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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to help the reader understand our results of operations and financial condition. MD&A is provided as a supplement to, and should be read in conjunction with, our audited Consolidated Financial Statements and the accompanying notes to the Consolidated Financial Statements and other disclosures included in this Annual Report on Form 10-K, including the disclosures under “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K. In particular, we encourage you to review the risk factor related to the impact of the coronavirus pandemic, “The COVID-19 pandemic could materially adversely affect our business, results of operations and financial condition.” These risks and uncertainties could cause actual results to differ significantly from those projected in forward-looking statements contained in this report or implied by past results and trends. Forward-looking statements are statements that attempt to forecast or anticipate future developments in our business, financial condition or results of operations. See the section titled “Forward-Looking Statements” that appears at the beginning of this Annual Report on Form 10-K. These statements, like all statements in this report, speak only as of the date of this Annual Report on Form 10-K (unless another date is indicated), and, except as required by law, we undertake no obligation to update or revise these statements in light of future developments. Our Consolidated Financial Statements have been prepared in accordance with United States (U.S.) generally accepted accounting principles (GAAP) and are presented in U.S. Dollars (USD).

Overview

We are a global biotechnology company that develops and commercializes innovative therapies for people with serious and life-threatening rare diseases and medical conditions. We select product candidates for diseases and conditions that represent a significant unmet medical need, have well-understood biology and provide an opportunity to be first-to-market or offer a significant benefit over existing products.

Our portfolio consists of several commercial products and multiple clinical and preclinical product candidates for the treatment of various diseases. A summary of our commercial products, as of December 31, 2020, is provided below:

Aldurazyme (laronidase) MPS I (3) Expired Expired Expired

Kuvan (sapropterin dihydrochloride) PKU (5) Expired Not Applicable Expired

Naglazyme (galsulfase) MPS VI (6) Expired Expired Expired

(1)See “Government Regulation—Orphan Drug Designation” in Part I, Item 1 of this Annual Report on Form 10-K for further discussion

(2)See “Government Regulation— Healthcare Reform” in Part I, Item 1 of this Annual Report on Form 10-K for further discussion

(3)For the treatment of Mucopolysaccharidosis I (MPS I)

(4)For the treatment of late infantile neuronal ceroid lipofuscinosis type 2 (CLN2)

(5)For the treatment of phenylketonuria (PKU)

(6)For the treatment of Mucopolysaccharidosis VI (MPS VI)

(7)For adult patients with PKU

(8)For the treatment of Mucopolysaccharidosis IV Type A (MPS IVA)

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(In millions of U.S. Dollars, except as otherwise disclosed)

A summary of our on-going major development programs as of December 31, 2020, is provided below:

Valoctocogene roxaparvovec Severe Hemophilia A Yes Yes Clinical Phase 3

Vosoritide Achondroplasia Yes Yes Clinical Phase 3

BMN 307 PKU Yes Yes Clinical Phase 1/2

Uncertainty Relating to the COVID-19 Pandemic

The outbreak of novel coronavirus disease (COVID-19) continues to affect economies and business around the world. Our global revenue sources, mostly in the form of demand interruptions such as missed patient infusions and delayed treatment starts for new patients, and our overall business operations were impacted by COVID-19 during the year ended December 31, 2020 and we anticipate a continued impact on our financial results in fiscal year 2021. The extent and duration of such effects are highly uncertain and difficult to predict. We are actively monitoring and managing our response and assessing actual and potential impacts to our operating results and financial condition, as well as developments in our business, which could further impact the developments, trends and expectations described below. See the risk factor related to the impact of the coronavirus pandemic, “The COVID-19 pandemic could materially adversely affect our business, results of operations and financial condition.” described in “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K.

Business Developments

We continued to grow our commercial business and advance our product candidate pipeline during 2020. We believe that the combination of our internal research programs, acquisitions and partnerships will allow us to continue to develop and commercialize innovative therapies for people with serious and life-threatening rare diseases and medical conditions. Below is a summary of key business developments:

Continued Emphasis on Research and Development

•Vosoritide - In February 2021, we announced that the FDA granted priority review designation for our New Drug Application (NDA) for vosoritide, an investigational, once daily injection analog of C-type Natriuretic Peptide (CNP) for children with achondroplasia, the most common form of disproportionate short stature in humans.

In December 2020, we announced results from our pivotal global Phase 3 randomized, double-blind, placebo-controlled study of vosoritide in approximately 121 children with achondroplasia ages 5-14 for two years. The data demonstrated that children in the open-label long-term extension of the Phase 3 study maintained an increase in Annual Growth Velocity through the second year of continuous treatment. An analysis comparing 52 children who were randomized and treated with vosoritide for two years to 38 children from the run-in study who were randomized to receive placebo with an untreated observation period of two years showed improvement in one-year height change in the treated group relative to the untreated group. The one-year height change improvement in the second year of treatment, 1.79 cm, was similar to the one-year height change improvement in the first year of treatment, 1.73 cm. The cumulative height gain over the 2-year period for treated children was 3.52 cm more than untreated children.

In 2020, marketing applications for vosoritide were validated and accepted by the EMA and FDA, respectively. The Committee for Medicinal Products for Human Use (CHMP) opinion is expected in Europe in June 2021. The U.S. NDA for vosoritide is under review by the FDA with a Prescription Drug User Fee Act (PDUFA) Target Action Date of August 20, 2021. Vosoritide has Orphan Drug designation from the FDA and EMA.

•BMN 307 - In February 2021, we announced that we plan to dose escalate participants in PHEarless, the Phase 1/2 study of BMN 307 our gene therapy candidate for PKU based on encouraging Phe lowering and safety signals observed in study participants who were treated with the lowest dose. Both the FDA and EMA have granted BMN 307 Orphan Drug Status. Additionally, the FDA has granted fast track designation to BMN 307. All subjects participating in the PHEarless study are receiving product made at commercial scale from our gene therapy manufacturing facility.

•Valoctocogene roxaparvovec – In January 2021, we announced topline results from our ongoing global Phase 3 study of valoctocogene roxaparvovec, an investigational gene therapy for the treatment of adults with severe hemophilia A. All 134 study participants received a single dose of valoctocogene roxaparvovec and completed a year or more of follow-up. Data from the study in the pre-specified primary analysis for Annualized Bleeding Rate (ABR) showed that a single dose of valoctocogene roxaparvovec significantly reduced ABR by 84% compared

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(In millions of U.S. Dollars, except as otherwise disclosed)

with prior treatment with prophylactic Factor VIII infusions from 4.8 (median 2.8) bleeding episodes per year at baseline to 0.8 (median 0.0). These results were from a pre-specified group of 112 participants in a non-interventional prospective baseline observational study with a median follow-up of 60.1 weeks after dosing with valoctocogene roxaparvovec. Of the 112 rollover study participants, 80% were bleed-free starting at week five after treatment.

Valoctocogene roxaparvovec also significantly reduced the mean annualized Factor VIII usage in the rollover population by 99%, from 135.9 (median 128.6) to 2.0 (median 0.0) infusions per year. At the end of the first year post-infusion with valoctocogene roxaparvovec, 132 participants in the modified intent-to-treat (mITT) population had a mean endogenous Factor VIII expression level of 42.9 (SD 45.5, median 23.9) IU/dL, as measured by the chromogenic substrate assay, supporting the clinical benefits observed with significant reduction of bleeding episodes and Factor VIII infusion rate. Factor VIII expression declined at a slower rate compared to the Phase 1/2 study, and remained in a range to provide hemostatic efficacy. In the 17 participants who comprise a subset of the mITT population and had been dosed at least two years prior to the data cut date, Factor VIII expression declined from a mean of 42.2 (SD 50.9, median 23.9) IU/dL at the end of year one to a mean of 24.4 (SD 29.2, median 14.7) IU/dL at the end of year two with continued hemostatic efficacy demonstrated by a mean ABR of 0.9 (median 0.0) bleeding episodes per year

In the United States, the Food and Drug Administration (FDA) recommended that we complete the Phase 3 study and submit two-year follow-up safety and efficacy data on all study participants. We plan to meet with FDA to review the two-year data request and share the Phase 3 results announced in January 2021. We are targeting resubmission of the Marketing Authorization Application (MAA) with these results to the European Medicines Agency (EMA) in the second quarter of 2021 pending confirmation in presubmission meetings.

