Zacks_Analysts' Blog : BioMarin Studies Cure for Cancer - Analyst Blog

Recently, BioMarin Pharmaceutical Inc. (BMRN) announced the initiation of an early-stage study of its cancer candidate BMN 673. BMN 673, administered orally once a day, is being developed for treating patients suffering from genetically-defined cancers.

The study will evaluate approximately 70 patients (aged above 18 years) suffering from advanced or recurrent solid tumors. The primary goal of the open-label study is to find the maximum tolerated dose of the candidate.  The secondary goals of the study include evaluating the safety, preliminary effectiveness and the tolerability of BMN 673 among other factors.

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 early stage study to specifically identify the types of cancer that can be treated by BMN 673. The candidate is a welcome addition to BioMarin’s robust pipeline.

We remind investors that late last year the UK regulatory body, the Medicines and Healthcare Products Regulatory Agency (MHRA) completed the scrutiny of the clinical trial application (CTA) for BMN 673 and issued a notice of acceptance.

We note that the other interesting candidates at BioMarin include PEG-PAL (PEGylated recombinant phenylalanine ammonia lyase), which is currently being developed 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 has other candidates in early-stage development.

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 Firdapse, launched last year, 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. These headwinds cause us to believe that there is limited upside potential from current levels. Consequently, we maintain our ‘Neutral’ stance on BioMarin in the long-run, which is supported by the Zacks #3 Rank (short-term ‘Hold’ recommendation) carried by the company.