SAN FRANCISCO, Nov. 1 /PRNewswire/ -- On the heels of a positive third quarter, the biotech industry continued its upward climb in October, even in the wake of eroding consumer confidence about the state of the economy and interest rate jitters as the markets drew to their month end close. The Burrill Large-Cap Biotech Index, for example, rose an impressive 6.1% in October -- in step with the NASDAQ, which was up 5.8% and well ahead of the DJIA which was unchanged.
"Entering the final two months of the year, biotech is in good shape," said G. Steven Burrill, CEO, Burrill & Company, a San Francisco based global leader in life sciences whose principal activities are in Venture Capital, Merchant Banking and Media. "Investors had a great deal to keep them interested in biotech during the month...in particular, Biogen Idec, which put itself 'up for sale' raising speculation that big Pharmawill go on an end-of-year buying spree adding large biotech companies with strong product pipelines to boost their own portfolios. And M&A transactions have picked up once again with several deals announced including the Galenica Group buying Canadian-based Aspreva, and Perkin Elmer picking up umbilical cord blood banking company ViaCell in a transaction valued at about $283M.
"Barring some dramatic unforeseen changes, the strong performance of the industry in the public markets will continue until the end of the year principally driven by biotech's emerging and elite companies," Burrill added.
"The Burrill Biotech Select Index performance is up 17.5% since the start of the year and is on track to equal its stellar annual 22% gain two years ago. At that time Amgen and Genentech led the charge...now with their share values down 15% and 9% respectively year-to-date other companies such as Gilead Sciences (up 42% YTD) and Illumina (up 43%) have picked up the slack and this demonstrates just how many successful biotech companies the industry now has," Burrill noted.
Major movers in the Large-Cap Index were Genzyme whose shares shot up 23% in October on the news that that the U.S. Food and Drug Administration (FDA) had granted its product Epicel (cultured epidermal autografts) marketing approval under the Humanitarian Device Exemption (HDE) for the treatment of life-threatening wounds resulting from severe burns. Biogen Idec's (BIIB) shares closed the month up 11% boosted by its announcement that it was up for sale. The $21-plus billion market cap of Biogen may mean that only large pharmaceutical companies will be able to afford the price tag.
The Burrill Mid-Cap Biotech Index also showed a strong performance with an increase of 5% in October (22% year-to-date). Driving the group was Telik Inc. (up 41%), after reporting that the FDA had removed its partial hold on clinical trials for its developmental drug, Telcyta, designed to treat advanced ovarian cancer and non-small cell lung cancer. Also jumping 24% was Aspreva Pharmaceuticals, which has agreed to be acquired by Galenica for approximately $915 million.
IPO's heat up again
After a short lull, the appetite for biotech IPOs increased once again. Four more biotech companies rolled out their IPOs in October bringing the total number of biotech IPOs in 2007 to 26.
-- MAP Pharmaceuticals, which is developing inhalable drugs to treat
migraine and pediatric asthma, priced its 5 million share offering at
$12, 20% below the midpoint of their proposed $14 to $16 range. During
the month its shares strengthened to close at $13.88.
-- Targanta Therapeutics, which developing an antibiotic treatment for
gram-positive bacterial infections, priced 5.8 million shares at $10
per share, 30% below the midpoint of its proposed range. The company's
shares closed down 13% at the end of October.
-- Genoptix, a company providing specialized laboratory services to
hematologists and oncologists, raised $85 million pricing its 5 million
share offering at $17, above its proposed $14-$16 range. Investors
liked the company's prospects and in the first day of trading after its
offering the company's share value jumped almost 50%.
-- On the last day of the month Nanosphere, which markets a platform for
molecular diagnostic testing, priced 7 million shares offering at the
low end of the $14-$16 range.
Two companies joined the IPO runway in October: molecular diagnostics company XDx. engaged in the development of gene expression-based tests to monitor transplant rejection and autoimmune diseases, and Canadian-based Akela Pharma, which is focused on therapeutics for treatment of cancer pain.
"The good news is that the recent biotech IPO graduates are not floundering once they get out of the gate as has been the case for other new public biotech companies over the past few years," commented Burrill. "Companies such as WuXi PharmaTech, whose stock has almost doubled since its IPO debut and Sirtris Pharmaceuticals (up 56%) are providing investors with renewed confidence about new biotech issues. We certainly see that our prediction of 30 biotech IPOs completed in 2007 will come to pass...and it could even be more given the prevailing mood of the markets toward biotech."
Biotech Industry's Market Cap
The biotech industry's market cap rose 3.6% in October to close at $499 billion.
Index 12/29/06 3/30/07 6/29/07 9/28/07 10/31/07 Month Year
Select 303.96 317.03 319.5 348.75 357.14 2.41% 17.50%
Biotech 424.56 419.97 409.56 450.85 478.59 6.15% 12.73%
Biotech 171.55 179.02 183.23 199.75 209.25 4.76% 21.98%
Biotech 143.6 144.44 142.06 137.03 143.72 4.88% 0.08%
Genomics 101.69 107.98 91.68 96.62 102.68 6.27% 0.97%
AgBio 124.52 141.8 171.3 179.11 189.53 5.82% 52.21%
Industrial 150.85 148.59 163.99 157.54 160.64 1.97% 6.49%
Diagnostic 122.79 136.76 149.77 169.72 175.89 3.64% 43.24%
Nutraceutical 629.56 639.2 613.86 677.58 693.44 2.34% 10.15%
NASDAQ 2415.29 2421.64 2603.23 2701.5 2859.12 5.83% 18.38%
DJIA 12463.15 12354.35 13408.62 13895.63 13930.01 0.25% 11.77%
2000 787.66 800.71 833.7 805.45 828.02 2.80% 5.12%
Biotech 754.25 764.18 779.49 821.72 840.36 2.27% 11.42%
Pharma 345.06 342.01 349.75 346.44 351.31 1.41% 1.81%
|SOURCE Burrill & Company|
Copyright©2007 PR Newswire.
All rights reserved