This biopharma handily beat earnings estimates this past week, posting EPS of $0.08, significantly higher than the -$0.06 loss that was expected.
BioMarin Pharmaceutical Inc. (BMRN)
From The Medical Technology Stock Letter
Just at our Thursday deadline, BioMarin Pharmaceutical Inc. (BMRN) announced that the FDA has accepted for Priority Review the BLA for ValRox (valoctocogene roxaparvovec) for adults with hemophilia A. This constructive action by the FDA marks the first marketing application accepted for a gene therapy (GT) product for any type of hemophilia in the United States. The PDUFA date is August 21, 2020.
For the past 2+ years, we have known that the FDA has been proactive with gene therapy companies with an emphasis on hemophilia. Hence, today’s news may not be the biggest surprise. However, with specific issues of variability and durability relating to ValRox data to date, the BLA acceptance is absolutely good news. Moreover, the agency also stated that, as of now they do not expect to convene an outside Advisory panel before the PDUFA. This tells us a few things. First, the agency believes it has enough information to make decision on its own. And second, the agency has beefed up its own internal gene therapy (and likely gene editing) efforts since ~2018.
Of course, we won’t know the final answer until this summer. In the meantime, investors will continue to not only assess the likelihood of ValRox approval but also the potential market size and competitive landscape. We know BMRN has a major lead time over the other players in hem A GT—notably PFE/SGMO and Roche/ONCE. The nuances of differences in durability that Sangamo and partner Pfizer may show before the ValRox PDUFA date occurs.
BMRN has made enormous investments in gene therapy manufacturing and in our view, bodes incredibly well for ValRox and the company with regards to the FDA acceptance of its application. (SGMO should have its new facility online in 2021 with partner Pfizer’s guidance and cooperation.) Either way, the floodgates for hem A gene therapy are open once more. As a reminder, back in January the EMA also validated BMRN’s ValRox application and that, too, is scheduled for an accelerated review.
This is important positive news for BMRN (and also SGMO, in our view) and the revolutionary advances for patients via biotechnology. We believe BMRN is undervalued at current levels, and remains ripe for an acquisition. Today’s news should help that process along.
BMRN is a BUY under 100 with a TARGET PRICE of 130.
John McCamant, The Medical Technology Stock Letter, www.bioinvest.com, February 20, 2020