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Biotech is Back

June 24, 2003

Great news on the product front and a rebound in the capital markets has re-ignited investor enthusiasm…

San Francisco, CA - June 24, 2003

Strong earnings, significant product approvals, steady deal flow, and now interest blossoming on Wall Street (again)-the biotech industry is showing that it has what it takes…and investors are buying," said G. Steven Burrill, CEO of Burrill & Company, a San Francisco-based life sciences merchant bank. Since the start of 2003, the Burrill Biotech Select Index has risen nearly 50%, outperforming both the DJIA (up 12% YTD) and the NASDAQ (up 25% YTD). "While we haven't seen this level of investor enthusiasm since the genomics "bubble", we're by no means back to those extraordinary values nor on the cusp of a new bubble…just at the start of a recovery from the massive biotech devaluation of the last three years," Burrill commented. "At the end of June 2000, the market capitalization for the biotech industry was $475 billion, while at close of business on June 16, it was $301 billion, still off by more than 35%," he said (see charts below).

"What's interesting is that biotech has far more intrinsic value than it did in 2000. Biotech sales and revenue in 2002 was $42.7 billion versus $32 billion in 2000, an improvement of more than one third. More biotech products have now been approved and there are nearly 400 products in late stage clinical trials," noted Burrill. "The platform companies took a huge beating last year, but the Burrill Genomics Index has gained 39% since the start of 2003 and that recovery has been based on improved sales, companies meeting their expectations, and technology validation, not hype," he said.

"Indeed, with the ImClone debacle, we saw the surrogates for value that Wall Street had always embraced, disintegrate," recalled Burrill. "That, coupled with economic uncertainty and global insecurity made for a very rough ride on Wall Street. As a result, the biotech industry was forced into 'survival mode' and although some companies had to close their doors, others restructured, refocused and refinanced," he said.

"Biotech is definitely back in vogue, but what we've seen thus far is mostly the recovery of lost value, rather than industry expansion," he noted. "There have been no IPOs in this industry for four consecutive quarters and the question on everyone's lips is 'when will the IPO window reopen?' Our answer: during the next several months…we expect to see as many as a dozen IPOs before the end of 2003…barring any major economic or global surprises," Burrill said.

"There is still tremendous upside in this industry," added Burrill. "Right now the publicly traded US biotech industry is worth approximately 0.8x the value of Pfizer and Merck combined (see chart below). "One has but to look at biotech's recent track record with the FDA to see that we are at a turning point. We've seen a number of novel drugs receive the FDA's blessing in 2003 and the 'new' FDA commissioner, Mark McClellan is delivering on his promise to facilitate a speedier drug approval process," Burrill said.

Pharma vs. Biotech Industry ($B)

Company 6/17/03 12/31/02 12/31/01 12/31/00 12/31/99 12/31/99
Pfizer 285* 188 251 290 124 158
J&J 163 159 181 146 129 114
Merck 142 125 133 216 153 166
Eli Lilly 78 69 88 105 75 98
BMS 56 46 112 145 125 129
Pfizer/Merck 427 313 384 506 277 324
Total US Biotech 321 219 366 425 312 149
Industry 0.8x 0.7x 1.0x 0.8x 1.1x 0.5x
*Note: Pfizer/Pharmacia merger completed in April 2003

Important FDA Approvals during the first half of 2003:




Date Approved
Aldurazyme BioMarin/Genzyme Enzyme replacement therapy for use in patients with Hurler-Scheie forms of mucopolysaccharidosis I and for patients who have the Scheie form with moderate to severe symptoms 4/30/03
Amevive Biogen Immunosuppressive dimeric fusion protein for the treatment of adult patients with moderate to severe chronic plaque psoriasis who are candidates for systemic therapy or phototherapy 1/30/2003
Fabrazyme Genzyme Enzyme replacement therapy for use in patients with Fabry disease 4/24/03
FluMist MedImmune Intranasal influenza vaccine 6/17/03
Iressa AstraZeneca Epidermal growth factor receptor blocker for use as last ditch therapy for patients with advanced or metastatic non-small cell lung cancer 5/5/03
Velcade Millennium Proteasome inhibitor for use in the treatment of multiple myeloma patients who have received at least two prior therapies and demonstrated disease progression on the last therapy 5/13/03
Xolair Genentech/Novartis/Tanox Antibody-based treatment for asthma which works by disabling a naturally occurring antibody called lgE that triggers inflammation 6/20/03

A Bump in Fundraising
In addition to biotech's comeback on the publicly traded markets, the industry has managed to raise $5.3 billion with an additional $3.4 billion in partnering deals (as of June 20)-in line with the first half of 2002 and $2+ billion over the total amount raised during 2H02 (see chart below). "The worst of the revaluation and restructuring is largely behind us with companies such as Orchid BioSciences and Paradigm Genetics managing to regain NASDAQ compliance. But the bar for financing has been raised much higher and we're hoping to open the IPO window before year-end," noted Burrill.

