Activist investor Elliott turns its attention to BioMarin

Hedge Fund Elliott Management has bought a big stake in BioMarin Pharma, causing a spike in the company’s share price, and started discussions with the company about its strategic direction, according to media reports.

The activist investor – which has agitated for change at other pharma companies, notably including GSK, Alexion, and Allergan – is said to have bought more than $1 billion in shares of BioMarin, currently in the throes of a change in chief executive and navigating the rollout of Roctavian (valoctocogene roxaparvovec), the first gene therapy for haemophilia A to reach the market.

The $2.9 million one-shot therapy has been cleared in the US and Europe, but uptake has been slow and sales are expected to be below $10 million this year, well below earlier predictions of $50 to $150 million.

Shares in the company – which last week named Genentech veteran Alexander Hardy to replace departing CEO Jean-Jacques Bienaimé – have fallen around 20% this year from almost $106 to a low of around $76 last week, but recovered to nearly $86 as news of Elliott’s investment emerged.

The recent fall in share price has led to speculation that BioMarin could become a takeover target, given that it has grown rapidly over the last few years with eight product launches and has revenue expectations of almost $3 billion for 2024. The group currently has a market cap of around $16 billion.

At the moment, there is very little information about Elliott’s intentions, although, the size of the investment suggests it is likely to have strong views about BioMarin’s current situation and future direction.

In the case of GSK, the hedge fund pushed strongly for new leadership – questioning whether former consumer health head Emma Walmsley was the right CEO for the group after that division was spun off – but was firmly rebuffed by the pharma group. One of the architects of the GSK campaign, Sebastien de La Riviere, left Elliott’s London office earlier this year.

BioMarin has not issued any comment on Elliott’s move, but analysts at William Blair have suggested that the investment group could be seeking cuts to the company’s R&D pipeline to reduce costs or a sale of the business.

The California-based drugmaker currently has eight drugs in clinical testing, including BMN 255 for hyperoxaluria in chronic liver disease in phase 2 and BMN 331 gene therapy for hereditary angioedema (HAE) in a phase 1/2 trial.