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Monday, November 5, 2012

Bearish Call on BMRN: 3k patient worldwide cannot generate 775 million. PT $40


 BioMarin Pharmaceutical Inc. (Nasdaq:BMRN) announced today that the pivotal Phase 3 study of GALNS met the primary endpoint of change in six-minute walk distance compared with placebo at 24 weeks in subjects receiving weekly infusions of GALNS at the dose of 2 mg/kg (p=0.0174). MOR-004 was a randomized, double-blind, placebo-controlled study evaluating two doses of GALNS (BMN-110, N- acetylgalactosamine-6-sulfatase) for the treatment of patients with the rare lysosomal storage disorder Mucopolysaccharidosis Type IVA (MPS IVA), also called Morquio A Syndrome.  Morquio A syndrome is estimated to occur in 1 in 200,000 to 300,000 live births. 

The rate of incidence of MPS IVA is as yet unconfirmed and varies among different populations but estimates vary between 1 in 200,000 live births and 1 in 250,000 live births. The estimated prevalence is between 1,000 and 1,500 patients in the U.S., EU and Japan and between 1,500 to 2,000 patients in the rest of the world for a total of 2,500 to 3,000 patients.
Anticipated Upcoming Milestones for Biomarin
4Q 2012: Results for Phase 3 trial for GALNS for MPS IVA
4Q 2012: Update on Phase 1/2 trial for BMN-673 for solid tumors
1Q 2013: Market authorization application filing for GALNS for MPS IVA
1Q 2013: Results for Phase 1/2 trial for BMN-701 for Pompe disease 
1H 2013: IND filing for BMN-190 for LINCL (Batten disease)
2Q 2013: Initiation of Phase 3 trial for PEG-PAL for PKU
2Q 2013: Results for PKU-016 Kuvan neurocognitive study
Mid 2013: Initiation of Phase 2 trial for BMN-111 for achondroplasia
2H 2013: Potential initiation of Phase 3 trial for BMN-673 for solid tumors
4Q 2013: Potential FDA approval of GALNS for MPS IVA
http://investors.bmrn.com/releasedetail.cfm?ReleaseID=716410


Cowen and Co. analyst Phil Nadeau wrote in a research note via Reuters, ”With an estimated 3,000 GALNS patients worldwide, we believe this represents a $500 million to $800 million opportunity for BioMarin.”


He added, “Our consultants have said that given the unmet need in (the disorder), the FDA could approve the drug even if the statistics in the primary endpoint were missed.”

Based on the above valuation, it means it would cost $166000 to -$266000 to the patient to generate 500-800 million which is outrages amount in any condition. Even Biomarin think it can generate 775 million in 2015.

Jacques Bienaime, CEO of BioMarin, said "the GALNS clinical program is currently the highest development priority at BioMarin, and this positive Phase 3 study serves as a potentially transformative milestone for the company."

"The positive results from this pivotal study will help support GALNS as the first therapy available to help the approximate 3,000 people worldwide suffering from MPS IVA -- a rare, degenerative, life-threatening genetic condition with no available therapy," commented Hank Fuchs Chief Medical Officer at BioMarin.

Through September 30, 2012, Biomarin had accumulated losses of approximately $486.4 million. 

Dendreon Corp (DNDN) was at $45 stock and it fda approved Provenge cost $93k and its stock went down and now its trading at $4.17. 


Other Biomarin approved products are Naglazyme (galsulfase), Kuvan (sapropterin dihydrochloride), Firdapse (amifampridine phosphate) and Aldurazyme (laronidase) and 533 million in Cash. Its good for long term but at current price of $49.10, its a sell with Price Target of $40 and long term price target of 36.92


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