The government gives orphan drug producers special incentives, such as enhanced patent protection and marketing rights. Because BioMarin's enzyme replacement therapies are the only products on the market for the rare genetic diseases that they treat, Cramer said, the company can charge "a great deal of money."
The company has three drugs on the U.S. market and a fourth in Europe, but Cramer said the reason to own the stock is for its pipeline, which includes three major catalysts coming in the second half of the year.
Cramer welcomed BioMarin CEO Jean-Jacques Bienaime to "Mad Money," calling the company one of the "single most exciting biotech companies I've ever had on the show." Bienaime described BioMarin's business model as the "opposite of bit pharma," in a sense, because it seeks a "very significant efficacy or safety improvement in a very small patient population."
He agreed with Cramer that because BioMarin's therapies are so effective, otherwise "stingy" health companies are willing to pay up for them. At the same time, said Bienaime, BioMarin's leading drug treats only 1,200 patients worldwide, "so it's never going to have a significant impact" on health companies' budgets.Because BioMarin's patient populations are so desperate for treatment, its development times are much shorter than the industry average. "Because patient population is so limited, regulatory authorities cannot ask us for a very large clinical trial size," Bienaime explained. Cramer told Bienaime that he's been "in awe" of BioMarin for a long time, calling it the son of Genzyme (GENZ), which Cramer said was "one of the biggest hits I have ever seen." BioMarin doesn't "need a takeover to make a lot of money," he said, "but I can't believe that one of these major pharmaceutical companies is going to let this company stay independent forever."
Off the ChartsIn his "Off the Charts segment, Cramer focused in on Nike (NKE), which is up 160% since its generational lows in March 2009 but is down 10% in the last six weeks alone. Its daily chart shows some "serious red flags," said Cramer, with the stock making a series of lower lows and lower highs since its early May peak at $113, which is a technical signal to sell. His colleague Dan Fitzpatrick, however, has a different take. To Fitzpatrick, the weakness in Nike's stock looks more like an imminently buyable pullback. That's because for the past two days the stock has been holding above two critical support levels. One is $100, which is a key psychological level of support, and the other is the 200-day moving average. The 200-day is a long-term measure of a chart's trajectory, Cramer explained. Above the line, a stock is a buy; below, a stock is a sell. Cramer said the technical story in Nike gets even better when you take into account the stock's trading volume. On June 13 and June 14, two big down days for the stock, Nike's volume increased to nearly twice the daily average. Since then volume is almost back to normal, and Nike is holding firm. To Fitzpatrick, this is a sign that last week's selloff was a "selling climax," said Cramer, and that everyone who wanted out of the stock already got out. Even better, the stock's weekly chart going back to 2009 suggests that Nike's recent breakdown is nothing more than a pullback to the 200-day moving average, which is also the 40-week moving average. Cramer pointed out that over the past three years, whenever Nike has tested this critical level the stock has held, making it a "terrific buying opportunity." So from a technical perspective, Fitzpatrick thinks Nike is a relatively safe buy as long as it stays above $100. If it falls below that level, Fitzpatrick says all bets are off. In terms of the fundamentals, Cramer called them "pretty darn good," which he said makes Nike a bargain on any pullback -- including below $100. Cramer thinks Nike's quarterly report, scheduled for next week, will be strong, but he said key to the stock is the Summer Olympics. Nike has historically outperformed the S&P 500 in Summer Olympics years, and Cramer expects this one to be no different. "When the Olympics come, the stock is going to take off and leave the S&P in the dust," he said. "I think Nike's a buy here."
Lightning RoundHere's what Cramer had to say about callers' stocks during the "Lightning Round": Activision (ATVI): "I think that business is dying on the vine. I want out." American Capital Agency (AGNC): "It's OK, but Annaly (NLY) at $17 is a better buy than AGNC at $32." Tractor Supply (TSCO): The short-sellers don't like this stock, Cramer said. "I think the business model is good. I know the stock's come down a lot, but it's a fine growth stock." EMC (EMC): Cramer prefers EMC to VMWare (VMW). "A little less wild, a little less crazy." Quest Diagnostics (DGX): "It is a fine company, but I'm not sure how it dovetails with what may happen with" the Supreme Court. Citigroup (C): "It's too low to sell," said Cramer, but it's also not his favorite bank.
Acorda's 'Internal Catalyst'Again Cramer turned to biotech for speculative ideas, saying that in this volatile environment, it's wise to seek out "small, relatively undiscovered companies that have their own internal catalyst." Biotech, he said, doesn't have "have to fret about the same big macro worries" that drive the rest of the market. He welcomed Acorda Therapeutics (ACOR) CEO Ron Cohen to discuss its multiple schlerosis drug Ampyra, which could have indications for other diseases including cerebral palsy and strokes. Cohen said Acorda has projected $255 million to $275 million in sales this year and notes that there are many people with MS who haven't tried the drug yet. Ampyra, which improves the ability to walk in some MS patients, "can be a really terrific, terrific thing," said Cohen. "Our challenge going forward is to make sure that as many people with MS who have a walking problem know about the drug and know that they should be asking their doctors to try it." As for Goldman Sachs' sell rating on Acorda, Cohen said that's just one analyst opinion, and it's not shared by many of the other analysts who cover the company. Cohen said Acorda is very excited about Ampyra's potential to treat other ailments and cited a successful trial in rats with chronic stroke, in which the drug improved limb function. Cramer encouraged viewers to check out Acorda, citing its profitability and the fact that it "has nothing to do with the economy." He said that today the economy "seemed OK, but we know better." "When the economy rears its ugly head again," said Cramer, "think about Acorda."
Retail TalesJ.C. Penney (JCP) has announced the departure of Michael Francis, part of CEO Ron Johnson's "dream team" intent on reinventing the retail chain. Now Johnson, who Cramer said "is way over his head" already, will take over merchandising in addition to the overall running of the stores. "Frankly," said Cramer, J.C. Penney "seems to have lost its way." Perhaps because J.C. Penney "has no raison d'etre" or because longtime customers don't understand what's happening, the result is "billions of sales up for grabs," said Cramer. And those sales are going to JCP's competitors: Target (TGT), Macy's (M), Wal-Mart Stores (WMT) and even Sears (SHLD). In another retail story, Cramer said that ever since Walgreen (WAG) "declared war" on Express Scripts (ESRX), it's been downhill for the drugstore chain -- and customers are fleeing to CVS (CVS). Tuesday, Walgreen announced a 45% stake in U.K. chain Alliance Boots. "How does spending a fortune to buy a piece of this global drugstore chain help reverse the defections to CVS?" Cramer wondered. Cramer acknowledged that retail is a tough business, but he said the directions that J.C. Penney and Walgreen are taking recently don't make a lot of sense to him. "These plans are terrific reasons to buy their competitors," he said. --Written by Rebecca Corvino in New York. To submit a news tip, send an email to: email@example.com. To watch replays of Cramer's video segments, visit the Mad Money page on CNBC.
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