Shares of

BioMarin Pharmaceutical

(BMRN) - Get Report

rose Wednesday after the Food and Drug Administration approved its drug for a rare, hereditary disease and following word the company negotiated an agreement with dissident shareholders to head off a proxy fight.

At 30 minutes after midnight on the East Coast, BioMarin said the FDA approved Naglazyme, one of the drugs that Wall Street sees as the foundation for near-term growth for the Novato, Calif., company.

The drug, known during development as rhASB, is an enzyme therapy for a rare, inherited disease called Maroteaux-Lamy syndrome. The disease, also known as MPS VI, causes, among other things, heart damage and usually leads to death before age 40. BioMarin says an estimated 1,100 people in developed countries have the disease.

BioMarin plans to start marketing the drug in the U.S. within the next 30 days. The FDA has granted the drug "orphan drug" status, meaning BioMarin has seven years' marketing exclusivity. Orphan status is granted to products that treat rare diseases, providing companies with an economic incentive to develop the compounds.

BioMarin also is seeking European Union approval for the drug, and it expects to hear from the EU health regulators during the fourth quarter.

BioMarin's stock rose 20 cents, or 2.9%, to $7 in early trading Wednesday.

Peace in the Boardroom

BioMarin also said Wednesday that it had signed a truce with OrbiMed Advisors, an investment management and advisory firm specializing in health care, on a slate of directors to be voted on at BioMarin's annual meeting June 28.

Dissident shareholders, led by OrbiMed,

had criticized corporate strategy and stock performance. OrbiMed nominated three members for the seven-member board; BioMarin nominated a full slate of directors.

In a May 23 proxy, BioMarin's

newly named chief executive, Jean-Jacques Bienaime, assailed the "costly and divisive proxy fight" waged by OrbiMed. "I am absolutely convinced that having a split board ... would be divisive and disruptive, and could be very harmful to the momentum that has been generated at BioMarin," he said.

But on Wednesday, OrbiMed, which owns 8.2% of the stock through several investment vehicles, agreed to accept five of the BioMarin nominees -- including Chairman Pierre Lapalme and CEO Bienaime -- while BioMarin agreed to accept two of the OrbiMed-endorsed nominees.

"We are pleased to have reached an agreement that addresses OrbiMed's concerns and enables the company to move forward on behalf of all shareholders," said Bienaime in a prepared statement.

"We believe that this agreement represents a great result for all BioMarin shareholders and that the new nominees will significantly strengthen the board," said Samuel D. Isaly, managing partner of OrbiMed, in a prepared statement.

BioMarin also said that following the annual meeting, it will appoint an eighth director "that is reasonably acceptable to OrbiMed." Excluded from the agreement is Richard B. Brewer, a veteran pharmaceutical executive, who had been a member of the original OrbiMed slate.

Before aligning with OrbiMed, Brewer had been approached by the BioMarin board about becoming chief executive. According to a recent BioMarin proxy, Brewer didn't want the CEO's job, but he had indicated he would like to become chairman. Eventually, the BioMarin board said it didn't want Brewer as an officer or director.

In the Pipeline

The next big event for BioMarin should be the results of a clinical trial on Phenoptin, an experimental drug for mild to moderate forms of the inherited metabolic disease phenylketonuria, which can lead to severe neurological damage. The clinical trial should be completed by the end of the year.

This drug has attracted the attention of the Swiss biotech company

Serono

(SRA)

, which

recently signed a deal with BioMarin to help develop and market Phenoptin and another experimental drug, Phenylase, which also is being examined as a treatment for phenylketonuria. BioMarin says Phenoptin "may also be useful" in treating diabetes and cardiovascular diseases.

BioMarin has two products on the market. In partnership with

Genzyme

(GENZ)

, it markets Aldurazyme, an enzyme replacement therapy for a rare, inherited fatal disease called MPS I that produces many debilitating symptoms and can kill by age 10. BioMarin also sells Orapred, a treatment for children suffering from respiratory inflammation caused by asthma.