Making a stellar cancer debut
BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) is a company that develops drugs to treat serious and rare conditions. At this year’s ASCO, it was presenting data from its first cancer drug BMN 673. Much like Clovis’ rucaparib, BMN 673 is a PARP inhibitor, meaning it targets patients who carry certain genes (BRCA).
BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) traded lower by more than 8% after its candidate meaningfully shrunk the tumors of less than half of ovarian and breast cancer patients who were tested. The drug’s response rate of roughly 30% was not enough to create optimism – but it doesn’t mean that BMN 673 won’t eventually be FDA approved.
With BMN 673 being a PARP inhibitor, there is no other drug that targets BRCA-expressing ovarian and breast cancer patients. Therefore, a 30% response rate is decent – but not extraordinary.
Basically, BioMarin didn’t disappoint, but it didn’t impress either. The company is currently valued at around $8 billion, and I believe this weakness is a good buying opportunity.
Last year, the company’s product, GALNS, for the life-threatening disease Morquio Syndrome Type A produced unparalleled results. GALNS will be approved in the near future. Thus, BioMarin’s 67% one-year return has been tied to GALNS, not BMN 673. Therefore, with GALNS expected to double BioMarin’s total sales, I would buy on this weakness, and would worry about BMN 673 later down the road.
Final thoughts
Looking at these three stocks, the risks associated with Synta Pharmaceuticals Corp. (NASDAQ:SNTA) appear too great. Thus, I can’t identify clear value.
Clovis Oncology Inc (NASDAQ:CLVS) produced results like I’ve never seen – but the company still has additional testing – meaning its story is far from complete. While I think it would make a great buy-and-hold, biotechs in this phase of development are typically volatile. Therefore, it might be a bad choice for those with short-term goals or for those who can’t stomach the volatility.
My post-ASCO play is BioMarin. The stock is currently trading about 16% off its 52-week highs and has an exciting year ahead with the launch of GALNS. Thus, I think the pullback was healthy and will prove to be a wise entry point for both short and long-term investors.
The article Post-ASCO Movers: Are Any a Buy? originally appeared on Fool.com.
Brian Nichols has no position in any stocks mentioned. The Motley Fool recommends BioMarin Pharmaceutical. Brian is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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