SAN FRANCISCO, May 3 /PRNewswire/ -- Despite the pop in the shares of Dendreon on the announcement that its prostate cancer therapy Provenge had finally been approved by the FDA, the biotech sector failed to build on that event and turned in a lackluster performance for the month with the Burrill Biotech Select Index dropping 2 percent in April. Not helping the cause was the fact that several companies including Amgen and Gilead Sciences cut their profit forecasts citing the impact of costs from U.S. healthcare reform in their outlooks. Gilead closed the month down almost 13 percent. Although the company reported a 45 percent jump in quarterly profit it lowered its full-year revenue forecast due to the recently passed health care reform legislation. They said its impact will be felt mostly in the company's HIV treatment business. Amgen, whose shares fell 3.6 percent in April, estimated that going forward, healthcare reform would trim annual U.S. sales revenue by 5 percent to 6 percent and $200 million to $250 million this year.
The new U.S. healthcare law calls on drug companies to offer higher price rebates for government funded health plans and will eventually require them to pay a fee based on their market share of the public plans. Some of the changes went into effect at the beginning of the year and all will be phased in by January 1, 2014.
"The industry convenes in Chicago this week for BIO 2010, where over 18,000 delegates from around the world are expected to attend, and despite April's performance of the 'blue-chip biotech companies, the sector is certainly in much better shape than it was one year ago when BIO 2009 was held in Atlanta," 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. "We are beginning to see signs of investor confidence return with capital markets rebounding.
"In the past year ten biotech IPOs have been completed with seven of these going out in the past four months, which is certain good news although investors continue to be selective," added Burrill. "The mood at this year's BIO convention will certainly be more upbeat than last year."
Busy month for IPOs
Three biotech companies priced their IPOs this month:
(For full details of the performance of the biotech IPOs see: www.burrillreport.com/article-2295.html)
BY THE NUMBERS
(Compiled by the Burrill Report*)
(*The April edition of the Burrill Report has a breakdown of the industry's Q1 2010 performance and copies are available on request.)
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 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.
|SOURCE Burrill & Company|
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