Insiders Are Selling BioMarin Pharmaceutical

Sep.30.13 | About: BioMarin Pharmaceutical (BMRN)

In this article, I will feature one biotech that has seen intensive insider selling during the last 30 days. Intensive insider selling can be defined by the following three criteria:

  1. The stock was sold by three or more insiders within one month.
  2. The stock was not purchased by any insiders in the month of intensive selling.
  3. At least two sellers decreased their holdings by more than 10%.

BioMarin Pharmaceutical (NASDAQ:BMRN) develops and commercializes biopharmaceuticals for serious diseases and medical conditions in the United States, Europe, Latin America and the rest of the world.

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Insider selling during the last 30 days

  • Henry Fuchs sold 20,000 shares on September 5-19, pursuant to a 10b5-1 trading plan. Henry Fuchs currently holds 43,266 shares or less than 0.1% of the company. Henry Fuchs joined BioMarin in 2009 and is the current Executive Vice President and Chief Medical Officer. Henry Fuchs decreased his holdings by 31.6% in September.
  • Jean-Jacques Bienaime sold 2,000 shares on September 16, pursuant to a 10b5-1 trading plan. Jean-Jacques Bienaime currently controls 108,740 shares and 98,500 options or 0.1% of the company. Jean-Jacques Bienaime joined BioMarin in May 2005 as Chief Executive Officer and member of the Board of Directors. Jean-Jacques Bienaime decreased his holdings by 1.0% in September.
  • Robert Baffi sold 20,000 shares on September 9, pursuant to a 10b5-1 trading plan. Robert Baffi currently holds 62,262 shares and 35,351 options or less than 0.1% of the company. Robert Baffi joined BioMarin in May 2000 and currently serves as Executive Vice President of Technical Operations. Robert Baffi decreased his holdings by 17.0% in September.
  • Daniel Spiegelman sold 9,000 shares on September 4, pursuant to a 10b5-1 trading plan. Daniel Spiegelman currently holds 37,950 shares and 88,000 options or less than 0.1% of the company. Daniel Spiegelman joined BioMarin in 2012 and is the current Executive Vice President and Chief Financial Officer. Daniel Spiegelman decreased his holdings by 6.7% in September.

Insider selling by calendar month

Here is a table of BioMarin's insider-trading activity by calendar month.

Month Insider selling / shares Insider buying / shares
September 2013 51,000 0
August 2013 1,000 0
July 2013 14,066 0
June 2013 1,591 0
May 2013 226,590 0
April 2013 51,102 0
March 2013 229,029 0
February 2013 83,003 0
January 2013 121,324 0
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There have been 779,705 shares sold and there have been zero shares purchased by insiders this year.

Financials

BioMarin reported the second-quarter financial results on July 25, with the following highlights:

Revenue $136.8 million
Net loss $21.5 million
Cash $524.4 million
Debt $109.8 million
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Outlook

BioMarin's full-year 2013 guidance is as follows:

Revenue $530 million to $555 million
Net loss $185 million to $160 million
Cash balance (end of year) Over $440 million
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Upcoming milestones

BioMarin has the following anticipated upcoming milestones during the next 12 months.

Date Milestone
3Q/2013 Initiation of Phase 1/2 trial for BMN 190 for Batten disease
3Q/2013 Initiation of Phase 3 trial for BMN 673 for BRCA breast cancer
4Q/2013 Initiation of Phase 2/3 switching trial for BMN 701 for Pompe disease
4Q/2013 Potential CHMP opinion for Vimizim for MPA IVA
4Q2013/1Q2014 Initiation of Phase 1/2 trial for BMN 111 for achondroplasia
1Q/2014 PDUFA date for Vimizim for MPS IVA
1Q/2014 Potential launch of Vimizim for MPS IVA
4Q/2014 Top-line results for Phase 3 trial for PEG-PAL for PKU
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BioMarin announced on September 23 that it had dosed the first patient in the Phase 1/2 trial for BMN 190, a recombinant human tripeptidyl peptidase 1 (rhTPP1) for the treatment of patients with neuronal ceroid lipofuscinosis type 2 (NCL-2), a form of Batten disease.

Pipeline

BioMarin's product portfolio comprises four approved products and multiple clinical and pre-clinical product candidates.

