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The Burrill Weekly Brief | October 10, 2011

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German Law Has Companies Weighing Whether to Sell New Drugs in Europe's Largest Market Podcast: October 10, 2011

The drug reorganization act in Germany known as AMNOG places new requirements on pharmaceutical companies to provide justification for their pricing. The new value assessment process is already causing companies to reconsider whether or not to launch new products in what is the largest pharmaceutical market in Europe. We spoke to Achim Diedenhofen, founder and partner of the consulting firm Executive Insight, about the new law, what it means to pharmaceutical revenues, and how companies will need to think about rolling out their drugs in Europe going forward.
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The October 2011 issue of The Burrill Report is now available 

The October 2011 issue of The Burrill Report is available. This month's issue focuses on personalized medicine. In addition, the issue features our usual round up of industry deals and data. 

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This issue is sponsored in part by Thomson Reuters. Click Here for a free trial of Thomson Reuters Cortellis for unrivaled competitive drug intelligence.

By The Numbers

Biggest movers for the week ending October 7, 2011

TICKER COMPANY CLOSING PRICE 9/30/2011 CLOSING PRICE 10/07/2011 PRICE CHANGE PERCENT CHANGE  
ADVANCERS
GEVO Gevo, Inc. 5.57 7.39 1.82 32.7%
ORNI Oragenics Inc. 1.55 1.95 0.4 25.8%
PPDI Pharmaceutical Product Development, Inc. 25.66 32.12 6.46 25.2%
INHX Inhibitex, Inc. 2.46 2.96 0.5 20.3%
REPC.F RepliCel Life Sciences Inc. 2.25 2.7 0.45 20.0%
DECLINERS
ILMN Illumina Inc. 40.92 27.18 -13.74 -33.6%
CSII Cardiovascular Systems Inc. 11.39 7.58 -3.81 -33.5%
SGMO Sangamo Biosciences Inc. 4.35 3.12 -1.23 -28.3%
HZNP Horizon Pharma, Inc. 6.99 5.2 -1.79 -25.6%
KIOR KiOR, Inc. 20.74 15.73 -5.01 -24.2%
Includes life sciences stocks with closing price of $1 or more on September 30, 2011

Job Data, European Action on Debt Crisis Bolsters Market
U.S. stocks rebounded from a dismal start on Monday to finish higher for the week. The market was bolstered by positive job data and hopes that Europe is better dealing with its debt crisis. Stocks fell to 13 month lows on Monday, but for the week the Dow Jones Industrial Average was up 1.7 percent, the S&P 500 gained 2.1 percent, and the Nasdaq Composite Index rose 2.7 percent. The Burrill Biotech Select Index stayed steady despite the volatile week and remains up 8.41 percent year-to-date. Gevo shares showed the greatest gains this week, up 32 percent on news that it had been awarded a contract by the Defense Logistics Agency to supply jet fuels to the Air Force. Burrill & Company is an investor in Gevo. Illumina’s shares took a big hit this week, plummeting 33.6 percent after news broke that its third-quarter revenue would fall well short of consensus estimates of $278 million. 

Contract Researcher PPD Goes Private
The $3.9 billion deal is one of the largest private equity buyouts of 2011. 

Pharmaceutical Product Development, or PPD, is being taken private by affiliates of the Carlyle Group and Hellman & Friedman in an all cash deal valued at $3.9 billion. The two private equity firms are paying $33.25 per share for PPD, a 29.6 percent premium over its closing price September 30. Read More Here



