BioMarin Pharmaceuticals Inc. ($BMRN) reported its second quarter results. The company announced its revenue for the period at $317.4 million, up 6 percent on year over year basis. The tepid growth is mainly on account of disappointing performance shown by its top performing drug Vimizim. The revenue from the drug declined 3 percent during the quarter, showing massive decline from the first quarter when it showed 45 percent year over year growth. The company’s other products also showed lagging growth in their volumes and revenue. However, on the positive side, the company reported $26.6 million in its non-GAAP income, up from $17 million it had reported for the corresponding quarter of the previous year.

BioMarin’s major drug candidate pegvaliase had some good news as the company reported that the FDA is not planning to hold an advisory committee meeting to discuss the Biologics License Application for the drug. The final decision for the drug is likely to come out next year, making it an important catalyst for the stock. The company posted some other positive news as it reported positive mid stage study results for its lead drug candidate BMN270. The drug candidate has been moved into Phase 3 clinical trial after encouraging results from its open label Phase 1/2 study pertaining severe Hemophilia A. It may be a lucrative position for the company as it is estimated that 1 in 5,000 live births face this ailment. There are also estimated to be over 20,000 Hemophilia A patients in the United States. The company’s other investigational enzyme replacement therapy BMN 250 has also shown good prospects with positive interim data from the dose escalation arm of a Phase 1/2 trial.

While the company has certain risks but the recent declines in its stock price has made it an attractively valued stock. Currently close to its 52 weeks low levels, the stock is priced well for accumulation.

Risks

The main risk factor for the company comes from its lethargic revenue performance. The company posted marginal growth in revenue for this quarter. Some of its products actually showed decline on year over year basis. The company also has restricted product development pipeline, which may hamper its future prospects as it may not have replacements for its mature products.

Catalysts

BioMarin is looking to hear from the FDA about its pegvaliase drug the next year. There are some positive developments as the company reported that the FDA is not planning to hold an advisory committee meeting for the drug. Pegvaliase is being developed as a potential treatment for adults with inadequately controlled levels in the study.

 Management

Jean-Jacques Bienaime

Chairman and Chief Executive Officer

Mr. Bienaimé is currently the Chairman and Chief Executive officer at BioMarin. He joined the company in May 2005 as Chief Executive Officer and member of the board of directors, bringing with him over 25 years of experience in the biotechnology and pharmaceutical industries. He received an M.B.A. from the Wharton School at the University of Pennsylvania and a degree in economics from the École Supérieure de Commerce de Paris.

Robert A Baffi

Executive Vice President, Technical Operations

Robert A. Baffi, Ph.D., joined BioMarin in May 2000 and currently serves as our Executive Vice President of Technical Operations, responsible for overseeing our manufacturing, process development, quality, and analytical chemistry departments. He serves on the board for the National Institute for Bioprocessing Research & Training. Dr. Baffi received a Ph.D., M. Phil and a B.S. in biochemistry from the City University of New York and an M.B.A. from Regis University.

Investment strategy

Entry - Current price point and at any dip

Profit Point – Medium to Long term holding

Hold duration – Medium to Long Term

Price Target (consensus) -  $114.00

Exit  - $102.00

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