J.P. Morgan Reiterates Overweight On BioMarin (BMRN)

J.P. Morgan Chase & Co. is reiterating its Overweight rating on price target BioMarin Pharmaceutical Inc. BMRN, after the company held an R&D yesterday in New York. It has a $28 price target on shares. In a note to clients, J.P. Morgan writes, "R&D spend will increase to a hefty $200M in 2011. Based on conversations with investors, we don't believe this development comes as a big surprise even though it appears to be well ahead of Street forecasts (our prior 2011 assumption was ~$160M, incl ZyStor). BMRN expects to be roughly cash flow neutral in 2011. Although steep, we are comfortable with this level of spending given that the funds appear to be supporting quality programs with a relatively high probability of success (GALNS in particular). To reflect the updated guidance and ZyStor acquisition, we are lowering our EPS estimates to ($0.07) from $0.00 in 2010 and to $0.01 from $0.47 in 2011." Shares of BMRN closd at $22.15 yesterday, a gain of 3 cents.