The Burrill Report

Life sciences companies focused on therapeutics, diagnostics, and tools and technology raised almost $2.7 billion in new capital globally from public investors in February as biotech continued its hot streak in the U.S. capital markets. This included $968 million in new capital raised by 14 companies that completed initial public offerings and $1.7 billion raised by 22 companies that completed follow-on offerings during the month.

Investor demand continues to be healthy, driven by rising revenues, strong early sales of recently approved biotech drugs such as Gilead Sciences’ Sovaldi and Pharmacyclics’ Imbruvica, and the gains being captured in biotech stocks as positive clinical trial results has rocketed stocks higher. Shares of InterMune rose more than 170 percent last week after it reported positive late-stage clinical results for its experimental treatment pirfendone in patients with idiopathic pulmonary fibrosis, a debilitating disease that leads to scarring of the lungs. Marketed as Esbriet in Europe, the U.S. Food and Drug Administration refused to approve the drug in 2010 without an additional clinical trial.

Globally, a total of 18 life sciences companies (13 drug developers, one diagnostics company, and four medical device companies) raised $1.1 billion through IPOs and 23 companies raised $1.8 billion through follow-on offerings on global markets during February, making the month the biggest for IPOs since February 2000 and the biggest for follow-on offerings since March 2000.

Seattle-based Acucela completed the largest IPO of the month on Tokyo Stock Exchange’s Mothers, raising $162.4 million in one of the biggest biotech IPOs in Japan. The biotech is developing a treatment for geographic atrophy associated with dry age-related macular degeneration with partner Otsuka Pharmaceutical that is in late-stage development.

The performance of the twenty-two life sciences companies that have completed IPOs on U.S. exchanges so far this year is on average up 37.9 percent. Seventeen of these companies ended February above their IPO price and five companies ended the month below. Though the IPO fever of the first two weeks of February did not continue into the final two weeks of the month, twelve companies added themselves to the IPO queue, with three Israeli biotechs planning IPOs on U.S. exchanges. And two British biotechs, Circassia and Horizon Discovery, said they were planning IPOs on London’s AIM Stock Exchange.

Six life sciences companies took advantage of rising share prices to complete follow-on offerings during the last week of February raising $494 million in new capital. They included two Israeli companies: Compugen, which raised $63 million to support its immunotherapy programs, and Enzymotec, which raised $131.6 million to support its lipid-based medical products development.

Life sciences companies, especially drug developers, are off to a roaring start in 2014. It will be interesting to see if the momentum continues, the sector could surpass the banner year it had in 2013.


March 03, 2014
http://www.burrillreport.com/article-biotech_continues_hot_streak_in_u_s_markets.html