BioMarin's Carnage Could Be Buying Opportunity, Says Stifel - Biomarin Pharmaceutical (NASDAQ:BMRN)

According to a recent research summary from Stifel, BioMarin Pharmaceutical Inc. BMRN is deserving of an upgrade.

Analysts Stephen Willey and Prakhar Verma began, “While acknowledging this isn't the easiest of environments for upgrading stocks, we do believe sector valuations are now approaching a level whereby a longer-term viewpoint requires some consideration.”

The Upgrade To Buy And Justification

While the analysts admitted to being “quite unsuccessful” anticipating bottoms within the biotech sector thus far in 2016, they cited particular scenarios as incrementally decreasing their concerns regarding market timing, and thus supporting their upgrade on the company to Buy. These scenarios include:

Current Base Business “capable of generating $1.4+ billion in peak net product revenue,” particularly when situated against the backdrop of “a diminished/stabilized operating expense structure on the R&D/SG&A fronts (stop laughing) and longer-term tax rate efficiency”

Sufficient Operating Leverage Being Created “to support valuation” as more Ireland-based manufacturing surfaces

“Better-Than-Average Probability Of Success On The Development Risk Front” potentially adding an additional $2.5 billion in peak product revenue

The analysts added that visibility of this potential pipeline peak should “meaningfully improve over the coming months.”

Furthermore, due to upcoming data flow from both management and analysts over the next few months, Stifel feels “it's an appropriate time […] to become incrementally more-constructive.”

The firm currently has a $105 price target on BioMarin.

At the time of this writing, BioMarin was up 4.81 percent on the day at $73.45.

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