Analyst Note| Karen Andersen, CFA |
The Food and Drug Administration has placed a clinical hold on BioMarin's phase 1/2 clinical trial of phenylketonuria gene therapy BMN 307 in the United States, following 52-week data from a preclinical study in mice, and BioMarin has opted to pause global enrollment. We're not making any changes to our $101 fair value estimate, as we had not yet included BMN 307 explicitly in our model. We also don't see evidence that any potential BMN 307 cancer risk in humans could be extrapolated to BioMarin's Roctavian, its gene therapy in hemophilia A that is poised to gain regulatory approval in 2022. We continue to see BioMarin's rare-disease portfolio and late-stage pipeline supporting a narrow moat. That said, if these safety concerns are found to reflect a safety issue with BioMarin's entire gene therapy platform or adeno-associated virus-based gene therapies more broadly, we might reconsider our long-term earnings growth assumptions and positive moat trend rating; this could also affect development of gene therapy BMN 331 in hereditary angioedema (to enter clinical development this year).