
  847
  897
  950
Earnings before tax, $m
  -1,144
  -1,326
  -1,523
  -1,735
  -1,962
  -2,202
  -2,457
  -2,725
  -3,006
  -3,301
  -3,537
  -3,858
  -4,193
  -4,541
  -4,903
  -5,279
  -5,670
  -6,076
  -6,498
  -6,937
  -7,393
  -7,868
  -8,362
  -8,876
  -9,412
  -9,971
  -10,553
  -11,161
  -11,795
  -12,457
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -1,144
  -1,326
  -1,523
  -1,735
  -1,962
  -2,202
  -2,457
  -2,725
  -3,006
  -3,301
  -3,537
  -3,858
  -4,193
  -4,541
  -4,903
  -5,279
  -5,670
  -6,076
  -6,498
  -6,937
  -7,393
  -7,868
  -8,362
  -8,876
  -9,412
  -9,971
  -10,553
  -11,161
  -11,795
  -12,457

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  4,769
  5,549
  6,392
  7,299
  8,268
  9,296
  10,383
  11,528
  12,730
  13,988
  15,302
  16,672
  18,099
  19,583
  21,127
  22,731
  24,399
  26,131
  27,932
  29,804
  31,751
  33,776
  35,884
  38,079
  40,366
  42,749
  45,235
  47,828
  50,534
  53,361
Adjusted assets (=assets-cash), $m
  4,769
  5,549
  6,392
  7,299
  8,268
  9,296
  10,383
  11,528
  12,730
  13,988
  15,302
  16,672
  18,099
  19,583
  21,127
  22,731
  24,399
  26,131
  27,932
  29,804
  31,751
  33,776
  35,884
  38,079
  40,366
  42,749
  45,235
  47,828
  50,534
  53,361
Revenue / Adjusted assets
  0.324
  0.324
  0.324
  0.324
  0.324
  0.324
  0.324
  0.324
  0.324
  0.324
  0.324
  0.324
  0.324
  0.324
  0.324
  0.324
  0.324
  0.324
  0.324
  0.324
  0.324
  0.324
  0.324
  0.324
  0.324
  0.324
  0.324
  0.324
  0.324
  0.324
Average production assets, $m
  1,859
  2,163
  2,492
  2,845
  3,222
  3,623
  4,047
  4,493
  4,962
  5,452
  5,964
  6,498
  7,054
  7,633
  8,235
  8,860
  9,510
  10,185
  10,887
  11,617
  12,376
  13,165
  13,987
  14,842
  15,733
  16,662
  17,631
  18,642
  19,697
  20,799
Working capital, $m
  87
  101
  116
  132
  150
  169
  188
  209
  231
  254
  278
  302
  328
  355
  383
  412
  443
  474
  507
  541
  576
  613
  651
  691
  732
  776
  821
  868
  917
  968
Total debt, $m
  1,072
  1,353
  1,658
  1,985
  2,335
  2,706
  3,099
  3,512
  3,946
  4,400
  4,874
  5,369
  5,884
  6,420
  6,977
  7,556
  8,158
  8,784
  9,434
  10,110
  10,812
  11,544
  12,304
  13,097
  13,922
  14,783
  15,680
  16,616
  17,593
  18,614
Total liabilities, $m
  1,722
  2,003
  2,308
  2,635
  2,985
  3,356
  3,748
  4,162
  4,595
  5,050
  5,524
  6,019
  6,534
  7,070
  7,627
  8,206
  8,808
  9,433
  10,083
  10,759
  11,462
  12,193
  12,954
  13,747
  14,572
  15,432
  16,330
  17,266
  18,243
  19,263
Total equity, $m
  3,048
  3,546
  4,085
  4,664
  5,283
  5,940
  6,635
  7,367
  8,134
  8,938
  9,778
  10,653
  11,565
  12,514
  13,500
  14,525
  15,591
  16,698
  17,849
  19,045
  20,289
  21,583
  22,930
  24,332
  25,794
  27,317
  28,905
  30,562
  32,292
  34,098
Total liabilities and equity, $m
  4,770
  5,549
  6,393
  7,299
  8,268
  9,296
  10,383
  11,529
  12,729
  13,988
  15,302
  16,672
  18,099
  19,584
  21,127
  22,731
  24,399
  26,131
  27,932
  29,804
  31,751
  33,776
  35,884
  38,079
  40,366
  42,749
  45,235
  47,828
  50,535
  53,361
Debt-to-equity ratio
  0.350
  0.380
  0.410
  0.430
  0.440
  0.460
  0.470
  0.480
  0.490
  0.490
  0.500
  0.500
  0.510
  0.510
  0.520
  0.520
  0.520
  0.530
  0.530
  0.530
  0.530
  0.530
  0.540
  0.540
  0.540
  0.540
  0.540
  0.540
  0.540
  0.550
Adjusted equity ratio
  0.639
  0.639
  0.639
  0.639
  0.639
  0.639
  0.639
  0.639
  0.639
  0.639
  0.639
  0.639
  0.639
  0.639
  0.639
  0.639
  0.639
  0.639
  0.639
  0.639
  0.639
  0.639
  0.639
  0.639
  0.639
  0.639
  0.639
  0.639
  0.639
  0.639