•BMN 255 - In January 2021, we announced that we filed an Investigational New Drug application (IND) for BMN 255, a small molecule for the treatment of a subset of chronic renal disease. BMN 255 was driven by genetic discoveries for both mechanism and for identifying individuals for treatment.

•Palynziq - In October 2020 we announced that the FDA approved our supplemental BLA to increase the maximum allowable dose of Palynziq Injection for treatment of adults with PKU to 60 mg daily. Previously, the maximum dose was 40 mg daily. In the Phase 3 PRISM studies, 19% of study participants required a 60 mg dose to achieve adequate response to Palynziq.

Palynziq is indicated to reduce blood Phe concentrations in adults with PKU, who have uncontrolled blood Phe concentrations greater than 600 μmol/L on existing management. Palynziq, a PEGylated recombinant phenylalanine ammonia lyase enzyme, is the first and only approved enzyme substitution therapy to target the underlying cause of PKU by helping the body to break down Phe.

•BMN 331 - In July 2020, we began IND-enabling studies for our third gene therapy product candidate, BMN 331, for the treatment of hereditary angioedema.

•BMN 351 - IND-enabling studies are underway for BMN 351, an oligonucleotide therapy that has demonstrated a high-level of protein expression in pre-clinical models for the treatment of Duchenne Muscular Dystrophy. We intend to determine the timing of a potential IND filing at the end of the year based on the results of these studies.

•Gene therapy manufacturing facility - In January 2020, we announced significant improvements in productivity at our gene therapy facility which has the potential to support the commercial production of multiple gene therapy products to meet global commercial demand, depending on dose and production mix.

2021 Outlook

In 2021, we will continue to focus on our key operating objectives which include continued progression of our product pipeline and continued uptake of our commercial products. From a research and development (R&D) perspective, we expect to continue to invest in our various ongoing clinical studies which support both our commercial products and research and early development pipeline. We expect to move forward on a number of late-stage clinical studies for new product candidates and plan to file marketing applications for various therapeutic areas.

From a commercial perspective, we expect to continue to build-out our commercial organization to support the commercialization of Palynziq and incur pre-commercialization expenses related to vosoritide.

While the continued impact of the COVID-19 pandemic on the global business environment remains uncertain, we expect the conditions and effects of the pandemic on our business will persist. We expect significant declines in Kuvan revenues in the U.S. due to the October 2020 loss of market exclusivity and plan to implement strategies to retain market share aimed to mitigate a complete loss of market share. We expect to experience continued growth in our base business for the other commercial products.

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(In millions of U.S. Dollars, except as otherwise disclosed)

We continue to monitor conditions in the macroeconomic environment that could affect our ability to achieve our goals, such as the continuing impact of the COVID-19 pandemic on all aspects of our business, changes in the reimbursement and payer landscape, changes in economic conditions in certain key markets, particularly in Europe and Latin America, patent expiration of competitive products and the launch of generic competitors, government pricing pressures internationally and the potential volatility in foreign currency exchange rates. We will adjust our business processes, as appropriate, to attempt to mitigate these risks to our business.

We expect that our product pipeline investments and expanding commercial infrastructure will enable us to execute on our 2021 operating objectives.

2020 Financial Highlights

Key components of our results of operations include the following:

Years Ended December 31,

Selling, general and administrative (SG&A) expense $ 737.7 $ 680.9 $ 604.4

Gain on sale of nonfinancial assets $ (59.5) $ (25.0) $ (50.0)

Benefit from income taxes $ (901.4) $ (71.0) $ (65.5)

The increase in Net Income for the year ended December 31, 2020 as compared to 2019 was primarily attributed to:

•an increase in the benefit from income taxes primarily due to the completion of an intra-entity transfer of certain intellectual property rights to an Irish subsidiary, to better align ownership of the intellectual property rights with how our business operates, resulting in a tax benefit of $835.1 million based on the fair value of the transferred intellectual property rights;

•decreased R&D expense primarily due to lower clinical activity spend for valoctocogene roxaparvovec and for tralesinidase alfa which was licensed to a third-party in the fourth quarter of 2019; and

•an increase in the gain of nonfinancial assets due primarily to the divestiture and sale of Firdapse in 2020; partially offset by

•decreased gross profits due primarily to $87.2 million of inventory charges recorded in 2020 related to pre-launch valoctocogene roxaparvovec inventory reserves due to regulatory responses received in the third quarter of 2020 requesting additional data extending anticipated regulatory approval timelines; and

•higher SG&A expense primarily due to an increase in pre-commercial activities related to valoctocogene roxaparvovec and vosoritide.

See “Results of Operations” below for additional information related to the Net Income (Loss) fluctuations presented above.

Our cash, cash equivalents and investments totaled $1.4 billion as of December 31, 2020, compared to $1.2 billion as of December 31, 2019. We have historically financed our operations primarily through our cash flows from operating activities and the issuance of common stock and convertible debt. We will be highly dependent on our net product revenues to supplement our current liquidity and fund our operations for the foreseeable future. We may in the future elect to supplement this with further debt or equity offerings or commercial borrowing. Further, depending on market conditions, our financial position and performance and other factors, we may in the future choose to use a portion of our cash, cash equivalents or investments to repurchase our convertible debt or other securities. See “Financial Position, Liquidity and Capital Resources” below for a further discussion of our liquidity and capital resources.

Critical Accounting Policies, Estimates and Judgments

In preparing our 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

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(In millions of U.S. Dollars, except as otherwise disclosed)

that can have a significant impact on our net income/loss and affect the reported amounts of certain assets, liabilities, revenue 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.

The full extent to which the ongoing COVID-19 pandemic will directly or indirectly impact our business, results of operations and financial condition, including revenues, expenses, reserves and allowances, manufacturing, clinical trials and research and development costs will depend on future developments that continue to remain highly uncertain at this time. As events continue to evolve and additional information becomes available, our estimates may change materially in future periods.

While our significant accounting policies are more fully described in Note 3 to our accompanying Consolidated Financial Statements included in this Annual Report on Form 10-K, we believe the critical accounting policies below reflect the more significant judgments and estimates used in the preparation of our Consolidated Financial Statements.

•Revenue Recognition and Related Allowances

•Inventory Produced Prior to Regulatory Approval

•Valuation of Goodwill and Acquired Intangible Assets

•Valuation of Contingent Consideration

•Income Taxes

Historically, our assumptions, judgments and estimates relative to our critical accounting policies have not differed materially from actual results.

Revenue Recognition and Related Allowances

Net Product Revenues –We recognize revenue when the customer obtains control of promised goods or services, in an amount that reflects the consideration which we expect to receive in exchange for those goods or services.For Aldurazyme revenues, we receive a payment ranging from 39.5% to 50% on worldwide net Aldurazyme sales by Sanofi Genzyme (Genzyme) depending on sales volume, which is included in Net Product Revenues in our Consolidated Statements of Operations. We recognize our best estimate of the entire revenue that we expect to receive when the product is released and control is transferred to Genzyme. We record Aldurazyme net product revenues based on the estimated variable consideration payable when the product is sold through by Genzyme. Actual amounts of consideration ultimately received may differ from our estimates. Differences between the estimated variable consideration to be received from Genzyme and actual payments received are not expected to be material. If actual results vary from our estimates, we will make adjustments, which would affect Net Product Revenues and earnings in the period such variances become known.

Gross-to-Net Sales Adjustments –We record product sales net of estimated mandatory and supplemental discounts to government payers, in addition to discounts to private payers, and other related charges. Rebates, cash discounts and distributor fees represent the majority of our gross-to-net deductions and are recorded in the same period the related sales occur.Rebates include amounts paid to Medicaid, other government programs, certain managed care providers, as well as foreign government rebates. Rebates, cash discounts and distributor fees are estimates based on contractual arrangements or statutory obligations, which may vary by product and payer. Estimation requiresevaluation of our historical experience,customer mix,current contractual and statutory obligations, specific known market events and trends and industry data.We evaluate our customer mix to estimate which sales will be subject to these revenue dilutive items and consider changes to government program guidelines that would impact the actual rebates and/or our estimates of which sales qualify for such rebates.

