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Biotech shows glimmer of an upward trend

June 01, 2009

FOR IMMEDIATE RELEASE
 
Contact: Peter Winter, Editorial Director
Tel: 415-591-5474 Email: pwinter@b-c.com
 
SAN FRANCISCO - June 1, 2009 – The markets closed out May in positive territory following on from their April performance…which was their best month in nine years. The Dow Jones industrial average posted its third straight monthly gain closing up 4 percent with the Nasdaq close behind – up 3.3 percent in May. The positive market trend helped biotech with the Burrill Biotech Select Index posting a modest monthly gain of 0.4 percent.
 
“There is just a glimmer of an upward trend for biotech as evidenced by the performance of the Burrill Mid-Cap Biotech Index, whose members have been particularly hard hit during this economic downturn,” 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. “For the past couple of months some of the companies in the Index, such as Cougar Biotech, Geron, and Dendreon, have been on a tear pushing the year-to-date performance of the Index up a remarkable 16 percent, with a 5 percent jump in May alone.
 
Vaulting development stage biopharmaceutical company Cougar Biotechnology’s share value by 33 percent in May was the news that Johnson & Johnson bid approximately $970 million cash to acquire the company and gain access to compounds in development for the treatment of prostate cancer, as well as breast cancer and multiple myeloma.
Cougar Biotechnology is currently conducting two Phase III trials for abiraterone acetate, a late stage, first-in-class compound for the treatment of prostate cancer.
 
“The predicted land grab of biotech by big pharma because of their depressed values has not yet panned out with pharma companies preferring to acquire each other. However, we may now see an upswing in M&A activity heading into the summer months, since the Johnson & Johnson acquisition of Cougar may prompt pharma, who have been generally been sitting on the sidelines, to ‘pull the trigger’ on biotech deals so that they don’t lose out to their competitors,” added Burrill.
 
Shares of Dendreon have increased in value by a whopping 440 percent since the company first announced it had positive Phase III data that showed its lead product Provenge extended the lives of men with advanced prostate cancer by an average of 4.1 months. According to analysts, Dendreon should be able to file for regulatory approval during the fourth quarter 2009. On the basis of its positive clinical data and strengthening share price the company raised $221 million, the second best biotech financing deal so far this year, to help fund the manufacture and sale of Provenge.
 
“While the industry overall is still going through tough times, and we predict it is still going to take many more months before biotech starts on the road to full recovery it is encouraging to see that investors are prepared to reward biotech companies that do achieve significant milestones,” Burrill noted.
 
“In addition, despite the prevailing economic recession and travel restrictions some countries imposed because of the H1N1 flu outbreak, the 2009 BIO International Convention, held this month, attracted well over 14,000 attendees to Atlanta, Georgia,” added Burrill. “The success of the meeting demonstrates that business is still ongoing and companies are actively looking for strategies and partners to help them get through the challenges that they are currently facing.”
 
By the Numbers
The monthly Burrill Report (www.burrillreport.com) provides ongoing statistics and analysis on the 343 biotechs that are publicly traded on major US markets. Among the current data the publication reports that: at the end of May this group of companies had an aggregate market cap of $297.6 billion (up 3.6 percent for the month). Also:
- There are 43 companies that have market caps greater than $1B
- 154 public biotech companies (44%) have a market cap below $100 million
- 69 are trading below their cash level
- Over 110 companies have announced a corporate restructuring by slashing staff and putting promising projects in the refrigerator
- YTD the Burrill Biotech Select Index has fallen 7 percent
- The performance of the top five biotech companies since the beginning of the year:
Amgen (-13.8 percent); Gilead Sciences (-16.5 percent); Celgene (-24 percent); Genzyme (-11 percent); and Biogen (+ 8.6 percent).
 
 
 
Biotech Indices
 
Index
12/31
2007
 
12/31
2008
 
4/30
    2009
 
5/29
    2009
% change
Month
%
change
YTD
Burrill Biotech
Select
331.52
300.33
278.3
279.32
0.37%
-7.00%
Burrill Large
Cap Biotech
437.71
379.7
388.73
398.06
2.40%
4.84%
Burrill Mid-Cap
201.89
139.39
154.15
162.29
5.28%
16.43%
Burrill Small Cap
137.6
78.35
79.72
81.04
1.66%
3.43%
Burrill Genomics
104.29
59.69
56.77
59.93
5.57%
0.40%
Burrill AgBio
198.83
127.72
148.41
149.35
0.63%
16.94%
Burrill BioGreentech
158.66
106.12
128.13
134.05
4.62%
26.32%
Burrill Diagnostic
159.43
138.3
120.05
122.31
1.88%
-11.56%
Burrill Nutraceutical
593.04
369.24
377.79
397.42
5.20%
7.63%
NASDAQ
2652.28
1577.03
1717.3
1774.33
3.32%
12.51%
DJIA
13264.82
8776.39
8168.12
8500.33
4.07%
-3.15%
Russell 2000
766.03
499.95
487.56
501.58
2.88%
0.33%
Amex Biotech
786.5
647.15
637.03
648.69
1.83%
0.24%
Amex Pharma
338.52
272.84
236.66
257.02
8.60%
-5.80%


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 monthly 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 and perspectives on the performance of the industry in 2008 and projections for 2009 and beyond.
 
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