Recently, BioMarin Pharmaceutical Inc.’s (BMRN) pipeline received a boost with the UK regulatory body, the Medicines and Healthcare Products Regulatory Agency (MHRA) completing the scrutiny of the clinical trial application (CTA) for BMN 673 for treating patients suffering from genetically-defined cancers.
The agency subsequently issued a notice of acceptance for the candidate. The company intends to move the candidate into a phase I/II study by the first quarter of next year.
The management at BioMarin is highly optimistic about the prospects of the candidate which has displayed greater potency, selectivity, and bioavailability compared to other candidates in pre-clinical studies. The company intends to use the human trial on the candidate to specifically identify the types of cancer that can be treated by BMN 673. The candidate, which is still in a nascent stage of development, is a welcome addition to BioMarin’s robust pipeline.
Apart from BMN 673, interesting candidates at BioMarin include PEG-PAL (PEGylated recombinant phenylalanine ammonia lyase), which is currently in development for the treatment of phenylketonuria (PKU) and GALNS (N-acetylgalactosamine 6-sulfatase), which is currently in development for the treatment of mucopolysaccharidosis IVA – a rare genetic enzyme deficiency disorder.
The company expects to initiate a pivotal late stage study with GALNS by January 2011. PEG-PAL is currently undergoing phase II studies from which initial updates were encouraging. The complete top-line data is expected in mid-2011. BioMarin intends to initiate a late-stage study with PEG-PAL for PKU either by the end of 2011 or the first quarter of 2012.
Moreover, in August 2010, BioMarin’s pipeline received a boost when the FDA granted orphan drug status to BMN-701, which is being developed to combat Pompe disease. The Investigational New Drug (IND) application for the candidate, which has been effective in pre-clinical studies, was accepted by the FDA with clinical trials expected to commence either by year end or in the first quarter of 2011.
The company has other candidates in early-stage development. On October 19, 2010, its research & development (R&D) day, BioMarin announced its program for BMN-111, a peptide therapeutic for treating achondroplasia. The company intends to file an IND application for the candidate in the fourth quarter of 2011. The successful development and commercialization of its robust pipeline will help drive long-term growth at BioMarin.
Apart from the strong pipeline, BioMarin has four products in the market. The marketed products include Aldurazyme, which is co-marketed with Genzyme Corporation (GENZ) for the treatment of MPS-I. The other three are Naglazyme for MPS-VI, Kuvan for treating PKU and Firdapse for treating Lambert Eaton Myasthenic Syndrome – a rare autoimmune disorder.
Our Take & Recommendation
We expect Naglazyme and Kuvan to continue performing impressively in the coming quarters. Moreover, an impressive ramp up of the recently launched Firdapse would boost the top line further. Furthermore, positive pipeline developments would bolster the stock.
However, declining sales of Aldurazyme bothers us. Moreover, we expect cash burn to increase since the company is investing heavily in its pipeline.
Consequently, we believe that the risk/reward profile is balanced at BioMarin with limited upside potential at current levels. This justifies our Neutral recommendation on the stock which is supported by the Zacks #3 Rank (short-term Hold recommendation) carried by the company.
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