BioMarin's MAA For Phenylketonuria Candidate Gains EU Nod

BioMarin Pharmaceutical Inc.’s (NASDAQ:BMRN) shares were up more than 2% after the company announced that its marketing authorization application (MAA) for its rare-disease candidate, pegvaliase, is accepted by the European Medicines Agency (EMA).

The company seeks an approval for pegvaliase to lower blood phenylalanine (Phe) levels in adults with phenylketonuria (PKU), a rare genetic enzyme deficiency disorder causing uncontrolled blood Phe levels.

Notably, pegvaliase is also under priority review in the United States with the FDA expected to announce its decision on May 25, 2018.

We remind investors that pegvaliase’s development/regulatory process has not been exactly smooth. The drug has suffered several delays and setbacks, thus making the latest development a big boost to BioMarin.

In March 2016, BioMarin produced results from the phase III study, PRISM-2, on pegvaliase. The trial, despite meeting the primary endpoint, failed to achieve the secondary endpoint.

BioMarin’s shares have lost 10.6% in a year’s time, wider than the 8.8% decline of its industry.

BioMarin hopes that pegvaliase, if approved, will supplement its phenylketonuria portfolio, which also includes the drug Kuvan. A potential acceptance of the candidate will likely strengthen the company’s commercial leadership in the treatment of PKU and drive its top line.

Kuvan generated revenues of $407.5 million for the trailing 12 months ending December 2017, up 17% year over year.

However, BioMarin faces a generic threat for Kuvan, which had been performing well since its launch. Per settlements with Dr Reddy’s (NYSE:RDY) and Par Pharmaceuticals, a subsidiary of Endo International (NASDAQ:ENDP) , Kuvan generics are expected to enter the U.S. market from October 2020. The approval of pegvaliase will help BioMarin offset any revenue loss from the drug.

Per the company, approximately 50,000 people in the developed countries are diagnosed with PKU, which underlines a significant need for such therapies.

We remind investors that in January 2016, BioMarin had acquired all global rights to pegvaliase and Kuvan from Merck (NYSE:MRK) Serono. Previously, the company had exclusive rights to Kuvan in the United States and Canada and to pegvaliase in the United States and Japan. With this transaction, BioMarin has gained exclusive worldwide rights to Kuvan and pegvaliase with the exception of Kuvan in Japan. The acquisition of PKU rights in these markets represents a significant opportunity for BioMarin to establish its commercial leadership for the treatment of the same, first with Kuvan and then with pegvaliase, upon regulatory developments.

Zacks Rank & Key Pick

BioMarin carries a Zacks Rank #3 (Hold). A better-ranked stock from the same space is Regeneron Pharmaceuticals (NASDAQ:REGN) , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Regeneron’s earnings per share estimates have moved up from $18.65 to $18.68 for 2018 in the last 30 days. The company pulled off a positive earnings surprise in three of the last four quarters with an average beat of 9.15%.

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