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Is BioMarin Pharmaceutical Stock a Bargain?

By George Budwell - Updated Apr 18, 2019 at 4:40PM

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BioMarin's shares stumbled in December, but better days appear to be ahead.

What happened

Most biopharma stocks saw their annual gains evaporate over the course of last December. Shares of the top orphan-drug specialist BioMarin Pharmaceutical ( BMRN -2.04% ), for example, were up by a healthy 7.69% heading into the last month of the year, but ended up losing a staggering 11.3% of their value in December, according to data from S&P Global Market Intelligence. As a result, BioMarin's stock exited 2018 with a modest loss of 4.51%. 

What triggered this double-digit slide? BioMarin, like most biotechs and biopharmas, experienced a drastic decline in its value last month due to the uncertainty created by President Trump's trade war with China, the continued political unrest in Washington, D.C., as well as rising interest rates.

Check out the latest BioMarin earnings call transcript.

Green chalkboard chart showing a positive trend turn negative.

Image source: Getty Images.

So what

The bright spot is that BioMarin's December swoon wasn't sparked by a company-specific event, such as a major clinical failure or regulatory setback. In fact, BioMarin arguably sports one of the better growth outlooks, product portfolios, and clinical pipelines in the industry right now -- a fact that probably explains the company's strong rebound during the first two weeks of 2019. At the time of this writing, BioMarin's shares have gained almost 11% in just the first nine days of trading this year.      

Now what

Fortunately for shareholders, BioMarin's strong momentum appears set to continue for the remainder of the year. The reason is that the company noted -- during a presentation at the 37th annual J.P. Morgan Healthcare Conference last week -- that it should end up rolling out two major clinical updates later this year.

Specifically, BioMarin is expected to update investors on the status of its gene therapy candidate, valoctocogene roxaparvovec, for hemophilia A, as well as its late-stage achondroplasia candidate vosoritide, before year's end. Both of these experimental therapies have the potential to reach blockbuster status (annual sales exceeding $1 billion per year), giving investors good reason to be optimistic about the company's long-term growth outlook.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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BioMarin Pharmaceutical Inc. Stock Quote
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