We update our estimates and assumptions each quarter based on actual historical experience, current contractual and statutory requirements, specific known market events and trends and forecasted customer buying and payment patterns and record any necessary adjustments to our reserves to reflect current information. We believe the methodologies that we use to estimate allowances are reasonable and appropriate given the facts and circumstances. However, actual results may differ significantly from our estimates.

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(In millions of U.S. Dollars, except as otherwise disclosed)

The following table summarizes the consolidated activities and ending balances of all our gross-to-net sales adjustments:

Inventory Produced Prior to Regulatory Approval

When future commercialization for a product candidate is considered probable and management believes that material uncertainties related to the ultimate regulatory approval have been significantly reduced and we expect to realize economic benefit in the future, we capitalize pre-launch or pre-qualification manufacturing costs prior to regulatory approval. For inventories that are capitalized in preparation of product launch, management considers a number of factorsbased on the information available at the time, including the product candidate’s current status in the drug development and regulatory approval process, results from the related pivotal clinical trial, results from meetings with relevant regulatory agencies prior to the filing of regulatory applications, historical experience, as well as potential impediments to the approval process such as product safety or efficacy, as well as commercialization and market trends.

In applying the lower of cost or net realizable value to pre-launch inventory, we estimate a range of likely commercial prices based on our comparable commercial products and consider the product candidate’s stability data for all of the pre-approval production to date to determine whether there is adequate expected shelf life for the capitalized pre-launch production costs. If the criteria for capitalizing inventory produced prior to regulatory approval are not met, we recognize such costs as R&D expense in the period incurred. As of December 31, 2020, there were no pre-launch inventory costs on our Consolidated Balance Sheets.

Valuation of Goodwill and Acquired Intangible Assets

We have recorded goodwill and acquired intangible assets primarily related to in-process research and development (IPR&D) projects through acquisitions accounted for as business combinations. When identifiable intangible assets, including IPR&D, are acquired, we determine the fair value of these assets as of the acquisition date. Discounted cash flow models are typically used in these valuations if quoted market prices are not available, and the models require significant estimates and assumptions including but not limited to:

•estimating the time and resources needed to complete the development and approval of product candidate;

•estimating future cash flows from product sales;

•developing appropriate probability of success rates for unapproved product candidates considering their stages of development;

•projecting timing of regulatory approval; and

•risks related to the viability of and potential alternative treatments in any future target markets.

Goodwill represents the excess of purchase price over fair value of net assets acquired in a business combination accounted for by the acquisition method of accounting and is not amortized, but subject to impairment testing. We review our goodwill and indefinite lived intangible assets for impairment annually in the fourth quarter, or more frequently if warranted by events or changes in circumstances indicate that the carrying amount may not be recoverable.

We assess goodwill impairment by comparing the fair value of our single reporting unit with its carrying amount. If the carrying value of the reporting unit exceeds its fair value, an impairment loss equal to the difference will be recorded.

We assess impairment of indefinite-lived intangible assets first by performing a qualitative assessment. If the qualitative assessment indicates that it is more likely than not that the fair value of our indefinite-lived intangible assets is less than its carrying amount, then we will perform a quantitative assessment and record an impairment loss. We assess definite-lived intangible assets for recoverability when there is an indication of impairment by comparing the estimated undiscounted future cash flows expected to result from the use of the asset or asset group and its eventual disposition to the carrying amount of the asset or asset group. Any excess of the carrying value of the asset or asset group over its estimated fair value is recognized as an impairment loss. As of December 31, 2020, we had no indefinite-lived intangible assets on our Consolidated Balance Sheets.

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(In millions of U.S. Dollars, except as otherwise disclosed)

Valuation of Contingent Consideration

Significant estimates and judgments are required in determining the acquisition fair value of any contingent obligations incurred in connection with an acquisition. We estimate the fair value of contingent consideration utilizing a probability-based income approach inclusive of an estimated discount rate. Each period we reassess the fair value of the contingent consideration associated with certain acquisitions and record increases in the fair value as contingent consideration expense and record decreases in the fair value as a reduction of contingent consideration expense. Changes in the fair value of the contingent consideration can result from changes to one or multiple inputs including the estimated probability with respect to regulatory approval, changes in the assumed timing of when milestones are likely to be achieved and changes in assumed discount periods and rates. Accordingly, subsequent changes in the underlying facts and circumstances could result in changes to our estimates and assumptions, which could have a material impact on the estimated future fair values of contingent consideration.

We believe the fair value used to record contingent consideration incurred in connection with business combinations is based on reasonable estimates and assumptions given the facts and circumstances as of the related valuation date.

Income Taxes

We calculate and provide for income taxes in each of the tax jurisdictions in which we operate. Our Consolidated Balance Sheets reflect net deferred tax assets and liabilities, which are measured using enacted tax rates. The net deferred tax assets primarily represent the tax benefit of tax credits and timing differences between book and tax recognition of certain revenue and expense items, net of a valuation allowance. When it is more likely than not that all or some portion of deferred tax assets may not be realized, we establish a valuation allowance for the amount that may not be realized. We utilize financial projections to support our net deferred tax assets, which contain significant assumptions and estimates of future operations. If such assumptions were to differ significantly, it may have a material impact on our ability to realize our deferred tax assets. Changes in our valuation allowance will result in a change to tax expense.

We establish liabilities or reduce assets for certain tax positions when we believe those certain tax positions are not more likely than not to be sustained if challenged. Each quarter, we evaluate these uncertain tax positions and adjust the related tax assets and liabilities in light of changing facts and circumstances.

We are subject to income taxes in the U.S. and various foreign jurisdictions, including Ireland. Due to economic and political conditions, various countries are actively considering changes to existing tax laws. We cannot predict the form or timing of potential legislative changes that could have a material adverse impact on our results of operations. In addition, significant judgment is required in determining our worldwide provision for income taxes. For example, the 2020 income tax benefit included a $835.1 million deferred tax benefit related to an intra-entity transfer of certain intellectual property rights to an Irish subsidiary. The transaction resulted in a step-up of the Irish tax-deductible basis, and the Irish subsidiary recognized a deferred tax asset for the book and tax basis difference of the transferred intellectual property rights. The tax deductions related to the amortization of these intangible assets will be recognized in the future and any amortization not deducted for tax purposes will be carried forward indefinitely under Irish tax laws. We expect to be able to realize the deferred tax asset resulting from this transaction and have not recorded a valuation allowance as of December 31, 2020. Management is not aware of any potential changes that would have a material effect on our Consolidated Financial Statements.

Recent Accounting Pronouncements

See Note 4 to our accompanying Consolidated Financial Statements for a full description of recent accounting pronouncements and our expectation of their impact, if any, on our results of operations and financial condition.

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(In millions of U.S. Dollars, except as otherwise disclosed)

Results of Operations

Net Income (Loss)

Net Income (Loss) consisted of the following:

Years Ended December 31,

Our Net Income for the year ended December 31, 2020 was $859.1 million, compared to Net Loss of $23.8 million and $77.2 million for the years ended December 31, 2019 and 2018, respectively. The changes in Net Income (Loss) were primarily a result of the following:

Net Product Revenues

Net Product Revenues consisted of the following:

Years Ended December 31,

Net product revenues by product:

2020 compared to 2019

The increase in Net Product Revenues for the year ended December 31, 2020 as compared to 2019 was primarily attributed to the following:

•Palynziq: the increase was attributed to a combination of revenue from more patients achieving maintenance dosing and new patients initiating therapy in the U.S.;

•Brineura: the increase was primarily attributed to growth in the number of patients in all regions;

•Aldurazyme: the increase was attributed to timing of product fulfillment to Genzyme;

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(In millions of U.S. Dollars, except as otherwise disclosed)

•Naglazyme: the increase was primarily attributed to increased orders from the Middle East and growth in North America; partially offset by

•Firdapse: the decrease was primarily attributed to the divestiture and sale of the Firdapse business in January 2020; and

•Kuvan: the decrease was primarily attributed to the U.S. loss of market exclusivity in October 2020 resulting in generic competition.

