MKGAF Merck KGAA (PK)

BioMarin Pharmaceutical Inc. (BMRN) recently reported positive results from the much awaited phase III study (MOR-004) of GALNS (2mg/kg) for the treatment of patients suffering from mucopolysaccharidosis Type IVA (MPS IVA) or morquio A syndrome. Data from the study revealed that there was a significant change in six-minute walk distance in comparison to placebo at the end of 24 weeks. The news positively impacted the stock price.

Data from the study also revealed an improving trend in three-minute stair climb and pulmonary function in patients treated with GALNS compared to placebo, at the end of 24 weeks. Moreover, patients treated with GALNS showed consistent and robust reduction in urinary keratan sulfate (KS) levels compared to placebo.

The company intends to seek regulatory approvals for the indication in the first quarter of 2013 based on the positive results from the MOR-004 study. At the third quarter conference call, the company stated that it expects the US Food and Drug Administration (FDA) to approve GALNS in the fourth quarter of 2013. BioMarin also announced positive data from the MOR-005 extension study on GALNS.

We are pleased with BioMarin's efforts to develop its pipeline. We believe that the company can swing to profitability on the back of the successful development of GALNS.

We note that in September this year, BioMarin reported positive preliminary results from a phase II program of PEG-PAL (PEGylated recombinant Phenylalanine Ammonia Lyase). We note that this is another important pipeline program for the company.

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

Our Recommendation

We have a long-term Neutral recommendation on BioMarin, which carries a Zacks #3 Rank (Hold) in the short run.

 
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