Biotech stock BioMarin (BMRN) gapped above a buy point and is now trading in a buy zone.
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On Wednesday, shares of BioMarin gapped up over 7% in strong volume and traded above a 92.86 buy point. When a stock gaps above a buy point, the buy zone starts from the first five-minute high on the day of the gap.
Since August, the biotech stock had been building a double-bottom base. Leading up to the breakout, the stock had been rising in higher volume, a good sign.
The stock’s relative strength line also went nearly vertical over the past few weeks. The stock is trading nicely above its 50-day moving average and its 200-day line, according to MarketSmith.
BioMarin broke out on news that the FDA said it wouldn’t hold an advisory committee meeting to discuss its proposed hemophilia A gene therapy. These advisory committees gather to discuss the benefits and risks of experimental drugs and make nonbinding recommendations to the FDA. With that step eliminated, the review process moves forward.
Biotech Stock’s Growth Accelerates
The California-based company reported a strong acceleration in year-over-year earnings and sales growth in the most recent quarter. Earnings rose from 18 cents a share in the same quarter a year ago to 45 cents a share in the recent September-ended quarter. That’s growth of 150%.
Q3 revenue rose 24% to $505.3 million. In the prior quarter, earnings and sales were up 9% and 6%, respectively. Acceleration in growth is a top quality investors want to see in stocks to buy and watch.
While full-year earnings are expected to fall 49% in 2022, analysts expect an EPS jump of 210% in 2023.
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