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Financial Snapshot For May 2003: Yee Hah
The biotech sector has turned in a remarkable performance this year – especially in May, when the stocks took off like a rocket. And, so far, they’re still climbing: On June 5, the Nasdaq Biotech Index closed at 743.39 – a 50% gain since the turn of the year. Enthused by a long run of positive news on the product development front – and ecstatic about biotech drugs’ prospects for fighting cancer following the ASCO meeting – investors have lit a fire under the stocks. They’ve risen so far so quickly that many analysts question whether this is just another bubble, one that’s bound to burst sooner rather than later. Others, though, are convinced that the biotech bull is back – and they’re riding it for all they’re worth.
The biotech stocks are far out-performing the general market, too: Between December 31, 2002 and June 5, 2003, the Nasdaq Biotech Index soared by 50%, while the Nasdaq Composite Index rose by 23%. This prominence was also apparent in May: Between April 25, 2003 and May 30, 2003, the Biotech Index climbed by 22% and the Comp improved by 11%. Moreover, over the last 12 months – between May 31, 2002 and May 30, 2003 – the Comp actually dropped by 1%, while the Biotech Index rose by 18%.
And if those data aren’t sufficient to convince you that the biotech sector is in the midst of a solid rally, consider this: Since bottoming out nearly a year ago – the Biotech Index hit its nadir of 403.98 on July 10, 2002 – the Index has risen by 84%, while the Comp has gained 22% as of June 5, 2003.
Importantly, as we’ve noted for the 12-month period, the sector is actually trading higher than it was a year ago – the first time we’ve seen this phenomenon in ages. (Even in April 2003, which was an excellent month, the stocks were still trading down 14% from their year-ago levels).
While the Nasdaq Biotech Index gained 18% 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 managed to gather plenty of momentum. On May 30, 2003, the average 12-month change in price for the 257 stocks tracked by Recombinant Capital and Signals was 6% -- a stunning 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 May was minus 3%, compared to minus 34% a month earlier.
May 2003 Stock Report
The May 2003 Stock Report, published by Recombinant Capital and Signals, includes detailed financial data on 257 publicly traded biotechnology stocks, based on their closing prices on May 30, 2003.
We have been tracking biotech stock performance since February 2000. To access the April 2003 Stock Report, click here. For the others -- February 2000 through March 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 169k), 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 5/30/03
|
% change from 5/31/02
|
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
|
|
|
77%
82% |
-17%
-12% |
$1,470
$387 |
$706
$273 |
$764
$170 |
$155
$49 |
$0.5
$0.6 |
($200.4)
($94.5) |
3.4
3.0 |
0.9
1.0 |
|
|
71%
76% |
4%
-3% |
$212
$113 |
$98
$57 |
$157
$32 |
$41
$2 |
$0.5
$0.2 |
($59.4)
($32.1) |
1.7
1.3 |
1.1
0.5 |
|
GenomicTargets
Average:
Median:
|
70%
76% |
-18%
-14% |
$258
$165 |
$113
$58 |
$112
$40 |
$21
$3 |
$0.3
$0.3 |
($43.2)
($32.3) |
6.3
1.6 |
0.7
0.6 |
|
|
75%
92% |
-13%
2% |
$288
$57 |
$39
$8 |
$249
$38 |
$0
$0 |
$0.4
$0.3 |
($34.6)
($16.8) |
0.9
0.9 |
2.0
1.1 |
|
|
85%
92% |
36%
40% |
$517
$211 |
$130
$43 |
$387
$107 |
$27
$1 |
$3.1
$2.6 |
($41.1)
($23.9) |
7.8
1.7 |
1.5
1.4 |
|
|
73%
80% |
5%
5% |
$326
$154 |
$98
$38 |
$243
$104 |
$16
$0 |
$1.6
$1.3 |
($42.1)
($25.3) |
2.1
1.5 |
1.1
0.8 |
|
|
80%
95% |
32%
36% |
$446
$95 |
$135
$63 |
$311
$49 |
$42
$2 |
$2.0
$0.8 |
($35.8)
($17.3) |
4.3
4.2 |
1.1
0.8
|
|
|
69%
70% |
-25%
-27% |
$289
$103 |
$134
$71 |
$155
$56 |
$34
$0 |
$0.5
$0.4 |
($31.5)
($11.6) |
3.9
4.0 |
1.2
0.9 |
|
|
73%
76% |
-3%
-7% |
$465
$129 |
$115
$46 |
$350
$76 |
$80
$0 |
$2.9
$1.7 |