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -1,144
  -1,326
  -1,523
  -1,735
  -1,962
  -2,202
  -2,457
  -2,725
  -3,006
  -3,301
  -3,537
  -3,858
  -4,193
  -4,541
  -4,903
  -5,279
  -5,670
  -6,076
  -6,498
  -6,937
  -7,393
  -7,868
  -8,362
  -8,876
  -9,412
  -9,971
  -10,553
  -11,161
  -11,795
  -12,457
Depreciation, amort., depletion, $m
  257
  288
  321
  356
  394
  434
  476
  521
  568
  617
  596
  650
  705
  763
  823
  886
  951
  1,019
  1,089
  1,162
  1,238
  1,317
  1,399
  1,484
  1,573
  1,666
  1,763
  1,864
  1,970
  2,080
Funds from operations, $m
  -887
  -1,038
  -1,202
  -1,379
  -1,568
  -1,768
  -1,981
  -2,204
  -2,439
  -2,684
  -2,941
  -3,209
  -3,487
  -3,778
  -4,079
  -4,393
  -4,719
  -5,057
  -5,409
  -5,775
  -6,155
  -6,551
  -6,963
  -7,392
  -7,839
  -8,304
  -8,790
  -9,297
  -9,825
  -10,377
Change in working capital, $m
  13
  14
  15
  16
  18
  19
  20
  21
  22
  23
  24
  25
  26
  27
  28
  29
  30
  31
  33
  34
  35
  37
  38
  40
  41
  43
  45
  47
  49
  51
Cash from operations, $m
  -899
  -1,052
  -1,218
  -1,396
  -1,585
  -1,787
  -2,000
  -2,225
  -2,460
  -2,707
  -2,965
  -3,234
  -3,513
  -3,805
  -4,107
  -4,422
  -4,749
  -5,089
  -5,442
  -5,809
  -6,191
  -6,588
  -7,001
  -7,432
  -7,880
  -8,348
  -8,835
  -9,344
  -9,874
  -10,429
Maintenance CAPEX, $m
  -158
  -186
  -216
  -249
  -285
  -322
  -362
  -405
  -449
  -496
  -545
  -596
  -650
  -705
  -763
  -823
  -886
  -951
  -1,019
  -1,089
  -1,162
  -1,238
  -1,317
  -1,399
  -1,484
  -1,573
  -1,666
  -1,763
  -1,864
  -1,970
New CAPEX, $m
  -279
  -304
  -329
  -353
  -377
  -401
  -424
  -446
  -468
  -490
  -512
  -534
  -556
  -579
  -602
  -625
  -650
  -675
  -702
  -730
  -759
  -789
  -822
  -856
  -891
  -929
  -969
  -1,011
  -1,055
  -1,102
Cash from investing activities, $m
  -437
  -490
  -545
  -602
  -662
  -723
  -786
  -851
  -917
  -986
  -1,057
  -1,130
  -1,206
  -1,284
  -1,365
  -1,448
  -1,536
  -1,626
  -1,721
  -1,819
  -1,921
  -2,027
  -2,139
  -2,255
  -2,375
  -2,502
  -2,635
  -2,774
  -2,919
  -3,072
Free cash flow, $m
  -1,336
  -1,542
  -1,763
  -1,998
  -2,247
  -2,510
  -2,786
  -3,076
  -3,378
  -3,694
  -4,022
  -4,364
  -4,719
  -5,089
  -5,472
  -5,871
  -6,285
  -6,715
  -7,162
  -7,627
  -8,111
  -8,615
  -9,139
  -9,686
  -10,256
  -10,850
  -11,470
  -12,117
  -12,794
  -13,500
Issuance/(repayment) of debt, $m
  259
  281
