Analysts offered a strong defense for young biotech
Tuesday, a day after a physician's comments concerning Kuvan sent shares down more than 11%.
On Monday, Cowen and Co. hosted a call featuring three experts discussing phenylketonuria (PKU).
Comments made by respected PKU expert Harvey Levy, MD
, about a light response to an outbound newsletter to bring patients back into the clinic, sent patient-uptake jitters through BioMarin shares.
Analysts say that while the comments were certainly fair and come from a highly regarded source, the reaction in the stock reaction may be not-so-fair.
On Monday shares fell as low as $28.75, a pre-Kuvan launch level.
"We believe investor conclusions for slower-than-anticipated uptake of Kuvan, which were made based on one of the experts' comments, ignore BioMarin's significant core opportunity and Kuvan's rapid near-term uptake in adolescents and teenagers, the patient segment our experts believe need Kuvan the most," wrote Rodman and Renshaw analyst Vernon Bernardino in a Tuesday note to investors titled, "Don't Buy the Slow Kuvan Uptake but Buy on Weakness."
Similarly, Wachovia's Aaron Reames, who reiterated an outperform rating, wrote: "We believe this is an over reaction and that there is momentum left in the name."
Also on Tuesday, Leerink Swann's Joseph Schwartz, who has an outperform rating on the stock, said that survey data indicate a strong launch for the drug. Amid his notes, Schwartz wrote that "patients who were considered lost to follow-up have already presented at 33% of clinics for responsiveness testing, even before BioMarin begins exercising its core competency of market development."
BioMarin shares were recovering Tuesday, up 78 cents, or 2.7%, at $29.90 in recent afternoon trading.
"While clearly not a uniformly positive call, we do not believe it was nearly as negative as the market perceived it to be," wrote Cowen analyst Phil Nadeau.