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BioMarin Pharmaceutical (BMRN)

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We are downgrading BioMarin Pharmaceutical Inc. (BMRN) to Underperform from Neutral following the below-par showing of the company in the final quarter of 2010. Earnings were hurt by lower-than-expected revenues. We were disappointed with the continued weak performance of Aldurazyme and the slow Firdapse ramp.

Moreover, we expect cash burn to increase since the company is investing heavily in its pipeline. Any negative news regarding the pipeline would have an adverse impact on the stock.

The early/mid-stage pipeline at BioMarin also concerns us. These headwinds cause us to believe that there is little reason for investors to own the stock at current levels. Our target price is $24.00.

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