The third driver is the easiest to address. The Nasdaq has not hit a new all-time high since March of 2000. In 2000, it was the dot-com bubble. In 2015, much of the broad sector gains can be tied to the biotech sector. Good for BioMarin.
BioMarin’s BMN-111 previously was considered one of the company’s biggest pipeline prospects. The aim was to develop a corrective therapy behind the genetic mutation that causes dwarfism. Now the company has outlined its Phase 2 drug study data, which was from 26 children, and it has now shown some proof of concept in human study data.
BioMarin showed that 10 children with achondroplasia demonstrated a mean increase of 50% in annualized growth velocity, versus their annualized prior six-month natural baseline growth velocity. It looks as if the company is on track to helping to normalize growth rates. The safety profile also looks promising.
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While it is too soon to count the eggs, it is possible that BioMarin could be sitting on a massive opportunity here. The issue to consider is that achondroplasia affects only a few thousand people in the United States, but rare disease drugs can come with a massive cost to patients and insurers. As of 2009, some 30,000 people in the United States and 651,000 internationally suffer from achondroplasia, according to Little People of America.
And what about the analyst calls acting as the other driving force?
BioMarin was reiterated as Outperform at RBC Capital Markets, and the firm’s price target was raised to $145 from $125 in the call. Canaccord Genuity has maintained its Buy rating, but its target was raised to $150 from $115. Deutsche Bank raised its target price to $156 from $140, after reiterating its Buy rating. Another call was from Jefferies, raising its target to $150 from $135.
BioMarin’s stock was last seen up 13% at $139.90 in early afternoon trading Thursday. Its market cap is $22.4 billion, and it has a 52-week trading range of $55.36 to $140.49. Is BioMarin now too big to be considered a takeover candidate as a maker of rare disease drug targets?
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