Biotech fundraising to date:

  Public Private Other Financing
Partnering* Total
IPO Secondary
PIPEs Debt Venture
2Q03 $0 $130 $525 $2,365 $602 $12 $3,634 $2,146 $5,780
1Q03 0 517 204 152 549 217 1,639 1,203 2,842
4Q02 0 180 77 517 528 50 1,352 2,354 3,706
3Q02 0 183 136 202 560 12 1,093 1,242 2,335
2Q02 325 33 321 857 889 2 2,427 2,875 5,302
1Q02 120 583 373 3,675 711 114 5,576 1,025 6,601
2002 445 979 907 5,251 2,688 178 10,448 7,496 17,944
* Partnering figures based on total deal value of disclosed transactions, worldwide.
Note: 2Q03 ending 6/20

"We are also beginning to see a slight swell in VC investmentŃ•$602 million to date in this second quarter of 2003, compared to $549 million in 1Q 03 and $528 million in 4Q 02 … but the most popular financing vehicle for the biotech industry of late, is convertible debt, which accounted for $2.5 billion of the total $5.3 billion that the industry has raised year to date in 2003," said Burrill. "Since the start of Q2 03, the industry has raised $2.4 billion using this financing mechanism where the investor is, essentially, 'paid to wait'," he noted. "Cephalon sold $750 million of zero coupon debt based on the company's growth prospects. Sales for Cephalon's products, including Provigil for narcolepsy and Actiq for pain, grew a whopping 106% in 2002 over 2001 and the company is predicting 41% sales growth in 2003," he said. "Now valued at $2.4 billion, (versus $750 million had the deal been struck in November 1999) investors have shown new interest," Burrill said.

"The current market rally and its attendant volatility, low interest rates, and relatively favorable terms are making debt pretty attractive right now for some companies," explained Burrill. "But there is also something to be said for the quality of companies that are doing these debt transactions. Cephalon is profitable, Celegene, Connetics, and Guilford have marketed products, while NPS, CV Therapeuitcs, and Durect all have products either in Phase III or already awaiting approval," he noted.

Over $700 million has been raised in PIPEs (Private Investment in Public Equities) since the start of the year compared to $213 million raised during the last half of 2002. Explained Burrill," These public securities are made available to private investors who often find them attractive because they are 'sold' at a discount to the market price, yet provide a reasonable vehicle to liquidity. Although typically venture capitalists invest in private firms in their early stages and exit when the companies go public, PIPES offer an appealing alternative when the window is shut and publicly traded stocks are cheap."

Convertible debt offerings during the first half of 2003:

Company Ticker Symbol Month Value ($US M)
Cephalon CEPH Jun 750
Celgene CELG May 400
Icos Corp ICOS Jun 250
NPS Pharmaceuticals NPSP Jun 170
Amylin Pharmaceuticals AMLN Jun 150
Axcan Pharma AXCA Feb 125
BioMarin Pharmaceutical BMRN Jun 125
CV Therapeutics CVTX Jun 100
Corixa CRXA Jun 85
Connetics Corp. CNCT May 80
Cell Therapeutics CTIC Jun 75
Guilford Pharmaceuticals GLFD Jun 60
Durect DRRX Jun 50
SuperGen SUPG Feb 21

Follow-ons during the first half of 2003:

Company Ticker
($US M)
Price at
Price at
Amylin Pharmaceuticals AMLN 175 16.60 25.45 53%
The Medicines Co. MDCO 85.5 17.50 22.73 30%
Martek Biosciences MATK 75.6 30.25 47.02 55%
BioMarin Pharmaceutical BMRN 75 10.00 12.20 22%
Inspire Pharmaceuticals ISPH 67.5 13.50 13.81 2%
Antigenics AGEN 62 9.92 15.45 56%
Cerus CERS 54.3 9.05 8.40 -7%
AtheroGenics AGIX 52 6.25 14.29 129%

