BioMarin (BMRN) Raised to Buy: Should You Add the Stock?

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On Dec 28, Zacks Investment Research upgraded BioMarin Pharmaceutical Inc.BMRN by one notch to a Zacks Rank #2 (Buy).

Why the Upgrade?

BioMarin's shares have gained 3.8% since the company reported stellar results for the third quarter of 2016 on Oct 27. Moreover, its year-to-date share price movement shows that the stock has outperformed the Zacks classified Medical-Biomedical/Genetics industry. In fact, it has lost 19.7% during this period, compared with a drop of 25.3% for the industry.

Backed by its strong presence in the orphan disease drug market, BioMarin's key drugs - Vimizim and Kuvan - continued to gain traction. While, Vimizim sales were driven by robust patient growth and penetration in additional markets, Kuvan witnesses robust sales in North American on the back of growth in new patients and high levels of adherence. BioMarin expects Vimizim and Kuvan to each generate sales of $340-$360 million.

With the Jan 2016 acquisition of global rights to Kuvan and pegvaliase from Merck KGaA's MKGAF Merck Serono, the company fortified its leadership position in the phenylketonuria (PKU) market.

Moreover, on its third-quarter call, BioMarin narrowed its loss guidance to the range of $10-$30 million from $30-$50 million, buoyed by strong top-line growth in the quarter and operating expense discipline. On the other hand, total revenue is still expected in the range of $1.10−$1.15 billion for 2016.

Meanwhile, the Zacks Consensus Estimate has narrowed from a loss of 28 cents to 25 cents for 2016 and from $1.16 to $1.11 for 2017 over the last 60 days.

BioMarin continues to progress with its pipeline candidates. Recently, the company initiated a global phase III study on vosoritide for the treatment of children with achondroplasia. The company plans to conduct a separate phase II study to evaluate the effect of vosoritide in infants and toddlers.

BIOMARIN PHARMA Price and Consensus


Other Stocks to Consider

A couple of other favorably placed stocks in the health care sector include Vanda Pharmaceuticals Inc. VNDA and MannKind Corporation MNKD . Both of them sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

Vanda's loss estimates for 2016 narrowed from 62 cents to 45 cents over the last 60 days. The company posted a positive earnings surprise in three of the four trailing quarters with an average beat of 56.65%.

MannKind's estimates narrowed from loss of 24 cents to earnings of 12 cents for 2016 over the last 60 days. For 2017, its loss estimates narrowed from 14 cents to 9 cents over this period. The company posted a positive surprise in two of the four trailing quarters with an average beat of 103.33%.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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