Apparently Biomarin Pharmaceuticals'
Investors are clearly happy that the Rule Breakers pick has reached the holy grail of drug development -- positive earnings -- and it appears destined to stay there. Yesterday afternoon it announced $0.01 per share of net income -- its fourth quarter in a row in the black.
And what's not to like about revenue nearly tripling from the year-ago quarter? Part of that growth was thanks to the launch of Kuvan, one of its three drugs for treating orphan diseases. The other two drugs weren't slackers either. Revenue from sales of Aldurazyme, which it sells in conjunction with Genzyme
Unfortunately the growth of patients using Kuvan hasn't picked up after the slowdown last quarter. The problem appears to be a concern about lack of long-term safety data for a drug that can be used in both children and adults. For instance, patients on message boards are apparently reminding each other of Merck's
Biomarin has over $560 million in cash and short-term investments, which is a pretty nice nest egg for a company with positive earnings -- although it's still burning through some cash. Cash is king in this market, and Biomarin would be smart to license other orphan drugs from drugmakers like Alexion Pharmaceuticals
Whether Biomarin is cheap at this level remains to be seen. It's going to need to keep up this growth and add drugs from its internal pipeline or through smart acquisitions. That's a relatively tall order, but management has shown it can do it so far.