BioMarin may be M&A target with activist Elliott pact - analysts

BioMarin (NASDAQ:BMRN) rose 2.4% after the company expanded its board, prominent activist Elliott Management entered into a cooperation pact and the board agree to establish a strategic review committee.

"We believe today’s announcement lends further support to the view that M&A will be an important part of the value creation plan," Bernstein analyst William Pickering, who has a market perform rating and $80 price target on the BMRN, wrote in a note on Wednesday.

Bernstein's Pickering, along with Guggenheim's Debjit Chattopadhyay, highlighted that the three new board members have M&A experience.

"Each of the new board members brings substantial industry M&A experience," Pickering wrote.

BioMarin (BMRN) on Wednesday announced it entered into a cooperation agreement with Elliott, one of its biggest investors, and "agreed to customary standstill, voting, and other provisions."

"Today’s announcement suggests that BioMarin is willing to consider all options to maximize shareholder value, including potential business development activity," Citi analyst David Lebowitz, who has a neutral rating and $85 price target on BMRN, wrote in a Wednesday note. "In our view, additional visibility on the true market potential of hemophilia A gene therapy Roctavian might be a predicate to the consummation of a variety of transactional activities."

Guggenheim's Chattopadhyay also believes M&A might be a possibility. Guggenheim has a buy rating and $105 price target on BioMarin (BMRN).

"Given the unpredictability of GTx, and the likely limited commercial uptake for Roctavian, a GTx spin-off followed by a potential eventual sale of the core business, leveraging its near-term $3-$4B franchise revenue opportunity, might be in the cards."