2019 compared to 2018

The increase in Net Product Revenues for the year ended December 31, 2019 as compared to 2018 was primarily attributed to the following:

•Palynziq: the increase was attributed to a combination of revenue from more patients achieving maintenance dosing and new patients initiating therapy in the U.S. as the product launched in the third quarter of 2018;

•Vimizim: the increase was primarily attributed to increased sales volume due to patient growth in the U.S. and orders from Latin America;

•Brineura: the increase was primarily attributed to growth in the number of patients in all regions;

•Kuvan: the increase was primarily attributed to increased sales volume due to patient growth in North America and in European markets;

•Naglazyme: the increase was primarily attributed to increased sales volume driven by orders from Latin America; partially offset by

•Aldurazyme: the decrease was primarily attributed to timing of product fulfillment to Genzyme.

In certain countries, such as in Latin America, governments place large periodic orders for Naglazyme and Vimizim. The timing of these large government orders can be inconsistent and can create significant period to period variation in our revenues.

We anticipate the COVID-19 pandemic will have a continued impact on future Net Product Revenues in 2021 as many of our products are administered via infusions in a clinic or hospital setting and/or by a healthcare professional. Although we are working with our patient community and health care providers to find alternative arrangements where necessary, such as providing infusions at home, the revenue from the doses of our products that are missed by patients and the lost revenue from delayed treatment starts for new patients will never be recouped. See the risk factor “The COVID-19 pandemic could materially adversely affect our business, results of operations and financial condition” in “Risk Factors” included in Part I, Item 1A of this Annual Report on Form 10-K for additional information.

In October 2020, we lost U.S. market exclusivity for Kuvan which adversely affected revenues in the fourth quarter of 2020. We have been preparing for this loss of exclusivity which will continue to result in a reduction in market share and adversely affect our revenue and results of operations in 2021. See the risk factor “The sale of generic versions of Kuvan by generic manufacturers may adversely affect our revenues and results of operations” in “Risk Factors” included in Part I, Item 1A of this Annual Report on Form 10-K for additional information. Additionally, the responses received from the FDA and EMA requesting additional safety and efficacy data from our valoctocogene roxaparvovec Phase 3 studies have extended our anticipated regulatory approval timelines which will have a negative impact on net product revenue growth for 2021.

We face exposure to movements in foreign currency exchange rates, primarily the Euro. We use foreign currency exchange contracts to hedge a percentage of our foreign currency exposure. The following table shows our Net Product Revenues denominated in USD and foreign currencies:

Years Ended December 31,

The net impact of foreign currency exchange rates on product sales denominated in currencies other than USD during 2020 and 2019 was unfavorable by $23.3 million and $24.8 million respectively, which was primarily driven by a weakening, relative to the USD, of currencies in Latin American markets such as Brazil, Colombia and Argentina.

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(In millions of U.S. Dollars, except as otherwise disclosed)

See “Quantitative and Qualitative Disclosures about Market Risk” in Part II, Item 7A of this Annual Report on Form 10-K for information on currency exchange rate risk related to our revenues.

Royalty and Other Revenues

Royalty revenues include royalties earned on net sales of products sold and milestones achieved by licensees or sublicensees. Other revenues include revenues earned from the sale of licenses of our intellectual property and rental income associated with the tenants in our facilities.

Years Ended December 31,

The 2020 increase in Royalty and Other Revenues compared to 2019 was primarily due to license revenues earned from the third-party that licensed tralesinidase alfa from us.

The 2019 increase in Royalty and Other Revenues compared to 2018 was primarily due to a one time license payment from a third party due to their achievement of a regulatory milestone and royalty revenues earned from Catalyst Pharmaceutical Partners, Inc. (Catalyst) on net product sales of Firdapse in North America, which was approved for sale in November 2018. See Note 20 to our accompanying Consolidated Financial Statements for additional information regarding our license and collaboration agreements.

We expect to continue to earn royalties from third parties in the future.

Cost of Sales and Product 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, 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 and charges for inventory valuation reserves.

The following table summarizes our Cost of Sales and product gross margin:

Years Ended December 31,

Cost of Sales increased for 2020 compared to 2019 primarily due to $87.2 million of inventory charges recorded in 2020 related to pre-launch valoctocogene roxaparvovec inventory as a result of anticipated regulatory approval delays. Product gross margin for 2020 compared to 2019 decreased primarily due to higher costs of sales and product mix as there were higher sales of lower margin products.

The 2019 increase in Cost of Sales compared to 2018 was primarily attributable to increased sales volumes. Product gross margin was relatively flat in 2019 compared to 2018.

We expect total product gross margin to remain near 75% over the next twelve months.

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 approved products. R&D expense primarily includes preclinical and clinical studies, personnel

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(In millions of U.S. Dollars, except as otherwise disclosed)

and raw materials costs associated with manufacturing clinical product, quality control and assurance, other R&D activities, facilities and regulatory costs.

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.

We continuously evaluate the recoverability of costs associated with pre-launch or pre-qualification manufacturing activities, and capitalize the costs incurred related to those activities if it is determined that recoverability is highly likely and therefore future revenues are expected. When regulatory approval and the likelihood of future revenues for a product candidate are less certain, the related manufacturing costs are expensed as R&D expenses. We did not have any pre-launch or pre-qualification manufacturing activities capitalized as of December 31, 2020. See Note 8 to our accompanying Consolidated Financial Statements for additional information regarding our inventory.

R&D expense consisted of the following:

Years Ended December 31,

2020 compared to 2019

The decrease in R&D expense primarily comprised the following:

•a decrease in costs related to valoctocogene roxaparvovec, due primarily to lower clinical activity spend;

•a decrease in tralesinidase alfa costs as the program was licensed to a third-party in the fourth quarter of 2019;

•a decrease in clinical study costs related to Palynziq due to the 2019 completion of the studies supporting European regulatory approval;

•a decrease in expenses related to approved products primarily due to completion of Brineura extension studies;

•a decrease in clinical manufacturing costs related to BMN 307; partially offset by

•an increase in early stage research program spending due primarily to the $26.3 million payment made for preclinical programs licensed from a third party and costs related to BMN 331 for the treatment of hereditary angioedema.

We expect R&D expense to increase in future periods compared to 2020, primarily due to increased spending on preclinical activities for our research and early development programs while we continue to develop our later stage programs.

2019 compared to 2018

The increase in R&D expense primarily comprised the following:

•an increase in preclinical and manufacturing activities related to our BMN 307 development program, including clinical manufacturing costs; and

•an increase in clinical activity related to our late-stage product candidates valoctocogene roxaparvovec and vosoritide; partially offset by

•a decrease in tralesinidase alfa clinical manufacturing costs; and

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Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

(In millions of U.S. Dollars, except as otherwise disclosed)

•a decrease in costs related to Palynziq, for which capitalization of manufacturing costs began in the second quarter of 2018 following FDA approval.

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 expenses consisted of the following:

Years Ended December 31,

S&M expenses by product were as follows:

Years Ended December 31,

2020 compared to 2019

The increase in S&M expense was primarily a result of an increase in pre-commercial activities related to valoctocogene roxaparvovec and vosoritide, partially offset by decreases in MPS Products, PKU Products and Brineura.

The increase in G&A expense was primarily due to employee-related expenses due to a higher headcount and the unfavorable impact of foreign exchange revaluation of non-USD denominated assets and liabilities.

We expect SG&A expense to increase in future periods as a result of preparing to launch new products and support of our global business as it grows.

2019 compared to 2018

The increase in S&M expense was primarily a result of an increase in pre-commercialization activities related to valoctocogene roxaparvovec and commercialization activities in support of the continued U.S. expansion and EU commercial launches of Palynziq.

The increase in G&A expense was primarily due to consulting fees and higher employee related expenses to support our growth.

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Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

(In millions of U.S. Dollars, except as otherwise disclosed)

Intangible Asset Amortization and Contingent Consideration and Gain on Sale of Nonfinancial Assets

Changes during the periods presented for Intangible Asset Amortization and Contingent Consideration and Gain on Sale of Nonfinancial Assets were as follows:

Years Ended December 31,

2020 compared to 2019

Fair value of contingent consideration: the 2020 increase in the fair value of contingent consideration is lower than the increase in 2019 due primarily to the achievement in 2019 of the Palynziq EU regulatory approval milestone.

Amortization of intangible assets: the increase in 2020 was due to the Palynziq intangible assets that were in service for the entire year compared to seven months in 2019.

Gain on Sale of Nonfinancial Assets: we recognized a gain of $59.5 million in 2020 due to the divestiture and sale of Firdapse compared to $25.0 million in 2019 due to the achievement of milestones by third parties, related to previously sold intangible assets. See Note 6 to the accompanying Consolidated Financial Statements for additional information.