Private placements during the first half of 2003:

Company Month Amt Raised
Exelixis Jun 71
Ribozyme Pharmaceuticals Feb 48
Rigel Pharmaceuticals May 46
Corixa Jun 30
Discovery Laboratories Jun 28
Dendreon Jun 27
AVI BioPharma Inc May 23
DepoMed Apr 20
Geron Apr 18
Vivus Inc. May 18
Targeted Genetics Jun 18
Neose Technologies Feb 17
Novavax Feb 17
Orchid BioSciences Apr 16
Aradigm Feb 15
Aphton Apr 15
Hollis-Eden Pharmaceuticals Jun 15
OxiGene Jun 15
Repligen May 13
Introgen Therapeutics Jun 12
Boston Life Sciences Mar 10
Onyx Pharmaceuticals Feb 10
Questcor Pharmaceuticals Jan 10
Cypress Bioscience Inc Apr 10
EntreMed Apr 10
Ariad Pharmaceuticals May 10

M&A and Alliances
We've seen several impressive M&A announcements since the start of the year. On June 23, Idec Pharmaceuticals agreed to a $6.8 billion all-share merger with Biogen, making this the second largest biotech/biotech deal ever (Amgen's $10 billion acquisition of Immunex being the largest). Earlier, in April, Scios shareholders approved Johnson & Johnson's bid to acquire the company for $2.4 billion. Then, in May, Chiron agreed to acquire UK biotech firm, PowderJect Pharmaceuticals for about $880 million to expand its vaccines business by gaining rights to that company's profitable flu vaccine.

While many think that massive industry consolidation is at hand with big pharma and big biotech gobbling up their smaller brethren for a bargain price, that scenario is, in our view, unlikely. There will continue to be a "marquee" M&A transaction each year and we'll also continue to see companies merge to broaden their product portfolio, integrate their technology forward, or obtain another company's cash reserves. But a wholesale game of "musical chairs" will not take place-mostly because 1+1 doesn't always add up to 2; in distressed times, sometimes it's 1+1=.8.

M&A transactions during the first half of 2003:

Acquirer Acquired Value
($US M)
Idec Pharmaceuticals Biogen Inc. 6,400
Johnson & Johnson Scios Inc. 2,400
Chiron Corp. PowderJect Pharmaceuticals 878
Novartis AG Idenix Pharmaceuticals 255
Cell Therapeutics Inc. Novuspharma S.p.A 236
Cephalon Inc. SIRTeX Medical 161
Celltech Group Oxford GlycoSciences 159
Genzyme General Genzyme Molecular Oncology 124
Johnson & Johnson 3-Dimensional Pharmaceuticals 88
Caliper Technologies Zymark Corp. 57
Gene Logic TherImmune Research 52
Aeterna Laboratories Zentaris AG 51
Straumann Holding Biora AB 47
OSI Pharmaceuticals Cell Pathways 42
GenVec Diacrin 40
Protein Design Labs Eos Biotechnology 38
Aventis S.A. Axcan Pharma 23

Selected biotech collaborations during the first half of 2003:

