MKGAF Merck KGAA (PK)

BioMarin Pharmaceutical Inc. (BMRN) recently announced preliminary results from a phase II program of PEG-PAL (PEGylated recombinant Phenylalanine Ammonia Lyase). PEG-PAL is an investigational enzyme substitution therapy which is being developed to treat phenylketonuria (PKU).

The phase II program consisted of four primary studies involving a total of 56 patients, above 16 years of age. Preliminary data from the program showed that PEG-PAL was well tolerated and could prove to be efficacious. Although two patients dropped out of the study due to adverse reactions, BioMarin said that the cases were not severe. Twelve more dropped out due to logistical reasons.

BioMarin expects to meet the US Food and Drug Administration (FDA) to review data from the phase II program in the first quarter of 2013. The company plans to initiate a phase III study of PEG-PAL in the second quarter of 2013 after the end of phase II discussion with the US regulatory body.

Primarily, the phase III program of PEG-PAL will include a study for the evaluation of safety and blood phenylalanine (Phe) levels in patients suffering from PKU.

BioMarin already markets Kuvan around the world which is indicated to treat PKU. BioMarin recorded net product revenue of $34.7 million from Kuvan in the second quarter of 2012. The company expects to generate around $130–$140 million as net sales of the product at the end of 2012.

We note that BioMarin has a partnership with Merck Serono, a division of Merck KGaA (MKGAF), since 2005 for the development and commercialization of both Kuvan and PEG-PAL. The agreement was later revised in 2007.

Our Recommendation

We have a Neutral recommendation on BioMarin, which carries a Zacks #3 Rank (Hold) in the short run. The company has multiple data readouts in the near future. We expect investor focus to stay on these results.

 
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