2019 compared to 2018

Fair value of contingent consideration: the increase in the fair value of the contingent consideration in 2019 was primarily attributable to changes in the estimated probability of achieving development milestones, related to our Palynziq program which received EU marketing approval in May 2019.

Amortization of intangible assets: the increase in 2019 was due to the Palynziq IPR&D assets that were placed into service following EU marketing approval in May 2019.

Gain on Sale of Nonfinancial Assets: we recognized a gain of $25.0 million in 2019 compared to $50.0 million in 2018 due to the achievement of milestones by third parties, 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.

Years Ended December 31,

The decrease in Interest Income during 2020 compared to 2019 was primarily due to lower interest rates. Interest Income during 2019 was flat compared to 2018.

We expect Interest Income to be lower over the next 12 months due to lower interest rates and yields on our cash equivalents and investments.

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Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

(In millions of U.S. Dollars, except as otherwise disclosed)

Interest Expense

We incur Interest Expense primarily on our convertible debt.

Years Ended December 31,

The increase in Interest Expense in 2020 compared to 2019 was primarily due to the issuance of the 1.25% senior subordinated convertible notes due in 2027 (the 2027 Notes) in the second quarter of 2020 partially offset by the maturity of our 1.50% senior subordinated convertible notes which matured in October 2020 (the 2020 Notes).

The decrease in Interest Expense in 2019 compared to 2018 was primarily due to the maturity of our 0.75% senior subordinated convertible notes, which matured in October 2018.

We expect Interest Expense to be lower over the next 12 months due to the maturity of the 2020 Notes. See Note 13 to our accompanying Consolidated Financial Statements for additional information regarding our debt.

Benefit from Income Taxes

We recognized an income tax benefit of $901.4 million, $71.0 million and $65.5 million in 2020, 2019 and 2018, respectively. Benefit from Income Taxes for 2020, 2019 and 2018 consisted of state, federal and foreign current tax expense which was offset by tax benefits related to stock option exercises and deferred tax benefits from federal orphan drug credits, federal R&D credits and California R&D credits. The Benefit from Income Taxes for the years ended December 31, 2020 and 2019 were further impacted by the following items:

•In the third quarter of 2020, we completed an intra-entity transfer of certain intellectual property rights to an Irish subsidiary where our ex-U.S. regional headquarters are located and we have significant manufacturing and commercial operations, to better align ownership of intellectual property rights with how the business operates. The transaction did not result in a taxable gain; however, our Irish subsidiary recognized a deferred tax asset for the book and tax basis difference of the transferred intellectual property rights. As a result, we recognized a deferred tax asset of $835.1 million and related tax benefit in the third quarter based on the fair value of the transferred intellectual property rights. The tax deductions related to the amortization of these intangible assets will be recognized in the future and any amortization not deducted for tax purposes will be carried forward indefinitely under Irish tax laws. We expect to be able to realize the deferred tax asset resulting from this transaction and have not recorded a valuation allowance as of December 31, 2020.

•2019 included a tax benefit of $29.6 million for the release of the valuation allowance against the net deferred tax asset of our Dutch subsidiary. In the second quarter of 2019, we determined that it is more likely than not that the deferred tax assets, including net operating losses and tax credit carryforwards of our Dutch subsidiary, will be realized. In making this determination, we analyzed our recent history of earnings, forecasts of future earnings and cumulative earnings for the last three years of our Dutch subsidiary and we reached the conclusion that it was appropriate to release the valuation allowance reserve.

•On March 27, 2020, The Coronavirus Aid, Relief and Economic Security Act (CARES Act) was signed into law lifting certain limitations originally imposed by the Tax Cuts and Jobs Act of 2017, including the calculation of certain deductions and treatment of net operating losses. On June 29, 2020, California enacted legislative changes (California AB 85) which suspended California net operating loss utilization for years 2020 through 2022. The enactment of both the CARES Act and California AB 85 did not result in any material adjustments to our income tax provision for the year ended December 31, 2020, or to our net deferred tax assets as of December 31, 2020.

Financial Position, Liquidity and Capital Resources

As of December 31, 2020, we had $1.4 billion in cash, cash equivalents, and investments which includes net proceeds of $535.8 million from our May 2020 convertible debt offering, net of the repurchase of our common stock. We believe our net product revenues from our commercial products, cash, cash equivalents and investments, potentially supplemented by proceeds from equity or debt financings and loans, or collaborative agreements with corporate partners will be sufficient to satisfy our liquidity requirements for the next 12 months. We may require additional financing to fund the repayment of our convertible debt, future milestone payments and our future operations, including the commercialization of our products and product candidates currently

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Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

(In millions of U.S. Dollars, except as otherwise disclosed)

under development, preclinical studies and clinical trials, and potential licenses and acquisitions. We will need to raise additional funds from equity or debt securities, loans or collaborative agreements if we are unable to satisfy our liquidity requirements. The timing and mix of our funding options 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 elect to settle all or a portion of our convertible debt in cash. Our ability to raise additional capital may also be adversely impacted by potential worsening global economic conditions and the recent disruptions to, and volatility in, financial markets in the U.S. and worldwide resulting from the ongoing COVID-19 pandemic.

In managing our liquidity needs in the U.S., we do not rely on unrepatriated earnings as a source of funds. As of December 31, 2020, $248.2 million of our $1.4 billion balance of cash, cash equivalents and investments was held in non-U.S. subsidiaries, a significant portion of which is required to fund the liquidity needs of these non-U.S. subsidiaries. See Note 18 to our accompanying Consolidated Financial Statements for additional discussion regarding income taxes.

We are mindful that conditions in the current macroeconomic environment could affect our ability to achieve our goals. We sell our products in 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 and adverse effects of the impact of the ongoing COVID-19 pandemic 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 liquidity and capital resources as of December 31, 2020, 2019 and 2018 were as follows:

Our cash flows for each of the years ended December 31, 2020, 2019 and 2018 are summarized as follows:

Cash Provided by Operating Activities

Net cash provided by operating activities during 2020 was $85.4 million, compared to net cash provided by operating activities of $48.3 million during 2019. The change in net cash provided by operating activities in 2020 compared to 2019 was due

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Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

(In millions of U.S. Dollars, except as otherwise disclosed)

to increased cash receipts from our customers, licensees and sublicensees, due in part to higher sales. The increase was partially offset by timing of payments made to vendors and due to increased payments for inventory purchases.

Net cash provided by operating activities during 2019 was $48.3 million, compared to net cash provided by operating activities of $20.2 million during 2018. The change in net cash provided by operating activities in 2019 compared to 2018 was primarily attributed to the timing of payments to vendors and cash receipts from customers.

Cash Provided by (Used in) Investing Activities

Net cash used in investing activities during 2020 was $53.6 million, compared to net cash used in investing activities of $31.0 million during 2019. The change in net cash used in investing activities in 2020 compared to 2019 was primarily attributable to a decrease of $82.0 million in proceeds from net maturities and sales of investments partially offset by an increase in proceeds from the sale of nonfinancial assets and lower purchases of property, plant and equipment.

Net cash used in investing activities during 2019 was $31.0 million, compared to net cash provided by investing activities of $264.4 million during 2018. The change in net cash used in investing activities in 2019 compared to 2018 was primarily due to a decrease of $250.8 million in proceeds from net maturities and sales of investments, lower cash receipts from milestone payments related to previously sold intangible assets and an increase in cash used in the purchase of intangible assets.

Cash Provided by (Used in) Financing Activities

Net cash provided by financing activities during 2020 was $181.1 million, compared to net cash used in financing activities of $74.7 million during 2019. The increase in net cash provided by financing activities in 2020 compared to 2019 was primarily attributed to the net proceeds from the issuance of the 2027 Notes and exercises of awards under our equity incentive plans, partially offset by the cash settlement of the 2020 Notes and the repurchase of our common stock.

Net cash used in financing activities during 2019 was $74.7 million, compared to net cash used in financing activities of $388.0 million during 2018. The decrease in net cash used in financing activities in 2019 compared to 2018 was primarily due to the settlement, in 2018, of the 2018 Notes which did not recur in 2019 .

