SAN FRANCISCO – July 1, 2008 -- The biotech industry’s report card for the first half of the year contains surprisingly good grades for its performance on the capital markets, and for partnering and venture capital deal making, but all other forms of financing didn’t fare as well, particularly IPOs, the new monthly Burrill Biotechnology Report finds.

 

“With the first half of the year dominated by macro economic factors such as inflation, recession, credit market turmoil and escalating oil prices it is not surprising that biotech IPOs were virtually non-existent with only one biotech IPO to date in 2008, said G. Steven Burrill, CEO, Burrill & Company, a San Francisco based global leader in life sciences with activities in Venture Capital, Private Equity, Merchant Banking and Media.”

 

Biotech did, however, outperform the broader stock market indices in the first half of the year even factoring in a brutal month of June for the capital markets where the Burrill Biotech Select Index, a price-weighted index tracking 20 of biotech’s “blue chip” companies, finished down 1.3% with the Dow falling 10% and the NASDAQ, dropping 9%. Comparing the six month performance of these bell weather indices, the Burrill Biotech Select Index closed up 1% while the Dow and NASDAQ were down a whopping 14% and 13% respectively.

 

"Investors have clearly gravitated to biotech’s elite companies and away from the traditional ‘safe havens’ of big pharma in these times of economic uncertainty,” noted Burrill. “Normally viewed as defensive, health care saw unusually high volatility in big pharma and managed care with shares of pharma giants like Merck and Schering-Plough falling 35% and 26% in the first half of the year because of Vytorin and Zetia issues, and Pfizer falling 23% over generic competition concerns.”

 

In the wake of these setbacks, the American Stock Exchange Pharmaceuticals Index has declined over 14% in the first half of 2008. In biotech land it has been a different story. Shares of Vertex Pharmaceuticals posted a strong 40% quarter gain on the strength of positive clinical developments and sales outlook. Amgen’s shares also recovered in the second quarter to post an 12% increase, placing them among the top gainers during the second quarter.