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Canaccord Genuity on Apple, BioMarin, and Tesla

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Apple sells 3 million iPads in the three days, BioMarin shares jump on genetic-disorder drugs, and Tesla races higher on production rate announcement.

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The following are excerpts from Canaccord Genuity analysts' commentaries.

Apple (NASDAQ:AAPL): Wow, that's a lot of punches to the throat.

Apple announced it has sold 3 million iPads in the three days since the launch of the iPad Mini. Canaccord Genuity Tech Analyst Michael Walkley estimates Apple will sell 9.25 million iPad Mini units in the December quarter and 40 million units in F2013. Walkley believes the iPad Mini has raised the bar relative to lower-priced competing tablets with impressive hardware specifications, competitive pricing, and the leading software ecosystem that includes over 275k iPad-specific applications. The iPad Mini hardware specs include: 4G LTE support, A5 processor, 7.9" display at 1024x768 resolution, iSight 5mp rear-facing camera, FaceTime HD front camera, and 10 hours (9 hours - 4G LTE) battery life.

Over the weekend, AllThingsD reported that it costs Apple $188 to manufacture the device. Is innovation at Apple stronger than ever? While many chuckled at late-night talk show host Jimmy Kimmel's take on the new iPad Mini (which aired last week), Kimmel may not be too far off the mark:

First came the iPod, then a slightly thinner iPod, then a tinier iPod, then a taller, thinner iPod, then a taller, thinner iPod that shuffles your songs, then a pink one, a blue one, a green one, then an even smaller iPod, then a wider iPod. [After then, came] an iPod you can touch, then an iPod you can talk on, then an iPod you can talk on with a G on it, then a shorter, fatter iPod, then a shorter, fatter iPod that shuffles, then a thinner iPod you can talk on with a 4 on it, then a gigantic iPod you cannot talk on, then a gigantic iPod you cannot talk on that's a little faster, then a white one, then a taller, thinner iPod you can talk on, and now a bigger but not gigantic iPod you cannot talk on...Don't forget to buy a new charger.

In light of Hurricane Sandy, Kimmel said anybody in New York or New Jersey who stands in line for an iPad Mini this weekend should be "punched in the throat."

BioMarin Pharmaceutical (NASDAQ:BMRN): Met main goal.

Shares of BioMarin Pharmaceutical jumped after the company said a late-stage trial of its experimental genetic disorder drug, GALNS, met the main goal of improving patients' walking ability when administered weekly. The rare genetic disorder is known Morquio A Syndrome, which is caused by the deficiency of a particular enzyme, leading to skeletal dysplasia, short stature, and joint abnormalities. There is currently no approved treatment. Based on the positive results from the Morquio A study, BioMarin plans to seek regulatory approval for GALNS in the first quarter of 2013. Analysts stated that the trial data was strong enough for an approval, especially given the lack of treatment options for the disorder.

It was also highlighted that GALNS is seen as the most important drug in the BioMarin's pipeline, with the potential to double the company's revenue. Following the results of the study, an analyst at JP Morgan said, "We view the result as clearly positive for BioMarin and see it as a best-case outcome."

Tesla Motors (NASDAQ:TSLA): Vroom?

Electric car maker Tesla Motors raced higher after saying that it was on track to reach an annual production rate of 20,000 for its Model S sedan in December. The company also said that it has reached the key 200 car/week production rate it needs in order to be operating-cash-flow positive. That's versus 100/week at the end of 3Q, and 5/week at the beginning of the quarter. Tesla expects the manufacturing rate to double this month to 400/week, which will get it to the 20,000 per mark. Recall, production of the Model S, Tesla's first mass-produced car, began on June 22. The company also said that by the end of the current quarter it would be halfway to its goal of a 25% gross margin. The positive outlook overshadowed Tesla's report of a wider Q3 loss. The company reported an adjusted loss of $0.92 a share, compared with a year-earlier loss of $0.55. The company ended the third quarter with $109 million in cash. After the quarter ended, it raised $222 million, bringing its total available cash to $330 million.

Commenting on the quarter, Chief Executive Elon Musk said that in the Q3 Tesla passed through a risky period as it ramped up to mass produce a car for the first time in its history. "Tesla is really past the point of high risk," he said. "Several months ago, I said that the coming several months would really be the test for Tesla and the classic phrase of going through the valley of death. I feel as though we are through that valley at this point."

Editor's note: For more information on Canaccord Genuity, click here.
No positions in stocks mentioned.
Canaccord Financial and its affiliated companies may have a Corporate Finance or other relationship with the companies mentioned and may trade in any of the Designated  Investments mentioned herein either for their own account or the accounts of their customers, in good faith and in the normal course of market making. The authors have not received, and will not receive, compensation that is directly based upon or linked to one or more specific Corporate Finance activities, or to coverage herein.
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