Other Information

Our $1.1 billion (undiscounted) of total convertible debt as of December 31, 2020 will impact our liquidity due to the semi-annual cash interest payments. As of December 31, 2020, our indebtedness consisted of the 2027 Notes and our 0.599% senior subordinated convertible notes due in 2024 (the 2024 Notes and together with the 2027 Notes, the Notes), which, if not converted, will be required to be repaid in cash at maturity in August 2024 and May 2027, respectively. We will need cash not only to pay the ongoing interest due on the Notes during their term, but also to repay the principle amount of the Notes if not converted.

Our 2020 Notes matured on October 15, 2020 and were settled in cash for approximately $375.0 million. No shares were issued in connection with the settlement as the Company’s share price did not exceed the conversion price of $94.15, as measured over a 25-day averaging period, and the capped call transaction entered into concurrently with the issuance of the 2020 Notes was not triggered. The Company incurred no gain or loss upon the extinguishment of the 2020 Notes. See Note 13 to our accompanying Consolidated Financial Statements for additional discussion on our outstanding debt.

In October 2018, we entered into an unsecured revolving credit facility of up to $200.0 million (the 2018 Credit Facility). The 2018 Credit Facility includes a letter of credit subfacility and a swingline loan subfacility and is also intended to finance ongoing working capital needs and for other general corporate purposes. The 2018 Credit Facility matures on October 19, 2021 at which time all outstanding amounts become due and payable. The 2018 Credit Facility contains financial covenants requiring us to maintain a minimum interest coverage ratio and a minimum liquidity requirement. As of December 31, 2020, there were no outstanding amounts due on nor any usage of the 2018 Credit Facility and we were in compliance with all covenants. See Note 13 to our accompanying Consolidated Financial Statements for additional discussion.

Funding Commitments

We cannot estimate with certainty the cost to complete any of our product development programs. Additionally, except as disclosed under “Overview” above, we cannot precisely estimate the time to complete any of our product development programs or when we expect to receive net cash inflows from any of our product development programs. Please see “Risk Factors” included in

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Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)

(In millions of U.S. Dollars, except as otherwise disclosed)

Part I, Item 1A of this Annual Report on Form 10-K, for a discussion of the reasons we are unable to estimate such information, and in particular the following risk factors:

Business and Operational Risks:

• The COVID-19 pandemic could materially affect our business, results of operations, and financial condition;

• 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 revenue could be adversely affected.

• If we do not achieve our projected development goals in the timeframes we announce and expect, the commercialization of our product candidates may be delayed and the credibility of our management may be adversely affected and, as a result, our stock price may decline.

Regulatory Risks:

• If we fail to obtain regulatory approval to commercially market and sell our product candidates, or if approval of our product candidates is delayed, we will be unable to generate revenue from the sale of these product candidates, our potential for generating positive cash flow will be diminished, and the capital necessary to fund our operations will increase;

Manufacturing Risks:

• If we are unable to successfully develop and maintain manufacturing processes for our product candidates to produce sufficient quantities at acceptable costs, we may be unable to support a clinical trial or be forced to terminate a program, or if we are unable to produce sufficient quantities of our products at acceptable costs, we may be unable to meet commercial demand, lose potential revenue, have reduced margins or be forced to terminate a program;

Our investment in our product development programs and continued development of our existing commercial products has a major impact on our operating performance. Our R&D expenses for the period since inception as of December 31, 2020 for certain of our key programs were as follows:

Since ProgramInception

Valoctocogene roxaparvovec $ 710.0

Other approved products $ 1,524.8

We may need or elect to increase our spending above our current long-term plans to be able to achieve our long-term goals. This may increase our capital requirements, including: costs associated with the commercialization of our products; additional clinical trials; investments in the manufacturing of our commercial products; preclinical studies and clinical trials for our product candidates; potential licenses and other acquisitions of complementary technologies, products and companies; and general corporate purposes.

Our future capital requirements will depend on many factors, including, but not limited to:

•our ability to successfully market and sell our products;

•the time and cost necessary to develop commercial manufacturing processes, including quality systems, and to build or acquire manufacturing capabilities;

•the progress and success of our preclinical studies and clinical trials (including the manufacture of materials for use in such studies and trials);

•the timing, number, size and scope of our preclinical studies and clinical trials;

•the time and cost necessary to obtain regulatory approvals and the costs of post-marketing studies which may be required by regulatory authorities; and

•the progress of research programs carried out by us.

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Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that are currently material or reasonably likely to be material to our consolidated financial position or results of operations.

Contractual and Commercial Obligations

We have contractual and commercial obligations under our convertible debt, operating leases and other obligations related to R&D activities, purchase commitments, licenses and sales royalties with annual minimums. Our contractual obligations as of December 31, 2020 are presented in the table below.

Payments Due within

1 Yearor Less >1 -3Years > 3 - 5Years MoreThan 5Years Total

As of December 31, 2020, we were also subject to contingent payments totaling approximately $662.8 million upon achievement of certain development and regulatory activities and commercial sales milestones if they occur before certain dates in the future. Of this amount, $235.0 million related to an early stage development programs licensed from a third party in the second quarter of 2020, $73.6 million related to the acquisition of certain rights and other assets with respect to Kuvan and Palynziq from Merck Serono and $237.7 million related to programs that are no longer being developed.

As of December 31, 2020, we have recorded $60.1 million of contingent consideration on our Consolidated Balance Sheet, all of which was long-term. See Note 21 to our accompanying Consolidated Financial Statements for additional discussion on our commitments.

In addition, our liability for unrecognized tax benefits has been excluded from the above contractual and commercial obligations table as the nature and timing of future payments, if any, cannot be reasonably estimated. As of December 31, 2020, our liability for unrecognized tax benefits was $182.6 million. See Note 18 to our accompanying Consolidated Financial Statements for additional discussion on our income taxes.

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Item 7A. Quantitative and Qualitative Disclosure About Market Risk

We are exposed to market risks that may result from changes in foreign currency exchange rates, interest rates and credit risks. To reduce certain of these risks, we enter into foreign currency derivative hedging transactions, follow investment guidelines and monitor outstanding trade receivables as part of our risk management program.

Foreign Currency Exchange Rate Risk

Our operations include manufacturing activities in the U.S. and Ireland and sales activities in the U.S. as well as in regions outside the U.S, including Europe, Latin America and Asia Pacific. As a result, our financial results may be significantly affected by factors such as the impact of the COVID-19 pandemic in these regions, changes in foreign currency exchange rates or weak economic conditions in the foreign markets in which we sell our products. Our operating results are exposed to changes in foreign currency exchange rates between the U.S. Dollar (USD) and various foreign currencies, primarily the Euro. When the USD strengthens against these currencies, the relative value of the sales made in the respective foreign currency decreases. Conversely, when the USD weakens against these currencies, the relative value of such sales increases. Overall, we are a net receiver of foreign currencies and, therefore, benefit from a weaker USD and are adversely affected by a stronger USD relative to those foreign currencies in which we transact significant business.

During 2020, approximately 41% of our net product sales were denominated in foreign currencies and 21% of our operating expenses, excluding Cost of Sales, were denominated in foreign currencies. To partially mitigate the impact of changes in currency exchange rates on net cash flows from our foreign currency denominated sales and operating expenses, we may enter into forward foreign currency exchange contracts (forward contracts). We also hedge certain monetary assets and liabilities, primarily those denominated in Euros, using forward contracts, which reduces but does not eliminate our exposure to currency fluctuations between the date the transaction is recorded and the date the cash is collected or paid. Generally, the market risks of these contracts are offset by the corresponding gains and losses on the transactions being hedged.

We do not use derivative financial instruments for speculative trading purposes, nor do we hedge foreign currency exchange rate exposure in a manner that entirely offsets the effects of changes in foreign currency exchange rates. The counterparties to these forward contracts are creditworthy multinational commercial banks, which minimizes the risk of counterparty nonperformance. We regularly review our hedging program and may, as part of this review, make changes to the program.

As of December 31, 2020, we had open forward contracts with net notional amounts of $678.9 million. A hypothetical 10% adverse movement in foreign currency exchange rates compared with the USD relative to exchange rates as of December 31, 2020 would have resulted in a reduction in the value received over the remaining life of these contracts by approximately $70.9 million on this date and, if realized, would negatively affect earnings during the remaining life of the contracts. The estimated fair value change was determined by measuring the impact of the hypothetical exchange rate movement on outstanding forward contracts. This analysis does not consider the impact of the hypothetical changes in foreign currency rates would have on the forecasted transactions that these foreign currency sensitive instruments were designated to offset. Our use of this methodology to quantify the market risk of such instruments is subject to assumptions and actual impact could be significantly different.

