BIO 2013 to BIO 2014: Huge Amount of Capital Raised by Life Sciences Industry in the Public Markets

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| Source: Burrill Media LLC

SAN FRANCISCO, June 23, 2014 (GLOBE NEWSWIRE) -- The life sciences industry raised $9.1 billion globally through 123 IPOs in the period between last year's BIO International Convention and this year's upcoming meeting. It is both the largest number of IPOs and the most money raised in any 12-month period in the 40+ history of the biotechnology industry and ample reason to be upbeat as the industry's members gather in San Diego for the 2014 BIO International Convention.

During the past 14 months, 97 companies raised $7.5 billion in the United States alone, with another seven IPOs in France, five in Japan, three in Taiwan, and two in the United Kingdom that included $333.5 million raised by UK biotech Circassia in March, an outsized IPO in any market especially considering the lack of IPO activity there.

After more than a month of almost no activity and a lot of speculation about whether or not investors had filled their coffers with biotech IPOs, seven companies raised almost a half billion dollars through initial public offerings during this week just before BIO 2014. Of these new offerings, only one took a deep haircut before going public.

BIO 2013 to BIO 2014: Performance of U.S. Life Sciences IPOs

  • Number of IPOs  97
  • Capital Raised      $7.5B
  • Avg price vs. target        -12.9%
  • Avg no. shares sold beyond target    20.9%
  • Avg capital raised vs. target        2.2%
  • Avg performance as of 6/20/14    36.4%

Therapeutics  

  • Number of IPOs        73
  • Capital Raised        $5.2B
  • Avg price vs. target        -13.0%
  • Avg no. shares sold beyond target    26.5%
  • Avg capital raised vs. target        6.1%
  • Avg performance as of 6/20/14    44.0%

"Though the issue of drug pricing, at the top of mind of stakeholders and politicians, triggered a market correction in late March and April, the biotech industry has been one of the best performers on Wall Street during the past 18 months," says G. Steven Burrill, CEO of Burrill Media, which produces publications and events focused on the global life sciences industry. 

The Burrill Biotech Select Index has risen 35.1 percent during the period compared with the benchmark S &P 500 (up 23.2 percent), the Dow Jones Industrial Average (up 15.1 percent), and the Nasdaq Composite Index (up 31%).

Change in Value BIO 2013 - BIO 2014

Index    Change

  • Burrill Select    35.4%
  • Burrill Large-Cap    34.6%
  • Burrill Mid-Cap    59.6%
  • Burrill Small-Cap    75.6%
  • Burrill Diagnostics    14.6%
  • Burrill Personalized Medicine    30.1%
  • NASDAQ    32.4%
  • DJIA    15.3%
  • S &P 500    24.0%
  • Amex Biotech    45.2%
  • Amex Pharmaceutical    24.0%
  • NASDAQ Biotechnology Index    49.4%

"Although payers, legislators, and consumer groups are up in arms over the cost of Gilead's new hepatitis C drug Sovaldi, it was the best new drug rollout ever as first quarter sales reached nearly $2.3 billion," Burrill says. "Because Sovaldi has a high rate of curing patients with the disease, the long-term value of using the drug is clear."

Issues of cost and value have also transformed the dealmaking environment since the last year's meeting in Chicago as drugmakers position themselves in a changing healthcare environment where drug pricing is a growing concern.

Big Pharma awoke from its acquisition slumber with a flurry of megadeals, several of which did not succeed. While the multibillion asset swap between Novartis and GlaxoSmithKline was about achieving global dominance in areas where the drugmakers were already big players, others such as Pfizer's failed $117 billion acquisition of AstraZeneca and AbbVie's failed attempt to buy Shire were driven by the tax advantages for U.S. companies relocating their headquarters to countries outside the United States, called inversions. A few days ago, mega-medical device maker Medtronic said it would acquire Ireland-based device maker Covidien for $42.9 billion in part to reduce its tax burden.

"Pharmaceutical companies in the face of unprecedented cost pressures are seeking to become more focused and efficient than ever," Burrill says.

Burrill's newest book on the industry, Biotech 2014 – Life Sciences: Transforming Healthcare, discusses how biotechnology is transforming healthcare, even as the demands on healthcare systems today are also transforming how life sciences companies develop products and conduct business. With more than 150 charts and figures, it provides a detailed analysis of the life sciences industry, including details of financing and dealmaking numbers and trends. It is available in both the print and digital edition at discounted rate for convention attendees at the BIO bookstore and can also be purchased at www.burrillmedia.com.

About Burrill

Burrill Media produces publications and events focused on the global life sciences industry. Its sister company Burrill Equities is a diversified global financial services firm focused on the life sciences industry. By leveraging the scientific and business networks of its team, Burrill Equities has established unrivaled access and visibility in the life sciences industry. This unique combination of resources and capabilities enables the company to provide life sciences companies with capital, transactional support, management expertise, insight, market intelligence, and analysis through its investments, conferences, and publications. Headquartered in San Francisco, the company's global network enables it to assist companies worldwide. For more information visit: www.burrillequities.com.

Marie Daghlian
Burrill Media

415-341-3870