2009: Turning the Corner

DATA PAGE 2009: Turning the corner Walter Yang Despite the shaky start to 2009, the biotech sector regained its financial Although initial public offerings showed signs of resuscitation (at least footing. Biotech indices were up, as were offerings and partnership mon- 13 more companies are now in the queue), follow-on financings came in ies. Excluding collaborations, the sector raised a total of $24.3 billion. above $6 billion—the second-best year over the past decade. <ul style="display: flex;"><li style="flex:1">Stock market performance </li><li style="flex:1">Global biotech industry financing </li></ul>Although biotech indices were up ~16% last year, they underperformed The boost in partnership promises to US biotechs and follow-on financings <ul style="display: flex;"><li style="flex:1">other major indices. </li><li style="flex:1">pushed industry funding to $61.3 billion, up 82% from 2008. </li></ul>1,500 36.9 10.0 5.1 2.2 6.0 0.9 S&P 500 Swiss Market 2009 2008 2007 2006 2005 2004 2003 NASDAQ Biotech NASDAQ Dow Jones 1,400 1,300 1,200 1,100 1,000 900 20.0 3.2 5.3 3.1 1.9 0.1 22.4 11.7 6.8 4.7 4.4 3.0 BioCentury 100 Partnering Debt and other Venture capital PIPEs 19.8 11.9 5.6 4.7 5.6 2.0 17.3 6.1 5.4 2.7 4.8 1.9 10.9 8.8 5.3 2.9 3.3 2.6 8.9 9.1 4.0 2.2 3.9 0.5 Follow-ons 800 IPOs <ul style="display: flex;"><li style="flex:1">0</li><li style="flex:1">10 </li><li style="flex:1">20 </li><li style="flex:1">30 </li><li style="flex:1">40 </li><li style="flex:1">50 </li><li style="flex:1">60 </li><li style="flex:1">70 </li></ul>700 Amount raised ($ billions) Partnership figures are for deals involving a US company. Source: BCIQ: BioCentury Online Intelligence, Burrill & Co. Month ending PIPEs, private investments in public equity; IPOs, initial public offerings Global biotech venture capital (VC) investment Global biotech initial public offerings (IPOs) Venture money fell slightly last year, as private companies raised <ul style="display: flex;"><li style="flex:1">$5.1 billion versus $5.3 billion in 2008. </li><li style="flex:1">The North American IPO market showed signs of life, with four companies </li></ul>raising $705 million versus only one raising $6 million in 2008. 107 1,436 5,241 8,000 Asia-Pacific Europe 585 1,055 1,309 58 1,206 4,315 3,500 7,000 6,000 5,000 4,000 3,000 2,000 1,000 078 1,451 3,871 69 1,213 4,045 55 1,145 4,070 Asia-Pacific Europe 53 1,130 3,947 230 474 1,852 3,000 2,500 2,000 1,500 1,000 500 40 797 Americas 98 869 1,063 15 930 913 Americas 3,151 65 158 705 43 19 483 12 115 6<ul style="display: flex;"><li style="flex:1">2003 </li><li style="flex:1">2004 </li><li style="flex:1">2005 </li><li style="flex:1">2006 </li></ul>Year <ul style="display: flex;"><li style="flex:1">2007 </li><li style="flex:1">2008 </li><li style="flex:1">2009 </li></ul>0<ul style="display: flex;"><li style="flex:1">2003 </li><li style="flex:1">2004 </li><li style="flex:1">2005 </li><li style="flex:1">2006 </li></ul>Year <ul style="display: flex;"><li style="flex:1">2007 </li><li style="flex:1">2008 </li><li style="flex:1">2009 </li></ul><ul style="display: flex;"><li style="flex:1">2003 2004 2005 </li><li style="flex:1">2006 2007 2008 2009 </li></ul>Americas Europe Asia-Pacific 184 77 5 190 82 6 182 95 9 204 81 8 223 105 9 212 101 6 196 87 42003 2004 2005 2006 2007 2008 2009 Americas Europe Asia-Pacific 815 35 12 6 18 24 3 26 21 3 23 21 7 132 433Table indicates number of VC investments and includes rounds where the amount <ul style="display: flex;"><li style="flex:1">raised was not disclosed. Source: BCIQ: BioCentury Online Intelligence </li><li style="flex:1">Table indicates number of IPOs. Source: BCIQ: BioCentury Online Intelligence </li></ul>Notable 2009 deals <ul style="display: flex;"><li style="flex:1">IPOs </li><li style="flex:1">Mergers and acquisitions </li></ul>Percent change in stock price ($ millions) since offer completed Target Genentech Sepracor Medarex CV Therapeutics Cougar Biotechnology Ovation Pharmaceuticals Proteolix Acquirer Roche <ul style="display: flex;"><li style="flex:1">Value ($ millions) </li><li style="flex:1">Date announced </li></ul>Amount raised <ul style="display: flex;"><li style="flex:1">$46,800 </li><li style="flex:1">12-Mar </li></ul>Date Dainippon Sumitomo Bristol-Myers Squibb Gilead Sciences Johnson & Johnson H. Lundbeck $2,600 $2,400 $1,400 $1,000 $900 3-Sep 22-Jul 12-Mar 21-May 09-Feb 12-Oct Company (lead underwriters) Talecris (Morgan Stanley, Goldman Sachs, Citigroup, JPMorgan) Movetis (Credit Suisse, KBC) Cumberland (UBS, Jefferies, Wells Fargo) Omeros (Deutsche Bank) <ul style="display: flex;"><li style="flex:1">$550.0 </li><li style="flex:1">17% </li><li style="flex:1">30-Sep </li></ul>$146.0 $85.0 $68.2 $40.7 3% –5% –30% –13% 3-Dec 10-Aug 7-Oct <ul style="display: flex;"><li style="flex:1">Onyx Pharmaceuticals </li><li style="flex:1">$851 </li></ul><ul style="display: flex;"><li style="flex:1">China Nuokang (Jefferies) </li><li style="flex:1">9-Dec </li></ul>Licensing /collaboration Researcher Investor Value Venture capital ($ millions) Deal description $1,924 Develop small molecules against four central nervous system disease targets Amount raised ($ millions) <ul style="display: flex;"><li style="flex:1">PTC </li><li style="flex:1">Roche </li></ul>Round number Date closed NA Therapeutics Company (lead investors) <ul style="display: flex;"><li style="flex:1">Nektar </li><li style="flex:1">AstraZeneca $1,505 Worldwide rights to NKTR-118 for opioid-induced con- </li></ul>stipation and NKTR-119 for pain without constipation Clovis Oncologya (Domain, New Enterprise Associates, Versant, Aberdare, Abingworth, Frazier, ProQuest, company management) <ul style="display: flex;"><li style="flex:1">$145.0 </li><li style="flex:1">21-May </li></ul><ul style="display: flex;"><li style="flex:1">Incyte </li><li style="flex:1">Novartis </li><li style="flex:1">$1,310 Ex-US rights to INCB18424; in phase 3 for myelofibro- </li></ul>sis; worldwide rights to preclinical INCB28060 <ul style="display: flex;"><li style="flex:1">Zogenix (Clarus, Domain) </li><li style="flex:1">$71.0 </li></ul>$70.0 $68.0 $60.0 $56.4 $55.0 2653NA 3 07-Dec 10-Nov 12-Aug 30-Jun 12-May 18-Feb Targacept Exelixis AstraZeneca $1,240 Worldwide rights to develop and commercialize major depressive disorder compound TC-5214 Sanofiaventis BioVex (Forbion, Morningside, Ventech, MVM) Pacific Biosciencesb (Deerfield, Intel) Hyperion (Bay City Capital, Panorama Capital) NovImmune (BZ Bank) Sopherion (Zoticon Bioventures) aLead investor not available. bSeries E extension. >$1,161 Exclusive, worldwide rights to XL147 and XL765 in phase 1b/2 to treat cancer ZymoGenetics Bristol-Myers $1,105 Codevelop and commercialize ZymoGenetics’ phase 1 Squibb hepatitis C virus compound PEG-interferon lambda >$1,075 Codevelop and commercialize therapeutics for obesity and related indications Amylin Alder Takeda Bristol-Myers $1,069 Worldwide rights to ALD518 for all indications, except Squibb cancer 116 volume 28 number 2 february 2010 nature biotechnology

2009: Turning the Corner

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