Based on our overall foreign currency denominated exposures as of December 31, 2020, we believe that a near-term 10% fluctuation of the USD exchange rate could result in a potential change in the fair value of our net foreign currency denominated assets and liabilities, excluding our investments and open forward contracts, by approximately $9.1 million. We expect to continue to enter into transactions based in foreign currencies that could be impacted by changes in exchange rates.

Interest Rate Market Risk

Our exposure to market risk for changes in interest rates relates primarily to our investment portfolio, which includes our cash equivalents and marketable debt securities. By policy, we place our investments with highly rated credit issuers and limit the amount of credit exposure to any one issuer. As stated in our investment policy, we seek to improve the safety and likelihood of preservation of our invested funds by limiting default risk and market risk.

We mitigate default risk by investing in high credit quality securities and by positioning our portfolio to respond appropriately to a significant reduction in a credit rating of any investment issuer or guarantor. The portfolio includes only marketable securities with active secondary or resale markets to ensure portfolio liquidity.

We have outstanding $495.0 million (undiscounted) of the 2024 Notes and $600.0 million (undiscounted) of the 2027 Notes. The interest rates on these notes are fixed and therefore they do not expose us to risk related to rising interest rates. As of December 31, 2020, the fair value of our convertible debt was $1.2 billion.

As of December 31, 2020, our investment portfolio did not include any investments with significant exposure to countries that face economic volatility and weakness. Although not predictive in nature, we believe a hypothetical 100 basis point threshold reflects a reasonably possible near-term change in interest rates. Based on our investment portfolio and interest rates at December 31, 2020, period ending, we believe that a 100 basis point increase in interest rates could result in a potential loss in fair

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value of our investment portfolio of approximately $5.9 million. Changes in interest rates may affect the fair value of our investment portfolio. However, we will not recognize such gains or losses in our Consolidated Statements of Operations unless the investments are sold or we determine that the declines in the investment’s fair values below the cost basis are a result of a credit loss, which, if any, are reported in Other Income, Net in the current period through an allowance for credit losses.

The table below summarizes the expected maturities and average interest rates of our interest-generating investments as of December 31, 2020 (in millions):

Expected Maturity

Average interest rate 0.3 % 0.3 % 0.3 % 0.4 % — % 5.4 % 0.3 %

Counterparty credit risks

Our financial instruments, including derivatives, are subject to counterparty credit risk that we consider as part of the overall fair value measurement. Our financial risk management policy limits derivative transactions by requiring transactions to be with institutions with minimum credit ratings of A or equivalent by Standards & Poor’s, Moody's or Fitch. In addition, we have an investment policy that limits investments to certain types of debt and money market instruments issued by institutions primarily with investment grade credit ratings and places restriction on maturities and concentrations by asset class and issuer.

Item 8. Financial Statements and Supplementary Data

The information required to be filed in this item appears under “Exhibits, Financial Statement Schedules” in Part IV, Item 15 of this Annual Report on Form 10-K.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

An evaluation was carried out, under the supervision of and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on the evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of December 31, 2020.

Management’s Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining an adequate internal control structure and procedures for financial reporting. Under the supervision of and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, our management has assessed the effectiveness of our internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act as of December 31, 2020. Our management’s assessment was based on criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), Internal Control-Integrated Framework (2013).

Based on the COSO criteria, our management has concluded that our internal control over financial reporting as of December 31, 2020 was effective at the reasonable assurance level.

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Our independent registered public accounting firm, KPMG LLP, has audited the financial statements included in this Annual Report on Form 10-K and has issued a report on the effectiveness of our internal control over financial reporting. The report of KPMG LLP is incorporated by reference to Item 8 of this Annual Report on Form 10-K.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during our most recently completed quarter that have materially affected or are reasonably likely to materially affect our internal control over financial reporting. We continue to utilize the Committee of Sponsoring Organizations of the Treadway Commission (COSO) 2013 Framework on internal control. We believe that our ability to maintain an effective internal control environment has not been impacted by the COVID-19 pandemic. We are continually monitoring and assessing the COVID-19 situation on our internal controls to minimize the impact on their design and operating effectiveness.

Scope of the Effectiveness of Controls

Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Our internal control over financial reporting includes those policies and procedures that:

•pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect our transactions and dispositions of our assets;

•provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and our board of directors; and

•provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on our financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

Item 9B. Other Information

None.

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Part III

Item 10. Directors, Executive Officers and Corporate Governance

The information required by this Item regarding our directors, executive officers and corporate governance is incorporated into this section by reference to the sections captioned “Election of Directors” and “Executive Officers” in the proxy statement for our 2021 annual meeting of stockholders.

Item 11. Executive Compensation

The information required by this Item regarding executive compensation is incorporated into this section by reference to the section captioned “Executive Compensation” in the proxy statement for our 2021 annual meeting of stockholders.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required by this Item regarding security ownership of our beneficial owners, management and related stockholder matters is incorporated into this section by reference to the section captioned “Security Ownership of Certain Beneficial Owners and Management” in the proxy statement for our 2021 annual meeting of stockholders.

The information required by this Item regarding the securities authorized for issuance under our equity compensation plans is incorporated into this section by reference to the section captioned “Equity Compensation Plan Information” in the proxy statement for our 2021 annual meeting of stockholders.

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information required by this Item regarding certain relationships, related transactions and director independence is incorporated into this section by reference to the sections captioned “Other Board Governance Information — Transactions with Related Persons, Promoters and Certain Control Persons,” “Other Board Governance Information — Review, Approval and Ratification of Transactions with Related Parties” and “Director Independence” in the proxy statement for our 2021 annual meeting of stockholders.

Item 14. Principal Accountant Fees and Services

The information required by this Item regarding our principal accountant fees and services is incorporated into this section by reference to the section captioned “Independent Registered Public Accounting Firm” in the proxy statement for our 2021 annual meeting of stockholders.

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Part IV

Item 15. Exhibits, Financial Statement Schedules

Page

Exhibit Index 84

Financial Statements

Reports of Independent Registered Public Accounting Firm 91

Consolidated Balance Sheets 94

Consolidated Statements of Operations 95

Consolidated Statements of Comprehensive Income (Loss) 96

Consolidated Statements of Changes in Stockholders’ Equity 97

Consolidated Statements of Cash Flows 98

Notes to Consolidated Financial Statements 99

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Exhibit Index

Exhibit Number Description

4.4 Description of Capital Stock

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21.1* Subsidiaries of BioMarin Pharmaceutical Inc.

24.1* Power of Attorney (Included in Signature Page to this Report)

101.SCH Inline XBRL Taxonomy Extension Schema Document

101.CAL Inline XBRL Taxonomy Extension Calculation Document

101.DEF Inline XBRL Taxonomy Extension Definition Linkbase

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101.LAB Inline XBRL Taxonomy Extension Labels Linkbase Document

101.PRE Inline XBRL Taxonomy Extension Presentation Link Document

* Filed herewith

† Management contract or compensatory plan or arrangement

Attached as Exhibit 101 to this report are documents formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets as of December 31, 2020 and December 31, 2019, (ii) Consolidated Statements of Operations for the years ended December 31, 2020, 2019 and 2018, (iii) Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2020, 2019 and 2018, (iv) Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2020, 2019 and 2018, (v) Consolidated Statements of Cash Flows for the years ended December 31, 2020, 2019 and 2018, and (vi) Notes to Consolidated Financial Statements.

Item 16. Form 10-K Summary

None.

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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: February 26, 2021 By: /S/ BRIAN R. MUELLER

Brian R. MuellerExecutive Vice President, Chief Financial Officer

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Exhibit 24.1

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Jean-Jacques Bienaimé and Brian R. Mueller, his or her attorney-in-fact, with the power of substitution, for him or her in any and all capacities, to sign any amendments to the Report on Form 10-K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:

Signature Title Date

Jean-Jacques Bienaimé

Brian R. Mueller

Andrea L. Acosta

/S/ ELIZABETH MCKEE ANDERSON Director February 26, 2021

Elizabeth McKee Anderson

/S/ WILLARD H. DERE, M.D. Director February 26, 2021

Willard H. Dere, M.D.

