Markets

BioMarin (BMRN) to Acquire Rights to Phenylketonuria Drugs

A generic image of coins in front of a stock chart.
Credit: Shutterstock photo

BioMarin Pharmaceutical Inc. 's BMRN shares were up 4.2% with the company's announcement of acquiring all global rights to Kuvan and pegvaliase from Merck Serono, a division of Merck KGaA MKGAF for the treatment of phenylketonuria (PKU). The transaction is slated to close in Jan 2016.

Terms of the Agreement

Merck Serono is entitled to receive an upfront payment of €340 million from BioMarin. In addition, Merck Serono will receive €60 million in milestones if combined sales of Kuvan and pegvaliase reach undisclosed cumulative sales thresholds and €125 million for regulatory milestones related to pegvaliase. From Jan 2016, BioMarin will begin commercializing Kuvan in additional 55 countries with the exception of Japan.

We remind investors that Kuvan is approved for the treatment of hyperphenylalaninemia (HPA) due to PKU in patients who have responded to Kuvan, or due to tetrahydrobiopterin deficiency. Kuvan sales came in at $110.3 million in the first half of 2015. Meanwhile, pegvaliase is currently in pivotal studies for the treatment of PKU. Data results expected in Mar/Apr 2016.

The company also provided guidance for Kuvan sales in 2016. The full-year total Kuvan revenue to BioMarin is expected in the range of $320 million - $350 million including $70 million - $80 million revenue from new rest of the world territories. In addition, the transaction is expected to be accretive to earnings starting from in 2016.

Our Take

BioMarin's decision to acquire global rights to Kuvan is a significant strategic move. By regaining the rights to Kuvan which has orphan drug exclusivity in Europe until 2020, BioMarin has the opportunity to expand its commercial efforts across the company's territories.

BioMarin carries a Zacks Rank #3 (Hold). A couple of better-ranked stocks in the health care sector are Nexvet Biopharma Public Limited Company NVET and Regeneron Pharmaceuticals, Inc. REGN , each sporting a Zacks Rank #1 (Strong Buy).

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days . Click to get this free report >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

REGENERON PHARM (REGN): Free Stock Analysis Report

BIOMARIN PHARMA (BMRN): Free Stock Analysis Report

NEXVET BIOPHARM (NVET): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

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.

In This Story

MKGAF BMRN REGN

Other Topics

Stocks

Latest Markets Videos

    Zacks

    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

    Learn More