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BioMarin's Drug for Children Could Be a Success, Analyst Says

Voxzogo could reach blockbuster status with sales of $1 billion

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Nov 17, 2021
Summary
  • FDA decision on treatment expected Saturday.
  • BioMarin well positioned for fast rollout.
  • Stock rated a buy or strong buy with high target of $169.
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BioMarin Pharmaceutical Inc. (

BMRN, Financial) investors could be in for a surprise according to a client note by SVB Leerink analyst Joseph Schwartz. FiercePharma reported that after polling physicians, he concluded the company’s dwarfism drug, Voxzogo, could become a billion-dollar seller.

Schwartz said that’s just what BioMarin needs to get back on track after a period of stagnation. Shares of the San Francisco-based company are down nearly 9% year to date to about $82. As recently as June 2020, the stock was trading at about $146.

Fierce Pharma reported that BioMarin should find out on Saturday, Nov. 20 if Voxzogo gets a green light from the Food and Drug Administration. The medication is already approved in Europe to treat achondroplasia in patients two years and older until their growth plates close, which is typically around 18 years of age.

Achondroplasia is a disorder of bone growth that prevents the changing of cartilage (particularly in the long bones of the arms and legs) to bone, according to the National Institutes of Health. It is characterized by dwarfism, limited range of motion at the elbows, large head size and small fingers. It can also cause a variety of health problems, including apnea, obesity and recurrent ear infections.

Schwartz said the condition "may appear cosmetic on the surface," but is "associated with life-threatening comorbidities that can increase mortality." Doctors told him they see it as a disease with a "huge unmet need." The analyst thinks uptake could be quick, with about 30% of eligible patients starting on the therapy within a year.

Also working in BioMarin’s favor is its large sales force, which is ready to implement a worldwide launch after the drug is approved.

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As with most medications, there are question marks that have made some investors wary of the stock. Schwartz thinks the disease is "fraught with social complexities, making the adoption of Voxzogo not very straightforward." In addition, some of BioMarin’s other launches have flopped. In September, the stock took a hit when the FDA, citing safety concerns, ordered the company to halt testing of its therapy for a rare inherited disease.

All in all, Schwartz thinks BioMarin's zeal for Voxzogo is justified and the drug could become the company’s top brand.

Given the potential of the market for achondroplasia, Schwartz noted BioMarin faces competition from others developing drugs for the disorder, including Ascendis Pharma A/S (

ASND, Financial), BridgeBio Pharma Inc. (BBIO, Financial) and Pfizer Inc. (PFE, Financial).

BioMarin’s third-quarter 2021 adjusted earnings of 18 cents per share beat the Zacks consensus estimate of 11 cents. Earnings declined nearly 67% from the same period a year earlier as product revenues dropped.

Total revenue was nearly $408 million in the quarter, down 14% from the year-ago period. Sales lagged the Zacks consensus estimate of $432 million.

BioMarin raised the lower end of its revenue guidance range for the year. The company now expects total sales in the range of $1.82 billion to $1.88 billion compared with the earlier projection of $1.79 billion to $1.88 billion.

Yahoo Finance reports that BioMarin shares are rated a buy or strong buy by 16 of the 21 analysts weighing in on the company. It is given an average target price of $111, a low of about $82 and a high of $169.

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