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Financial Snapshot For December 2009: A Harbinger Of Days To Come
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Coming after a year of economic turmoil that affected businesses and governments across the globe, it’s not surprising that the capital markets got off to a rocky start in 2009. Fortunately, they bottomed out in March and have been on the mend – albeit slowly – ever since. Between December 26, 2008 and December 31, 2009, the Dow Jones Industrial Average (DJIA) gained 22%, the S&P 500 Index rose by 28%, and the Nasdaq Composite Index (Comp) soared 48%. Compare these numbers to the indices’ behavior for the calendar year 2008: the DJIA dropped 34%, the S&P 500 Index lost 39%, and the Comp shed 41% (its worst year ever).
Stocks in the biotech and specialty pharma sector took some major hits, too, but all in all they weathered the storm remarkably well. As measured by the AMEX Biotechnology Index, these stocks also hit a low in March 2009, then started to slowly improve until the end of the first full week of July – at which point they bounded to higher levels and kept right on going. When all was said and done, the biotech and specialty pharma stocks – as measured by the AMEX Biotech Index – jumped 50% between December 26, 2008 and December 31, 2009, even outperforming the Comp, which gained 48% during the same time frame. (As with the other indices mentioned here, the AMEX Biotech Index suffered in 2008, dropping 18% over the course of the year.)
Surprisingly, the 181 stocks in our universe, when taken as a whole, performed far better than the AMEX Biotech Index – gaining 168% in value, on average, between December 26, 2008 and December 31, 2009.
Since so many of the public companies we track have low stock prices and dwindling resources – especially in a constrained economy – we expect to see an average 12-month performance far below that of the Amex Biotech Index. And we usually do. But we’ve seen this reversal of fortune (so to speak) since September 2009.
In part, this is due to the underwhelming performance of many of the sector’s top-tier companies in 2009. The 5 stocks in our revenue-driven group lost an average of 5% over the course of the year, led by troubled Genzyme Corp., whose stock dropped 26%. Gilead Sciences Inc.’s stock shed 13% and even the almighty Amgen Inc. saw its stock shed 1% during 2009.
On the other hand, a large number of biotech and specialty pharma stocks exhibited substantial gains in 2009 – and a few went ballistic. Incyte Corp., for instance, saw its stock appreciate 162% between December 22, 2008 and December 31, 2009, EntreMed Inc.’s stock gained 300%, and Dendreon Corp.’s stock rose 470%. But Human Genome Sciences Inc.’s stock left them all in the dust: It gained 1,776% year over year. And Keryx Biopharmaceuticals Inc.’s stock rose 1,090% during the same time frame.
Sadly, not all biotech stocks have had such good fortune: We lost 28 stocks from our universe in 2009, many of them to bankruptcy.
December 2009 Stock Report
The December 2009 Stock Report, published by Deloitte Recap LLC and Signals, includes detailed financial data on 181 publicly traded biotechnology stocks, based on their closing prices on December 31, 2009.
We have been tracking biotech stock performance since February 2000. To access the September 2009 Stock Report, click here. For the others -- February 2000 through March 2009 -- click here to go to Signals' Table Of Contents. [We did not publish Stock Reports for the June 2001 - September 2001 time frame, nor did we publish one for June 2009.] Click on the year of interest; you will find all the Stock Reports listed under the Signals vs. Noise section.
We've classified the companies on the list into 17 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 88k), 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 12/31/09 |
% change from 12/26/08 |
Market cap ($M) |
Liquidity, pro forma ($M) |
Company valuation ($M) |
Valuation/
employee ($M) |
Burn rate, annualized
($M) |
Survival index (yrs) |
Cash/
cash from IPO/
share |
1st Generation
Genomics
Average:
Median: |
83%
95% |
639%
162% |
$2,879
$2,510 |
$221
$206 |
$3,003
$2,193 |
$5.8
$7.1 |
($211)
($211) |
0.8
0.8 |
6.0
4.8 |
Genomic Supply
Average:
Median: |
67%
74% |
1,008%
87% |
$580
$157 |
$134
$23 |
$579
$192 |
$1.5
$1.1 |
($27)
($19) |
2.0
1.1 |
0.7
0.3 |
Genomic Targets
Average:
Median: |
57%
62% |
10%
0% |
$320
$299 |
$110
$87 |
$275
$246 |
$0.9
$0.6 |
($84)
($80) |
1.9
1.1 |
0.4
0.3 |
Autoimmune
Average:
Median: |
54%
57% |
32%
14% |
$1,159
$150 |
$86
$92 |
$1,092
$65 |
$5.0
$2.8 |
($23)
($27) |
2.3
1.4 |
1.6
0.2 |
Cancer
Average:
Median: |
58%
53% |
117%
66% |
$429
$172 |
$94
$45 |
$374
$127 |
$15.8
$1.8 |
($61)
($38) |
2.3
1.2 |
0.9
0.4 |
Cardiovascular
Average:
Median: |
35%
38% |
-37%
-45% |
$162
$31 |
$58
$25 |
$109
$33 |
$1.5
$0.9 |
($24)
($24) |
0.4
0.4 |
0.1
0.0 |
Chemistry
Average:
Median: |
71%
71% |
65%
15% |
$1,279
$189 |
$181
$94 |
$1,163
$166 |
$2.0
$0.6 |
($173)
($35) |
5.1
1.2 |
1.8
0.4 |
CNS
Average:
Median: |
67%
69% |
804%
38% |
$597
$174 |
$194
$54 |
$510
$141 |
$5.2
$1.4 |
($41)
($44) |
127.5
0.8 |
1.1
0.5 |
Delivery
Average:
Median: |
65%
71% |
67%
60% |
$362
$179 |
$100
$43 |
$323
$143 |
$2.8
$1.7 |
($41)
($32) |
1.9
1.2 |
1.9
1.1 |
Diagnostic/
Imag.