BioMarin's approved products include:

  1. Naglazyme (galsulfase) for mucopolysaccharidosis VI (MPS VI), a product wholly developed and commercialized by BioMarin.
  2. Aldurazyme (laronidase) for mucopolysaccharidosis I (MPS I), a product which BioMarin developed through a 50/50 joint venture with Genzyme Corporation, part of Sanofi (NYSE:SNY).
  3. Kuvan (sapropterin dihydrochloride) Tablets, for phenylketonuria (PKU), developed in partnership with Merck Serono, a division of Merck KGaA of Darmstadt, Germany.
  4. Firdapse (amifampridine), which has been approved by the European Commission for the treatment of Lambert Eaton Myasthenic Syndrome (LEMS).

BioMarin's product candidates include:

  1. BMN 110 (N-acetylgalactosamine 6-sulfatase), formally referred to as GALNS, which successfully completed Phase III clinical development for the treatment of MPS IVA.
  2. PEG-PAL (PEGylated recombinant phenylalanine ammonia lyase), which is currently in Phase III clinical development for the treatment of PKU.
  3. BMN 701, a novel fusion protein of insulin-like growth factor 2 and acid alpha glucosidase (IGF2-GAA), which is currently in Phase I/II clinical development for the treatment of Pompe disease.
  4. BMN 673, a poly ADP-ribose polymerase (PARP) inhibitor, which is currently in Phase I/II clinical development for the treatment of genetically-defined cancers.
  5. BMN 111, a modified C-natriuretic peptide, which is currently in Phase I clinical development for the treatment of achondroplasia.
  6. BMN 190, a recombinant human tripeptidyl peptidase 1 (rhTPP1), which is currently in Phase 1/2 development for the treatment of neuronal ceroid lipofuscinosis Type 2 disease.Click to enlarge

Competition

The following is a summary analysis of known competitive threats for each of BioMarin's major product programs:

Naglazyme, Aldurazyme and Vimizim

Small companies and academic groups continue to evaluate various approaches to treating MPS VI, MPS I or MPS IVA however, BioMarin is not aware of any active competitive program for enzyme replacement therapy for MPS VI, MPS I or MPS IV A that has entered clinical trials.

Kuvan and PEG-PAL

There are currently no other approved drugs for the treatment of PKU. PKU is commonly treated with a medical food diet that is highly-restrictive and unpalatable. BioMarin perceives medical foods as a complement to Kuvan and PEG-PAL and not a significant competitive threat.

Firdapse and LEMS

There are no other approved drugs for the treatment of LEMS. Current options rely on intravenous immunoglobulin, plasmapherisis and/or immuno suppressant drugs. In some countries, 3,4 DAP is available, as a base, through various compounding pharmacies, as a special or magistral formulation, or through investigator sponsored studies. Firdapse is the only approved version of 3,4 DAP. One other aminopyridine, 4AP, has been approved in the U.S. by another pharmaceutical company. However, this is for the treatment of fatigue associated with Multiple Sclerosis. The role of 4AP in LEMS is unproven and uncertain.

BMN-673

There are several other PARP inhibitors ahead of BMN-673 in clinical development for the treatment of various solid and hematologic malignancies. None of these PARP inhibitors however, has yet been approved by the FDA or any other regulatory agency.

BMN-701

There are two approved enzyme replacement therapies for Pompe disease in the U.S. and at least two more in preclinical studies. Gene therapy is also being tested in clinical trials and a pharmaceutical company initiated a Phase 2 clinical trial to test its small molecule chaperone as a combination therapy with enzyme replacement therapy.

BMN-111

There are currently no approved drugs for the treatment of achondroplasia. There are other peptides in early development for achondroplasia, although BMN-111 is the only peptide therapeutic that has entered clinical trials for achondroplasia.

Conclusion

There have been four different insiders selling BioMarin and there have not been any insiders buying BioMarin during the past 30 days. Two of these four insiders decreased their holdings by more than 10%. BioMarin has an insider ownership of 0.30%.

Before entering short BioMarin, I would like to get a bearish confirmation from the Point and Figure chart. The two main reasons for the proposed short entry are negative earnings and the intensive insider selling activity.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.