|  |
Financial Snapshot For December 2002: Down, But Not Out
It seems that the current bear market will never end. Wall Street just closed out 2002 on a down note -- for the third straight year. All three of the major market indices -- the Dow Jones Industrial Average, the Nasdaq Composite Index and the Standard & Poor's 500 index -- suffered losses in 2002, as they had in 2001 and 2000. This three-year losing streak hasn't happened to the Dow and the S&P since 1939-1941. And it's the first time in Nasdaq's 31-year history that it's recorded a three-year loss.
Given those unsettling statistics, it comes as no surprise that the biotech stocks have also taken a beating. But, due to the genomics bubble, the biotechs actually outperformed the Nasdaq Comp in 2000: That year, the Nasdaq Biotech Index gained 23%, while the Comp lost 39%.
Since then, as we know all too well, it's been a downhill ride. Between December 29, 2000 and December 31, 2002, the Nasdaq Biotech Index dropped by 54%, while the Comp shed 46%.
And it's not over yet. During October and November 2002, both the Biotech Index and the Comp exhibited significant gains: The Biotech Index rose by 11% and 9%, respectively, while the Comp gained 11% each month. In December, however, both indices fell back: The Biotech Index shed 11% and the Comp lost 10%.
For the year ended December 31, 2002, the Nasdaq Biotech Index dropped by 45%, underperforming the Comp, which lost 32% between December 31, 2001 and December 31, 2002.
If the 72 stocks (the largest and most actively traded) that comprise the Nasdaq Biotech Index took such a beating in 2002, what of the others? Unfortunately, many biotech stocks fared worse. On December 26, 2002, the average price drop for the 233 stocks tracked by Recombinant Capital and Signals was 50% and the median change in stock price from December 31, 2001 was minus 57%.
On a positive note, the biotech stocks are still in better shape than they were in mid-July: Between July 10 and December 31, 2002, the Biotech Stock Index rose by 23% (while the Comp shed 1%).
December 2002 Stock Report
The December 2002 Stock Report, published by Recombinant Capital and Signals, is the 31st in a series. It includes detailed financial data on 233 publicly traded biotechnology stocks, based on their closing prices on December 26, 2002.
(To access the November 2002 Stock Report, click here. For the others -- February 2000 through October 2002 -- click here to go to Signals' Table Of Contents. [We did not publish stock reports for the June 2001 - September 2001 time frame.] All the Stock Reports are listed under the Signals vs. Noise section. The spreadsheets underlying these articles are quite large, so please be patient while you download them.)
We've classified the companies on the list into 18 separate categories, based largely on either technology or disease focus. These categories can be found in the table that follows, which provides a summary of the underlying data and the average values (the sum of all values divided by the number of values) for each. Because the average value tends to be distorted when there are extreme values in a set (as occurs in the biotech stocks as a group and even within groups), we've also calculated the median (mid-point) for each set of data and for the entire group. We believe that the median values reflect a more realistic financial profile for the biotech stocks.
If you wish to access the entire spreadsheet (HTML 222k), just click here (and remember, it's a large spreadsheet and takes time to download. Don't despair if your screen seems to remain forever blank after the download; it might take a minute or so for the spreadsheet to appear.) If you wish to access the section of the spreadsheet that concerns a specific category (i.e., cancer or gene therapy), click on that category in the summary table below.
|
Company
|
% 52 wk high on 12/26/02
|
% change from 12/31/01
|
Market cap ($M)
|
Cash & Mkt. Sec. ($M)
|
Tech value ($M)
|
LT Debt plus Convert.
|
Tech value/staff ($M)
|
Est. burn rate ($M)
|
Survival index (yrs)
|
Equity multiple
|
|
|
25%
26% |
-73%
-72% |
$878
$348 |
$789
$275 |
$89
($18) |
$275
$94 |
$0.0
$0.0 |
($149.6)
($51.7) |
4.7
3.5 |
0.8
0.6 |
|
|
37%
38%
|
-55%
-60% |
$305
$87 |
$201
$95 |
$103
$11 |
$44
$1 |
$0.2
$0.1 |
($35.3)
($29.2) |
8.7
2.0 |
1.2
0.5 |
|
|
25%
20% |
-73%
-77% |
$142
$48 |
$113
$64 |
$29
($4) |
$17
$1 |
$0.0
$0.0 |
($43.1)
($34.5) |
2.9
1.7 |
0.4
0.4 |
|
|
54%
47% |
-30%
-33% |
$311
$5 |
$25
$2 |
$285
$3 |
$0
$0 |
$0.2
$ 0.4 |
($0.8)
($0.1) |
10.4
1.1 |
1.4
1.0 |
|
|
48%
52% |
-45%
-46% |
$301
$65 |
$112
$30 |
$189
$21 |
$20
$0 |
$1.5
$1.3 |
($36.2)
($9.6) |
23.2
1.8 |
0.9
1.0 |
|
|
30%
29% |
-63%
-66% |
$204
$87 |
$100
$53 |
$103
$19 |
$26
$0 |
$0.7
$0.2 |
($42.6)
($26.3) |
3.6
2.1 |
0.8
0.5 |
|
|
50%
39% |
-35%
-56% |
$409
$64 |
$112
$52 |
$298
$27 |
$38
$3 |
$1.3
$0.9 |
($49.1)
($24.9) |
2.2
1.9 |
1.1
1.0 |
