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BioMarin Pharmaceutical Inc. (BMRN) develops enzyme therapies for serious chronic genetic disorders and other diseases. Its leading product, Aldurazyme, is used for treating the ultra-rare genetic disorder mucopolysaccharidosis-I (MPS-I) while its second product, Naglazyme, is appoved for the treatment of MPS-VI. Recently, the company received FDA approval for its third product, Kuvan, for the treatment of PKU.
Strong product sales will drive the company to profitability in 2008 and beyond. The company's clinical pipeline remains impressive, as well. As such, we maintain our Buy rating on the stock with a price target of $28.
We arrive at our price target by using the biotech industry's average P/E multiple of 25x, multiplied by our estimated 2011 EPS of $1.78, discounted at 20% for 2.5 years. We believe the target price is warranted given the company's competitive advantage in the ultra-rare genetic disorder market. Practically there is no competition for Aldurazyme, Naglazyme and Kuvan.
Read the analyst note on BMRN
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