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Financial Snapshot For June 2003: Taking A Breather
Although the biotech stocks’ meteoric rise was slowed somewhat by profit-takers during the latter part of June, the sector ended the quarter in excellent shape. The stocks, as measured by the Nasdaq Biotech Index, were up 35% for the year, outperforming the Nasdaq Composite Index, which gained 22% between December 31, 2002 and June 30, 2003.
Perhaps the plateau reached in June was but a temporary resting place for biotech stocks, for the positive news keeps on flowing. In June, the FDA finally approved Corixa Corp. and GlaxoSmithKline plc’s non-Hodgkin’s lymphoma drug Bexxar and MedImmune Inc.’s intranasal flu vaccine FluMist. As well, the agency gave its approval to Xolair, the antibody-based therapy for asthma developed by Genentech Inc., Novartis Pharmaceuticals Corp. and Tanox Inc. And on the 2nd of July, Gilead Sciences Inc.’s HIV drug Emtriva (formerly Coviracil) joined the ranks of approved biotech therapies. The FDA’s on a roll – and that bodes extremely well for the sector.
While the Nasdaq Biotech Index slipped by about 2% between May 30, 2003 and June 30, 2003, it’s done quite well in the last year. Between June 28, 2002 and June 30, 2003, the Biotech Index climbed by 32%, while the Comp only added 11%.
Importantly, since May the sector has been trading higher than it was a year ago – the first time we’ve seen this phenomenon in quite a long time. (Even in April 2003, which was an excellent month, the Biotech Index was still down 14% from its year-ago levels).
While the Nasdaq Biotech Index gained 32% over the last 12 months, we must recall that this value only reflects the activity of the 71 largest and most actively traded biotech stocks. What about the hundreds of others? Well, here too we find that they’ve staged an amazing comeback. On June 27, 2003, the average 12-month change in price for the 253 stocks tracked by Recombinant Capital and Signals was 33% -- a dazzling number when you consider that the 12-month average change at the end of April 2003 was minus 24%. The median change in stock price at the end of June was 12%, compared to minus 3% in May and minus 34% in April.
June 2003 Stock Report
The June 2003 Stock Report, published by Recombinant Capital and Signals, includes detailed financial data on 253 publicly traded biotechnology stocks, based on their closing prices on June 27, 2003.
We have been tracking biotech stock performance since February 2000. To access the May 2003 Stock Report, click here. For the others -- February 2000 through April 2003 -- click here to go to Signals' Table Of Contents. [We did not publish Stock Reports for the June 2001 - September 2001 time frame.] Click on the year of interest; you will find all the Stock Reports listed under the Signals vs. Noise section. (The spreadsheets underlying these articles are quite large, so please be patient while you download them.)
In April 2003, we made several changes to our list. We added more than 30 companies, reclassified a number of companies that were already on the list and created a new category, “CRO/Service/Supply.”
We've classified the companies on the list into 19 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 100k), just click here. 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 6/27/03
|
% change from 6/28/02
|
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
|
|
|
67%
67% |
-5%
5% |
$1,411
$362 |
$672
$235 |
$739
$157 |
$155
$49 |
$0.5
$0.5 |
($199.4)
($100.1) |
3.5
2.3 |
1.2
1.0 |
|
|
64%
65% |
20%
-19% |
$197
$105 |
$100
$49 |
$135
$37 |
$41
$1 |
$0.4
$0.4 |
($31.1)
($30.4) |
2.5
1.3 |
1.0
0.6 |
|
|
63%
70% |
-18%
-16% |
$250
$143 |
$109
$58 |
$112
$30 |
$19
$1 |
$0.3
$0.2 |
($39.3)
($30.9) |
3.2
1.6 |
0.6
0.5 |
|
|
78%
89% |
-3%
10% |
$279
$61 |
$44
$8 |
$235
$44 |
$0
$0 |
$0.4
$0.3 |
($11.6)
($5.3) |
2.3
1.6 |
2.0
1.1 |
|
|
77%
82% |
75%
74% |
$554
$222 |
$126
$34 |
$429
$99 |
$27
$1 |
$3.5
$2.3 |
($45.1)
($23.5) |
2.2
1.4 |
10.8
2.1 |
|
|
70%
75% |
51%
18% |
$361
$174 |
$94
$40 |
$276
$128 |
