Biotech companies and stocks had one of their best months of the year in October, according to a report Wednesday from Burrill & Co., a San Francisco merchant bank that specializes in the industry.
"Biotech is riding a wave of heightened investor enthusiasm driven by an increase in M&A activity, significant clinical data reported broadly and excellent third quarter financial reports," says Steven Burrill, CEO of Burrill & Co. "Historically, the fourth quarter has always been a good one for biotech and so there is every reason to believe that it is on target to make up for the beating suffered during the first two quarters of 2006.”
The biotech industry's aggregate market cap at the end of October was just over $488 billion and by the end of the year it could reach a new record high, Mr. Burrill says.
Merger and acquisition activity picked up in October, the company says.
Eli Lilly said it was acquiring Icos Corp. for $2.1 billion, a move that gains full ownership of the erectile-dysfunction drug Cialis.
Merck & Co., Inc. enhanced its interest in RNA interference technologies with its $1.1 billion acquisition of Sirna Therapeutics, Inc. Sirna has been at the forefront of efforts to create RNAi-based therapeutics.
The improved environment for biotechs opened the way for three IPOs getting done, although all had to modify their original filing prices ranges, Burrill says in its report.
Achillion Pharmaceuticals Inc. priced its initial public offering of 4.5 million shares of its common stock at $11.50 per share (down from its $14- $16 filing range). Net proceeds from the offering are expected to be approximately $46.2 million, or $53.4 million if the underwriters exercise their over-allotment option in full. The infectious disease company's shares closed October at $14.00 up 21 percent.
Cadence Pharmaceuticals priced six million shares at $9 each (also below its $11-$13 filing range) in its initial public offering. The company's shares closed October at $9.60 up 6 percent.
Trubion Pharmaceuticals Inc. priced its offering of four million shares at $13 per share. At the close of the month its shares were valued at $14.00, up 7 percent.
On the other side of the ledger, BioVex and Asthmatx withdrew their planned IPOs.
"Investors are obviously wondering whether the fourth quarter will be a robust one for the IPO market," says Mr. Burrill. He says investors are "still selectively looking at individual company portfolios and still skittish on the market's performance in October. While those that did get out benefited from the positive environment, valuation of offerings remains soft."
"Biotech is riding a wave of heightened investor enthusiasm driven by an increase in M&A activity, significant clinical data reported broadly and excellent third quarter financial reports," says Steven Burrill, CEO of Burrill & Co. "Historically, the fourth quarter has always been a good one for biotech and so there is every reason to believe that it is on target to make up for the beating suffered during the first two quarters of 2006.”
The biotech industry's aggregate market cap at the end of October was just over $488 billion and by the end of the year it could reach a new record high, Mr. Burrill says.
Merger and acquisition activity picked up in October, the company says.
Eli Lilly said it was acquiring Icos Corp. for $2.1 billion, a move that gains full ownership of the erectile-dysfunction drug Cialis.
Merck & Co., Inc. enhanced its interest in RNA interference technologies with its $1.1 billion acquisition of Sirna Therapeutics, Inc. Sirna has been at the forefront of efforts to create RNAi-based therapeutics.
The improved environment for biotechs opened the way for three IPOs getting done, although all had to modify their original filing prices ranges, Burrill says in its report.
Achillion Pharmaceuticals Inc. priced its initial public offering of 4.5 million shares of its common stock at $11.50 per share (down from its $14- $16 filing range). Net proceeds from the offering are expected to be approximately $46.2 million, or $53.4 million if the underwriters exercise their over-allotment option in full. The infectious disease company's shares closed October at $14.00 up 21 percent.
Cadence Pharmaceuticals priced six million shares at $9 each (also below its $11-$13 filing range) in its initial public offering. The company's shares closed October at $9.60 up 6 percent.
Trubion Pharmaceuticals Inc. priced its offering of four million shares at $13 per share. At the close of the month its shares were valued at $14.00, up 7 percent.
On the other side of the ledger, BioVex and Asthmatx withdrew their planned IPOs.
"Investors are obviously wondering whether the fourth quarter will be a robust one for the IPO market," says Mr. Burrill. He says investors are "still selectively looking at individual company portfolios and still skittish on the market's performance in October. While those that did get out benefited from the positive environment, valuation of offerings remains soft."
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