Biotech Pharma Description Qtr Value
($US M)
Regeneron Pharmaceuticals Novartis AG The companies partnered to develop REGN's IL-1 Trap, which is in Phase II testing to treat rheumatoid arthritis. 1Q 350
Idenix Pharmaceuticals Novartis AG Novartis will license 2 HBV compounds and has the option to jointly develop NM283 which is in Phase I/II trials to treat HCV 1Q 250
Tularik Amgen Amgen will select cancer targets and certain leads against them from Tularik to co-develop under a five-year deal 2Q 125
Medivir GlaxoSmithKline Glaxo received exclusive development and marketing rights to Medivir's nucleoside analogue reverse transcriptase inhibitor to treat HIV infection. 2Q 100
Guilford Pharmaceuticals Inc. Pfizer Pfizer received exclusive worldwide rights to a class of inhibitors from Guilford to treat neurodegenerative diseases. 2Q 92
Affymetrix Roche $70M upfront from Roche in exchange for up to 18 years of non-exclusive access to Affy's GeneChip technologies 1Q 70
Flamel Technologies GlaxoSmithKline GSK licensed Micropump controlled-release technology from Flamel 1Q 47
Leo Pharma Galen Pharma Galen will develop and market Leo's Dovobet, a combination of calcipotriene and betamethasone dipropionate, in the U.S. 2Q 47
GW Pharmaceuticals Bayer AG GW Pharmaceuticals granted Bayer exclusive U.K. marketing rights to its sublingual cannabis extract spray, which is under U.K. review to treat neuropathic pain and symptoms of multiple sclerosis. 2Q 41
Astex Technology AstraZeneca Astex will use structural screening methods to generate drug leads for AstraZeneca 1Q 40
Phytopharm Yamanouchi Pharmaceutical Phytopharm granted Yamanouchi an exclusive license to develop and commercialize its PYM50028 to treat Alzheimer's disease in Japan and certain other Asian countries. 2Q 33
Acadia Pharmaceuticals Allergan Allergan and Acadia partnered to develop therapeutics based on Acadia's G protein-coupled receptor and nuclear receptor targets. The deal will initially focus on ophthalmic therapeutics. 2Q 32
Biosensors International Guidant Corp. Guidant will obtain an exclusive license from Biosensors to IP covering everolimus-eluting stents 1Q 20
Affymetrix Perlegen Sciences Affymetrix broadened its access to Perlegen's technologies 1Q 18

Excitement in the Wings
There are now more than 900 drugs in development worldwide to treat cancer, which kills 1,500 Americans a day and leaves survivors weakened and vulnerable. At this year's American Society of Clinical Oncology (ASCO) meeting there was plenty of excitement. Genentech announced positive results for its monoclonal antibody (Avastin) against vascular epithelial growth factor (VEGF) in patients with colorectal cancer and saw its stock increase by 50%, over $12 billion in market cap in a day. Merck KgaA also reported good results for Erbitux (see chart below), also driving up the value of ImClone. "Acceleration in cancer has been enormous. Well over 100 different cancer genes have been identified and researchers now have a better understanding about how the disease arises and manifests itself," noted Burrill.

Targeted CRC therapeutics:

Company Product Target
Abgenix ABX-EGF EGFr
AstraZeneca Iressa EGFr
Chiron Tezacitabine Ribonucleotide reductase
Genentech Avastin VEGF
Genta Genasense Bcl-2 mRNA
GlycoGenesys GCS-100 Cell surface
ImClone Erbitux EGFr
Immunomedics CEA-Cide CEA
Millennium Velcade 20S/26S
Schering AG PRK767/ZK 22584 VEGFr
Sirna Angiozyme VEGFr

Another advance in the war against cancer has been the development of various vaccines. Some are designed to stimulate the body's immune system to fight off cancer by recognizing antigens on tumor cells and launching a killer strike back. Provenge from Dendreon is such a vaccine for the treatment of prostate cancer. The company recently reported that a Phase III trial had shown that the vaccine delayed the onset of disease-related pain in patients with a certain level of hormone resistant prostate cancer.

Geron is also advancing a universal cancer vaccine which targets telomerase, a protein that gives cells "immortality". The vaccine uses the patient's immune cells which are spliced with genetic signals from telomerase and returned to the patient. The hope is that the treated cells will prompt other immune cells to destroy telomerase.

Also being developed are fusion vaccines comprised of fusions of patient-specific cancer cells and dendritic cells. Vaccines are being tested to determine T-cell reactions to various antigens using marker therapies as well. In fact, there are more than 50 vaccines in development for cancers, two-thirds of which are aimed at raising a cellular response.

"There's also been progress on the evolution of a vaccine for AIDS. Phase III trails for AIDSVAX, developed by VaxGen, delivered mixed results," noted Burrill. "While it was ineffective in white and Hispanic populations, it worked rather well in Asian and black populations. VaxGen's study, involving some 5,400 individuals over three years was 78.3% effective in blacks and 68% effective in Asians," he said.

In addition to the VaxGen product, there are some 14 additional AIDS vaccines being researched. One of them, a vaccine that targets the C-strain of the virus (developed by AlphaVax) is the first vaccine to be approved for human trials in South Africa. The trials which are set to begin later this year pending a safety evaluation, will involve 96 individuals divided equally between the US and South Africa. Incidence of the C-strain of the AIDS virus is most prevalent in southern Africa and occurs rarely in Europe and the US.

