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 posts gain in February as broader markets strengthen

March 03, 2010

SAN FRANCISCO - March 2, 2010 – Biotech maintained its positive climb in February in lockstep with the general markets, which despite a few bumps in the road, also continued to strengthen.
 
The Burrill Biotech Select Index posted an almost 3 percent jump in value in February buoyed by Affymetrix, whose shares surged and closed the month up 38 percent after reporting an unexpected profit in the fourth quarter. In addition, most of the companies in the group posted modest single digit percentage gains in their share values. The Dow also performed well in February, despite dipping below the 10,000 mark earlier in the month, closing up 2.5 percent with the NASDAQ up 4 percent.
 
“While biotech’s uptick in a comparatively short trading month is encouraging,” 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, the market is not ready to embrace venture-backed biotechnology companies in their desire to go public. It was hoped that Ironwood Pharmaceuticals’ debut this month would pave the way for several other aspirants to follow.
 
“However, the Ironwood IPO was tough to get out. It was below the prior private round pricing, and a deal the investment bankers had to buy 50 percent of to get it done. Companies on the IPO runway are now having second thoughts about IPOs due to the uncertainty of reaching their intended share offering prices. California biotech Anthera Pharmaceuticals, for example, which expected to go public late February, pulled back, and delayed its planned offering until March 1,” Burrill noted. “It finally sold six million shares at $7 each, after cutting the size of its deal by 39 percent. Anthera had originally planned to sell 4.61 million shares at $13 to $15 each to finance the development of three drugs currently in clinical trials.
 
“I think the message from Wall Street,” explained Burrill, “is that biotech deals will still be tough to do. The equity markets in general are in tough shape right now, about where they were at the beginning of the year. If you are on the ‘buyside’ it makes sense to be working with companies already public. This avoids the immediate risk of a downside event if you participate in an IPO offering.”
 
“In our shortly to be released annual report on the industry - Biotech 2010-Life Sciences: Adapting for Success* – we do predict that at least 15 biotech IPOs will get done in 2010, but supply will overwhelm demand, and the markets will be very selective - a situation we are currently witnessing now.
 
“We also predict that the worldwide financing environment in 2010 will be more robust than 2009 but choppy and selective at times. This environment favors risk mitigated companies rather than earlier stage development companies. Capital markets in the US and globally will continue to strengthen, building on a return of investor confidence. Much of the global economic recovery has so far been driven by stimulus funding and, as a result real economic growth will remain uncertain. The large universe of small public companies and private companies looking for venture capital will still face challenges as they try to find ways to extend their runway and stretch out their remaining funds. Expect to see further consolidation in 2010 although at a slower pace that we saw in 2009.”
 
Biotech Industry Statistics
(compiled by the Burrill Report)

- The industry closed the month with a collective market cap of $362.42 billion (up 1.6 percent for the month and 3.9 percent for the year)
- 56 companies (18.5 percent) have market caps greater than $1B (there were 49 companies at the beginning of 2008)
- Top five biotech companies are: Amgen ($56.3B, unchanged YTD), Gilead Sciences ($42.8B, up 10 percent YTD), Celgene ($27.4B, up 6.8 percent YTD), Genzyme ($15.2B, up 16 percent YTD), and Biogen ($14.8B, up 2.7 percent YTD)
 
IPO News
Ironwood Pharmaceuticals priced its initial public offering at $11.25 per share at the beginning of February, less than the $14 to $16 the company had hoped for. The company did $203 million from the completion of their IPO and the exercise of an over-allotment option and will use the cash to develop and commercialize linaclotide being evaluated in a phase 3 program for the treatment of irritable bowel syndrome.

Anthera, the second biotech IPO of the year has an anti-inflammatory drug known as A-002, in the last stage clinical testing.
Late February two biotech companies - AVEO Pharmaceuticals and Trius Therapeutics - set the terms of their offerings. AVEO, which is developing novel cancer therapeutics, announced plans to raise $98 million by offering 7 million shares in the price range of $13 to $15. Trius said it plans to sell 6 million shares to investors at a price range of $12 to $14 to raise as much as $84 million.
Also on the biotech IPO runway are the following companies:

  • Alimera Sciences - developing products that treat retina-related diseases;
  • Aldagen developing regenerative cell therapies
  • AutoGenomics is developing an automated microarray platform to assess disease signatures
  • Prometheus Laboratories a specialty pharma company
  • Rules Based Medicine a biomarker testing laboratory
  • Tengion developing neo-organs and neo-tissues, currently derived from a patient's own cells.
 
*Biotech 2010-Life Sciences: Adapting for Success Burrill & Company’s 24th annual report on the industry will be available in early March.
 
 
 
 
 
Burrill Biotech Indices
 
INDEX
12/31/09
01/29/10
02/26/10
03/31/10
% CHANGE 
(MONTH)
% CHANGE 
(QTR/YR)
312.47
316.49
325.48
337.48
3.69%
8.00%
Burrill Large Cap
461.85
470.96
481.52
516.89
7.35%
11.92%
Burrill Mid-Cap
166.01
159.41
161.7
171.22
5.89%
3.14%
Burrill Small Cap
88.12
85.1
85.71
95.50
11.42%
8.37%
Burrill Genomics
159.87
151.88
161.74
179.72
11.12%
12.42%
Burrill Diagnostics
147.96
143.23
144.61
150.20
3.87%
1.51%
Burrill Personalized Medicine
91.71
89.25
91.98
94.90
3.17%
3.48%
NASDAQ
2269.15
2147.35
2238.26
2397.96
7.14%
5.68%
DJIA
10428.05
10067.33
10325.26
10896.63
5.53%
4.49%
Amex Biotech
941.92
964.34
1040.76
1227.55
17.95%
30.32%
Amex Pharmaceutical
309.21
305.76
302.64
308.15
1.82%
-0.34%
 
 
U.S. Biotech Financings for Q1 2010






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 and annual “State of the Industry” report.

Contact: Peter Winter, Editorial Director, Burrill & Company
pwinter@b-c.com tel: 415-591-5474


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