BioMarin stock tumbled Friday on a Food and Drug Administration setback for its experimental gene therapy in a rare disease.
Last year, the FDA halted testing for the gene therapy, citing concerns that it could cause cancer. Now, the agency says it needs new tests in animals before it will greenlight a new round of testing in people. This could delay the experimental drug by "several quarters," BioMarin Pharmaceutical said, according to analysts' reports.
The company is working on a treatment for phenylketonuria, or PKU. Patients with this disorder lack the enzyme needed to break down phenylalanine, an amino acid. This leads to dangerous accumulation of phenylalanine when the patient eats food with protein or aspartame, an artificial sweetener.
The setback doesn't impact Piper Sandler analyst Christopher Raymond's views on this specific drug, dubbed BMN 307. He maintained his overweight rating and 121 price target on BioMarin stock.
"But one does have to wonder about the 'knock-on' effect here," he said in a report. The FDA hosted an advisory committee meeting last year to address the issue of safety in gene therapy. Still, the agency "remains somewhat enigmatic with regard to its stance on (adenoviral vector) gene therapy."
BioMarin Stock Dives On Setback
On the stock market today, BioMarin stock skidded 6% to 84.86.
The safety issues stem from how BioMarin — and others — deliver their gene therapies. An adenoviral vector is a virus emptied of harmful materials and, instead, programmed to deliver genetic instructions. Some studies in mice have shown the vector instead integrates in other spots, leading to cancer.
BioMarin hasn't elaborated on what additional testing the FDA requires, RBC Capital Markets analyst Kennen MacKay said in a report to clients.
"We do see a timeline of 'several quarters' required to generate the data needed to fulfill the FDA's request as indicative of additional preclinical toxicology/oncogenesis (causer-causing) studies," he said. He expects BioMarin to run further testing in mice.
MacKay kept his sector perform rating on BioMarin stock. But shares fell below their 50-day moving average, according to MarketSmith.com.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
