Recently, BioMarin Pharmaceutical, Inc. (NASDAQ:BMRN) signed an agreement with Merck Serono for purchasing rights to medications Kuvan and pegvaliase. This week, analyst Liana Moussatos from Wedbush weighed in on the biopharmaceutical company, maintaining a Neutral rating on the stock while raising her price target to $137 (from $131).
Moussatos said, “BioMarin has bought the ex-US/Canada rights to Kuvan and pegvaliase from Merck Serono and announced 2016 revenue guidance for Kuvan of $320MM- $350MM. Under the terms of the agreement, BioMarin will pay Merck Serono €340MM as an upfront payment (upon close of transaction), €125MM for regulatory milestones related to pegvaliase and an additional €60MM in milestones if combined sales of Kuvan and pegvaliase reach an undisclosed threshold.”
The analyst added, “In return, BioMarin will gain exclusive worldwide rights to Kuvan and pegvaliase with the exception of Kuvan in Japan and noted that it will begin commercializing and recognizing Kuvan revenue from global sales (except Japan) in January 2016 and expects 2016 revenue for Kuvan to be between $320MM-$350MM including $70MM-$80MM from expected 2016 ex-US/Canada sales.”
Moussatos says they have updated their model on the basis of this guidance. As per the analyst, the increased price target is due to an expected improvement in 2016 revenue and net income, because the additional potential income from Kuvan is higher than the payment made to Merck Serono.
Liana Moussatos has only issued Neutral rating on BioMarin since 2013. Consequently, she does not have an average return or success rate for the company.
As per TipsRanks’ statistics, out of 11 analysts who have recently rated BioMarin, a majority (10) have rated the stock as a Buy, and only 1 has rated the stock as a Hold; none of the analysts have recommended to Sell the stock. The average consensus price target for BioMarin is $160.33, an upside of nearly 55% over current levels.
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