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Wedbush Cuts Price Target on BioMarin Pharma (BMRN) Following Announced Sale of Talazoparib to Medivation (MDVN)

August 25, 2015 6:55 AM EDT
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Price: $87.34 -1.43%

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    22 Buy, 10 Hold, 0 Sell

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Wedbush maintained a Neutral rating on BioMarin Pharmaceutical Inc. (NASDAQ: BMRN), and cuts the price target to $131.00 (from $139.00), following the announced sale of talazoparib to Medivation (MDVN-OUTPERFORM) for a total of $570MM. BioMarin expects to receive $410MM upfront, up to $160MM in milestone payments and mid-single digit royalties on sales of talazoparib.

Analyst Liana Moussatos commented, "BioMarin announced that it has reached an agreement to sell talazoparib, its PARP inhibitor, to Medivation (MDVN-OUTPERFORM) for a total of $570MM plus mid-single digit royalties. BioMarin expects to receive $410MM upfront, up to $160MM in milestone payments and mid-single digit royalties on sales of talazoparib. In addition, at the close of this transaction, Medivation will be responsible for all costs associated with the ongoing and future development. Recall talazoparib is currently in a Phase 3 trial (EMBRACA) in patients with germline BRCA mutated breast cancer and is expected to complete enrollment in the first half of 2016. We believe BioMarin selling this asset now at an apparent bargain to Medivation allows it to focus on its core strengths in rare diseases. Despite the reduction in total value from a potential $1.4+ billion in gross peak annual sales to mid-single digit royalties plus milestones, we believe the terms of the agreement provide a decent ROI on the ~$179MM ($18MM acquisition cost plus $11MM milestone, and ~$150MM in development costs) already invested."

For an analyst ratings summary and ratings history on BioMarin Pharmaceutical Inc. click here. For more ratings news on BioMarin Pharmaceutical Inc. click here.

Shares of BioMarin Pharmaceutical Inc. closed at $119.68 yesterday.



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