This week Jim Cramer has been on a search for the next generation of biotech companies, the ones that shot through the roof in 2014 and could be the best play for 2015.
This weekend, the big-dog specialty biopharmaceutical company Shire announced that it will acquire NPS Pharmaceuticals, at a 51 percent premium to where it was trading before. NPS is a developer of orphan drugs that treat ultra-rare diseases.
If there is one thing that the Shire acquisition tells Cramer, it is that big pharma has finally figured out that there is enormous value potential available in companies within the orphan drug space.
One of those companies is BioMarin, which is widely considered the top orphan drug developer. It helps to develop enzyme replacement therapies for rare genetic diseases.
In Cramer's perspective, BioMarin has the strongest pipeline of orphan drugs that exist. It also announced on Thursday that it would acquire Prosensa for $840 million. Prosensa sports a drug treatment for the fatal genetic condition Duchenne muscular dystrophy.
BioMarin upped its guidance for 2015, indicating that it is confident with what's in the pipeline. The "Mad Money" host spoke with company CEO Jean-Jacques Bienaime to find out more.
"The launch is going better than we anticipated around the world. The feedback we are getting from clinicians and patients about the benefits they are observing with the drug is very positive," said Bienaime.
With big pharma recognizing the value of orphan drug companies, Cramer worries about the ability for a company like BioMarin to stay independent. The CEO commented on the staying power of BioMarin and its opportunity for growth in the next five years.
"We have been managing this company to grow and stay independent. We have growing revenues; we will soon report 2014 revenues of over $700 million. We believe that we will reach $1 billion in revenues in the next two to three years."
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BioMarin has gained 41 percent since Cramer last spoke with the CEO in September. However, Cramer also agrees that there is more value to come.
In the context of how Shire valued NPS, Cramer estimated that BioMarin could be worth $22 billion—significantly higher than its current $14.4 billion market cap.
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