VOXZOGO Expansion And BMN 351 Progress Will Open New Markets

Key Takeaways

• Strategic initiatives and pipeline prioritization aim to enhance operating efficiency and achieve long-term revenue growth, despite increased R&D expenditure.
  
• Global expansion and targeted commercialization efforts, especially for VOXZOGO and enzyme therapies, drive top-line revenue growth while maintaining profitability.
  
• Increasing competition, reliance on new patient growth, and regulatory delays pose risks to BioMarin's VOXZOGO revenues and overall financial targets.

Catalysts

A biotechnology company, engages in the development and commercialization of therapies for life-threatening rare diseases and medical conditions in the United States, Europe, Latin America, the Middle East, the Asia Pacific, and internationally.

• BioMarin has strategic initiatives such as its $500 million cost transformation program and prioritizing pipeline candidates like BMN 351 and BMN 333, potentially leading to improved operating efficiency and the ability to achieve ambitious mid
• and long-term revenue growth targets.
  
• The global expansion of VOXZOGO for achondroplasia, expected to grow significantly, coupled with potential expansion into hypochondroplasia and additional skeletal conditions by 2027, supports continued growth in top-line revenue.
  
• Despite increased R&D expenditure in 2025, the company expects to maintain strong revenue growth from existing commercial products such as VIMIZIM and PALYNZIQ, which should sustain and potentially increase profit margins through 2027.
  
• Strategic global expansion and targeted commercialization efforts, like those for enzyme therapies in markets such as Brazil, aim to align geographic revenue distribution, further driving revenue growth, while maintaining significant profitability.
  
• The upcoming clinical results from programs like PALYNZIQ for adolescents and the advancement in Duchenne muscular dystrophy and other pipeline products indicate potential for revenue growth, supporting projections for high single-digit CAGR and long-term revenue targets.

BioMarin Pharmaceutical Future Earnings and Revenue Growth

Assumptions

• This narrative explores a more pessimistic perspective on BioMarin Pharmaceutical compared to the consensus, based on a Fair Value that aligns with the bearish cohort of analysts.
• The bearish analysts are assuming BioMarin Pharmaceutical's revenue will grow by 4.9% annually over the next 3 years.
• The bearish analysts assume that profit margins will increase from 15.0% today to 21.9% in 3 years time.
• The bearish analysts expect earnings to reach $720.0 million (and earnings per share of $3.61) by about April 2028, up from $426.9 million today. The analysts are largely in agreement about this estimate.
• In order for the above numbers to justify the price target of the more bearish analyst cohort, the company would need to trade at a PE ratio of 26.6x on those 2028 earnings, down from 27.8x today. This future PE is greater than the current PE for the US Biotechs industry at 19.6x.
• Analysts expect the number of shares outstanding to grow by 0.47% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 6.46%, as per the Simply Wall St company report.

BioMarin Pharmaceutical Future Earnings Per Share Growth

Risks

• BioMarin's financial outlook could be affected by the increasing competition from therapies like infigratinib, which poses a risk to VOXZOGO, their key revenue product for achondroplasia, thus potentially impacting future revenues.
  
• The performance of BioMarin's enzyme therapies is subject to fluctuations in international ordering patterns and government purchases, posing risks to revenue consistency for these therapies.
  
• BioMarin's reliance on new patient starts and expansion into new geographies for VOXZOGO growth emphasizes the importance of successful regional market penetration and could affect future growth. Failure to achieve growth in these new regions could negatively impact overall revenues.
  
• BioMarin's business development strategy to strengthen mid
• to long-term growth using BD activities may not yield expected results if pipeline additions do not complement or enhance existing revenue streams.
  
• The possibility of delays in the regulatory approval process for new therapies under development, like VOXZOGO expansions or PALYNZIQ for adolescents, present risks that could impact BioMarin’s ability to meet its revenue targets and financial goals.

Valuation

• The assumed bearish price target for BioMarin Pharmaceutical is $81.87, which represents one standard deviation below the consensus price target of $96.87. This valuation is based on what can be assumed as the expectations of BioMarin Pharmaceutical's future earnings growth, profit margins and other risk factors from analysts on the more bearish end of the spectrum.
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $126.0, and the most bearish reporting a price target of just $65.0.
• In order for you to agree with the bearish analysts, you'd need to believe that by 2028, revenues will be $3.3 billion, earnings will come to $720.0 million, and it would be trading on a PE ratio of 26.6x, assuming you use a discount rate of 6.5%.
• Given the current share price of $61.93, the bearish analyst price target of $81.87 is 24.3% higher.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.