  305
  327
  350
  371
  393
  413
  434
  454
  474
  495
  515
  536
  557
  579
  602
  625
  650
  676
  703
  731
  761
  792
  825
  860
  897
  936
  977
  1,020
Issuance/(repurchase) of shares, $m
  1,601
  1,824
  2,062
  2,315
  2,580
  2,859
  3,152
  3,456
  3,774
  4,105
  4,377
  4,734
  5,105
  5,490
  5,889
  6,304
  6,735
  7,183
  7,649
  8,133
  8,637
  9,162
  9,709
  10,279
  10,873
  11,494
  12,141
  12,818
  13,525
  14,264
Cash from financing (excl. dividends), $m  
  1,860
  2,105
  2,367
  2,642
  2,930
  3,230
  3,545
  3,869
  4,208
  4,559
  4,851
  5,229
  5,620
  6,026
  6,446
  6,883
  7,337
  7,808
  8,299
  8,809
  9,340
  9,893
  10,470
  11,071
  11,698
  12,354
  13,038
  13,754
  14,502
  15,284
Total cash flow (excl. dividends), $m
  523
  563
  604
  644
  683
  721
  758
  794
  830
  865
  829
  865
  900
  937
  974
  1,012
  1,052
  1,093
  1,136
  1,181
  1,229
  1,278
  1,330
  1,385
  1,443
  1,504
  1,568
  1,636
  1,708
  1,784
Retained Cash Flow (-), $m
  -1,601
  -1,824
  -2,062
  -2,315
  -2,580
  -2,859
  -3,152
  -3,456
  -3,774
  -4,105
  -4,377
  -4,734
  -5,105
  -5,490
  -5,889
  -6,304
  -6,735
  -7,183
  -7,649
  -8,133
  -8,637
  -9,162
  -9,709
  -10,279
  -10,873
  -11,494
  -12,141
  -12,818
  -13,525
  -14,264
Prev. year cash balance distribution, $m
  219
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  141
  165
  192
  222
  253
  287
  322
  360
  400
  441
  485
  530
  578
  627
  679
  732
  788
  846
  906
  968
  1,033
  1,101
  1,171
  1,244
  1,320
  1,399
  1,482
  1,568
  1,658
  1,752
Cash available for distribution, $m
  -859
  -1,261
  -1,458
  -1,671
  -1,898
  -2,139
  -2,394
  -2,662
  -2,944
  -3,240
  -3,548
  -3,869
  -4,204
  -4,553
  -4,915
  -5,292
  -5,683
  -6,090
  -6,512
  -6,952
  -7,408
  -7,884
  -8,378
  -8,894
  -9,430
  -9,990
  -10,573
  -11,181
  -11,817
  -12,480
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  -824
  -1,154
  -1,269
  -1,376
  -1,471
  -1,552
  -1,617
  -1,664
  -1,691
  -1,698
  -1,685
  -1,651
  -1,599
  -1,528
  -1,443
  -1,345
  -1,236
  -1,121
  -1,003
  -883
  -766
  -654
  -549
  -453
  -367
  -291
  -227
  -173
  -129
  -94
Current shareholders' claim on cash, %
  91.1
  83.3
  76.3
  70.1
  64.5
  59.4
  54.9
  50.7
  46.9
  43.5
  40.4
  37.5
  34.9
  32.5
  30.2
  28.2
  26.3
  24.5
  22.8
  21.3
  19.9
  18.6
  17.3
  16.2
  15.1
  14.2
  13.2
  12.4
  11.6
  10.8

