Biomarin uses its deep expertise in enzyme-based treatments to target rare genetic diseases. The patient populations for these drugs may be small, but the selling price for each drug could be tremendous. The focus on niche diseases also means more limited competition. Although Biomarin has several drugs on the market, it's the company's promising pipeline that explains why this stock has surged in value. A key drug, PEG-PAL, which treats sufferers of phenylketonuria, or PKU, may not reach the market until 2015. Before then, Biomarin's GALNS, which also treats PKU, may get FDA approval in late 2013. Analysts at Morningstar anticipate that this drug will get approval and predict peak sales of $800 million annually. Even if that happens, these analysts still think shares are worth just $44, or roughly 20% below current levels. That's the result of a 10-year DCF analysis. In effect, this stock's tremendous run already reflects any good news yet to come. Life TechnologiesLife Technologies ( LIFE), which provides a wide range of lab tools for biotech scientists has seen its shares surge more than 50% since the summer of 2012, when management noted that the company may put itself up for a sale. Make no mistake, this is a "good" but not "great" business. Sales rose 5% in 2011 (to $3.8 billion) and 1% in 2012, and they are expected to rise just 3% in 2013 and 2014, according to consensus forecasts. Operating profits have never exceeded $650 million, meaning this stock trades for around 16 times likely peak cash flow. That's quite rich for a company with limited growth prospects. The recent move -- from $40 to $58 -- has left shares vastly overvalued, and there appears to be little upside, even if the company is sold. If Life Technologies doesn't get acquired, shares may disgorge all of those gains. To see these overvalued biotechs in action, visit the 4 Overvalued Biotech Stocks portfolio.