/S/ MICHAEL G. GREY Director February 26, 2021

Michael G. Grey

/S/ ELAINE J. HERON Director February 26, 2021

Elaine J. Heron

/S/ ROBERT J. HOMBACH Director February 26, 2021

Robert J. Hombach

/S/ V. BRYAN LAWLIS Director February 26, 2021

V. Bryan Lawlis

/S/ RICHARD A. MEIER Lead Independent Director February 26, 2021

Richard A. Meier

/S/ DAVID PYOTT Director February 26, 2021

David Pyott

/S/ DENNIS J. SLAMON Director February 26, 2021

Dennis J. Slamon

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BIOMARIN PHARMACEUTICAL INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

PAGE

Reports of Independent Registered Public Accounting Firm 91

Consolidated Balance Sheets 94

Consolidated Statements of Operations 95

Consolidated Statements of Comprehensive Income (Loss) 96

Consolidated Statements of Stockholders’ Equity 97

Consolidated Statements of Cash Flows 98

Notes to Consolidated Financial Statements 99

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Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

BioMarin Pharmaceutical Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of BioMarin Pharmaceutical Inc. and subsidiaries (the Company) as of December 31, 2020 and December 31, 2019, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2020, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and December 31, 2019, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2020, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 26, 2021 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Change in Accounting Principle

As discussed in Note 3 to the consolidated financial statements, the Company has changed its method of accounting for Leases as of January 1, 2019 due to the adoption of Accounting Standards Codification 842 (ASC 842), Leases.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Evaluation of variable consideration relating to Aldurazyme product sales

As described in Notes 3 and 15 to the consolidated financial statements, during the year ended December 31, 2020 the Company recognized $130 million in Aldurazyme net product revenue. Under its arrangement with Genzyme Corporation (Genzyme), a wholly owned subsidiary of Sanofi, the Company receives payments ranging from 39.5% to 50% on worldwide net Aldurazyme sales by Genzyme, depending on Genzyme’s sales volume. The Company estimates this variable consideration based on the amount that it expects to be entitled to from Genzyme’s sales of Aldurazyme. The Company recognizes this revenue upon satisfying the product performance obligation, which is when the product is shipped to Genzyme and all required quality control certificates are complete.

We identified the evaluation of variable consideration relating to Aldurazyme net product revenue as a critical audit matter. Evaluating the key assumptions of forecasted Genzyme sales volume and average price per vial involved a high degree of

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Report of Independent Registered Public Accounting Firm

subjective auditor judgment due to the nature of available supporting evidence being limited to historical sales and price data related to these assumptions. Changes in these key assumptions could have had a significant impact on Aldurazyme net product revenue.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s process for recognizing Aldurazyme net product revenue. This included controls over forecasting Genzyme’s sales volume and average price per vial used to estimate variable consideration. We evaluated the Company’s ability to estimate the variable consideration by comparing historical estimates of sales volume and price per vial to actual sales volume and price per vial of product sold by Genzyme. We also compared the Company’s current-period forecasts of future Genzyme sales volume and average price per vial to Genzyme’s historical sales volume and price per vial. We performed a sensitivity analysis to assess the impact of changes in these key assumptions on the Company’s estimate of variable consideration.

Evaluation of the fair value of the underlying intangible assets utilized to recognize a deferred tax asset

As discussed in Note 18 to the consolidated financial statements, the Company completed an intra-entity transfer of certain intellectual property rights to an Irish subsidiary during the year ended December 31, 2020, resulting in the recognition of a deferred tax asset and a related income tax benefit of $835.1 million.

We identified the evaluation of the fair value of the underlying intangible assets utilized to recognize a deferred tax asset as a critical audit matter. A high degree of auditor judgment was required to evaluate certain assumptions utilized by the Company in estimating the fair value of the underlying intangible assets. These assumptions included product-specific projected revenues and the inclusion or exclusion of a terminal value for each product.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s process to estimate the fair value of the underlying intangible assets. This included controls over the development of product-specific projected revenues and the inclusion or exclusion of terminal value for each product. We compared the product-specific projected revenue data to historical revenue data and compared the estimated fair value of each intangible asset to industry reports. We involved professionals with specialized skills and knowledge who assisted in evaluating the Company’s inclusion or exclusion of terminal value for each product by assessing the likelihood and potential magnitude of future competitor products.

/s/ KPMG LLP

We have served as the Company’s auditor since 2002.

San Francisco, California

February 26, 2021

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Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

BioMarin Pharmaceutical Inc.:

Opinion on Internal Control Over Financial Reporting

We have audited BioMarin Pharmaceutical Inc. and subsidiaries' (the Company) internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2020 and December 31, 2019, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2020, and the related notes (collectively, the consolidated financial statements), and our report dated February 26, 2021 expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ KPMG LLP

San Francisco, California

February 26, 2021

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BIOMARIN PHARMACEUTICAL INC.

CONSOLIDATED BALANCE SHEETS

December 31, 2020 and 2019

(In thousands of U.S. Dollars, except share and per share amounts)

ASSETS

Current assets:

Noncurrent assets:

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Short-term convertible debt, net — 361,882

Noncurrent liabilities:

Stockholders’ equity:

Accumulated other comprehensive income (loss) (16,139) 20,164

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

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BIOMARIN PHARMACEUTICAL INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

Years Ended December 31, 2020, 2019 and 2018

(In thousands of U.S. Dollars, except per share amounts)

REVENUES:

OPERATING EXPENSES:

Intangible asset amortization and contingent consideration 66,658 74,108 48,791

Equity in the loss of BioMarin/Genzyme LLC (6) (587) (553)

NET INCOME (LOSS) PER SHARE, BASIC $ 4.75 $ (0.13) $ (0.44)

NET INCOME (LOSS) PER SHARE, DILUTED $ 4.53 $ (0.13) $ (0.44)

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

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BIOMARIN PHARMACEUTICAL INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Years Ended December 31, 2020, 2019 and 2018

(In thousands of U.S. Dollars)

OTHER COMPREHENSIVE INCOME (LOSS):

Available-for-sale debt securities:

Net change in unrealized holding gain (loss), net of tax 324 5,482 1,391

Cash flow hedges:

Net change in unrealized holding gain (loss), net of tax (36,642) 9,413 27,433

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

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BIOMARIN PHARMACEUTICAL INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Years Ended December 31, 2020, 2019 and 2018

(In thousands of U.S. Dollars and share amounts in thousands)

Repurchase of common stock (518) — —

Conversion of convertible notes, net — — 95

Common stock:

Issuances under equity incentive plans, net of tax 2 2 2

Additional paid-in capital:

Repurchase of common stock (50,000) — —

Conversion of convertible notes, net — — (16)

Common stock held by the NQDC (122) (692) —

Accounting impact of NQDC Plan change (See Note 17) — 10,653 —

Treasury stock:

Beginning balances — — —

Purchase of treasury stock (50,000) — —

Retirement of treasury stock 50,000 — —

Ending balance — — —

Company common stock held by the NQDC:

Accounting impact of NQDC Plan change (See Note 17) — 2,648 —

Accumulated other comprehensive income (loss):

Impact of change in accounting principle — — (586)

Accumulated Deficit:

Impact of changes in accounting principles — (2,727) 20,625

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

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BIOMARIN PHARMACEUTICAL INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years Ended December 31, 2020, 2019 and 2018

(In thousands of U.S. dollars)

CASH FLOWS FROM OPERATING ACTIVITIES:

Amortization of premium on investments (accretion of discount) 567 (2,000) 358

Inventory reserves, net of stock-based compensation 75,609 — —

Non-cash changes in the fair value of contingent consideration 4,500 5,205 9,296

Changes in operating assets and liabilities:

CASH FLOWS FROM INVESTING ACTIVITIES:

Investment in convertible note (8,709) — —

CASH FLOWS FROM FINANCING ACTIVITIES:

Repurchase of common stock (50,000) — —

Proceeds from convertible senior subordinated note offering, net 585,752 — —

Payment of contingent consideration — (58,518) (44,623)

Principal repayments of financing leases (6,918) (5,087) —