What does BioMarin’s voucher sale mean to Knight Therapeutics?

Today BioMarin (NASDAQ:BRMN) announced it had sold its FDA priority review voucher to Regeneron (NASDAQ:REGN) for US$67.5 million. Regeneron and its partner Sanofi plan to share the cost of the voucher and use it for their Biologics License Application (BLA) submission for their dyslipidemia product, alirocumab. The voucher grants the holder an expedited-review with FDA, shortening the review process to 6 months from the standard-review of 10 months.

There have only been four vouchers ever issued by FDA and Montreal-based Knight Therapeutics (TSX:GUD) holds one of them. In fact, next to its war chest of $200 million plus in cash, it is the most valuable asset held by the company. Knight received the voucher earlier this year after the FDA approved their drug Impavido for three forms of leishmaniasis, a rare tropical parasitic disease.

Until today’s news from BioMarin, investors in Knight have had to rely on analyst estimates for the potential value of the voucher. These estimates have been around $100 million. How will investors react to news that BioMarin has sold its for $67.5 million? Perhaps investors should focus on the supply of vouchers rather than the price.

With one sold, that leaves three vouchers outstanding. The non-Knight vouchers are hold by Novartis and Janssen (Johnson & Johnson). It seems more likely that these huge health care companies will use these vouchers themselves rather than sell them. That leaves one voucher for sale – Knight’s.