BioMarin: Potential Voxzogo Competition Lowers Our Valuation, but Shares Look Attractive

BioMarin shares fell nearly 18% on Sept. 16 following solid data from a potential competitor to the firm’s key growth driver, achondroplasia drug Voxzogo. We’re slightly dialing back our fair value estimate to $83 per share, from $87, after assuming more significant competition that should slow BioMarin’s market share gains. Based on pivotal data, Ascendis’ TransCon CNP appears capable of generating similar increases in growth velocity as Voxzogo over a one-year period but with faster and clearer benefit to proportionality. In addition, the once-weekly injection could be more convenient for patients than the once-daily Voxzogo injections. Ascendis plans to file for approval in 2025, suggesting this could be a meaningful competitor by 2027. That said, we think BioMarin shares are trading at a slight discount to our new fair value estimate after this news. Our valuation does not include any explicit forecast for revenue from the firm’s pipeline over the next 10 years, and our revenue and operating margin assumptions over this period remain below the guidance outlined at the firm’s Sept. 4 investor day. We continue to see BioMarin’s portfolio of rare disease drugs supporting a narrow moat.