Sticking with their acquisition plan, BioMarin has purchased a number of strategic companies that have greatly expanded their pipeline and accelerated growth. The company purchased LEAD Therapeutics with their pre-clinical oral oncology drug for genetically defined cancers. In 2009, BioMarin acquired Huxley Pharmaceuticals for approximately $22.5 million and $36 million in royalties from future sales of Firdapse for the treatment of Lambert-Eaton Myasthenic Syndrome, LEMS.
In January 2013, BioMarin acquired Zacharon Pharmaceuticals for $10 million (plus additional undisclosed milestone payments), which gave BioMarin control of Zacharon’s heparan sulfate synthesis inhibition platform, which BioMarin plans on researching in the treatment of MPS III, other MPS disorders, and ganglioside diseases such as Tay-Sachs.
In October 2012, BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) may have made the single best investment in their entire history by investing $5,000,000 for a 17% stake in Catalyst Pharmaceutical Partners. At the same time, they out-licensed the North American rights for Firdapse to Catalyst that has already begun the Phase III clinical trials. It is especially important to note that Catalyst also owns CPP115 that is likely very attractive to BioMarin because it appears to be a serious contender for several Orphan Drug indications such as, Epilepsy, Refractory Epilepsy, Tourette Syndrome, Infantile Spasms, Movement Disorders, Post Traumatic Stress Disorders and other indications. CPP115 was designed by the well-known Dr. Richard Silverman, who also designed the blockbusters Lyrica and Neurontin for Pfizer Inc. (NYSE:PFE). Pfizer is also seeking opportunities in Orphan Drugs and they know how successful Dr. Silverman has already been for them so it would not be a surprise if Pfizer also becomes interested in BioMarin if CPP115 becomes part of their pipeline.
With BioMarin’s resources, CPP115 would be an extremely valuable addition to their pipeline that could increase their valuations substantially in the next two to three years. CPP115 could almost double the size of BoMarin’s already robust pipeline. Catalyst is therefore another logical but understandably quiet takeover target for BioMarin.
After all the successful takeovers that helped BioMarin grow, now the company finds itself a target as rumors are heating up again suggested in Fierce Biotech where GlaxoSmithKline plc (ADR) (NYSE:GSK) and Shire, two U.K. drugmakers with existing footholds in rare diseases, have been rumored to be considering bids for BioMarin.
Even in the face of persistent buyout rumors, Bienaime said he didn’t anticipate interest from an acquirer until BioMarin reports later this year on final testing on GALNS, a treatment for the rare genetic bone disease Morquio A syndrome. Analysts predict peak sales for GALNS of $500 million. In April this year, after positive data from a Vimizim Trial (previously known as GALNS), BioMarin Submitted its Vimizim BLA to the U.S. FDA for the Treatment of MPS IVA and now the rumors are flying again, and the stock is just beginning to follow right along with the rumors. Michael Yee, an analyst at RBC Capital Markets in San Francisco, described GALNS as the biggest driver and most important data set of the year for BioMarin.
Given Bienaime’s statement that BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) would not be interested in an acquisition even at a 25% to 30% premium, that would set a buyout price in the neighborhood of $90 per share based on the recent high over $70. If BioMarin can lock up Catalyst’s CPP115, soon, that makes them even more attractive and may give them more leverage for a loftier price. Until a formal takeover offer is made, the predicted price is never known for certain, but based on BioMarin’s expected growth, it could easily be north of $100.
BioMarin is one to watch very closely.
colin simpson has no position in any stocks mentioned. The Motley Fool recommends BioMarin Pharmaceutical.
The article Exploding Pipeline Makes BioMarin Attractive Takeover Target originally appeared on Fool.com.
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