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Financial Snapshot For June 2005: Some Resilience
Half way through the year, investors remain a cautious bunch – mainly due to concerns surrounding the increase in oil prices and the recent hike in interest rates. That attitude spills over into the biotech sector, too, which has put in a relatively lackluster performance -- although some individual stocks have done well and selected companies have managed to pull off substantial debt financings.
Interestingly, given the general environment, the biotech sector actually outperformed the market during the latest quarter: Between March 31, 2005 and June 30, 2005, the AMEX Biotech Index gained greater than 14%, while the Nasdaq Composite Index managed to add a mere 3%. That also puts the biotech sector ahead for the year: Between December 31, 2004 and June 30, 2005, the AMEX Biotech Index rose by 4%, while the Comp shed 5% during the same period.
Over the 12-month period between June 30, 2004 and June 30, 2005, the biotech index also added a few points, rising by 8% while the Comp remained unchanged during the same time period.
We use the AMEX Biotech Index to track the performance of the biotech stocks as a group – but it’s important to recall that the 17 stocks that comprise this index (which is equal dollar weighted) represent the biotech sector’s top-tier companies – and their performance may not reflect what’s happening to the group as a whole.
Indeed, on June 30, 2005, the average 12-month change in price for the 233 stocks tracked by Recombinant Capital and Signals was –11% and the median change was -20%. That means that many, if not most, of the biotech stocks are not recovering as rapidly as the tracking index suggests.
June 2005 Stock Report
The June 2005 Stock Report, published by Recombinant Capital and Signals, includes detailed financial data on 233 publicly traded biotechnology stocks, based on their closing prices on June 30, 2005.
We have been tracking biotech stock performance since February 2000. To access the March 2005 Stock Report, click here. For the others -- February 2000 through December 2004 -- 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, and may take some time to download.)
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 110k), 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 6/30/05
|
% change from 6/30/04
|
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:
|
65%
64%
|
-17%
-6%
|
$1,129
$594
|
$338
$429
|
$1,006
$544
|
$1.3
$1.3
|
($184)
($129)
|
2.1
1.8
|
2.5
3.1
|
|
Genomic
Supply
Average:
Median:
|
62%
64%
|
-9%
-32%
|
$463
$171
|
$51
$31
|
$427
$128
|
$1.8
$0.6
|
($25)
($26)
|
1.4
1.1
|
1.2
0.3
|
|
Genomic
Targets
Average:
Median:
|
64%
67%
|
-21%
-22%
|
$331
$253
|
$109
$77
|
$237
$87
|
$0.8
$0.5
|
($58)
($60)
|
4.7
2.3
|
0.6
0.4
|
|
Autoimmune
Average:
Median:
|
66%
66%
|
-15%
-14%
|
$651
$564
|
$133
$158
|
$672
$487
|
$4.6
$3.1
|
($70)
($64)
|
3.3
2.6
|
1.4
1.6
|
|
Cancer
Average:
Median:
|
50%
48%
|
-34%
-39%
|
$466
$166
|
$118
$43
|
$399
$116
|
$2.9
$1.4
|
($46)
($29)
|
2.3
1.5
|
1.5
0.6
|
|
Cardiovascular
Average:
Median:
|
68%
72%
|
15%
-15%
|
$482
$457
|
$136
$107
|
$407
$357
|
$4.1
$3.4
|
($78)
($52)
|
2.1
1.9
|
1.3
1.5
|
|
Chemistry
Average:
Median:
|
74%
71%
|
-10%
-23%
|
$371
$190
|
$101
$83
|
$310
$124
|
$1.0
$0.6
|
($45)
($20)
|
2.3
1.9
|
1.0
0.7
|
|
CNS
Average:
Median:
|
61%
64%
|
-23%
-26%
|
$418
$163
|
$117
$58
|
$400
$134
|
$5.4
$3.2
|
($41)
($31)
|
2.2
1.5
|
1.2
0.6
|
|
Delivery
Average:
Median:
|
63%
70%
|
-17%
-21%
|
$772
$256
|
$153
$52
