BioMarin Pharmaceutical Inc.

BMRN Details

BioMarin Pharmaceutical Inc. (NASDAQ: BMRN) is a global biotechnology company that discovers and commercializes novel medicines for rare and ultra-rare genetic illnesses that are serious and life-threatening. Six commercialized medications (Naglazyme, Vimizim, Brineura, Palynziq, Kuvan, and Aldurazyme) plus several clinical and pre-clinical product candidates make up the company's portfolio.

Positive Data for Valoctocogene Roxaparvovec: On July 21, 2021, the company published new data from an open-label Phase 1/2 study for their investigational gene therapy medication (valoctocogene roxaparvovec) for individuals with severe haemophilia A. It found that the valoctocogene roxaparvovec treatment advantage was sustained five and four years after therapy in the 6e13 vg/kg and 4e13 vg/kg groups, respectively.

EMA Validation: On July 15, 2021, the European Medicines Agency (EMA) approved BMRN's Marketing Authorization Application (MAA) for valoctocogene roxaparvovec. The next stage is to start the MAA review, with a CHMP opinion expected in H1FY22. The safety and efficacy data from 134 participants recruited in the Phase 3 GENEr8-1 trial are included in the review submission.

Q2FY21 Results: The company reported a sharp uptick of 16.81% in revenues to USD 501.69 million in Q2FY21 (ended June 30, 2021) compared to USD 429.49 million in Q2FY20, driven by higher product orders from Europe and the Middle East and higher revenue from more U.S. patients achieving maintenance dosing and new patients initiating therapy. Net income for Q2FY21 was USD 12.94 million, compared to a net loss of USD 29.83 million in Q2FY20. BMRN exited the quarter with a cash balance of USD 1.12 billion and a total debt of USD 1.08 billion.

Key Risks: The government generally has control over pricing in the pharmaceutical industry. They can restrict the amount that BMRN can charge for its products, which would adversely affect its revenue and results of operations. Moreover, BMRN may be subject to suspensions/withdrawal of prior approvals if its products fail to comply with the regulatory requirements, which could negatively impact its business and financial condition.

Outlook: As of Q2FY21, BMRN expects its revenue to range from USD 1.79 to 1.88 billion in FY21, with GAAP net loss ranging from USD 110 to 60 million. Its R&D and selling, general & administrative expenses are estimated to range from USD 645 to 685 million and USD 735 to 775 million, respectively.

Valuation Methodology: EV/Sales Multiple Based Relative Valuation

(Analysis by Kalkine Group)

• % Premium/(Discount) is based on our assessment of the company's FY1 trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

BMRN Daily Technical Chart (Source: REFINITIV)

Stock Recommendation: BMRN's stock price fell 13.20% in the past six months and is currently close to the lower-band of the 52-week range of USD 71.35 to USD 121.23. The stock is currently trading below its 50 and 200 DMA levels, and its RSI Index is 35.88. We have valued the stock using the EV/Sales-based relative valuation methodology and arrived at a target price of USD 85.71. Considering the correction in the stock price, decent financial performance, strong product pipeline, and current valuation, we recommend a "Hold" rating on the stock at the current price of USD 75.55, down 0.21% as of August 13, 2021, 1:24 PM ET.

* The reference data in this report has been partly sourced from REFINITIV.

*All forecasted figures and industry information have been taken from REFINITIV.