CONVERTIBLE PROMISSORY NOTE

Exhibit 10.38

CONVERTIBLE PROMISSORY NOTE

SECTION 1. Principal Repayment . BioMarin Pharmaceutical Inc., a Delaware corporation (the “ Company ”), having an address at 105 Digital Drive, Novato, California 94949, for value received, hereby promises to pay to Medicis Pharmaceutical Corporation, a Delaware corporation (the “ Holder ”), having an address at 8125 N. Hayden Road, Scottsdale, Arizona 85258, on the earlier to occur of: (a) the Option Closing Date (as defined in the Securities Purchase Agreement dated as of May 18, 2004, by and among the Company, BioMarin Pediatrics Inc., the Holder and Medicis Pediatrics, Inc. (formerly known as Ascent Pediatrics, Inc.), as amended, supplemented or otherwise modified from time to time in accordance therewith (the “ Securities Purchase Agreement ”); and (b) August 17, 2009 (such date being referred to hereinafter as the “ Maturity Date ”), in lawful money of the United States of America, in immediately available funds, the lesser of (1) the principal amount of TWENTY-FIVE MILLION DOLLARS ($25,000,000.00) or (2) an amount constituting the aggregate principal amount of all Advances (as defined below) outstanding hereunder on the Maturity Date, in each case, plus any accrued and unpaid interest due thereon as hereinafter provided. Such Advances shall be endorsed from time to time by the Holder on the Schedule of Advances attached hereto, provided , however , that the failure of the Holder to make any such recordation shall not affect the obligations of the Company to make a payment when due of any amount owing under this Note. For purposes of clarity, this Note is not a revolver and thus, no more than an aggregate principal amount of $25,000,000 may be borrowed under this note irregardless of whether any portion of the $25,000,000 amount is then-currently outstanding or has been repaid. This Convertible Promissory Note (this “ Note ”) has been issued pursuant to that certain Settlement Agreement and Mutual Release dated as of January 12, 2005 by and among the Company, BioMarin Pediatrics Inc., a Delaware corporation and wholly-owned subsidiary of the Company, the Holder and Medicis Pediatrics, Inc., a Delaware corporation (formerly known as Ascent Pediatrics, Inc.) and a wholly-owned subsidiary of the Holder.

SECTION 2. Advances . Subject to the terms hereof, the Holder shall, from time to time after July 1, 2005, make advances (collectively, the “ Advances ” and each an “ Advance ”) of funds available hereunder to the Company. Holder shall not have any obligation to make any Advance to Company under this Note from and after the earliest of the following to occur:

(a) the date on which the Company enters into a contract or agreement to effectuate a Change in Control (as defined herein) of the Company;

(b) the date of consummation of a Change in Control of Company;

(c) the Company fails to pay any principal of or interest on any Advance (including scheduled interest payments, mandatory prepayments or the payment due at maturity), when such principal or interest becomes due and such failure to pay has not been cured within five (5) days after the date such payment is due;

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(d) a proceeding shall have been instituted in a court of competent jurisdiction in respect of the Company seeking (i) an involuntary or voluntary case under any applicable bankruptcy, insolvency, reorganization or other similar law now or hereafter in effect, (ii) the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator, conservator (or similar official) of the Company for any substantial part of its property, or (iii) the winding-up or liquidation of the Company’s affairs; provided that with respect to any such proceeding, case or appointment that is instituted without the application or consent of the Company, such proceeding, case or appointment shall have continued undismissed or unstayed and in effect for a period of 30 or more days;

(e) the Company admits in writing its inability to pay its debts as they mature; or

(f) the Maturity Date.

The Company shall give the Holder written notice (each, an “ Advance Notice ”) requesting an Advance, which shall specify the amount of such Advance and the date that the Company desires to receive such Advance, which date shall be not less than four (4) business days after the date of delivery of such Advance Notice to the Holder. Upon receipt of any Advance Notice, the Holder shall make the Advance to the Company as described therein on the date set forth therein in accordance herewith. Notwithstanding any term or provision of this Note to the contrary, the Holder shall not be required to make an Advance hereunder if the amount of such Advance together with the aggregate principal amount of all Advances then outstanding pursuant to this Note exceeds $25,000,000.00.

SECTION 3. Payments . The Company promises to pay interest on the outstanding principal amount of each Advance from the date such Advance is made until payment in full of the principal amount thereof in accordance herewith, which interest shall accrue at the per annum rate equal to the sum of (a) the Three-Month LIBOR plus (b) 1%. “ Three -Month LIBOR” shall mean, as of the date of any determination thereof, the interest rate then most recently published in the “Money Rates” section of The Wall Street Journal as the three-month London Interbank Offered Rate. The initial Three-Month LIBOR shall be determined on the date the first Advance is made and thereafter the Three-Month LIBOR shall be adjusted on the first day of the calendar quarter with respect to which such interest accrues in accordance with the immediately preceding sentence. Interest shall be due and payable quarterly in arrears not later than the tenth day (each such date, an “ Interest Payment Date ”) of the calendar quarter immediately following the calendar quarter during which such interest has accrued and shall be calculated on the basis of a 365 day year for the actual number of days elapsed. The initial Interest Payment Date shall be the tenth day of the calendar quarter immediately following the calendar quarter in which the first Advance is made. On the Maturity Date, all outstanding principal and accrued and unpaid interest are due and payable.

Notwithstanding any other provision of this Note, interest on the indebtedness contemplated by this Note is expressly limited so that in no contingency or event whatsoever, whether by acceleration of the maturity of such indebtedness or otherwise, shall the interest contracted for, charged or received by the Holder exceed the maximum amount permissible under applicable law. If from any circumstances whatsoever fulfillment of any provisions of this Note or of any other document evidencing or pertaining to the indebtedness contemplated

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hereby, at the time performance of such provision shall be due, shall involve transcending the limit of validity prescribed by law, then, ipso facto, the obligation to be fulfilled shall be reduced to the limit of such validity, and if from any such circumstances the Holder shall ever receive anything of value as interest or deemed interest by applicable law under this Note or any other document evidencing or pertaining to the indebtedness contemplated hereby or otherwise an amount that would exceed the highest lawful rate, such amount that would be excessive interest shall be applied to the reduction of the principal amount owing under this Note or on account of any other indebtedness of the Company to the Holder, and not to the payment of interest, or if such excessive interest exceeds the unpaid balance of principal of this Note and such other indebtedness, such excess shall be refunded to the Company. In determining whether or not the interest paid or payable with respect to any indebtedness of the Company to the Holder, under any specific contingency, exceeds the highest lawful rate, the Company and the Holder shall, to the maximum extent permitted by applicable law: (a) characterize any non–principal payment as an expense, fee or premium rather than as interest; (