The past year also saw passage of the Jumpstart Our Business Startups (JOBS) Act, which seeks to make it easier for emerging
growth companies to access capital through the public markets. The Act provides exemption from compliance with costly regulations
for smaller companies. It also allows companies to test investor interest before having to make sensitive information public
in securities regulatory filings.
Global life-sciences venture financings totaled more than $1.2 billion during the first 11 months of 2012, an increase of
23% over the same period a year ago. Venture investors, however, are moving away from early-stage financings. Companies are
relying more on alternative sources of financing, including accelerators, angel capital, corporate venture sources, and private
equity investment. In fact, of the top 10 private financings in 2012, four had significant backing from private equity firms.
When venture investors do fund early-stage companies, increasingly they are providing large rounds to carry a company to proof-of-concept
when investments can be exited or new financing at higher valuations can be raised. While therapeutics grabbed the largest
portion of funding with a total of $3.1 billion through the first 11 months of 2012, digital health and life-sciences information
technology deals showed the biggest jump in activity with a 63.2% increase to $690 million.
It was a good year in the stock market for biotech stocks overall. The Burrill Select Index rose 41.8% through the end of
November 2012. That compares to a 6.5% increase in the Dow Jones Industrial Average, a 12.4% gain for the S&P 500, and a 15.4%
rise in the Nasdaq Composite Index.
A total of 16 life-sciences companies completed initial public offerings (IPOs) in the US through the end of November, the
same as last year. US life-sciences IPOs rose an average of 12% from their initial offering price through the end of November
2012. Of the 16 issues, 12 came below their target range. Overall, these companies sold their shares at an average of 22.7%
below the median of their target price. The 12 therapeutics companies that debuted in public markets in 2012 outperformed
life sciences IPOs as a whole. Those issues rose 17.8% by the end of November 2012.
Through the end of November 2012, companies announced a total of $101.1 billion in mergers and acquisitions transactions,
down 34.5% from the activity a year ago. Big Pharma and Big Biotech continue to be the most active acquirers. While generic
drugs and consumer health were big areas of activity, the top deals involving innovative biopharmaceuticals in 2012 included
Bristol-Myers' $7 billion acquisition of Amylin, GlaxoSmithKline's $3 billion purchase of Human Genome Sciences, and Dainippon
Summitomo Pharma's $2.6 billion acquisition of Boston Biomedical, which is developing drugs to target cancer stem cells.
Global partnering deals rose to $34.4 billion through the first 11 months of 2012, a 5.4% increase over the same period a
year ago. Discovery deals led the way with a total of 66 transactions, followed by preclinical (42), phase 2 (36), and phase
1 (28) transactions. Most deals are back-end loaded with significant milestones tied to achievement of sales targets for drugs
that are approved and marketed. Allergan's agreement with Swiss biotech Molecular Partners to develop and commercialize a
class of biologics aimed at treating serious eye diseases was the largest deal of the year through the end of November, with
$62.5 million in upfront payments and a potential total value of $1.4 billion.
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