GENZ Genzyme Corp. - Genzyme Corp. Common Stock (MM)

We are maintaining our 'Neutral' recommendation on BioMarin Pharmaceutical Inc.(BMRN) with a target price of $27.00 following the release of fourth quarter and full-year 2010 results.

BioMarin develops and commercializes biopharmaceuticals for serious diseases and medical conditions. The company's portfolio comprises of four approved products and multiple pipeline candidates. The marketed products include Aldurazyme {co-marketed with Genzyme Corporation (GENZ)}, Naglazyme, Kuvan and Firdapse.

Naglazyme is the biggest contributor to revenues at BioMarin. Kuvan has also performed impressively since being launched. We believe that these two products will continue to perform well in the coming quarters, thereby driving growth at BioMarin. The addition of Firdapse to its product portfolio should augment revenues.

Furthermore, BioMarin has a robust pipeline. The pipeline includes PEG-PAL (PEGylated recombinant phenylalanine ammonia lyase), which is currently under development for the treatment of phenylketonuria and GALNS (N-acetylgalactosamine 6-sulfatase), which is currently under development for the treatment of MPS (mucopolysaccharidosis) IVA. Additionally, the company has other candidates in early-stage development. We believe that the successful development and commercialization of the robust pipeline at BioMarin will boost the company’s top line.

However, we are disappointed about the stalled growth rate of Aldurazyme. Even though the efforts of BioMarin to develop its pipeline are encouraging, we note that most of the pipeline candidates at BioMarin are in early or mid stage of development. The pipeline will take some time to develop. With multiple pipeline events lined up we believe that the stock will be adversely affected in the event of any news pertaining to a pipeline setback.

We see limited upside from current levels and reiterate our 'Neutral' recommendation on BioMarin.  

 

 
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