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Biotech records strong surge in October

November 01, 2010

SAN FRANCISCO – November 1, 2010 – The biotech industry outperformed the capital markets in October with the Burrill Biotech Select Index surging 6.1 percent, while the Dow Jones Industrial Average finished the month up 3 percent and the Nasdaq Composite Index rose 5.9 percent.
 
“The biotech industry has certainly benefited from a return of investor confidence in the second half of the year,” 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.
 
“As we move into the closing months of the year our earlier prediction that the Burrill Biotech Select Index would outperform the Dow Jones Industrial Average in 2010 is on track as the biotech industry is well positioned for a strong fourth quarter, Burrill noted.  
 
The Select index is already up 12.6 percent year-to-date compared with the Dow’s 6.6 increase in value over the same period. “The change in investor sentiment for biotech has also spilled over to biotech IPOs with the debut of Pacific Biosciences and Aegerion Pharmaceuticals this month,” Burrill noted.
 
Pacific Biosciences successfully completed its initial public offering selling 12.5 million shares of its common stock at $16 per share, in the middle of its expected range, to raise $200 million. The stock closed the month up 0.5 percent. The Menlo Park, California-based company’s technology platform provides real-time analysis of biomolecules with single molecule resolution, enabling a deeper understanding of biological systems. It will sell third-generation DNA sequencing machines to other companies.
 
Aegerion was hoping to price its shares at $14 to $16 but eventually lowered its offering price to $9.50 a share. The Bridgewater, New Jersey drug developer sold 5 million shares to raise $47 million. Shares were up 14 percent by month end.
 
Aegerion’s late stage therapeutic is a treatment for homozygous familial hypercholesterolemia, a rare genetic disease that causes dangerously high levels of LDL cholesterol in the blood. The company plans to file for marketing approval in the United States and the European Union before the end of 2011 if the outcome of a current late-stage trial is successful.
 
“It’s interesting to note that PacBio’s IPO is more of a technology play and unlike the traditional drug developer companies that have recently gone public to lukewarm receptions,” commented Burrill. “These genomics tools companies are currently finding favor with investors." Complete Genomics, which has developed its own third-generation sequencing technology, but offers sequencing services rather than selling the systems outright, is planning to go public in the second week of November.
 
Established genomics companies such as Illumina and Life Technologies had a good month. Illumina was up 11 percent while Life Technologies rose 7 percent helping the Burrill Personalized Medicine Index finish October up almost 4 percent. Both companies are developing faster sequencers in the race to bring the cost to sequence the human genome to below $1000. Life Technologies joined the race when it recently paid $350 million for Ion Torrent, for their third generation sequencing technology, with a potential payout of an additional $300 million to Ion Torrent’s investors.
 
Biotech IPO Activity
Year-to-date there have been thirteen biotech IPOs and their average market performance as of the end of October is down 11.4 percent.

BIOTECH IPOs
Company TICKER IPO Price 10/29/10 Percent Change
Ironwood Pharmaceuticals IRWD $11.25 $11.17 -0.71%
Anthera Pharmaceuticals ANTH $7.00 $6.20 -11.43%
AVEO Pharmaceuticals AVEO $9.00 $15.19 68.78%
Alimera Sciences ALIM $11.00 $10.75 -2.27%
Tengion TNGN $5.00 $2.85 -43.00%
CorMedix CRMD $6.25 $1.40 -77.60%
Codexis CDXS $13.00 $10.24 -21.23%
GenMark Diagnostics GNMK $6.00 $4.90 -18.33%
Trius Therapeutics TSRX $5.00 $3.62 -27.60%
NuPathe PATH $10.00 $6.26 -37.40%
Amyris Biotechnologies AMRS $16.00 $17.08 6.75%
Pacific Biosciences PACB $16.00 $16.08 0.50%
Aegerion Pharmaceuticals AEGR $9.50 $10.90 14.74%
 
BY THE NUMBERS
(Compiled by The Burrill Report*)
- The industry closed the month with a collective market cap of $354.64 billion (up 1.2 percent for the month and up 1.6 percent for the year)
- Top five biotech companies by market cap are: Amgen ($54.5B, share price up 4 percent in October and up 1 percent YTD), Gilead Sciences ($32.4B, share price up 13.4 percent for October and down 8 percent YTD), Celgene ($28.5B, up 12 percent for October and up 11.4 percent YTD), Genzyme ($18.4B, up 2.6 percent for October and up 47.2 percent YTD), and Biogen ($15.0B, up 9.5 percent for October and up 17.6 percent YTD).
- 52 biotech companies (17 percent) have market caps greater than $1B (compared to 49 companies at the same time last year)
- 90 biotech companies (30 percent) have market caps less than $100M compared to 39 percent (122 companies) at the same time last year.
 
(*The November edition of the monthly, subscription-based Burrill Report has a breakdown of the industry’s October 2010 performance.)
 
 
Index 12/31/2009 9/30/2010 10/29/2010 Month Chg Year Chg
Burrill Select 312.47 331.5 351.84 6.14% 12.60%
Burrill Large Cap 461.85 498.38 508.7 2.07% 10.14%
Burrill Mid-Cap 166.01 173.26 193.31 11.57% 16.44%
Burrill Small Cap 88.12 84.27 82.93 -1.59% -5.89%
Burrill Genomics 159.87 171.68 163.58 -4.72% 2.32%
Burrill Diagnostics 147.96 133.15 135.86 2.04% -8.18%
Personalized Medicine 91.71 90.45 93.95 3.87% 2.44%
Canadian Biotech 40.35 53.72 53.71 -0.02% 33.11%
BioGreentech 126.8 129.34 137.57 6.36% 8.49%
NASDAQ 2269.15 2368.62 2507.41 5.86% 10.50%
DJIA 10428.05 10788.05 11118.49 3.06% 6.62%
Amex Biotech 941.92 1157.87 1165.49 0.66% 23.74%
Amex Pharma 309.21 307.69 310.9 1.04% 0.55%

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 $1 billion 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 leading industry conferences worldwide and publisher of a range of bio-intelligence reports including the monthly Burrill Report (www.burrillreport.com) and annual “State of the Industry” report, the latest of which has just been released entitled Biotech 2010-Life Sciences: Adapting for Success
 
 
Contact: Peter Winter, Managing Director, Editorial, Burrill & Company
Editor, Burrill Report
pwinter@b-c.com tel: 415-591-5474

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