TCW Relative Value Mid Cap Fund initiates BioMarin position at $60

TCW Funds initiated a position in BioMarin Pharmaceutical Inc. (NASDAQ: BMRN) during the second quarter of 2026, a move detailed in the firm's latest investor letter for the TCW Relative Value Mid Cap Fund. The biotechnology company, headquartered in San Rafael, California, closed at $60.00 on September 30, 2026, reflecting a market capitalization of $11.61 billion at that date. TCW noted that BioMarin met three of five valuation characteristics at the time of initiation, specifically regarding its price-to-earnings, price-to-cash flow, and price-to-book ratios.

The investment firm reported that the fund returned 14.10% in the quarter, outperforming the S&P 500's 13.40% gain. Equities advanced during the period as the S&P 500 reached record highs, a trend supported by AI-related data center spending and earnings growth estimates that rose from 18.8% to 23.1%. TCW attributed the fund's positive results to portfolio stock selection, while noting that elevated valuations and thin margins for error have made markets sensitive to policy shifts and earnings reports. The firm stated it favors resilient, cash-generative businesses, a strategy that led to the addition of BioMarin to its holdings.

BioMarin focuses on developing therapies for rare, genetically defined diseases, with a portfolio that spans enzyme replacement therapies and small molecules. The company operates in over 60 countries and received an MSCI ESG2 score of BBB in the fund's documentation. Despite the firm's valuation-driven entry, hedge fund interest in the stock has declined recently; data indicates that 54 hedge fund portfolios held BioMarin shares at the end of the second quarter, down from 62 in the previous quarter. TCW did not list BioMarin among its top five holdings for 2026 in the letter.

The broader market context includes volatility stemming from a Federal Reserve leadership transition and Middle East tensions, though markets rebounded from first-quarter lows. TCW identified AI, digital infrastructure, and energy transition as supportive themes for the coming period. Conversely, labor and consumer concerns may be offset by OBBB-related stimulus measures. The firm emphasized that certain AI stocks offer greater upside potential and carry less downside risk compared to other positions, a sentiment reflected in its broader portfolio construction alongside its new stake in BioMarin.