Is the Rally Ready to Begin for BioMarin Pharmaceutical? BMRN stock is consolidating on light volume prior to earnings. The company is projected to report earnings and revenue that are lower on a year-over-year basis. With a potential upside of over 46%, that could make BioMarin an attractive buying option.

Shares of BioMarin Pharmaceutical (NASDAQ:BMRN) are trading at light volume as the company prepares to deliver its first quarter 2021 earnings report on April 29, 2021. BRMN stock is down considerably from its 52-week high of $131.94.

It's always important to understand why a stock moves dramatically in one direction or another. In the case of BRMN stock, the drop largely came last summer. At that time news broke that its lead gene therapy candidate would be delayed. BioMarin is a leader in rare disease therapy and focuses on genetic disorders with high unmet medical needs. The drug candidate, Roctavian, is being developed to treat hemophilia A.

With so much attention being paid to the biotechs involved in the Covid-19 vaccine and therapeutic race, it's not surprising that BMRN stock dropped. However, after a rally of nearly 20% for the remainder of 2020, the stock is trading down nearly 7% for the current year.

But the analyst community is still bullish on BioMarin Pharmaceuticals. Unfortunately that hasn't translated into an increased stock price. The stock chart for BRMN stock shows some consolidation that is often a bullish indicator. With that in mind, let's take a look at why BioMarin may be ready to reward investors with some growth.

BioMarin Has Products On the Market

Many biotechnology companies are pre-revenue companies. This simply means that the company does not have any products on the market. That's not the case with BioMarin. BioMarin has several products on the market today. In fact, the company had over $1.8 billion in revenue in 2020. That was a 9% year-over-year increase.

But the lifeblood of any biotech company is its pipeline. Being a one-hit wonder may reward investors in the short term. However, what gets investors excited is the consistent revenue growth that comes from having multiple drugs on the market.

Roctavian is a gene augmentation therapy that is designed to treat hemophilia A, a disease that affects one in 5,617 males, according to the Centers for Disease Control and Prevention (CDC). Roctavian provides patients with the clotting factor that their own genes can't provide.

One of the company's most promising candidates beyond its hemophilia A drug is a candidate for achondroplasia, a disorder of bone growth that prevents the changing of cartilage to bone and is characterized by dwarfism.

Currently there are no approved treatments for this condition. And the company is awaiting FDA approval for its New Drug Application (NDA) which is expected in August of this year.

Delayed Does Not Mean Canceled

That means investors can take away two positives from the delay in BioMarin's hemophilia drug. First, a delay doesn't mean it won't make it to market. It just means that it will likely be launched in 2022 instead of 2021.

And here's why that may be worth the wait. According to some industry insiders, Roctavian could cost as much as $3 million per injection. That may sound like a negative, but you have to keep in mind that the current approved treatment for Hemophilia A must be applied anywhere from 100 to 150 times per year at a cost of up to $500,000.

So if Roctavin can be approved as a long-term treatment (I.e. one treatment and done) BioMarin will have a very compelling case to health insurers by showing a long-term savings.

BioMarin Is a Cautious Buy

BMRN stock is consolidating on light volume. And if the company meets analysts' expectations for earnings per share of 7 cents on revenue of $447 million, the stock may drift lower. Both of those numbers would be lower on a year-over-year basis.

That could make BioMarin an even more attractive buying option. And with a potential upside of over 46%, the time looks right to initiate a long position in BMRN stock.

Featured Article: Accumulation/Distribution