BioMarin shares plunge on Kuvan concerns

Shares tumbled $3.39, or 10.7 percent, to $28.06 in midday trading. The stock has traded between $18.85 and $41 over the past 52 weeks.

Late Tuesday, the Novato, Calif.-based drug developer said a tripling in revenue pushed its second-quarter profit, prompting a boost in full-year revenue expectations. The better-than-expected performance came mainly from Naglazyme and Aldurazyme, which are treatments for genetic enzyme deficiencies.

Meanwhile, Kuvan sales of $12 million fell short of Wall Street's forecast for $14 million. The drug is used to treat phenylketonuria, also known as PKU, a genetic disorder.

"Management indicated that attrition remains low, with 88 percent of patients remaining on Kuvan after 90 days of treatment," Jefferies & Co. analyst Dr. Adam A. Walsh said in a note to investors. "We believe it is too early to predict long-term compliance and predictions by PKU specialist vary widely."

He also said a "summer slow down" of patient referrals was anticipated by the company. He reaffirmed a "Buy" rating but cut his price target to $35 from $45.

Overall, Wall Street brushed aside the weaker-than-expected Kuvan sales and instead focused on the company's growth surge during the quarter. The company swung to a second-quarter profit of 4 cents per share as revenue more than doubled to $64.2 million. The results topped Wall Street forecasts of 3 cents per share on revenue of $66.3 million.

Meanwhile, BioMarin now expects to earn between $30 million and $42 million during the full year. It previously anticipated earnings would range between $28 million and $40 million for the full year. Revenue is now expected to range from $288 million to $326 million from $271 million to $316 million.

"With Kuvan under a microscope, we understand the disappointment from the second-quarter miss and (Kuvan) guidance revision," said Robert W. Baird analyst Christopher Raymond, in a note to investors.

But, he reaffirmed an "Outperform" rating on the stock, saying sales upside from Naglazyme and Aldurazyme could more than offset any weakness in Kuvan sales.