"The funding for bioterrorism countermeasures is also expected to give the vaccine segment a big boost," noted Burrill. "A number of companies are already creating vaccines as countermeasures (see chart below) The biggest award has been a $770 million contract to Acambis (Cambridge, U.K, and Cambridge, MA) by the Centers for Disease Control and Prevention and Health and Human Services for production of a new smallpox vaccine with fewer side effects.

Selected Companies involved in Developing Vaccines as Countermeasures:

Companies Vaccines
Acambis Live vaccines (smallpox)
Avant Immunotherapeutics Attenuated bacterial vaccines (anthrax)
Coley Pharmaceuticals Vaccines using proprietary CpG oligos to stimulate immune-response recombinant subunit vaccines (anthrax)
Dor BioPharma Microencapsulation delivery for recombinant subunit vaccines (anthrax)
DynPort Vaccine Prime contractor for the DoD's Joint Vaccine Acquisition Program
Macrogenics Proteomics and antibody engineering vaccines (plague, smallpox, anthrax)
Microscience Oral anthrax vaccine
Siga Technologies Live recombinant vaccines (anthrax, smallpox)
Vical Naked DNA vaccine (anthrax)

With the World Health Organization (WHO) predicting that the incidence of diabetes will increase from approximately 177 million to 370 million by 2030 and the US Centers for Disease Control and Prevention saying that one in three Americans born in 2000 will develop the condition, there is tremendous pressure to find better ways to treat diabetes. The total number of drugs addressing the disease has mushroomed from 93 in 1995 to 272 currently. "Although less than half of these compounds have moved into human trials, there are a dozen in final Phase III testing including an inhaleable insulin that uses technology from Nektar (formerly Inhale Therapeutic Systems) and an inhaled insulin from Aradigm and Novo Nordisk. If either drug passes muster with the FDA, it would improve the lives of diabetics dramatically," he explained.

"There are thousands of additional products in the pipeline-not just medications but also novel diagnostics, genetically modified seeds, novel nutraceuticals, bioindustrial enzymes and more-giving further credence to the industry's inevitable potential," noted Burrill.

The Political Scene
The swift victory in Iraq has freed up the US government to turn its attention to other matters, some of which are likely to have a dramatic effect on the biotech industry. Topping the agenda were the approval of versions of the Project BioShield Act in the House and the Senate, the former authorizing about $5.6 billion over the next ten years and the latter calling for a permanent funding stream of around $6 billion for ten years. Completion of the legislation may yet take time as any differences between the various bills are hashed out. Meanwhile many biotech and pharmaceutical companies have criticized the proposed plan saying that it doesn't go far enough. "Industry wants amendments such as higher guaranteed markets and fewer restrictions than the current legislation calls for," explained Burrill. "Unlike cancer drugs or those for AIDS, diagnostics, therapeutics and vaccines addressing bioterrorism threats could well sit unused…and the industry needs to know they'll be compensated for their efforts regardless," he said.

Medicare finally hit the front burner and both houses of Congress are contemplating legislation that would serve as a compromise between the Democrats' desire to preserve the traditional program where the government runs the show and President Bush's preference to overhaul Medicare with the private sector providing services. In June, the Senate Finance Committee voted 16 to 5 to send Medicare legislation (S. 1) to the floor for a vote. Both S. 1 and legislation that was presented by the House Republican Leadership provide for the same drug benefits whether seniors opt for Medicare of a preferred provider organization.

Of importance to the biotech industry are provisions in both bills that address the controversial Outpatient Prospective Payment System (OPPS) which sets Medicare reimbursement for drugs. The Senate voted to include an amendment that would prohibit the Secretary of HHS from publishing relations that prospectively adopt a functional equivalence or similar standard "for the purpose of limiting or reducing payment under Medicare." The House bill also prohibits the HHS Secretary from this action unless the HHS Secretary uses the regulatory process to develop criteria , including coordination with the FDA and scientific community to show the clinical relationship and functional equivalency. S. 1 also would establish reimbursement at 95% of the average wholesale price for existing drugs (including biologics) purchased before January 1, 2004.