$22
$0 |
$1.9
$1.5 |
($39.8)
($23.8) |
1.8
1.5 |
1.2
0.9 |
|
|
77%
76% |
29%
48% |
$421
$144 |
$132
$58 |
$288
$92 |
$42
$2 |
$2.0
$1.3 |
($30.6)
($18.6) |
3.7
3.1 |
1.1
1.0 |
|
|
68%
68% |
17%
-6% |
$293
$104 |
$137
$71 |
$156
$51 |
$40
$0 |
$0.5
$0.4 |
($13.5)
($10.3) |
7.6
2.3 |
1.2
0.7 |
|
|
64%
60% |
49%
4% |
$455
$132 |
$107
$46 |
$348
$102 |
$80
$0 |
$3.2
$1.6 |
($27.7)
($18.5) |
2.4
1.5 |
1.4
1.3 |
|
|
83%
92% |
12%
9% |
$714
$291 |
$196
$52 |
$554
$168 |
$73
$1 |
$0.4
$0.3 |
($31.6)
($29.6) |
1.6
1.5 |
4.0
1.2 |
|
|
69%
71% |
37%
-3% |
$412
$163 |
$101
$36 |
$311
$149 |
$89
$0 |
$2.0
$1.3 |
($34.4)
($17.2) |
2.0
1.4 |
1.5
1.5 |
|
|
84%
87% |
45%
39% |
$380
$190 |
$26
$15 |
$354
$166 |
$5
$0 |
$1.6
$1.2 |
($10.7)
($6.1) |
3.8
1.3 |
4.0
2.0 |
|
|
55%
56% |
24%
13% |
$125
$71 |
$57
$12 |
$72
$33 |
$7
$0 |
$0.8
$0.5 |
($33.5)
($20.6) |
2.2
1.0 |
0.6
0.5 |
|
|
62%
70% |
39%
24% |
$735
$89 |
$91
$16 |
$644
$83 |
$46
$0 |
$1.9
$1.0 |
($40.0)
($23.7) |
1.5
1.0 |
0.9
0.7 |
|
|
79%
81% |
37%
63% |
$517
$179 |
$90
$23 |
$427
$156 |
$1
$0 |
$2.0
$1.3 |
($57.7)
($15.2) |
2.6
1.9 |
1.4
1.3 |
|
|
70%
72% |
52%
42% |
$189
$144 |
$36
$15 |
$153
$113 |
$11
$2 |
$2.6
$1.0 |
($19.5)
($17.2) |
1.4
0.9 |
1.6
1.2 |
|
|
88%
92% |
56%
63% |
$23,103
$8,743 |
$1,355
$828 |
$21,748
$8,064 |
$797
$507 |
$4.8
$3.3 |
NA
NA |
NA
NA |
5.8
4.9 |
|
|
70%
80% |
1%
3% |
$425
$299 |
$133
$71 |
$292
$237 |
$75
$14 |
$1.1
$0.9 |
($72.5)
($81.3) |
1.7
1.6 |
1.0
1.2 |
|
|
79%
84% |
62%
107% |
$103
$86 |
$5
$3 |
$98
$79 |
$7
$1 |
$1.1
$0.6
|
($6.9)
($1.2) |
1.4
1.0 |
1.3
1.2 |
|
|
71%
74% |
33%
12% |
$1,002
$174 |
$135
$41 |
$888
$128 |
$56
$1 |
$1.7
$0.9 |
($38.4)
($23.6) |
2.4
1.6 |
2.0
1.2 |
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 June 2003 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 12/02 or 3/03, with some figures adjusted for more recent financings.
Highlights From The June 2003 Stock Report:
§ The biotech stocks surged through the first half of 2003. Since our December 2002 reported, the average market cap of the 253 companies in our universe climbed 29%, from $776 million on December 26, 2002 to $1,002 million on June 27, 2003. The median market cap is up nearly 70%, from $103 million to $174 million.
§ After a long period of lackluster performance, we have turned a corner for the sector as a whole. In their annual reports, many companies have reported an increase in the number of employees, and we see steady revenue growth and stronger pipelines.
§ The average technology value for the entire group is now $1.7 million per employee, with a median value of $0.9 million. This is a significant jump from June 2002, when we reported $1.0 million per employee and $0.5 million per employee, respectively.
§ Almost 40% of the companies in our universe saw their stock prices climb more than 30% over the one year period between June 28, 2002 and June 27, 2003. Moreover, nearly 79% of these companies saw their stock prices recover at least two-fold from their 52-week lows.
§ It’s also encouraging to note that only 14 companies on our list – less than 6% -- sported negative technology values at the end of June. A year ago, 38 firms, or 15%, suffered from negative technology values.
§ Thirty-one companies in the group – or 12% -- now have market caps of $1 billion or greater. And 98% of all firms had market caps of greater than $10 million at the end of June.
§ On the other hand, some companies are still faced with a difficult future. About 20% of the companies on our list have a survival index of less than one year. In June 2003, Sheffield Pharmaceuticals Inc. and Deltagen Inc. filed for bankruptcy, and there will probably be other bankruptcies and delistings to follow in the coming months.
§ Thus, although institutional investors have returned to the biotech sector – as witnessed by the heated market for convertible debt financings in June -- it may be a while until “average” investors jump back into biotech stocks.
Satomi Degami, Research Manager, Recombinant Capital
Jennifer Van Brunt, Editor, Signals
originally published 07/03/2003 |