|
$757
$207
|
$2.0
$1.8
|
($42)
($27)
|
6.5
1.4
|
4.9
2.6
|
|
Diagnostic/Imaging
Average:
Median:
|
70%
75%
|
12%
-1%
|
$564
$303
|
$58
$41
|
$519
$294
|
$1.5
$1.3
|
($14)
($12)
|
12.4
1.7
|
4.6
1.8
|
|
Gene
Therapy
Average:
Median:
|
62%
62%
|
24%
-16%
|
$224
$102
|
$47
$29
|
$203
$69
|
$2.2
$1.0
|
($28)
($23)
|
2.0
2.0
|
0.6
0.4
|
|
Infection
Average:
Median:
|
63%
60%
|
-4%
-23%
|
$340
$193
|
$53
$49
|
$322
$162
|
$4.0
$1.6
|
($33)
($23)
|
2.3
1.8
|
0.8
0.6
|
|
Metabolic
Average:
Median:
|
66%
64%
|
0%
3%
|
$427
$274
|
$93
$48
|
$418
$192
|
$4.0
$2.1
|
($92)
($37)
|
2.8
1.8
|
0.9
0.7
|
|
Other
Average:
Median:
|
54%
47%
|
-11%
-23%
|
$259
$169
|
$85
$58
|
$176
$113
|
$3.1
$1.9
|
($53)
($45)
|
1.7
1.5
|
1.1
0.6
|
|
Revenue-Driven
Average:
Median:
|
84%
93%
|
8%
14%
|
$31,448
$15,160
|
$1,724
$1,334
|
$30,822
$15,274
|
$6.1
$3.9
|
NA
NA
|
NA
NA
|
43.8
17.4
|
|
Screening
Average:
Median:
|
62%
59%
|
-9%
-32%
|
$321
$235
|
$109
$77
|
$307
$314
|
$2.1
$1.1
|
($59)
($26)
|
3.5
2.1
|
0.9
0.4
|
|
Wound
Average:
Median:
|
54%
58%
|
-2%
1%
|
$145
$48
|
$12
$5
|
$136
$49
|
$1.1
$0.6
|
($20)
($20)
|
0.2
0.2
|
0.9
0.3
|
|
Grand
Average:
Median:
|
62%
64%
|
-11%
-20%
|
$1,387
$243
|
$152
$58
|
$1,338
$190
|
$2.7
$1.6
|
($49)
($28)
|
3.3
1.8
|
3.0
0.7
|
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 June 2005 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 3/05, with pro forma adjustments for more recent financings (including debt offerings), if any.
Highlights From The June 2005 Stock Report:
§ Last year at this time, the biotech stocks were just beginning to come off a long winning streak that began in 2003. But they were still performing well: Between the end of June 2003 and the end of June 2004, the average change in price for the stocks in our universe was 29%. But, as we know, the stocks have since lost considerable ground: At the end of June 2005, the average 12-month change in price for the stocks in out universe was –11%.
§ Only 27% of the individual stocks in our universe increased in price over the one-year period.
§ Interestingly, stocks in the Gene Therapy contingent (which includes stem cell companies) fared the best over the 12-month period, gaining an average of 24%. Stocks in the Cardiovascular group also gained ground over the year, adding 15%, on average, in value.
§ Both groups bested the Revenue-Driven set, though, which gained an average of 8% over the 12-month period ended June 30, 2005. This group was brought down by Biogen Idec Inc. and Chiron Corp., whose stocks both lost ground due to high-profile product disasters (Tysabri and Fluvirin, respectively).
§ The worst-performing group was Cancer, which shed 34%, on average, over the 12-month period. Companies in the CNS contingent also lost ground – an average 23% over the same time frame.
§ The average market capitalization of the stocks in our universe actually increased by 15% between March 31, 2005 and June 30, 2005 – no doubt due to a handful of very rich financings during the quarter.
§ Biotech companies are still burning lots of cash, though. In the first part of 2003, which was tough on biotech companies, the average annualized burn rate was $40 million. But as financing picked up during 2004, the pro forma liquidity increased by 20% (as compared to 2003) and the average burn rate went up as well. At the end of June 2005, the average burn rate was $49 million per year, nearly 23% higher than it was in the first part of 2003.
Satomi Degami, CFA, Recombinant Capital
Jennifer Van Brunt, Editor, Signals
originally published 07/08/2005 |