The Office of Generic Drugs estimates that by 2010, branded drugs that are generating some $20 billion in revenues will lose patent protection. That coupled with President Bush's plan to speed the introduction of generics may be good news for patients seeking inexpensive alternatives, but it also places big pharma and big biotech in an unenviable position (patent protection is critical to the long-term valuation of innovative biotech companies). Companies that are expected to be the big winners are the generics manufacturers such as Teva Pharmaceutical Industries, Mylan Laboratories, Taro Pharmaceutical Industries and Pharmaceutical Resources Inc.

On May 19, the US Supreme Court ruled that the state of Maine could implement its new law to lower prescription drug prices for the poor and uninsured. "The move may have some heavy implications for the drug industry. Billions of dollars in revenue may be at stake if more states follow this route and there are currently 18 states or more that are pursuing laws that are similar to those of Maine's," noted Burrill.

The outbreak of Severe Acute Respiratory Syndrome (SARS) was nature's own bioterrorism. But the good news is that within several weeks of the outbreak, the scientific community was able to decipher the genetic signature of the virus and make it freely available to the scientific world to accelerate the development of diagnostics, therapeutics, and vaccines. Indeed, by early June customized micro array chips enabling researchers to rapidly resequence different isolates of the virus were made available by Affymetrix. By mid-June, Roche had developed a diagnostic test for the disease.

Burrill's Outlook for 2003…
What is in store for 2003? "In these first five months of 2003 we've seen biotech's market capitalization rise by 34%. At the end of May 2003, the industry's market cap was $301 billion," Burrill said. "While the last market momentum (1999-2000) was fueled by the excitement surrounding the completion of the human genome, the return of investor enthusiasm this time around is being fueled by very real progress: product approvals, clinical triumphs, partnerships, and revenue and earnings growth that are yielding results. Although we are bound to see some profit taking as a result of this rally, we can expect a strong second half of the year with a few trends unfolding:

  • Industry consolidation will continue on the biotech and the pharma side as companies seek to increase technology integration, achieve dominance and jockey for power.

  • At the same time, the US will continue to move towards a paradigm where players in the healthcare system have more buying power than ever before. As a result, we'll see more big economic transactions where bundling and incentives are used to get the best bang for the buck.

  • After two years of downward revaluation, the surviving technology platform companies are on the path to building growing, sustainable businesses. These companies will gain value in the year ahead based on positive revenue trends and earnings. As investors begin to grasp that not only products but also the tools used to discover and develop them can create sustainable business models, we'll see investor interest in these technology companies return as companies increasingly integrate along the drug discovery value chain.

  • There will be continued interest in the intersection of biotechnology, information technology, and nanotechnology-all-important components to understanding biology on a systems level. We will see more intra-industry integration as companies link disparate technologies and different pieces into a grander whole. In addition, we'll see the an increased use of toxicogenomics to rout out the losing compounds far earlier in the discovery process-an event that is likely to save considerable time and money in development.

  • We also will see increased investment in biotech outside the pure healthcare side where biotech will be used to improve our "wellness", our food system, our energy resources, and our environment.

  • Stem cells and therapeutic cloning will continue to be scrutinized by various government bodies around the world. While the scientific community has succeeded in stalling an outright ban by emphasizing that new medical treatments and solutions for devastating illnesses are emerging from this research, the fear is that the "religious right" may win out over the "pragmatic center" on this emotionally charged issue.

  • The link between diagnostics and medical treatment will increase as the Mayo Clinic and other major clinics pursue a more personalized, information-based approach to treating patient populations. Pharmacogenomics will continue to gain ground as a valuable tool first for determining the best patient outcomes in clinical trials and ultimately for building more tailored therapeutics.

  • We will also see diagnostics become less hospital-centric and more patient-centric in their product development. We'll see increased interest in the use of patient specific diagnostics and we'll see a rise in the number of individuals who will be willing to pay for those tests out of their own pocket.

  • On the agbio side, GM acreage will grow and we are likely to see more penetration of GM crops in South America and, hopefully, in Europe as consumers and decision makers are educated about the economic and health benefits associated with biotech products.

  • We are still not out of the woods with the "plants as factories" debate in the US and elsewhere in the world where concerns about cross-pollination and the co-mingling of crops has folks worried about inadvertently eating industrial enzymes or therapeutic proteins in their corn flakes.

  • The nutraceuticals segment will continue to gain ground in 2003 as we discover more correlative evidence that regimens involving herbs, supplements, and specific foods are very adjunctive to regaining and maintaining health. As we understand more about how various active ingredients contained in plants and herbs affect human health, we'll see more people embracing nutrition as part of their overall health program. Wellness is an industry with lots of new players participating.

