BioMarin Gyrates as Bears and Bulls Spar Over Gene Therapy Data

(Bloomberg) -- BioMarin Pharmaceutical Inc. shares fluctuated after the market open as three-year data for the company’s Hemophillia A gene therapy failed to meet the most bullish investor expectations.

The effectiveness of Valrox measured by the amount blood-clotting protein factor VIII declined more quickly at three years than investors had hoped, triggering the stock to oscillate between gains and losses. The median expression of factor VIII was 19.9% of normal at three years, a statement said, compared to some forecasts for expression of roughly 25%.

A key argument from skeptical investors centered around management’s expectations that the data show a plateau of the declining benefits are on the horizon. The median factor VIII expression as measured using a chromogenic substrate assay have declined to 19.9% at three years for the one-time medicine from 60% of normal one year after dosing.

Despite the data missing heightened expectations, sell-side analysts from banks including Morgan Stanley and RBC Capital Markets advised investors to buy any weakness.

“Updated 3 year data support slowing of factor level declines and interim” late-stage data support an accelerated filing with U.S. regulators, Morgan Stanley analyst Matthew Harrison wrote. He called Tuesday morning’s news an “upside surprise” supporting shares to trade to at least $100.

The data remove a major overhang for a company that is undervalued on a fundamental basis, RBC’s Kennen MacKay wrote advising investors to buy the dip. The potentially underwhelming data are offset by late-stage results that may enable a USA launch by 2020, MacKay said.

While the number of bleeding events the patients receiving the medicine suffered has been a focus for management, the level of factor VIII has been increasingly more important for investors.

Spark Therapeutics Inc., which is in a proposed takeover deal with Roche Holding AG, as well as Sangamo Therapeutics Inc. and partner Pfizer Inc. are among the companies studying potential one-time treatments for hemophilia A.

To contact the reporter on this story: Bailey Lipschultz in New York at blipschultz@bloomberg.net

To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Will Daley

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