Smallcap BioMarin's Drug Kuvan Showing Great Promise

Feb.12.08 | About: BioMarin Pharmaceutical (BMRN)

Cowen is out very positive on BioMarin (NASDAQ:BMRN) following a survey aimed at tracking the uptake of the company's Kuvan.

Physicians expect to test the vast majority (79%) of their patients for Kuvan sensitivity in 2008, and expect nearly one-half (45%) to remain on long term therapy.

Just as important, this survey suggests likely upside to Kuvan's price. Physicians report a 55kg average patient weight, 94% compliance, and 19.5mg/kg average dose. These figures imply an average annual price per patient of $107K, well above BioMarin's guidance ($57K) and firm's estimate ($72K). It is increasingly clear to them that BioMarin will likely be one of the most attractive growth stories in biotech for the next several years.

The responses imply 2008 Kuvan revenue of over $100MM, above Cowen's $80MME, and that Kuvan will enter 2009 at a U.S. revenue run rate of over $250MM, above their FY 2009 estimate of $200MME. Moreover they imply a peak U.S. opportunity of $625MM, above their 2012 U.S. estimate of $375MM.

Cowen considers BMRN a top small-cap biotech pick.

Notablecalls: Well, it sure looks like Cowen's biotech team is on to something big here. Their estimates are now well above the consensus.

Just for comparison, Jefferies was out with a call on BMRN yesterday saying that based on their survey, they are increasing their average dose used from 15 mg/kg/day to 17 mg/kg/day, which results in an increase in the average annual cost of Kuvan from $57K to $66K. As a result, the firm increased their FY08 U.S. Kuvan revenue estimate from $61M to $71M. (Yet, Cowen stands at $100M).

I think the upside pressure in this name is just too strong to resist. These two calls will likely cause some serious buy interest as soon as today.

One to watch!