  • The international markets, which typically lag behind the US, will continue to go through more revaluation and restructurings in 2003. As they go for their next round of funding, many of the European biotech firms will find that both the private and public markets in Europe will be slower to return to value than the US. However, many European biotech companies are successfully moving products through clinical trials and building value.

  • We will see increased investment in Asia, Scandinavia, and parts of Eastern Europe where acceptance and interest in biotech is strong and there is a powerful belief that biotech can solve huge problems affecting human health and welfare.

  • We can expect to see a considerable sum of money pour into anti-bioterrorism efforts ranging from the discovery of new vaccines and therapeutics to the development of powerful portable biosensors capable of detecting minute levels of toxins. The multi-billion dollar bioterrorism/biodefense spend will be a "moon shot" for the biotech industry and most of the R&D will be applicable beyond immediate homeland security needs. Both R&D funding and new markets will spur this biodefense segment."

  • The SARS incident has been a grim reminder of how ill-prepared we are for a plague-be it released purposefully by terrorists or innocently by Mother Nature. While vaccines and cures may yet be years away, SARS has brought into focus the need to generate novel diagnostics and therapeutics to address new diseases. It will be interesting to see if the concern surrounding SARS will translate to stronger push to address pandemic diseases in third world nations.

"Biotech is the one industry that's poised to grapple with every major human and environmental challenge from global hunger to global warming. We have moved a long way from the initial mapping of the human genome-indeed the scientific community was able to sequence the SARS virus in a matter of days. The industry not only survived the economic challenges of 2002, it moved forward dramatically breaking new scientific ground in human healthcare, diagnostics, agriculture, nutrition, energy, industrial processes and materials, as well as the environment. Now the table is finally set for many of the companies in this industry to generate revenues and make profits . But investment in biotech is not just about money, it's about humanity, health, and the preservation of the planet," said Burrill.

G. Steven Burrill has just published his 17th annual report on the biotech industry, Biotech 2003 Life Sciences: Revaluation and Restructuring gives readers a comprehensive and detailed analysis of the events that advanced, augmented, and in some cases, altered biotechnology forever.

In Biotech 2003 you will find:

  • 2002 Industry Financials for the US, Europe, Canada and Australia

  • Analysis of pivotal activities taking place in healthcare, diagnostics, nutraceuticals, agbio and industrial biotechnology

  • Industry highlights including: new product approvals, advances in technology, scientific breakthroughs, regulatory challenges, strategic partnering and M&A activities and the capital markets

  • Almost 500 pages of analysis, data and graphs

To review the table of contents and order a copy for $295 plus shipping and handling, visit the Burrill & Company website at

Burrill & Company
Burrill & Company is a life sciences merchant bank, focused exclusively on companies involved in biotechnology, pharmaceuticals, diagnostics, human healthcare and related medical technologies, wellness and nutraceuticals, agricultural technologies, and biomaterials/bioprocesses.

Venture Capital
The Burrill family of venture capital funds, with over $450 million under management, includes the Burrill Life Sciences Capital Fund, the Burrill Biotechnology Capital Fund, the Burrill Diagnostics Fund, the Burrill Agbio Capital Fund and its successor-the Burrill Agbio Capital Fund II, the Burrill Nutraceuticals Capital Fund, and the Burrill Biomaterials/Bioprocess Capital Fund.

Strategic Partnering
Burrill & Company assists life science companies to identify, negotiate and close strategic partnerships providing access to resources, technologies or collaborations essential for executing their business plans.

Spin-outs/Spin-ins-Burrill & Company works with major life science companies to spin-out internal assets and capitalize on their value, ranging from the outright sale of products or businesses to creation of new companies to exploit these assets. We also use our extensive network to help companies identify, assess and capture ("spin-in") products and companies strategic to building their businesses.

BioStreet™-Burrill & Company's BioStreet™ is an internet-based life sciences transaction service which enhances dealmaking capabilities by offering a broad range of services designed to streamline and facilitate deals. BioStreet combines the efficient distribution power of the worldwide web with the scientific skills and strategic relationships necessary for concluding successful transactions.

We have completed more than 25 strategic partnerships with a value in excess of $1.5 billion.

For more information, please visit Burrill & Company's website at

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