We recently maintained our Neutral recommendation on BioMarin Pharmaceutical Inc. (BMRN). Our target price is $62.00 per share.
Why the Reiteration?
BioMarin’s first quarter 2013 loss of $0.31 per share was wider than the Zacks Consensus Estimate of a loss of $0.28 and the year-ago loss of $0.21 per share. The wider loss was due to higher operating expenses. Total revenues climbed 9.7% to $127.9 million due to higher net product revenues.
We are, however, pleased with the efforts of BioMarin to develop its pipeline. The most interesting candidate in BioMarin’s pipeline is Vimizim. BioMarin is looking to get Vimizim – an enzyme replacement therapy – approved for treating patients suffering from mucopolysaccharidosis type IVA (MPS IVA) – a rare lysosomal storage disorder.
The candidate is under priority review in the US (target date: Feb 28, 2014) for the above indication. Vimizim is also under review in the EU. The Marketing Authorization Application for Vimizim had been granted accelerated assessment status by the European Medicines Agency. Consequently, BioMarin expects a decision on Vimizim in the EU in the first quarter of 2014. BioMarin is also seeking approval for Vimizim in Brazil.
We expect investor focus to stay on the regulatory updates regarding Vimizim. Positive news from the regulatory agencies on the candidate would further strengthen the company’s product portfolio.
BioMarin’s product portfolio currently includes Aldurazyme, Naglazyme, Kuvan and Firdapse. Aldurazyme, co-marketed with Sanofi (SNY), is available for the treatment of MPS-I (mucopolysaccharidosis). Naglazyme is marketed for treating MPS-VI. Kuvan is marketed for phenylketonuria. Firdapse is marketed for treating patients suffering from Lambert Eaton Myasthenic Syndrome.
Stocks That Warrant a Look
While we expect BioMarin to perform in line with its peers and industry levels in the coming months and advice investors to wait for a better entry point before accumulating shares, one can consider stocks such as Biogen Idec Inc. (BIIB) and Jazz Pharmaceuticals (JAZZ). Both stocks carry a Zacks Rank #1 (Strong Buy).
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