NEW DIRECTIONAL CALL PLAYS
BioMarin Pharmaceutical Inc. - BMRN - close: 64.93 change: +0.94
Stop Loss: 61.95
Target(s): To Be Determined
Current Option Gain/Loss: Unopened
Average Daily Volume = 1.26 million
Entry on August -- at $---.--
Listed on August 11, 2014
Time Frame: 8 to 12 weeks
New Positions: Yes, see below
Why We Like It:
BMRN is in the healthcare sector, specifically the biotech industry. According to the company's press release they "develop and commercialize innovative biopharmaceuticals for serious diseases and medical conditions. The company's product portfolio comprises five approved products and multiple clinical and pre-clinical product candidates."
The company's strategy is "providing first-in-class or best-in-class treatments for patients with serious unmet medical needs, optimizing powerful biology with demonstrated potential and development clarity, accelerating approval process, strategic pipeline development."
BMRN's current product portfolio looks like this:
VIMIZIMâ„¢ for Morquio A syndrome (MPS IVA), NaglazymeÂ® for MPS VI, AldurazymeÂ® for MPS I, Firdapseâ„¢ (currently approved in the EU only) for LEMS, KUVANÂ® Tablets for PKU.
BMRN lists their current clinical pipeline as follows:
PEG PAL for PKU, BMN 673 for genetically defined cancers, BMN 701 for Pompe disease, BMN 111 for achondroplasia, BMN 190 for late-infantile neuronal ceroid lipofuscinosis (CLN2), a form of Batten Disease, BMN 270 for hemophilia A and BMN 250 for Sanfilippo Syndrome or MPS IIIB.
The company is developing a trend of beating Wall Street's earnings estimates. Back in February they reported results that bested analysts' estimates by a wide margin. They did it again in May. Wall Street was looking for a loss of 44 cents on revenues of $145.1 million. BMRN reported a loss of just 1 cent with revenues rising +18.5% to $151.6 million. Their most recent earnings report was July 30th. Analysts were expecting a loss of 41 cents on revenues of $159.2 million. BMRN announced a loss of 23 cents with revenues soaring +40.1% to $191.7 million.
Furthermore BMRN management raised their 2014 guidance following the July 30th report.
The stock peaked back in February this year. When the market corrected in March most of the high-growth and momentum names were crushed. BMRN was in that group that saw their stock hammered lower. Shares fell from almost $85 to $55.00. Fortunately the $55.00 level has been solid support. Shares have been building a significant base in the $55-65 zone for over three months.
Currently the rebound from its July lows is pushing the stock up against major resistance in the $65.00-66.00 area. This is where BMRN has resistance with its simple 200-dma and its trend line of lower highs. If the stock breaks out it could spark a significant move higher.
Tonight we're suggesting a trigger to buy calls at $66.55. We're not listing an exit target tonight but I will share that the point & figure chart is bullish with a $77.00 target.
Trigger @ $66.55
- Suggested Positions -
buy the Oct $70 call (BMRN141018C70) current ask $2.50
Option Format: symbol-year-month-day-call-strike