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BioMarin Pharmaceutical Inc. (BMRN) develops enzyme therapies for serious chronic genetic disorders and other diseases and conditions. Its leading product, Aldurazyme, is used for treating the ultra-rare genetic disorder mucopolysaccharidosis-I (MPS-I) while its second product, Naglazyme, is approved for the treatment of MPS-VI.
Recently, the company received FDA approval for its third product, Kuvan, for the treatment of PKU. Strong sales of Kuvan, coupled with accelerating sales of both Aludrazyme and Naglazyme, will drive the company to profitability in 2008 and beyond.
We upgraded the stock in early August 2005. Since then the stock has more than quadrupled. We continue to believe that both Aldurazyme and Naglazyme will make significant contributions to the company's top-line growth in the coming years. We are pleased to see the impressive growth in the sales of Aldurazyme and Naglazyme. Naglazyme sales continued to grow strongly in the first quarter with sales of $25.5 million, up 51.1% year-over-year.
BioMarin updated its 2008 guidance for Naglazyme sales from $105 million - $116 million to $115 million - $125 million. Approval of the drug in Japan in April 2008 will help drive stronger sales. We expect to see meaningful contribution to the company's top-line and bottom-line growth from the U.S. launch of Kuvan in December 2007 in the coming quarters.
We expect further appreciation and maintain our Buy rating on the stock with a price target of $40 per share. We arrive at our price target by using a P/S multiple of 12.6x, multiplied by our 2011 sales estimate of $527 million, discounted at 15% for three 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.
Varun Parwal contributed to this report.
Read the full analyst report on BMRN.
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