Biotech posts lackluster performance in November

December 01, 2010

SAN FRANCISCO – December 1, 2010 – After surging 6 percent in October the biotech industry came down to earth in November with the Burrill Biotech Select Index dropping 1.5 percent. The capital markets faired no better with Dow Jones Industrial Average closing the month down 1 percent and the Nasdaq Composite Index down 0.37 percent.
Dragging on the markets towards the end of the month was a concern that Europe's debt crisis will continue to spread and much of the world’s economy continues to sputter.

“It is interesting to note that the Burrill Biotech Select index has climbed 16.5 percent in value year-over-year with the Dow up 13 percent in the same period,” said G. Steven Burrill, CEO, Burrill & Company, a San Francisco based global leader in life sciences with activities in venture capital, private equity, merchant banking and media. “The Index’s almost 11 percent gain in 2010, which has come mainly in the second half of the year, has not been distributed evenly across the board. It has been linked to the stellar stock performances of companies such as Genzyme, Dendreon, Illumina, and Pharmasset. Many of biotech’s blue-chip companies, in fact, have had sub-par years with Amgen, for example, down 7 percent year-to-date and Vertex Pharmaceuticals down almost 23 percent for the same period.

“The unevenness can also be seen in biotech’s newly minted public companies,” noted Burrill. “This year 16 new biotech issues have debuted on the U.S. market, but most of them have been plagued by lackluster receptions (selling fewer shares well below the pricing range) and their average market performance at the end of November is down 13.2 percent.”

Biotech IPO Activity
Investor enthusiasm for the oversubscribed $23 billion General Motors initial public offering this month failed to carry over to the biotech sector where three IPOs were completed. Complete Genomics, Zogenix and Anacor Pharmaceuticals all debuted to tepid market interest, each pricing well below what company managers hoped to fetch.

- DNA sequencing firm Complete Genomics went public, raising $54 million, after scaling back its deal price more than 30 percent to get it done. Founded in 2005, it is one of a handful of sequencing companies racing to offer complete sequencing of the human genome for less than $1,000. Shares closed the month at $7.72, down 14 percent.

- Zogenix sold 14 million shares at $4 each on November 23 in an offering the company had postponed since August 2008. Its first commercial product, Sumavel DosePro, is a needle-free drug delivery system launched in January 2010 for the acute treatment of migraine and cluster headache. The company plans to use the net proceeds from the offering to fund late-stage clinical trials and development for ZX002, its controlled-release formulation of the opioid hydrocodone and to fund the ongoing commercialization of its DosePro device. The company’s shares closed down 3.7 percent from the offering.

- Anacor Pharmaceuticals raised $60 million through the sale of 12 million shares at $5 per share, priced far short of the $16 to $18 range in which it had hoped for. The company plans to use the funds to pay off debt and to fund late stage clinical trials of AN2690 for fungal nail infections and AN2728 for psoriasis.

Performance of 2010 Biotech IPOs

Company	TICKER	IPO	Amount Raised ($M)	Price	%	11/30/10 Market Cap($M)
		Price		11/30/2010	Change
Ironwood Pharmaceuticals	IRWD	$11.25	215.6	$10.78	-4.18%	1,000
Anthera Pharmaceuticals	ANTH	$7.00	42	$5.51	-21.29%	180.1
AVEO Pharmaceuticals	AVEO	$9.00	89.7	$14.82	64.67%	532.6
Alimera Sciences	ALIM	$11.00	72	$11.46	4.18%	368.6
Tengion	TNGN	$5.00	30	$2.20	-56.00%	26.9
CorMedix	CRMD	$3.25	12.5	$1.25	-61.54%	14.7
Codexis	CDXS	$13.00	78	$9.47	-27.15%	341.9
GenMark Diagnostics	GNMK	$6.00	28	$3.70	-38.33%	46.2
Trius Therapeutics	TSRX	$5.00	50	$3.36	-32.80%	75.5
NuPathe	PATH	$10.00	50	$6.09	-39.10%	93.1
Amyris Biotechnologies	AMRS	$16.00	85	$20.68	29.25%	940.7
Pacific Biosciences	PACB	$16.00	109	$12.70	-20.63%	665.5
Aegerion Pharmaceuticals	AEGR	$9.50	47.5	$10.41	9.58%	186.9
Complete Genomics	GNOM	$9.00	54	$7.72	-14.22%	206.5
Anacor Pharmaceuticals	ANAC	$5.00	60	$5.01	0.20%	7.5
Zogenix	ZGNX	$4.00	56	$3.85	-3.75%	5.6

BY THE NUMBERS
(Compiled by The Burrill Report*)
– The industry closed the month with a collective market cap of $351.91 billion (up 0.4 percent for the month and up 0.8 percent for the year)
– The decliners outpaced the gainers in the Burrill Biotech Select index; on the plus side, shares of Exelixis soared 30 percent in November after the company reported positive data from studies that are testing its drug candidate XL184 as a treatment for ovarian cancer and prostate cancer.
– Top five biotech companies by market cap are: Amgen - $49.8B, share price down 8 percent in November; Gilead Sciences – $29.6B, share price down 8 percent in November, Celgene- $27.9B, share price down 4 percent in November; Genzyme - $18.4B, share price down 1.4 percent in November; and Biogen - $15.2B, up 1.5 percent for November.
– 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 December edition of the monthly, subscription-based Burrill Report has a breakdown of the industry’s November 2010 performance.)

INDEX	12/31/2009	10/29/2010	11/30/2010	% CHANGE  (MONTH)	% CHANGE  (YR)
Burrill Select	312.47	351.84	346.59	-1.49%	10.92%
Burrill Large Cap	461.85	508.7	500.87	-1.54%	8.45%
Burrill Mid-Cap	166.01	193.31	197.34	2.08%	18.87%
Burrill Small Cap	88.12	82.93	87.68	5.73%	-0.50%
Burrill Genomics	159.87	163.58	154	-5.86%	-3.67%
Burrill Diagnostics	147.96	135.86	139.48	2.66%	-5.73%
Burrill Personalized Medicine	91.71	93.95	97.02	3.27%	5.79%
Canadian Biotech	40.35	53.71	51.49	-4.13%	27.61%
BioGreenTech Index	100	137.57	134.77	-2.04%	6.29%
NASDAQ	2269.15	2507.41	2498.23	-0.37%	10.10%
DJIA	10428.05	11118.49	11006.02	-1.01%	5.54%
Amex Biotech	941.92	1165.49	1142.17	-2.00%	21.26%
Amex Pharmaceutical	309.21	310.9	291.84	-6.13%	-5.62%

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.


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

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