Knee-Jerk Market Reaction to BioMarin Data Undue

BioMarin (BMRN) took a beating on Monday as more mature data at the American Society for Clinical Oncology meeting for its Phase I PARP inhibitor, BMN-673, didn’t excite to the extent that investors had hoped. The stock’s action knocked almost a billion dollars off of BioMarin’s market capitalization, a reflection of investors’ high expectations for the potential cancer therapy but a move that we consider an over-reaction. BMN-673 remains a strong contender among the novel PARP inhibitors in development, and the stock’s weakness should be seen as an entrance point in our view. Poly ADP-ribose polymerase (PARP) inhibitors are expected to play a key role in treating solid tumors cancer patients with the BRCA mutation , namely breast and ovarian cancers, and ‘673 has demonstrated the potential to lead the segment. BioMarin faces three primary competitors in the race to develop an effective PARP inhibitor: Clovis’ (CLVS) rucaparib, Abbvie’s (ABBV) veliparib, and Tesaro’s (TSRO) niraparib. You can read more on BioMarin in PropThink’s latest report, but we see this selling pressure as a buying opportunity.

BioMarin’s reported that in its Phase I/II study of ‘673 in solid tumors, the BRCA+ ovarian cancer cohort demonstrated a RECIST response rate of 44% (11/25) with one complete response in a platinum‐resistant patient. ‘673 generated a response rate in BRCA+ breast cancer patients of 39% (7/18). Of the 18 gBRCA breast cancer patients, there were six partial responses (3 unconfirmed) and one complete response. The response rates were slightly lower than anticipated (‘673 previously generated a 67% RR in BRCA+ ovarian cancer), hence the stock’s decline. Compare that to Tesaro’s PARP inhibitor niraparib, for which Tesaro presented new data on Tuesday morning at ASCO, and the drugs are arguably neck-and-neck. Niraparib produced a 50% (5/10) response rate in BRCA+/platinum-sensitive ovarian patients and 50% (2/4) in BRCA+ breast cancer. Note that these are significantly smaller populations than the ‘673 trial, thus the better response rates than ‘673 should be taken with a grain of salt, particularly in the n=4 BRCA+ breast cancer population. In addition, Tesaro’s patients, on average, had received fewer prior treatments.

BioMarin is moving ‘673 into a Phase III study with metastatic gBRCA breast cancer patients that should initiate in the fourth quarter of this year. Tesaro will do the same with niraparib in breast cancer, and will conduct a Phase III trial of niraparib in relapsed platinum-sensitive ovarian patients. Again, read more about BioMarin in PropThink’s latest report, but our view is that BMRN’s weakness on Monday relating to ‘673 was unwarranted. The candidate tops the list of PARP inhibitors in development, although BioMarin is slightly behind Tesaro in initiating late-stage studies. On Tuesday, BMRN has already recouped most of its losses from Monday, suggesting both that investors got comfortable with the data for ‘673, and that the release of additional data for niraparib on Tuesday morning wasn’t particularly detrimental. In fact, after climbing 12% in the early trading hours, TSRO was down 3% just before the noon hour.