Market Overview

Credit Suisse Cuts BioMarin Price Target As Company Gives Up Revenue For Profit

Share:
Related BMRN
3 Screens That Hint At Which Stocks May Outperform In Q4
Benzinga's Top Upgrades, Downgrades For October 1, 2018
Biotech Stocks Bloodied But Can Now Drive M&A (Seeking Alpha)

BioMarin Pharmaceutical Inc. (NASDAQ: BMRN) announced the termination of the development of BMN-701 for Pompe disease, besides saying that it was planning to out-license the asset. Credit Suisse’s Alethia Young maintained an Outperform rating for the company, while reducing the price target from $114 to $103.

Reasons For Discontinuation

Management announced that it is focusing on products worth more than $500M and that BMN-701 represented a $400 million opportunity. Another reason cited by the company was the presence of another treatment for Pompe disorder.

Continued development of BMN-701 might have also proved expensive for BioMarin in light of the company’s 2017 guidance for non-GAAP profitability, analyst Alethia Young pointed out. The company is now seeking a partner to bring the asset into a Phase II trial.

Reduced Contribution From BMN-701

“We had previously given the company full economic credit for development. Now, we are adjusting to give BioMarin a 20% royalty on peak sales of ~$350M for BMN-701,” Young wrote. The probability of success of the treatment has also been lowered from 65 percent to 50 percent.

BioMarin’s shares have lost 9 percent over the past one week after the company announced the termination of Drispersen and modification of its Pompe strategy.

“We didn’t think drisapersen was in the valuation, but a negative headline. Pompe is impactful to the valuation, but likely the right decision. We want the company to focus development on highest value programs,” the analyst commented.

Latest Ratings for BMRN

DateFirmActionFromTo
Oct 2018Cantor FitzgeraldInitiates Coverage OnOverweight
Aug 2018CitigroupMaintainsBuyBuy
Aug 2018BarclaysMaintainsEqual-WeightEqual-Weight

View More Analyst Ratings for BMRN
View the Latest Analyst Ratings

Posted-In: Alethia Young Credit SuisseAnalyst Color Long Ideas Price Target Reiteration Analyst Ratings Trading Ideas

 

Related Articles (BMRN)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
AAPLWedbushInitiates Coverage On310.0
DHTJP MorganUpgrades0.0
DISBarclaysUpgrades130.0
DXCMGoldman SachsUpgrades125.0
ORLYJP MorganUpgrades398.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

Tesla Fundamentals Are Extremely Strong: 'An Industry Creation Event'

Verizon, AT&T Enter Final Round Of Bidding For Yahoo's Internet Assets