FDA Clears BioMarin’s Vimizim

BioMarin Pharmaceutical Inc.’s (BMRN) product portfolio was strengthened following the U.S. Food and Drug Administration’s (FDA) decision to approve the company’s enzyme replacement therapy Vimizim (elosulfase alfa). The U.S. regulatory body cleared the drug for the treatment of patients suffering from mucopolysaccharidosis type IVA (MPS IVA) or morquio A syndrome.

Following the FDA clearance, Vimizim becomes the first therapy to be cleared for the treatment of this rare genetic disorder, which affects approximately 3,000 patients in the developed nations according to BioMarin. The shortage of activity in an enzyme involved in glycosaminoglycan metabolism causes people to be affected by MPS IVA.

Vimizim’s approval does not surprise us as the Endocrinologic and Metabolic Drugs Advisory Committee (EMDAC) of the FDA had recommended the approval of Vimizim for the above indication in November last year. The FDA clearance came a few days ahead of the assigned target date of Feb 28, 2014.

Presence of Severe Warning Causes Marginal Dip in Shares

We note that even though Vimizim managed to get FDA clearance, all aspects of the decision did not favor BioMarin. The drug was approved with a boxed warning to include the risk of anaphylaxis as the infusion of the drug resulted in life-threatening anaphylactic reactions in some patients during clinical trials. We note that the target population is not large in the first place. The presence of a severe warning in the drug’s label will further limit its sales potential. Consequently, the U.S. approval of Vimizim is not expected to boost BioMarin’s top line significantly. The shares of the biopharmaceutical company slipped marginally on the news of the presence of the boxed warning in Vimizim’s label.

BioMarin is looking to get Vimizim approved for MPSIVA in additional markets such as the EU, Brazil, Australia, Canada and Mexico. Approval in additional markets will boost the drug’s sales potential.

Apart from Vimizim, the approved products at BioMarin are Naglazyme, Kuvan, Aldurazyme and Firdapse. BioMarin co-markets Aldurazyme with Sanofi (SNY).

BioMarin currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the biopharma space include Actelion Ltd. (ALIOF) and Medivation, Inc. (MDVN). Both stocks carry a Zacks Rank #2 (Buy).

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