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BioMarin Pharmaceutical (BMRN)

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We are downgrading BioMarin Pharmaceutical Inc. (BRMN) to Underperform from Neutral purely on valuation grounds as we believe that the stock is overvalued at current levels. Moreover, we are disappointed by the initial sales ramp of the company's newest marketed product - Firdapse.

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.

These concerns have caused us to widen our loss estimate for 2012 by $0.32 to $0.39 per share. Since we believe the stock is overvalued at current levels, we advise investors to avoid the name. Our target price is $35.00.

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