Biotechnology sector ends second-quarter 2000 on a high note

The US biotechnology sector has managed to stay afloat and, indeed,prosper in the second quarter of 2000, according to a report from US merchant banker Burrill & Co (see also Marketletter July 10), which notes that the period "started and ended with events typical of the unpredictable nature of the industry." Just before the beginning of the quarter, "unnecessary comments on genomic patenting" made by US President Bill Clinton and UK Prime Minister Tony Blair (Marketletter March 20) caused biotechnology stocks to spiral downwards, but the same subject sparked a dramatic rise by the end of the quarter and some highly-successful initial public offerings.

The announcements made by Celera and the Human Genome Project with regard to the sequencing of the human genome (Marketletter July 3) attracted a huge amount of public attention, with many observers claiming that the event is equal in importance to landing a man on the moon or the invention of the wheel, noted the report. The upturn in biotechnology stocks was considerable and the industry "showed amazing resilience," according to Steven Burrill, chief executive of the bank. Just within this one quarter, he said, the sector lost $100 billion in terms of market capitalization in a week "after the Clinton-Blair debacle," but only three months later, biotechnology completed one of its "most successful IPO quarters in recent years."

During the second quarter of 2000, the industry raised $5.5 billion, which represented a significant drop from the $12 billion raised in the first quarter. Nevertheless, 13 firms completed IPOs, raising $1.3 billion (see table below), and of all the biotechnology companies in registration for such offerings at the end of the first quarter, only eight were forced to change their plans: Adolor, AtheroGenics, Centaur Pharmaceuticals, DrugAbuse Sciences, Esperion Therapeutics, First Horizon, Introgen Therapeutics and Signal Pharmaceuticals, which is about to be acquired by Celgene Corp (Marketletter July 10).