BioMarin Pharmaceuticals (BMRN)

Tweet BioMarin Pharmaceuticals (BMRN)

David Miller
February 7, 2007

At the end of this month, BioMarin Pharmaceuticals (BMRN) will report data from a pilot study on uncontrolled hypertension. BioMarin typically seeks to develop drugs for orphan indications, so this is their first shot at a blockbuster indication.

The drug is nicknamed BH4, and the so-called CONTROL study enrolled 116 patients whose hypertension (high blood pressure) was not controlled by other drugs. What is not commonly known is the CONTROL trial is a repeat of a successful smaller study. While not guaranteeing success, it does lead us to be hopeful about the outcome of the CONTROL trial.

BioMarin has big plans for BH4 in 2007. They will launch a proof of concept trial to treat sickle-cell anemia. A trial in pulmonary arterial hypertension should also be underway soon. Data from a 210-patient trial to treat peripheral arterial disease (PAD) should arrive in the first half of 2008. A win in that trial would be very important, because PAD is where good cardiac drugs go to die – it’s a damn tough indication to beat. A good drug there would easily sell over a billion per year in the US.

The company released data last year on a successful Phase III study of the orphan drug Phenoptin in people with the PKU enzymatic deficiency. Last month, they released positive data from a label expansion study in the same disease. This is an orphan indication, but if the drug is approved by the FDA with a preferential label Phenoptin could be bigger than most people expect. They’ll make the filing next quarter in the US and in Q3-2007 in the EU. They are partnered with Serono (Merck Serono KGaA) outside the US. BioMarin has 100% of US rights and will get $15M cash when they file in the EU and $30M more if Phenoptin is approved in the EU.

BioMarin markets the orphan drug Aldurazyme with Genzyme (GENZ) in a 50/50 joint venture. The company also markets Naglazyme for patients with the orphan disease MPS-IV. Alan Leong, who covers BioMarin for us, believes sales of Phenoptin (if approved), Aldurazyme, and Naglazyme could push the company to profitability in late 2008.

We’ve been covering BioMarin since 2004 and made them our top pick in our August 2006 Anniversary Issue. If you glance at the chart over that period, you’ll see it’s been a good performer for us. The stock ran into a headwind in January when the company cleaned up its remaining convertible debt by issuing 8 million shares. That supply seems to have worked its way through the markets, however.

Investing ahead of pivotal results is always “exciting” because of the prospect of big downside (40-60%) surprises. If the CONTROL trial is clearly positive, we doubt BioMarin will exit 2007 as an independent company. Good cardiovascular drugs are hard to find and the company’s orphan programs are profitable.

One or more members of BSR’s research team own shares of BioMarin. Check out the Disclosures pages of our website for more information.