News

Biotech's Boom Suffers a Setback in March April 01, 2014 | Press Release

Investors Flock to Biotech March 03, 2014 | Press Release

Biotech IPOs Off to a Strong Start in 2014 February 03, 2014 | Press Release

  See all News
 
Sign up for a free subscription to The Burrill Weekly Brief 
Sign up to receive email notifications about our upcoming events and news.


Biotech drops on weaker first quarter drug sales, but broader markets remain on a roll

May 01, 2009

FOR IMMEDIATE RELEASE
 
Contact: Peter Winter, Editorial Director
Tel: 415-591-5474 Email: pwinter@b-c.com
 
SAN FRANCISCO - May 1, 2009 – April was Wall Street's best month in nine years, which analysts believe send the strongest signals yet that the economy is about to begin a turnaround. The Dow Jones industrial average provided an encore performance up 7.4 percent in April, on top of a 7.7 percent gain in March and the Nasdaq was up a healthy 12 percent as investors were not phased by a World Health Organization warning that a flu pandemic was imminent. The strain of flu that's causing concern appears to be a mix of flu viruses derived from pigs, birds, and humans.
 
 “Apart from those biotech companies that are linked to combating a potential flu pandemic, such as Gilead Sciences, Novavax and BioCryst Pharmaceuticals, biotech didn’t fare as well as the general markets,” said G. Steven Burrill, CEO, Burrill & Company, a San Francisco based global leader in life sciences with activities in Private Equity, Venture Capital, Merchant Banking and Media, “with the Burrill Biotech Select Index down three percent in April.
 
“The first quarter 2009 financial results from biotech’s elite companies did not inspire investor confidence and confirmed that the worldwide economic crisis is taking a tougher-than-expected toll on drug sales.”
 
Amgen reported lower-than-expected Q1 09 earnings as sales of virtually all of its key drugs fell well short of Wall Street estimates and the company lowered its 2009 revenue forecast, blaming deterioration in the global economy. The company’s shares closed down two percent in April. Other companies followed suite with Genzyme’s shares dipping 10 percent in April; shares of Biogen fell almost 8 percent on weaker-than-expected first-quarter sales, although its per-share earnings beat Wall Street estimates. Celgene beat lowered first-quarter earnings expectations on weak sales of its cancer drugs but blamed its first-quarter financial shortfall on weakening demand for its cancer drugs, including Revlimid, due to the global recession.
 
“It is not just biotech that is feeling the pain of the economic downturn, IMS Health has reported that it now expects the global pharmaceutical market to grow by an anemic 2.5 percent to 3.5 percent in 2009, down 2 percentage points from the forecast it issued six months earlier, and the lowest growth rate in at least 25 years,” noted Burrill.
 
Traditionally considered more impervious to economic downturns than other sectors, the pharmaceutical industry is feeling the pinch this time. Sales in the world's largest market, the United States, are seen declining by 1 percent to 2 percent in 2009 -- the first decline since IMS started tracking U.S. sales data in 1957.
 
“Further compounding biotech and pharma’s woes is the fact that Congressional Democrats are looking to fast track legislation overhauling the U.S. healthcare system.
Democrats enjoy a solid majority in the House and can pass legislation there at will. In the Senate, they now have 60 votes (assuming that Al Franken is seated) and Sen. Arlen Specter recently joining the Dems to pass health care reform,” said Burrill. “Healthcare reform will put pressure on developers of new therapies, devices, and diagnostics to show they are not only safe and effective for specific patient groups, but provide financial benefits to the healthcare system as well.”
 
Industry Market Cap
According to the latest Burrill Report, there are 342 biotechs that are publicly traded on major US markets as at the end of April with an aggregate market cap of $287.4B (down one percent in the month). There are 43 companies that have market caps greater than $1B. Jumping into the “billion dollar club” was Dendreon whose shares doubled following the detailed study results for its prostate cancer treatment candidate Provenge, which met its goal of prolonging the survival of men with prostate cancer.
The Burrill Report also found that:
- 135 public biotech companies are trading with less than one year of cash (42% of these have less than 6 months of cash)
- 69 are trading below their cash level
- 53% have market cap below $100M
- Over 100 companies have announced a corporate restructuring by slashing staff and putting promising projects in the refrigerator

Biotech Indices
 
Index
12/31
2007
 
12/31
2008
 
1/31
 2009
 
2/27
 2009
 
3/31
    2009
 
4/30
    2009
% change
Month
%
change
YTD
Burrill Biotech
Select
331.52
300.33
298.00
276.85
287.12
278.3
-3.07%
-7.34%
Burrill Large
Cap Biotech
437.71
379.7
375.57
351.02
375.01
378.14
0.83%
-0.41%
Burrill Mid-Cap
201.89
139.39
145.13
123.3
137.08
137.62
0.39%
-1.27%
Burrill Small Cap
137.6
78.35
77.27
66.68
73.27
79.72
8.80%
1.75%
Burrill Genomics
104.29
59.69
55.88
41.58
45.8
56.77
23.95%
-4.89%
Burrill AgBio
198.83
127.72
139.59
133.12
147.19
148.41
0.83%
16.20%
Burrill BioGreentech
158.66
106.12
108.66
99.34
113.44
128.13
12.95%
20.74%
Burrill Diagnostic
159.43
138.3
139.99
124.73
124.1
120.05
-3.26%
-13.20%
Burrill Nutraceutical
593.04
369.24
338.48
292.6
314.16
377.79
20.25%
2.32%
NASDAQ
2652.28
1577.03
1476.42
1377.84
1528.59
1717.3
12.35%
8.89%
DJIA
13264.82
8776.39
8000.86
7062.93
7608.92
8168.12
7.35%
-6.93%
Russell 2000
766.03
499.95
443.53
389.02
422.75
487.56
15.33%
-2.48%
Amex Biotech
786.5
647.15
634.56
596.42
640.85
637.03
-0.60%
-1.56%
Amex Pharma
338.52
272.84
258.17
226.38
244.08
236.66
-3.04%
-13.26%
 
 
About Burrill & Company
Founded in 1994, Burrill & Company is a San Francisco-based global leader in life sciences with activities in Venture Capital, Private Equity, Merchant Banking and Media. The Burrill family of venture capital funds has over $950 million under management and its merchant banking business is one of the industry leaders in life sciences transactions. Burrill is also the creator, sponsor and facilitator of over a dozen leading industry conferences worldwide and publisher of a range of bio-intelligence reports including the Burrill Report, which tracks the progress of the global biotechnology industry and annual “State of the Industry” report the latest of which is Biotech 2009-Life Sciences: Navigating the Sea Change, the 23rd annual report on the industry. The 470-plus page book contains analysis

Back to News list  
News Archive: 2014 | 2013 | 2012 | 2011 | 2010 | 2009 | 2008 | 2007 | 2006 | 2005 | View All