2006: a Stellar Year for Financing

DATA PAGE 2006: A stellar year for financing

Stacy Lawrence

Last year, biotech excelled in terms of financing, but failed to set the where payments may (or may not) extend into the future. Debt deals led stock markets alight. Total biotech financing surpassed 2000 levels to all categories, almost doubling over 2005, whereas private investment reach $46 billion, although much of this came from partnership deals in public equity (PIPEs) increased by more than half. Stock market performance Global biotech industry financing Mainstream indices closed strongly to finish the year with double-digit Biotech financing increased by ~24% to $47 billion, with the amount of debt increases, whereas biotech indices had no gains or some losses after raised almost doubling and PIPEs growing by more than half. Partnering, recovering in the third quarter. venture capital and public offerings also grew, albeit more modestly.

120 2006 $17.3, 11.6, 5.7, 5.5, 4.5, 2.0 Nasdaq Biotech 2005 $17.3, 5.7, 5.4, 4.8, 2.7, 1.8 Biocentury 100 110 2004 $10.9, 8.6, 5.1, 3.3, 2.8, 2.5 Nasdaq 2003 $8.9, 8.7, 4.0, 3.9, 2.2, 0.5

100 Dow Jones Year 2002 $7.5, 5.4, 4.0, 1.0, 1.2, 0.3 Index Swiss Exchange 2001 $7.5, 5.3, 4.7, 4.1, 1.9, 0.4 90 2000 $6.9, 6.6, 5.2, 11.2, 4.7, 8.7 80 01020304050 6 06 Amount raised ($ billions) /3/06 /7/06 1/6/06 2/3/06 3 4/7/06 5/5/ 6/9/06 7 8/4/06 9/8/06 10/6/0611/3/06 12/8/0 í Partnering í Debt and other í Venture capital í Follow-on í PIPES í IPOs

All indices reset to 100 at start of year for better visualization of annual trend. Source: BioCentury, Burrill & Company Source: Multex, BioCentury http://www.nature.com/naturebiotechnology Global biotech initial public offerings Global biotech venture capital investment Markets in Europe continued to account for a significant share of VC investment climbed by 5% making this the third year in a row of IPO funds raised, with those in Asia-Pacific also contributing. growth.

$57 $230 $63 $78 $1,248 3,000 $474 $81 $1,341 $98 Asia-Pacific 6,000 $1,143 $4,433 $1,805 $15 $1,249 $3,951 Asia-Pacific 2,500 $863 $34 $44 $3,882 $930 Europe $3,417 $1,055 5,000 $985 $844 Europe 2,000 $913 North America $2,977 $3,113 4,000 North America 1,500 $7 $8 3,000 $35 1,000 $82 $19

($ millions) $35 2,000 $319 $483 Amount raised

500 ($ millions) $206 1,000

Nature Publishing Group Group Nature Publishing 0 2001 2002 2003 2004 2005 2006 VC amount raised

Amount Percent change in Company raised stock price Date Licensing/ Value Deal IPOs (Lead underwriters) ($ millions) since offer1 launched collaboration Researcher/investor ($ millions) description Date Altus Pharmaceuticals 105.0 26% 1/26/06 Genmab/GlaxoSmithKline 2,100 Develop of 12/19/06 (Merrill Lynch., Morgan Stanley, atumumab SG Cowen) (anti-CD20 IgG1κ) Renovo (Goldman Sachs) 99.9 101% 7/4/06 ChemoCentryx/GlaxoSmithKline 1,500 Develop four 8/24/06 Newron Pharmaceuticals 99.0 -3% 12/8/06 anti-inflammatory (Lehman Brothers, small molecules Morgan Stanley) targeting CCR1/ Affymax (Morgan Stanley) 92.5 38% 12/14/06 CCR9/C5aR Wilex (WestLB, Sal. 70.2 1% 11/10/06 Epix Pharmaceuticals/ 1,200 Develop small 12/13/06 Oppenheim jr. & Cie) GlaxoSmithKline molecules targeting Amount G protein–coupled Venture Company invested Number receptors capital (Lead investors) ($ millions) of round Date closed Fibrogen/Astellas 815 License small 4/28/06 Kalypsys 100.0 3 11/29/06 molecules inhibiting (Tavistock Life Sciences) hypoxia-inducible Macroflux 75.0 1 10/10/06 factor prolyl (Nomura Phase4 Ventures) hydroxylase Microbia 75.0 5 2/27/06 Trubion/Wyeth 800 Develop single-chain 1/3/06 (Sigma Capital Management) polypeptides Xanthus Pharmaceuticals (N/A) 68.0 2 11/30/06 targeting CD20 Merrimack Pharmaceuticals 65.0 5 4/3/06 (N/A). Plexxikon/Roche 706 Develop small 10/5/06 Mergers & Deal value Date molecule targeting acquisitions Acquirer/target ($ millions) announced2 B-RafV600E gene Merck/Serono 13,200 9/6/06 Sirna Therapeutics/ 700 Develop RNAi drugs 4/3/06 Abbott Laboratories/Kos 3,700 11/6/06 GlaxoSmithKline for respiratory disease Pharmaceuticals 1As of January 3. 2As of deal announcement date. Source: BioCentury, Recombinant Capital Gilead Sciences/Myogen 3,200 10/6/06 Eli Lilly/Icos 2,300 10/6/06 Watson Pharmaceuticals/Andrx 1,900 3/6/06 AstraZeneca/Cambridge Antibody 1,100 5/6/06 Technology Merck/Sirna Therapeutics 1,100 10/6/06 Stacy Lawrence is a Senior Writer at BioCentury Publications

156 VOLUME 25 NUMBER 2 FEBRUARY 2007 NATURE BIOTECHNOLOGY