BioMarin's Results Are In: What Do They Mean?

Encouraging early results from a trial of BioMarin Pharmaceutical Inc. BMRN dwarfism treatment sent the company's shares higher Thursday while analysts boosted their targets.

Shares changed hands recently at $138.50, up 12 percent.

BioMarin said a trial of its vosoritide drug in 26 children suffering from a form of dwarfism showed that at higher doses, the drug increased growth rates to normal levels.

Further studies may show whether the drug affects "proportionality" in patients' various body parts, as well as whether higher doses will sufficiently boost growth rates to enable young patients to "catch up" with healthy peers.

$1 Billion Market

Cowen's Phil Nadeau estimated the drug's potential market at more than $1 billion annually, and said if results hold up in further trials, vosoritide will get widely adopted.

The company on Wednesday disclosed there is an outside patent on the treatment, which Nadeau believes is held by Kazuwa Nakao of the University of Kyoto.

Nadeau, who maintained an Outperform rating, expects BioMarin can license on the patent "for a relatively modest royalty" in the low single digits, because it's not held by a large corporation.

Related Link: Barclays: BioMarin Is A Buy, Sees $150/Share

Ultimate Success

Deutsche Bank's Robyn Karnauskas predicted ultimate success for the dwarfism treatment and looked to BioMarin's next likely catalyst, coming by year end, with the potential regulatory approval of its Duchene multiple scleroisis drug called Drisapersen.

Biomarin acquired Drisapersen through its $840 million agreement in November to acquire Dutch drug developer Prosensa Holding NV.

A burgeoning, late-stage pipeline could lead to buyout offers for BioMarin, according to RBC's Michael J. Yee, who maintained an Outperform rating.

"The potential revenue base will be too scarce to pass up," Yee said.

Price Target Changes

With pipeline successes, BioMarin's takeout value could range between $300 and $436 a share, according to Karnauskas, who rates BioMarin at Buy.

Karnauskas raised her target on BioMarin Thursday by 11 percent to $150; Lee boosted his by 16 percent to $145.

JP Morgan's Cory Kasimov increased his price objective by 8 percent to $151 and maintained an Overweight rating on BioMarin Thursday, while Jefferies' Eun K. Yan maintained A Buy rating, raising her target 15 percent to $150.

Wall Street analysts on average maintain a Buy rating and $133.74 target on BioMarin.