BioMarin Tanks 36% As FDA Rejects Hemophilia A Gene Therapy Application
Shares in BioMarin Pharmaceutical plunged 36% after the US Food and Drug Administration (FDA) in a surprise move rejected the biotech company’s license application for its gene therapy to treat severe hemophilia A.
The stock sank to $75.93 in midday trading on Wednesday. BioMarin (BMRN) announced that the FDA issued a letter saying that its Biologics License Application (BLA) for valoctocogene roxaparvovec gene therapy, is not ready for approval in its present form. The US regulator had changed its data requirements for the application and is now asking BioMarin to provide two years of data from the company’s ongoing Phase 3 study of the therapy.
“We remain committed to the hemophilia community and to leading the way to the first ever gene therapy in hemophilia A,” said BioMarin CEO Jean-Jacques Bienaimé. “We are surprised and disappointed that the FDA introduced new expectations. We are confident in valoctocogene roxaparvovec gene therapy and its potential to redefine the treatment paradigm for people with hemophilia A.”
The application was based on the Phase 3 study interim analysis of study participants treated with investigational product manufactured by the to-be-commercialized process and three-year data from the Phase 1/2 study. The FDA had granted valoctocogene roxaparvovec priority review status and breakthrough therapy as well as orphan drug designations.
The FDA now recommended that BioMarin completes the Phase 3 study and submits two-year follow-up safety and efficacy data on all study participants. The US agency concluded that the differences between Phase 1/2 and the Phase 3 study limited its ability to rely on the Phase 1/2 study to support durability of effect. The Phase 3 study was fully enrolled in November 2019, and the last patient will complete two years of follow up in November 2021.
BioMarin said that while the company is exploring the next steps to obtain approval, the ongoing valoctocogene roxaparvovec clinical trials will continue. The European Medicines Agency (EMA) review of the company’s Marketing Authorization Application (MAA) for valoctocogene roxaparvovec is still underway, the company added.
Approximately 1 in 10,000 people have hemophilia A. Additionally, people with severe hemophilia A often experience painful, spontaneous bleeds into their muscles or joints. These individuals with the most severe form of the disease make up 50% of the hemophilia A population.
Shares in BioMarin are now down 9% year-to-date, with the $126.86 average analyst price target indicating 66% upside potential lies ahead.
J. P. Morgan analyst Cory Kasimov slashed the stock’s price target to $131 from $156, saying that today’s selloff is overdone citing the company’s fundamentals, while recovery likely requires patience.
This “comes as a shock to BioMarin and all stakeholders involved, as this highly anticipated gene therapy for hemophilia A is likely delayed by at least 2 years in the US,” Kasimov wrote in a note to investors.
However, the analyst, who reiterated a Buy rating on the stock believes that BMRN is “well positioned with a nice blend of diversified commercial value”.
“In particular, we believe BioMarin’s depth and breadth of orphan disease assets present a unique opportunity in biotech,” he added.
The rest of the Street now has a cautiously optimistic outlook on BMRN with a Moderate Buy analyst consensus after 3 analysts downgraded the stock to Hold today. (See BioMarin stock analysis on TipRanks).
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