Mad Money

A Bet on Biomarin

Prescription Plan

There are few catalysts that move pharmaceuticals stocks as much as Food & Drug Administration approval of a much-anticipated drug. A thumbs-up from the government can send a company’s share price soaring. Of course, a thumbs-down can send it in the other direction too. Biomarin’sfate hangs in this same balance.

The Navato, Calif., company wants to bring to market a drug called Kuvan that was developed to treat pheylketonuria, which prevents the body from processing the essential amino acids in a lot of protein-containing foods. Cramer expects approval by the end of the year, “but I’m not 100% sure,” he said, “which is why this is still a speculative stock.”

There’s no treatment for PKU, as it’s called, other than a restrictive diet. So Kuvan would allow the 50,000 people in the developed world living with the condition to enjoy chicken, milk, eggs, cheese, even an ice cream sundae. Biomarin , which is working on the drug with Merck , would enjoy the benefits of Kuvan’s orphan-drug status, protecting the company from generic competition until 2015 in the U.S. and 2018 in Europe.

This isn’t the only drug Biomarin makes – it has treatments for MPS-I and MPS-IV as well – but if the FDA puts the kibosh on Kuvan, the stock “will get hurt badly,” Cramer said.

“Biomarin is the definition of a speculative trade,” he said. “I think you buy it for Kuvan, which should get approval and should be huge, although it still has a considerable amount of risk."

Questions for Cramer?

Questions, comments, suggestions for the Mad Money website?