($29.2)
($21.7) |
2.2
1.7 |
1.4
1.3 |
|
|
84%
87% |
8%
1% |
$725
$291 |
$197
$52 |
$568
$205 |
$73
$1 |
$0.4
$0.4 |
($22.4)
($16.7) |
2.4
1.6 |
4.3
1.3 |
|
|
65%
70% |
6%
-28% |
$415
$142 |
$104
$25 |
$311
$127 |
$86
$0 |
$2.3
$1.2 |
($42.7)
($20.6) |
1.7
1.2 |
1.4
1.3 |
|
|
86%
88% |
14%
11% |
$359
$193 |
$28
$17 |
$331
$181 |
$5
$0 |
$1.5
$1.1 |
($12.8)
($9.0) |
7.2
1.3 |
3.8
2.2 |
|
|
63%
75% |
-11%
-14% |
$115
$72 |
$70
$18 |
$51
$30 |
$7
$1 |
$0.7
$0.6 |
($34.4)
($22.5) |
2.2
1.0 |
0.6
0.6 |
|
|
69%
75% |
6%
-2% |
$768
$96 |
$93
$22 |
$675
$79 |
$46
$0 |
$2.6
$0.9 |
($40.4)
($19.6) |
1.1
1.0 |
1.1
0.6 |
|
|
79%
84% |
22%
12% |
$487
$166 |
$70
$24 |
$418
$143 |
$9
$0 |
$2.7
$1.2 |
($53.2)
($11.2) |
2.5
2.1 |
1.5
1.3 |
|
|
73%
75% |
35%
25% |
$179
$141 |
$30
$13 |
$150
$116 |
$4
$1 |
$2.6
$0.9 |
($20.7)
($14.8) |
1.2
0.9 |
1.4
1.1 |
|
|
94%
98% |
29%
41% |
$22,369
$9,224 |
$1,392
$828 |
$20,977
$8,445 |
$796
$507 |
$4.7
$4.0 |
NA
NA |
NA
NA |
5.8
4.5 |
|
|
69%
71% |
-18%
-17% |
$406
$354 |
$132
$79 |
$274
$201 |
$75
$18 |
$1.0
$1.0 |
($63.2)
($53.2) |
2.7
1.6 |
1.0
1.1 |
|
|
69%
77% |
9%
8% |
$84
$77 |
$8
$3 |
$75
$58 |
$7
$1 |
$0.8
$0.5 |
($10.5)
($3.7) |
1.2
1.0 |
1.0
1.0 |
|
|
74%
77% |
6%
-3% |
$969
$169 |
$138
$46 |
$858
$121 |
$55
$1 |
$1.7
$0.9 |
($41.2)
($25.2) |
3.0
1.6 |
1.6
1.1 |
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 May 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 May 2003 Stock Report:
§ As mentioned above, the Nasdaq Biotech Index has been on a tear the last few months, gaining 22% in May alone. But it’s not just the 71 stocks included in the Index that have recorded such impressive gains: On average, the share prices for the 257 biotech stocks in our universe increased by a whopping 37% between April 25, 2003 and May 30, 2003. Moreover, 16 of those companies saw their stock prices more than double over the one-month period.
§ Over the 12-month period, the stocks in our universe were trading at 74% of their 52-week highs, on average. The following categories exceeded this average: agbio/environmental (75%); 1st generation genomics (77%), metabolic (79%); cardiovascular (80%); CRO/service/supply (84%); autoimmune (85%); diagnostic/imaging (86%); and revenue-driven (94%).
§ At the end of May, the average and median market caps for the 257 stocks we track were $969 million and $169 million, respectively, up from $823 million and $131 million, respectively, at the end of April.
§ Thirty companies in the group – or 12% -- now have market caps of $1 billion or greater. That’s up slightly from April, when 10% of the companies had market caps of at least $1 billion.
§ It’s especially encouraging to note that only 2% (6/257) of the companies in our universe had market caps of $10 million or less at the end of May. That’s down from 4% (10/258) in April and 8% (18/224) in March.
§ The median technology value per employee for the entire group is still less that $1 million, while the average value is $1.7 million (due to a highly skewed distribution curve). The revenue-driven category, of course, leads the herd with an average per employee technology value of $4.7 million. Certain disease categories – including autoimmune, cancer and infection – have shown a stronger recovery in technology value than other sectors.
§ Given the average and median values for one-year stock performance (6% and minus 3%, respectively), it’s clear that the stocks are basically back to where they were last May. However, at that point, they were still sliding south, and kept on going until July 10. This year, the stocks are headed higher – and the fact that the economy has been showing signs of an overall turnaround gives us hope that the biotech stocks will keep right on climbing.
Satomi Degami, Research Manager, Recombinant Capital
Jennifer Van Brunt, Editor, Signals
originally published 06/06/2003
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