FINANCINGS AND PARTNERING
Our Burrill Report recorded a significant 25% increase in total financings and partnering in Q2 '09 compared to Q1 '09 (Table
1). Although financings were down quarter over quarter, the amount US biotech firms raised in partnering deals was up 68%.
Table 1. Quarter comparisons of US biotech financings (USD)
This increase shows that in a tight fiscal environment, companies are devoting their energies on finding pharmaceutical and
biotech partners to help build value of their lead product programs. It has become increasingly difficult to attract venture
capital (VC) and this is reflected by the fact that the amount raised by biotechs in the US in the second quarter was 43%
down from the total raised in the first quarter.
Table 2. Year-to-date (YTD), the Burrill Biotech Select Index was up 3%
At the end of August, the group of public biotech companies had an aggregate market cap of $340 billion (Table 2). Statistics
also show that:
- there are 49 companies with market caps greater than $1 billion
- there are 36 companies that have market caps between $500 and $999 million
- a total of 136 public biotech companies (41%) have a market cap below $100 million
- approximately $530 million in VC was raised by US biotech companies in August. Notable deals included: Pacific Biosciences
($65 million), Complete Genomics ($45 million), and Adamas Pharmaceuticals ($40 million).
- year-to-date, the Burrill Biotech Select Index is up 3%.
Biotech is not yet fully back on track because many companies are still struggling to find the necessary funding to maintain
their operations. Almost half of US public biotechs have market caps below $100 million and we are seeing companies still
shutting shop. It is important to remind ourselves that the biotech industry is undergoing a major transition, a process that
will likely continue for many months.
This is because we do not know how President Barack Obama's proposal for healthcare reform will fully impact the biotechnology
industry and the status of biosimiliar legislation is also still unresolved. There are fears that these issues will drive
the prices of innovative drugs lower and eat away at biotech company profits.
Going into the final quarter of the year, which is traditionally one of biotech's best, we will likely see the industry continue
to build on its momentum gained during the past several months.
G. Steven Burrill is chief executive officer at Burrill & Company, San Francisco, CA, 415.591.5400, firstname.lastname@example.org