Average:
Median: |
68%
69% |
78%
12% |
$667
$415 |
$93
$56 |
$600
$361 |
$2.4
$1.8 |
($30)
($17) |
2.9
1.2 |
3.1
1.5 |
Gene/Cell Therapy
Average:
Median: |
52%
41% |
70%
47% |
$107
$128 |
$24
$18 |
$91
$113 |
$1.4
$1.0 |
($22)
($22) |
1.0
1.2 |
0.2
0.1 |
Infection
Average:
Median: |
55%
57% |
25%
3% |
$292
$148 |
$93
$51 |
$239
$128 |
$2.9
$1.0 |
($45)
($35) |
1.2
0.9 |
0.8
0.3 |
Metabolic
Average:
Median: |
60%
71% |
145%
42% |
$698
$453 |
$152
$85 |
$748
$501 |
$3.4
$2.1 |
($127)
($127) |
4.7
1.5 |
0.7
0.6 |
Other
Average:
Median: |
61%
56% |
68%
6% |
$276
$169 |
$83
$78 |
$212
$140 |
$2.0
$1.6 |
($35)
($24) |
20.7
2.3 |
1.0
0.8 |
Revenue-Driven
Average:
Median: |
85%
87% |
-5%
-1% |
$30,077
$25,591 |
$4,410
$2,738 |
$28,648
$22,965 |
$8.2
$3.9 |
NA
NA |
NA
NA |
48.8
21.4 |
Screening
Average:
Median: |
62%
68% |
5%
-6% |
$535
$245 |
$176
$56 |
$432
$204 |
$1.4
$1.5 |
($42)
($46) |
12.4
3.7 |
1.3
1,1 |
Specialty
Average:
Median: |
63%
74% |
66%
21%
|
$393
$256 |
$45
$42 |
$369
$291 |
$3.5
$1.4 |
($28)
($29) |
2.8
1.5 |
0.9
0.8 |
Grand
Average:
Median: |
62%
64% |
168%
29% |
$1,394
$233 |
$230
$62 |
$1,304
$197 |
$5.0
$1.5 |
($56)
($34) |
13.3
1.2 |
2.6
0.6 |
Footnotes to the table:
§ ST & LT Debt: Short-term and long-term debt.
§ Company valuation: Market cap + short-term and long-term debt, minus pro forma cash and cash equivalents.
§ Annualized 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.
§ Cash/cash from IPO/share: cash on cash return from IPO price = current stock price / IPO price per share (split-adjusted).
§ Price/share at IPO: IPO share price, adjusted for all subsequent splits.
§ Median: Middle value in a set of values.
§ The information contained in the December 2009 Stock Report has been obtained from public sources. Where information is not available, it is indicated as “na.” Deloitte Recap LLC 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 September 2009.
Highlights From The December 2009 Stock Report:
- The median market capitalization for the entire universe has improved in the last 12 months. It was $233 million at the end of the fourth quarter of 2009, up substantially from $152 million at the end of the fourth quarter of 2008.
- There are now 26 companies that sport a market cap of $1 billion or more, the same as there were at the end of December 2008. In each year, the companies which comprise the Revenue-Driven group have market caps that exceed $10 billion.
- At the other end of the scale, there are 49 companies whose market cap was $100 million or less at the end of 2009. This represents 27% of all companies in our universe – far better than the situation in December 2008, when 47% of the companies in our universe had market caps of $100 million or less.
- That leaves 106 companies, or 59% of our universe, with market caps between $100 million and $1 billion.
- The group exhibiting the lowest median market cap at the end of December 2009 was Cardiovascular ($31 million). The highest median market cap, of course, was held by the Revenue-Driven group ($25.6 billion), but the First Generation Genomics group holds second place ($2.5 billion).
- The median cash on cash return from the IPO price (the current stock price/IPO price per share [split-adjusted]) was 0.6 at the end of December 2009, substantially better than the median value of 0.35 obtained at the end of December 2008.
- As we mentioned earlier, a significant number of stocks gained value between December 26, 2008 and December 31, 2009. In fact, 66% of the stocks in our universe (120/181) increased in value, while 34% (61/181) decreased in value. That’s a very encouraging sign: Hopefully it marks the start of a new bull market for biotech.
Satomi Degami, CFA, Deloitte Recap LLC
Jennifer Van Brunt, Editor, Signals
originally published 01/28/2010 |