Unless you’re a medical professional seeing patients, attending research conferences, and working hands-on with the latest medical technology, it’s near impossible to keep up with the incredible advancements happening in the $1.27 trillion pharmaceutical industry. From blood tests that can detect Alzheimer’s disease to needle-free glucose monitors, the medical field is constantly developing innovative products that continue to amaze me.
Among those breakthroughs, there’s one area that I’m particularly interested in as an investor – orphan drugs. That’s because the companies that successfully bring orphan drugs to market can be some of the most profitable investments in the pharmaceutical space.
Remember that orphan drugs are developed to fight rare diseases that otherwise do not have a cure.
Under the Orphan Drug Act of 1983, in order to incentivize companies to create treatments for rare diseases, the FDA offers a whole host of incentives to help bring those drugs to market. Pharmaceutical companies like AbbVie Inc. (ABBV) and Bristol Meyers Squib (BMY) have taken full advantage of this program and made shareholders very happy as a result. But they’re not the only ones you need to be aware of.
I’ve identified a $6.77 billion company manufacturing life-saving drugs whose stock is massively undervalued. This stock is currently down about 20% from its 2021 high, and while it might be over-sold and overlooked right now, you don’t want to underestimate its profit potential.
It reminds me of another biotech company, BioNTech SE (BNTX), which was formed in 2008 to focus on cancer and other diseases. COVID-19 hit in 2020, BioNTech SE teamed up with Pfizer Inc. (PFE) to develop a vaccine, and something remarkable happened.
Investors that owned BNTX stock pre-COVID were rewarded with a jaw-dropping 1,000%-plus return by the summer of 2021, as shares surged from just $29.90 on January 30, 2020, to as high as $389.01 on August 1, 2021:
The stock I’m about to show you could very well bring you the same kind of rewards, especially for those who act now. That’s why I’m bringing it to your attention today as the latest company to add to your Future Tech Watchlist.
There’s a good chance you’ve never heard of this stock, but once you see the kind of profit potential it has, you’ll want to pay close attention from here on out…
The Biopharmaceutical Company You Haven’t Heard of Could Be Your Next Big Moneymaker
This latest company to deserve a spot on my Future Tech Watchlist is BioMarin Pharmaceutical Inc. (BMRN). Recognized by Forbes as one of the most innovative companies in the world four years in a row, BioMarin treats patients in over 78 countries. It currently has seven approved therapies on the market with multiple drugs in the pipeline to receive FDA approval.
BioMarin’s approved drugs include treatments for hemophilia A, which causes increased bleeding mostly in males, and Duchenne muscular dystrophy, which severely limits standing and walking.
Approved by the FDA and European Medicines Agency (EMA), its VOXZOGO drug is the first and only of its kind to treat the rare genetic bone disorder, achondroplasia, in children aged five and over. Commercial sales of the drug launched in the U.S. and Europe in the second half of 2021, and BioMarin expects this single product to add as much as $115 million in revenues this year.
Among BioMarin’s most valuable orphan drugs is its treatment for Batten disease, Brineura, which went to market in 2017. Batten disease isn’t just rare – it’s ultra-rare, only affecting between 1,200 to 1,500 patients worldwide. And if you need proof of just how much money an orphan drug like this is worth, Brineura is it, with a $702,000 per year price tag.
Then there’s Vimizim, which was designated an orphan drug in 2009 for the treatment of mucopolysaccharidosis (MPS), the underlying cause of Morquio A syndrome. Vimizim is currently BioMarin’s highest-grossing product, bringing in $623.1 million in sales for the company in 2021.
The most recent to receive orphan drug status is BioMarin’s BMN 331 drug, which is currently in preclinical trials for the treatment of hereditary angioedema (HAE), a rare disease affecting 1 in 50,000 people that causes severe swelling, which can sometimes lead to death.
Biotech companies and agencies go through a rigorous process to get approval from the U.S. Food and Drug Administration Office of Orphan Products Development to administer these drugs.
As of this writing, BioMarin has 17 orphan drug designations and a number of promising new treatments in the pipeline to look forward to:
Source: biomarin.com
The Right Leader in the Right Place at the Right Time
I’ve said it once, and I’ll say it again – leadership is one of the single most important signifiers of whether a company can make you money. And BioMarin has seen rapid growth under the leadership of CEO Jean-Jacques Bienaimé. The company grew from around a $450 million market cap in 2005 when Bienaimé first took his role to $14 billion in 2021.
Prior to him joining, BioMarin was without a CEO for nine months. The company needed direction, and Bienaimé jumped at the chance over objections from close friends.
As a leader, this CEO believes failure is necessary to see success. And considering the fact that drug candidates have a 90% failure rate, Bienaimé’s philosophy fit right in – leading him to be recognized as one of Healthcare Technology Reports’ Top 50 Healthcare Technology CEOs in 2020.
The persistence of this leader shows in the company’s performance. New product approvals for treatment received regulatory approval in Europe, the U.S., and Brazil in 2021.
Now, BioMarin is waiting for approval on the investigational gene therapy for hemophilia A from the anticipated Committee for Medical Products for Human Use recommendation in Q2 2022, followed by an EU decision in Q3 2022.
Persistence Pays Off
At the end of Q3 2021, BioMarin was down about $70 million in revenue from the year prior – and that had some investors underestimating the stock’s potential. But the launch of its VOXZOGO drug in the U.S. and Europe could be exactly what this company needed to turn 2022 into a blockbuster year for revenue growth.
There’s no question that this is one undervalued pharmaceutical stock to keep an eye on as it moves more and more groundbreaking treatments through the pipeline.
Cheers and good investing,
— Michael A. Robinson
Source: Strategic Tech Investor