Wedbush Finally Steps Off The Sidelines, Bumps BioMarin To Outperform

BioMarin Pharmaceutical Inc. BMRN shares have been having a stellar run following its presentation at the American Society of Hematology's annual meeting.

Notwithstanding the rally, one analyst has found reasons to bump up the ratings on shares.

The Analyst

Wedbush analyst Liana Moussatos upgraded BioMarin from Neutral to Outperform and increased her 12-month price target from $108 to $110, with the revision attributed to a potential single-dose Hemophilia A cure.

The Thesis

Recent events, including the potential for Valoctocogene Roxaparvovec, have created reasons for being optimistic about the prospects for the company, Moussatos said in a note.

Valoctocogene Roxaparvovec gene therapy meant for Hemophilia A has the potential for a becoming a single-treatment cure, Moussatos said. The update on the Phase 1/2 presented by the company at the ASH showed up to 78 weeks durable clinical efficacy after a single treatment, the analyst said.

"Considering BMN 270 could threaten multi-billion dollar sales of Factor VIII for sHA, we see the potential for BioMarin's acquisition—despite $15 billion market capitalization," the analyst added.

With a 2-trial Phase 3 program set to start in December, Wedbush expects the program to last two years. Accordingly, the firm arrived at a potential launch date of late-2020 for BMN 270. The firm increased its 2025 sales estimate for BMN 270 to $5.3 billion.

While noting that BioMarin recently sold a second priority review voucher, or PRV, for $125 million, the firm said additional PRVs sales could occur in the future and provide a source of non-dilutive financing.

Wedbush outlined the next milestones, including achievement of non-GAAP break-even for 2017 and initiation of two Phase 3 trials testing BMN 270 gene therapy for severe Hemophilia A.

"A company selling FVIII for Hemophilia A may be willing to pay a premium for a commercial license or for BioMarin as BMN 270 could be a serious threat to the multi-billion dollar worldwide FVIII franchise," Wedbush said.

Price Action

BioMarin shares are up over 7 percent in the year-to-date period.

Related Links:

ASH 2017 Highlights: Gilead, Novartis, Juno, Bluebird Bio And More

Attention Biotech Investors: Mark Your Calendar For These December PDUFA Dates