BioMarin stock surged Friday after winning Food and Drug Administration approval for its dwarfism treatment in children as young as 5.
The drug called Voxzogo treats achondroplasia, a form of short-limbed dwarfism. With the approval, patients in the U.S. can begin treatment as young as age 5. The BioMarin Pharmaceutical (BMRN) drug encourages growth before a patient’s growth plates close.
Piper Sandler analyst Christopher Raymond noted the FDA approval “is right down the fairway.” In Europe, the drug is allowed in children beginning at age 2.
“Most importantly, with this approval, BioMarin’s next growth inflection is finally unlocked,” he said in a report to clients. “We model Voxzogo revenues of $165 million, $449 million, $558 million and $630 million in fiscal years 2022-25.”
On today’s stock market, BioMarin stock popped 10.3% to close at 91.47. The news sent BioMarin stock to its highest point since January.
BioMarin Stock Pops On FDA Approval
In children with achondroplasia, the gene that controls bone tissue growth contains a mutation. It’s a spontaneous mutation in 80% of patients. Others have an inherited mutation. Voxzogo bypasses that gene to promote endochondral bone growth.
This is also the first treatment option for children with achondroplasia, BioMarin Chief Executive Jacques Bienaime said in a written statement.
“Voxzogo is a medical first that is rooted in BioMarin’s focus on molecular genetics and targets the underlying cause of the condition,” he said. “More than a decade of scientific research underpins the medical advance that Voxzogo represents.”
Piper Sandler’s Raymond kept his overweight rating and 121 price target on BioMarin stock after the approval.
Why This Launch Could Be Big
SVB Leerink analyst Joseph Schwartz expects the Voxzogo launch to be among BioMarin’s biggest. He raised his price on BioMarin stock to 112 from 108 days ahead of the approval.
Voxzogo aims to increase annualized growth velocity — how much and quickly a child grows over the course of a year. Schwartz acknowledges achondroplasia is a complex disorder. In testing, Voxzogo showed trends toward improving body proportionality. But the results weren’t statistically significant.
“However, according to our survey, physicians believe that annualized growth velocity improvement is meaningful and likely to translate into additional benefits, including quality of life improvements,” he said in a note.
Schwartz’s survey of physicians suggests Voxzogo could capture about 25% of the market at its peak. He has an outperform rating on BioMarin stock.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
YOU MAY ALSO LIKE: