SAN FRANCISCO, Sept. 1 /PRNewswire/ -- Just as biotech was "hot" in July it was a different story in August as the Burrill Biotech Select Index suffered from the summer "blahs" and posted a lackluster performance to close down 1.1 percent. The broader markets, on the other hand, continued their upward swing with the Dow closing the month up a healthy 3.5 percent and the Nasdaq closing up 1.5 percent.
Investors were, however, reminded on the last day of the trading month, that despite Federal Reserve Chairman Ben Bernanke's assessment that the economy is on the verge of recovery, there is still some way to go yet. The Dow and Nasdaq dropped 0.5 and 1 percent respectively because a sharp drop in Chinese equities added to concerns about the relative strength of the global economy's recovery.
"The final quarter of the year is traditionally one of biotech's best," 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, "and we will likely see, despite the market uncertainties, the industry build on its momentum gained during the past several months.
"Although biotech's year-to-date performance lags the general markets there have been some encouraging signs that investors are coming back spurred in July by the market performances of companies such as Human Genome Sciences and Targacept and the marquee acquisition of Medarex by Bristol-Myers Squibb. In addition, we did see an IPO get out the door in August. Cumberland Pharmaceuticals raised $85 million by offering 5,000,000 shares at $17.00, below the expected range of $19.00 to $21.00. The specialty pharmaceuticals company has products on the market, including a new injectable treatment for pain and fever, which is one of the reasons why the deal got done," noted Burrill.
"The Cumberland IPO will not open the biotech IPO window just yet, but companies on the runway with products already on the market, or close to it, might be tempted to 'test the waters' but early-stage, research-based biotechs are unlikely to find favor in a climate that still has no tolerance for risk."
One biotech predicted to test the US IPO waters in the near future is Talecris Biotherapeutics, a manufacturer of plasma-based proteins. Like Cumberland, the company has products on the market and its 2008 sales were $1.4 billion.
There was an international IPO completed during August as well. Israeli biotech company, D-Pharm, listed on the Tel Aviv Stock Exchange raising $7.6 million in an oversubscribed offering. The offering price of approximately $4.50 per share was higher than D-Pharm's original minimum goal, but still considered a bargain considering the company's pre IPO valuation of about $32 million. D-Pharm also raised $15.4 million in a rights offering at the same time and at the same terms. The company will use most of the proceeds to fund a late-stage clinical trial of its lead drug DP-b99 in moderate to severe ischemic stroke for which the only currently approved drug is tissue-plasminogen activator (t-PA), marketed by Genentech as Activase.
Biotech Industry Statistics for August
The monthly, subscription-based Burrill Report (www.burrillreport.com) provides ongoing statistics and analysis on the 328 biotechs that are publicly traded on major US markets as well as tracking the financings and deal flow in the global biotech industry. Among the current data the publication reports that at the end of August the group of public biotech companies had an aggregate market cap of $340 billion (down 1.4 percent for the month). Also:
Among the decliners was Onyx Pharmaceuticals Inc., whose 12 percent drop was precipitated by an analyst's downgrade. During the month the company raised $122 million in common shares and $200 million in senior notes. Also, after an excellent run up in share value over the past few months, Affymetrix came up short in August dropping 13 percent in value.
August Biotech Indices
% % 12/31 12/31 6/30 7/31 8/31 change change Index 2007 2008 2009 2009 2009 Month YTD Burrill Biotech 331.52 300.33 294.09 313.23 309.76 -1.11% 3.14% Select Burrill Large Cap Biotech 437.71 379.7 424.71 452.87 450.36 -0.55% 18.61% Burrill Mid-Cap 201.89 139.39 173.97 178.77 176.26 -1.40% 26.45% Burrill Small Cap 137.6 78.35 82.51 96.13 100.56 4.61% 28.35% NASDAQ 2652.28 1577.03 1835.04 1978.5 2009.06 1.54% 27.40% DJIA 13264.82 8776.39 8447 9171.61 9496.28 3.54% 8.20%
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. (www.burrillandco.com)
|SOURCE Burrill & Company|
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