|
|
37%
38% |
-55%
-56% |
$240
$82 |
$134
$70 |
$107
$46 |
$33
$0 |
$0.4
$0.3 |
($27.0)
($20.5) |
5.3
2.8 |
0.9
0.8 |
|
|
41%
45% |
-57%
-67% |
$525
$85 |
$137
$53 |
$388
$23 |
$99
$0 |
$1.3
$0.4 |
($35.0)
($23.4) |
2.2
1.5 |
1.1
0.5 |
|
|
35%
26% |
-54%
-76% |
$241
$70 |
$126
$28 |
$116
$56 |
$113
$1 |
$0.7
$0.4 |
($104.2)
($39.9) |
1.0
0.7 |
0.9
0.7 |
|
|
55%
61% |
-36%
-36% |
$269
$104 |
$26
$21 |
$243
$77 |
$4
$0 |
$0.9
$0.5 |
($13.5)
($11.0) |
5.2
1.7 |
2.5
1.1 |
|
|
33%
41% |
-61%
-56% |
$104
$34 |
$106
$37 |
$3
$1 |
$9
$1 |
($0.1)
$0.0 |
($43.1)
($26.9) |
2.8
1.3 |
0.4
0.3 |
|
|
44%
49% |
-44%
-48% |
$896
$93 |
$118
$43 |
$778
$79 |
$44
$1 |
$2.3
$1.0 |
($43.9)
($31.9) |
1.5
1.2 |
1.2
0.7 |
|
|
43%
50% |
-36%
-46% |
$487
$100 |
$80
$62 |
$407
$40 |
$3
$0 |
$2.9
$1.0 |
($51.4)
($22.5) |
1.1
1.0 |
3.9
1.6 |
|
|
46%
42% |
-33%
-43% |
$365
$99 |
$67
$16 |
$297
$88 |
$24
$0 |
$0.6
$0.4 |
($16.0)
($11.5) |
1.7
1.0 |
1.6
1.0 |
|
|
65%
70% |
-30%
-27% |
$18,173
$6,812 |
$1,419
$793 |
$16,754
$6,443 |
$729
$40 |
$4.0
$2.8 |
NA
NA |
NA
NA |
6.7
2.8 |
|
|
40%
31% |
-48%
-64% |
$280
$186 |
$132
$82 |
$149
$65 |
$59
$6 |
$0.6
$0.7 |
($57.0)
($47.5) |
3.2
1.9 |
0.8
0.7 |
|
|
62%
69% |
-16%
1% |
$84
$73 |
$4
$4 |
$79
$68 |
$2
$1 |
$1.0
$0.8 |
($11.3)
($0.2) |
6.7
1.0 |
1.0
1.0 |
|
|
40%
37% |
-50%
-57% |
$776
$103 |
$147
$55 |
$633
$56 |
$55
$0 |
$0.9
$0.4 |
($42.7)
($27.0) |
4.6
1.8 |
1.3
0.7 |
Footnotes to the table:
§ Technology value: Market cap - cash (and cash equivalents)
§ LT debt plus convert.: Long-term debt plus convertible debt
§ Estimated burn rate: Net loss from the last available quarterly report, X4. Companies with net profit (instead of loss) are indicated as "na."
§ Survival index: Cash (plus cash equivalents) / Estimated burn rate.
§ Equity multiple: Market cap / (common stock + preferred stock + additional paid-in capital).
§ Median: Middle value in a set of values
§ The information contained in the December 2002 Stock Report has been obtained from public sources. Where information is not available, it is indicated as "na." Recombinant Capital cannot warrant the ultimate accuracy of the data. All data are subject to change.
§ Most of the accounting figures are from quarterly reports as of 6/02, with some figures adjusted for quarterly reports as of 9/02 and/or one-time write-offs.
Highlights From The December 2002 Stock Report:
§ The continued pressure on biotech stock prices has taken a heavy toll. While the stocks in our universe did manage to rally in the late fall, they couldn't hold on in December. In fact, between November 29 and December 31, 2002, about 80% of the companies on our list saw their stock prices move lower.
§ At the end of December 2001, there were 254 companies on our list. A year later, that number had been whittled down to 233. Some companies have dropped off our list due to M&A activity, others have gone bankrupt, and the remainder have been delisted from Nasdaq.
§ At the end of December 2001, 13 (or 5%) of the stocks on our list closed at $1 per share or less. A year later, that number had increased dramatically, with 43 (or 18%) closing at $1 per share or less on December 26, 2002.
§ Obviously, declining stock prices lead to shrinking market caps. At the end of December 2001, the median market cap for the biotech companies in our universe was $239 million. At the end of December 2002, the median market cap was $103 million.
§ With such low valuations, an increasing number of companies are trading below cash. At the end of December 2001, 11 (4%) of the firms on our list had negative technology values, meaning that their cash, cash equivalents and marketable securities were worth more than their market caps. At the end of December 2002, 54 (23%) of the companies in our universe had negative technology values.
§ The list of companies trading below cash includes many of the biotech sector's former high-flyers -- Human Genome Sciences Inc., Incyte Genomics Inc. and Celera Genomics Group, for instance.
§ In fact, the genomics sector suffered greatly in 2002: Stocks of the 1st generation genomics companies lost a median 72% of their value; genomic supply companies lost a median 60% and genomic target-based companies saw their stocks drop by a median 77% over the year just ended. All three groups fared worse than the median for the entire universe of 233 companies.
§ But these weren't the only groups that fell below the grand median loss in stock price of 57%. Others included: cancer (-66%); CNS (-67%); delivery (-76%) and screening (-64%).
§ While some public biotech companies managed to raise money in 2002 (mainly through private equity or debt financings), most are now in survival mode. And until the market turns around, we are likely to see more announcements of delistings, bankruptcies and mergers in the coming months.
Satomi Degami, Research Manager, Recombinant Capital
Jennifer Van Brunt, Editor, Signals |