BioMarin Pharmaceutical Inc. is a biotechnology company. The Company develops and commercializes pharmaceuticals for various diseases and medical conditions. As of December 31, 2016, the Company's therapy portfolio consisted of five products, and multiple clinical and pre-clinical product candidates. Its commercial products include Aldurazyme (laronidase) for Mucopolysaccharidosis I (MPS I), Firdapse (amifampridine phosphate) for Lambert Eaton Myasthenic Syndrome (LEMS), Kuvan (sapropterin dihydrochloride) for phenylketonuria (PKU), Naglazyme (galsulfase) for Mucopolysaccharidosis VI (MPS VI) and Vimizim (elosulfase alpha) for Mucopolysaccharidosis IV Type A (MPS IV A). The Company is conducting clinical trials on various product candidates for the treatment of various diseases. Its clinical product candidates include Brineura, pegvaliase, vosoritide, BMN 270 and BMN 250.

FINANCIAL RATIOS  of  BioMarin Pharmaceutical (BMRN)

Valuation Ratios
P/E Ratio -28.2
Price to Sales 15.9
Price to Book 6.4
Price to Tangible Book
Price to Cash Flow -77.8
Price to Free Cash Flow -47.2
Growth Rates
Sales Growth Rate 25.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -35.1%
Cap. Spend. - 3 Yr. Gr. Rate 17.9%
Financial Strength
Quick Ratio 36
Current Ratio 0.1
LT Debt to Equity 23.9%
Total Debt to Equity 24.7%
Interest Coverage -91
Management Effectiveness
Return On Assets -16.1%
Ret/ On Assets - 3 Yr. Avg. -8.9%
Return On Total Capital -19.3%
Ret/ On T. Cap. - 3 Yr. Avg. -10.8%
Return On Equity -24.4%
Return On Equity - 3 Yr. Avg. -14.2%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 81.2%
Gross Margin - 3 Yr. Avg. 82.6%
EBITDA Margin -64.9%
EBITDA Margin - 3 Yr. Avg. -28.5%
Operating Margin -71.9%
Oper. Margin - 3 Yr. Avg. -32.3%
Pre-Tax Margin -74.4%
Pre-Tax Margin - 3 Yr. Avg. -36.2%
Net Profit Margin -56.4%
Net Profit Margin - 3 Yr. Avg. -31.2%
Effective Tax Rate 24.2%
Eff/ Tax Rate - 3 Yr. Avg. 2%
Payout Ratio 0%

BMRN stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the BMRN stock intrinsic value calculation we used $1314 million for the last fiscal year's total revenue generated by BioMarin Pharmaceutical. The default revenue input number comes from 2017 income statement of BioMarin Pharmaceutical. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our BMRN stock valuation model: a) initial revenue growth rate of 17.6% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for BMRN is calculated based on our internal credit rating of BioMarin Pharmaceutical, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of BioMarin Pharmaceutical.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of BMRN stock the variable cost ratio is equal to 172%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for BMRN stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for BioMarin Pharmaceutical.

Corporate tax rate of 27% is the nominal tax rate for BioMarin Pharmaceutical. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the BMRN stock is equal to 10.7%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for BMRN are equal to 120.3%.

Life of production assets of 10 years is the average useful life of capital assets used in BioMarin Pharmaceutical operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for BMRN is equal to 5.6%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $2809 million for BioMarin Pharmaceutical - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 174 million for BioMarin Pharmaceutical is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of BioMarin Pharmaceutical at the current share price and the inputted number of shares is $17.9 billion.

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COMPANY NEWS

▶ Why I Just Bought These 3 Stocks   [Jun-07-18 09:45AM  Motley Fool]
▶ Probing the Long Side of BioMarin   [11:53AM  TheStreet.com]
▶ Which Is the Best Hemophilia Stock to Buy Now?   [May-26-18 08:05AM  Motley Fool]
▶ BioMarin's New Rare-Disease Med Costs 50% More Than Expected   [May-25-18 12:18PM  Investor's Business Daily]
▶ Why Analysts Remain Bullish On This Hemophilia Gene-Therapy Play   [May-22-18 04:25PM  Investor's Business Daily]
▶ The FDA Is Trying To 'Shame' Celgene, Gilead Here's Why It Won't Work   [May-17-18 04:48PM  Investor's Business Daily]
▶ Why Hemophilia Patients Could Pay $1.5 Million For Gene Therapy   [May-07-18 04:04PM  Investor's Business Daily]
▶ BioMarin to Attend Upcoming Investor Conference   [May-02-18 08:30AM  PR Newswire]
▶ BioMarin Cruises While It Waits on Seventh Approval   [Apr-27-18 07:15PM  Motley Fool]
▶ BioMarin: 1Q Earnings Snapshot   [Apr-25-18 04:36PM  Associated Press]
▶ How These Gene Therapy Stocks Benefit From Novartis-AveXis Deal   [Apr-10-18 04:23PM  Investor's Business Daily]
▶ Motley Fool 100 Update: What's In and What's Out   [Apr-03-18 03:48PM  Motley Fool]
▶ MARKETS: Why April could be a bad month for stocks   [Apr-02-18 10:52AM  Yahoo Finance Video]
▶ Roche Hashes Out Details Of Patient Deaths In Hemophilia Drug   [Mar-29-18 04:30PM  Investor's Business Daily]
▶ 10 Growth Stocks at Value Prices   [Mar-07-18 06:00AM  Morningstar]
▶ BioMarin to Attend Upcoming Investor Conference   [Mar-06-18 08:30AM  PR Newswire]
▶ Is This Biotech Hedging Its 2018 Outlook On A Key FDA Approval?   [Feb-23-18 04:45PM  Investor's Business Daily]
▶ BioMarin reports 4Q loss   [Feb-22-18 04:32PM  Associated Press]
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