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%.

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