BioMarin Stock Jumps on Analyst Upgrade
Barclays analyst says the market is underestimating the value of the BioMarin’s experimental gene therapies for hemophilia A and achondoplasia. Its stock jumps.
Barclays analyst says the market is underestimating the value of the company’s experimental gene therapies for hemophilia A and achondroplasia.
Shares of the biotech company BioMarin Pharmaceutical jumped 3% on Wednesday morning after an analyst at Barclays upgraded the stock to Overweight from Equal Weight, saying that the current price of the stock underestimates the value of the company’s experimental gene therapies for hemophilia A and achondroplasia.
“We see favorable risk/reward with near term upside on likely positive data readout, and potentially long-term upside with higher pricing, better than expected commercial uptake for ValRox and vosoritide,” wrote Barclays analyst Gena Wang, referring to the company’s hemophilia A and achondroplasia drugs, respectively.
Wang set a price target for BioMarin (ticker: BMRN) of $98, up from her previous price target of $86. Shares of BioMarin closed on Tuesday at $78.51, and were up to $80.76 by late Wednesday morning.
The back story. BioMarin shares are down 5.1% so far this year, though have rallied in recent weeks along with much of the rest of the biotech sector. The stock is up 20% since the start of October, as shares of the iShares Nasdaq Biotechnology ETF (IBB) have risen 19.4%. Earlier this month, BioMarin submitted ValRox to European drug regulators for approval.
What’s new. In her note, Wang wrote that the company’s gene therapy for achondroplasia, a genetic disorder that leads to dwarfism, would achieve meaningful sales even if the additional growth it triggers is minimal. BioMarin will be releasing data on a Phase 3 trial of the gene therapy, called vosoritide, before the end of the year.
“We spoke to three [key opinion leaders] who would all use vosoritide with any improvement in [annualized growth velocity] given the lack of any therapeutic options for achondroplasia patients,” Wang wrote.
Wang wrote that Phase 3 results would need to show growth improvement of between 0.74 and 0.77 centimeters a year to demonstrate statistical significance.
“Even with ~1 cm/year improvement, our [key opinion leaders] believed accumulative improvement over 5 years would still be meaningful to most patients,” Wang wrote.
She warned that a competing therapy called TransCon CNP from Ascendis Pharma (ACND) would present a significant competitive threat to vorositide, though Ascendis is years behind BioMarin in developing its drug.
Looking forward. Topline data on the vorositide Phase 3 trial is expected to be released before the end of the year. “We view high probability of positive vosoritide Ph3 readout,” Wang wrote.
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