INDEX 12/31/10 9/30/11 10/7/11 CHANGE  WEEK CHANGE YEAR CHANGE QUARTER CHANGE YEAR
Burrill Select 365.12 396.75 395.84 -0.23% 8.41% -7.69% 8.66%
Burrill Large Cap 526.55 474.08 472.68 -0.30% -10.23% -18.74% -9.55%
Burrill Mid-Cap 218.10 271.18 285.09 5.13% 30.72% -3.88% 24.34%
Burrill Small Cap 94.97 82.31 77.81 -5.47% -18.07% -20.68% -13.33%
Burrill Diagnostics 158.05 162.88 163.06 0.11% 3.17% -14.21% 2.85%
Burrill Personalized Medicine 106.26 96.83 93.01 -3.95% -12.47% -11.63% -8.34%
Burrill BioGreenTech 152.78 134.19 136.78 1.93% -10.47% -13.80% -11.50%
Canadian Biotech 55.68 50.56 48.46 -4.15% -12.97% -20.11% -4.83%
NASDAQ 2652.87 2415.40 2479.35 2.65% -6.54% -12.91% -8.95%
DJIA 11577.51 10913.38 11103.12 1.74% -4.10% -12.09% -5.74%
Amex Biotech 1297.61 1124.97 1116.69 -0.74% -13.94% -22.98% -13.30%
Amex Pharmaceutical 305.88 305.44 304.16 -0.42% -0.56% -8.09% -0.14%

Former Cougar Biotechnology CEO Seeks to Repeat Success with Puma 
With $55 million from former investors, Auerbach licenses Pfizer cancer drug.

Alan Auerbach is vying for a repeat success. The former Cougar Biotechnology founder and CEO says his newest venture, Puma Biotechnology, has acquired the rights to Pfizer’s late-stage cancer drug, neratinib, completed a reverse merger, and raised $55 million. Read More Here

Avastin Loses Insurer Support in California
Blue Shield of California follows FDA’s lead in questioning drug’s value. 

Blue Shield of California will require all new requests to treat breast cancer with Genentech’s Avastin to be reviewed and found medically necessary by a panel of oncology experts before covering the therapy. Read More Here

Sing for Your Supper
NIH chief tries to inspire a chorus. 

Francis Collins has been known to sing. There are various YouTube videos of him with guitar in hand belting out a tune. But the other day Collins was hoping to get others to sing, as it were, in unison. 
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Thriving in the Data Deluge
New infrastructure, standardization, and technical literacy key elements for finding meaning in genomics revolution. 

During a recent bit of home computer maintenance I moved several gigabytes of family photos from one hard drive to another. I know there are some wonderful snapshots hidden among the seemingly infinite 0’s and 1’s encoding my memories. But given the volume of data, it will undoubtedly take me hours to find them. Even once I’ve identified the good stuff, I’m haunted by knowing that my wife has captured gigabytes of her own photos of many of the same events and people from different angles, named them different things, and filed them away with different organizational schemes on her own drives and social networks. Read More Here

Illumina Falls on Disappointing Sales
The weekly round-up of failed trials, missed targets, and other business mishaps.

Illumina shares sank nearly 35 percent to $27.01 Friday morning on news that the company’s forecasted third-quarter revenue of about $235 million fell short of consensus estimates of $278.3 million. The maker of tools for genetic analysis said the uncertainty related to unknown levels of research funding has resulted in purchasing delays for both instruments and consumables, particularly among large-volume sequencing centers. Read More Here

FDA Outlines Innovation Plan
Agency seeks to accelerate personalized medicine drive, improve service to small business.

The U.S. Food and Drug Administration has unveiled a new plan to address the most pressing concerns of industry and patient advocates, highlighting its plans to build a better agency as it makes its case to Congress for a bigger budget. Read More Here

Blame it on the FDA
VCs attribute decreased investment in medical innovation to regulatory hurdles.

A new report blasts the U.S. Food and Drug Administration for putting the United States at risk of losing its leading position as a home of biomedical innovation. The report, based on a survey of venture capitalists, says regulatory challenges posed by the agency are the main factor for declining investment in experimental drug and device startups in the United States and a shift toward investment in Europe and Asia. Read More Here

Commentary : Et tu, Pharma?
Like Gogol says, "It is no use to blame the looking glass if your face is awry." 

According to a survey by the National Venture Capital Association’s Medical Innovation & Competitiveness Coalition, VC firms are decreasing their investments in biopharmaceutical and medical device companies and shifting investment away from the U.S. towards Europe and Asia. The statements came as part of a survey of 156 of NVCA’s member firms. Of the respondents, 39% of firms decreased investment in life sciences companies over the last three years and the same percentage expect to further decrease investment over the next three years. Read More Here

 

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