Biomarin Pharmaceutical

BioMarin posted second-quarter revenue of $990 million, a 20% increase from the prior year. Management raised its 2026 revenue outlook by 65 basis points to a midpoint of $3.9 billion and adjusted earnings per share by 100 basis points to a midpoint of $5 per share. Shares rose nearly 4% on Aug. 7.

Why it matters: Voxzogo's 14% revenue growth underscores the franchise's resilience. We believe BioMarin's established market position, extensive real-world experience, and strong position among younger patients, with more than 50% of new US starts under age 2, should help defend its market share as it faces competition from Ascendis Pharma and BridgeBio. BioMarin's metabolic conditions portfolio generated $695 million in revenue, up 25% year over year. Growth across every marketed product reinforces our view that the firm is becoming less reliant on any single franchise. Sales from Galafold and Pombiliti + Opfolda contributed $136 million in revenue, and this early success signals that management can successfully leverage its global commercial infrastructure to expand long-term revenue and operating margins.

The bottom line: We maintain our $90 fair value estimate and positive outlook for narrow-moat BioMarin. Shares are trading about 30% below our valuation. While the market remains focused on achondroplasia competition, we believe it is underestimating BioMarin's durable growth outlook and potential for margin expansion as revenue scales and Amicus synergies are realized. We forecast a 15% three-year compound annual growth rate. The Amicus deal helps diversify BioMarin’s portfolio beyond Voxzogo. We forecast Galafold and Pombiliti + Opfolda could reach peak sales of $1.4 billion and $1.2 billion, respectively, by the end of our 10-year forecast.

Coming up: We assign a 90% probability of approval and expect a 2027 launch for Voxzogo's expanded indication in hypochondroplasia, positioning it as the first approved therapy for this condition.

We have raised our fair value estimate to $90 per share from $83 for narrow-moat BioMarin.

In December 2025, BioMarin announced plans to acquire Amicus Therapeutics for $4.8 billion, adding two US- and EU-approved rare-disease therapies, Galafold (Fabry disease) and Pombiliti + Opfolda (Pompe disease). We see strong growth potential from leveraging BioMarin’s scale, global footprint, and commercial capabilities. We forecast BioMarin's total revenue to grow at a 15% compound annual growth rate over the next five years.

Fabry and Pompe are underdiagnosed diseases, and ongoing phase 3 studies for Pombiliti + Opfolda could allow expansion into younger patient cohorts. We project Galafold and Pombiliti + Opfolda to each exceed $1 billion in annual sales by the end of our 10-year forecast, representing about 30% of total company revenue in 2034.

We forecast Voxzogo sales for 2034 of about $1.9 billion, including $1.45 billion in achondroplasia and roughly $430 million (with an 80% probability weighting) in hypochondroplasia. With a US net price around $240,000, relatively flat expected global pricing, and more than 20,000 achondroplasia patients in BioMarin's commercial territories who still have open growth plates, we think the achondroplasia market has multi-billion-dollar potential. Still, other firms, such as Ascendis and BridgeBio, could launch drugs with better efficacy and more convenient administration profiles.

We see BioMarin as less exposed to the Inflation Reduction Act than its peers, given that less than 50% of its sales are derived from the US market and less than 10% of US sales go through Medicare.

In PKU, Kuvan sales are declining with the entry of US generic competition, and Palynziq's launch has been slowed by genetic center prioritization of patients with more severe genetic disorders. Overall, our model includes steady annual PKU sales exceeding $500 million, largely from Palynziq by year 10.

We rate the systematic risk surrounding BioMarin shares as below average and use a 7.5% cost of equity to align our capital cost assumptions with the returns that equity investors are likely to demand over the long run.

We assign BioMarin a Morningstar Economic Moat Rating of narrow thanks to its lucrative monopolies in several rare diseases and a strong commercial launch of Voxzogo (for achondroplasia), which could extend to multiple short-stature indications. BioMarin’s heavy research and development spending has historically kept ROICs below the cost of capital, despite several approved and successful rare-disease therapies. However, BioMarin has generated positive net income consistently since 2022, and its midcycle operating margin is in line with its peers. Voxzogo launched in the United States and the European Union in 2022, and its strong uptake is on track to move ROICs north of the cost of capital in 2025.

Similar to other biotechnology and pharmaceutical firms under our coverage, we think BioMarin faces environmental, social, and governmental risks related to US drug price-related policy reform and the ongoing potential for product governance issues (including litigation). However, less than half of BioMarin's revenue is derived from the US pharmaceutical market. The firm's focus on rare diseases and relatively flat global pricing insulates it from these pressures to some extent; therefore, policy reform risk does not affect our valuation or moat rating. Product governance issues (including litigation) also remain a risk. Still, given BioMarin's focus on life-saving rare-disease therapies, we don't think this risk is significant enough to capture in our valuation or moat rating.

