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Morningstar | BioMarin's Rare Disease Portfolio and Pipeline Support a Narrow Moat

BioMarin is amassing a portfolio of genetic-disease therapeutics, making historical comparisons with Genzyme (now Sanofi) difficult to avoid. Commercialization and research and development expenses have kept BioMarin in the red, but we're confident in the profit-generating power of its rare-disease treatments, and we expect that non-GAAP profitability in 2017 will be sustainable. With a deep in-house pipeline and the ability to supplement growth with strategic acquisitions, BioMarin is in a strong position.BioMarin's life-saving therapies may serve only a few thousand patients globally, but with six-figure price tags on most products and high barriers to entry, we see this as a very attractive marketplace. Genzyme (now Sanofi) and BioMarin formed a 50/50 joint venture to market BioMarin's first drug, Aldurazyme, for the treatment of mucopolysaccharidosis I, or MPS I. BioMarin's MPS VI drug, Naglazyme, is maturing, but still seeing solid growth due to use in emerging markets like Brazil and higher (more expensive) dosing as young patients mature; we think peak sales will surpass $400 million. BioMarin is also well-positioned to treat the entire spectrum of patients with phenylketonuria, or PKU, one of the world's most common metabolic disorders. Kuvan is approved to treat mild to moderate PKU, and more potent drug Palynziq launched in 2018 in the U.S. to serve adult patients with PKU. PKU is well-diagnosed thanks to state-mandated newborn screening programs, and no alternative drug therapies exist. Vimizim in Morquio A syndrome and the launch of Brineura in 2017 to treat CLN2 disease should also drive growth. We are the most aggressive on our assumptions for vosoritide (which has shown the ability to restore normal growth rates in young patients with the most common form of dwarfism) and hemophilia A gene therapy valoctocogene roxaparvovec, or v-rox. We think each could launch in 2020 and generate peak sales north of $1 billion.