BioMarin has historically operated in the market for ultra-orphan disease treatments. Aldurazyme, BioMarin's first product, was approved in 2003. Only 3,000 people in the developed world are afflicted with the life-threatening disease MPS I, but Aldurazyme's $200,000 price tag and market monopoly (thanks to its orphan drug exclusivity and difficult manufacturing) have made it a $200 million product. Naglazyme (an enzyme replacement therapy for MPS VI or Maroteaux-Lamy syndrome) was approved in 2005, and although a key patent expired in 2022, we don't see any Naglazyme biosimilars in development. We think Naglazyme will grow to a $500 million product in the long run, and BioMarin retains global rights to this product. We appreciate that Aldurazyme and Naglazyme do not face biosimilar competition despite expired patents, which keeps BioMarin’s patent exposure relatively minimal.

BioMarin’s enzyme replacement therapy, Palynziq (for adults with severe phenylketonuria, or PKU) was approved in the US in 2018 and Europe in 2019 and is mitigating the generic pressure on Kuvan, which received FDA approval in 2007. Vimizim, for Morquio A syndrome, was approved in 2014 and is BioMarin's largest drug, with annual sales of $700 million. Vimizim has patent protection through 2029 in the US and Europe, and we expect peak sales around $1 billion. While Brineura (approved in 2017 for CLN2 disease) is a smaller opportunity, we expect sales to gradually ramp north of $300 million as the treatment expands its reach to the prevalent population for this severe neurodegenerative disease.

BioMarin's new rare-disease drug for achondroplasia, Voxzogo, is quickly becoming a key product and diversifying the firm's revenue. BioMarin also has five additional skeletal indications for Voxzogo in hypochondroplasia, idiopathic short stature, Noonan syndrome, Turner syndrome, and SHOX deficiency. In the currently approved indication of achondroplasia, Voxzogo has an attractive global expansion opportunity. It is further supported by broad labels for early treatment with Voxzogo—with treatment starting from birth in the United States and treatment beginning at four months old in the European Union. We assign an 80% probability of approval to the hypochondroplasia indication, and it could reach the market in 2027.

BioMarin’s Palynziq, for the treatment of phenylketonuria, PKU, was approved in 2018 for adults who have this rare genetic disease. The US has accepted BioMarin’s priority review for Palynziq in adolescents (ages 12-17) with PKU, with a decision expected in February 2026. Approval would broaden the addressable patient base, and we project global sales approaching $800 million by the end of our 10-year forecast period.

BioMarin has several other enzyme replacements, antisense oligonucleotides, and small molecules in or approaching early clinical development. We do not include these programs in our model, but we are watching closely for initial efficacy data to determine a probability weighting for our sales forecasts.

BioMarin’s rare-disease markets are generally monopoly markets, allowing the firm to charge high-six-figure prices for chronic treatments. Enzymes to treat rare genetic diseases—including Aldurazyme, Naglazyme, and Vimizim—are quite difficult to manufacture reliably, as Genzyme showed with its viral contamination issues in 2009.

This, coupled with the fact that most of BioMarin's drugs hover below blockbuster status, could make them less profitable targets for generics firms, once the costs of manufacturing, clinical trials, and global marketing are tallied. Biosimilar competition to the firm’s older enzyme replacement therapies is still not on the radar despite expired patents, which we think is a sign of the strong intangible assets surrounding these therapies. Further in support of BioMarin's narrow moat rating, the firm’s products qualify for several years of market exclusivity thanks to their orphan drug status.

BioMarin's approved drugs have been granted orphan-drug status in the US and the EU, providing them with at least seven and 10 years of market exclusivity, respectively.

BioMarin's drugs target rare chronic conditions that often require treatment from a very young age, and while locating eligible patients on a global level is challenging, the firm has high patient retention rates.

With a growing portfolio in an attractive rare-disease niche and an acceleration of profit growth since 2022, BioMarin could be an acquisition target for pharmaceutical firms with pipelines to fill.

Diagnosis of very rare genetic diseases can be difficult, and BioMarin could have a hard time locating enough patients to recoup development and manufacturing costs.

BioMarin's gene therapy pipeline has faced setbacks, including a three-year delay in the US approval of Roctavian and the stalled development of PKU gene therapy BMN 307, as the Food and Drug Administration halted a trial to investigate potential cancer risks.

Viral contamination forced Genzyme to halt manufacturing of its enzyme replacement therapies in 2009, highlighting the manufacturing risk in the industry.