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Biotech / Medical : ABSC: Aurora Biosciences Corp.

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From: betone6/1/2001 11:23:09 AM
   of 1
 
Friday June 1, 7:01 am Eastern Time
Press Release
SOURCE: Burrill & Company

Biotech Industry Prospers in May

Burrill Indices Continue to Rise as the Broader Stock Markets Also Display Increasing Signs of Health
SAN FRANCISCO, June 1 /PRNewswire/ -- Biotech continued its upward trend during the month of May, the Burrill Life Science Composite was up 8 percent for the month, outperforming the DOW and NASDAQ, up 3 and 6 percent, respectively. The general markets were propelled by a further cut of interest rates by the Fed and a general opinion among investors the markets had ``bottomed,'' although at month end, the general market direction was very tentative. With many biotechs, trading at or near their cash value, bargains were plentiful and investors began returning to the sector; consequently biotech outperformed other segments of the market.

Pharma and biotech alike used the American Society of Clinical Oncology (ASCO) meeting to release positive news on programs targeting cancer. During ASCO, Novartis (NVS) continued release of positive results using Gleevec(TM), an oral treatment for a rare form of leukemia that sped through a 3 month FDA review to gain market approval in May. In other news, Pharma was positively affected by issuance of guidelines from the federal government recommending wider use of cholesterol-lowering drugs, re-attracting investor attention to the therapeutic sector. However, politics moved Washington in the other direction, with a democratic controlled Senate being more problematic for the industry.

A flurry of M&A within the enabling technology sector helped to improve values in investors interest. On the last day of April, Vertex Pharmaceuticals (VRTX) announced their intent to acquire Aurora Biosciences (ABSC), followed by Merck's (MRK) decision to acquire Rosetta Inpharmatics (RSTA), then capped at the end of May by the announcement Sequenom (SQNM) will merge with Gemini Genomics (GMNI). Moreover, the markets maintained their appetite for not only stock price appreciation, but for financings, demonstrated by Cephalon's (CEPH) $300 million convertible debt offering. ``So, on balance, biotech had a good month especially compared with the other major market sectors,'' said G. Steven Burrill, CEO of Burrill and Company, a San Francisco-based private merchant bank focused exclusively on life sciences.

A review of the Burrill Life Sciences Indices for May 2001 is as follows:

Percent
Change Percent
Index 12/31/00 4/30/01 5/31/01 for Change
Value Value Value Month YTD
Burrill Life Science
Composite Index 183.2 159.19 170.98 7.40% -6.67%
Burrill Biotech
Select Index 412.97 318.65 339.70 6.61% -17.74%
Burrill LARGE-CAP
Biotech Index 387.93 334.77 344.34 2.86% -11.24%
Burrill MID-CAP
Biotech Index 284.78 218.24 234.50 7.45% -17.66%
Burrill SMALL-CAP
Biotech Index 187.79 153.80 182.11 18.41% -3.02%
Burrill Agbio Index 87.64 77.95 83.13 6.65% -5.14%
Burrill Animal Health Index 96.87 112.94 119.28 5.61% 23.13%
Burrill Genomics Index 421.53 324.85 360.88 11.09% -14.39%
Burrill Biomaterials/
Bioprocess Index 132.04 118.81 121.36 2.15% -8.09%
Burrill Diagnostic Fund 100.00 82.99 95.26 14.78% -4.74%
Burrill Nutraceuticals
Index 105.36 107.16 112.12 4.63% 6.42%

Percent
Change Percent
Index 12/31/00 4/30/01 5/31/01 for Change
Value Value Value Month YTD
Burrill Life Science
Composite 183.2 159.19 170.98 7.40% -6.67%
NASDAQ 2471.43 2116.24 2110.49 -0.27% -14.60%
DJIA 10787.99 10734.97 10911.94 1.65% 1.15%
Russell 2000 483.53 485.32 496.50 2.30% 2.68%

The Burrill Large-Cap Biotech Index rose nearly 3 percent in May, the Burrill Mid-Cap Biotech Index was up 7 percent with advancers leading decliners 2 to 1, and the Burrill Small-Cap Biotech Index was up 18 percent. Genomics-focused companies led these indices upward, with Affymetrix's (AFFX) 19 percent gain driving up the large-cap index, and Orchid Biosciences' (ORCH) 43% gain driving up the mid-cap index. Orchid's gain was due largely to investors bargain shopping among devalued genomics opportunities and rumors, these companies would now make attractive targets for acquisition in the wake of Merck's purchase of Rosetta. Another standout performer was Bio-Technology General (BTGC), up 49 percent for the month after release of earnings that significantly beat analyst estimates, due in part to an alliance with Abbott Laboratories marketing Oxandrin, a drug developed to promote weight gain following surgery. The Burrill Small-Cap Biotech Index posted the largest percent gain of any index for the month, up 18 percent. Twelve out of 75 stocks tracked within this index posted gains of 40 percent or more. Immune Response Corp. (IMNR) was up 58 percent, releasing data from an ongoing Phase II trial indicating that treatment with REMUNE(TM) appears to induce both allo and HIV specific cell mediated immune responses.

The Burrill Genomics Index posted impressive gains, up 11 percent on a continuation of renewed investor interest into this field. Incyte Genomics (INCY) was up an impressive 32 percent, a result of multiple announcements reflecting Incyte's commitment to remain a leader within this space. One such announcement was the launch of Agilent's (A) gene expression microarrays utilizing genes and cDNA supplied by Incyte. In addition, Incyte announced a collaboration with Odyssey Pharmaceuticals to utilize their functional genomics platform to probe protein interactions among genes identified by Incyte to be involved in the insulin signaling pathway.

The Burrill Agbio Index rose 7 percent, led by EDEN Bioscience (EDEN) and Large Scale Biology (LSBC), up 36 and 63 percent, respectively. Though no significant news was issued during May for either company, gains can largely be attributed to a rebound effect, as each company stock traded near its low as the month began. The Burrill Animal Health Index, up 6 percent, posted a healthy gain as shares of PetsMart (PETM) traded higher, up 20 percent, after release of positive earnings.

The Burrill Nutraceuticals Index gained 5 percent for the month, led by Natrol (NTOL), up 44 percent on news which included a collaboration with Next Pharmaceuticals to develop and market a line of products featuring Nexrutine(TM), a dietary ingredient that acts as a natural inhibitor of the COX-2 enzyme. The Burrill Biomaterials Index rose 2 percent on little news among its portfolio companies. Finally, the Burrill Diagnostics Index posted a gain of 15 percent. Sequenom (SQNM) continued its upward rise, after posting a 40 percent gain in April, the Company managed an additional 24 percent increase in May. Near the end of the month, Sequenom announced they would purchase Gemini Genomics (GMNI), to combine Gemini's capabilities in population genomics with Sequenom's genotyping platform.

The Biotech Select Index was up 7 percent, due mainly to the performance of Incyte (INCY) and Transkaryotic Therapies (TKTX), up 32 and 38 percent respectively. Transkaryotic announced positive results in a pivotal clinical trial of its investigational enzyme replacement therapy, Replagal(TM), for the treatment of Fabry disease.

Burrill Life Sciences Indices Definitions

The Burrill Life Sciences Composite Index is the average of all of the other Burrill Life Sciences indices, except for the Burrill Biotech Select Index and the Burrill Genomics Index.

The Burrill Biotech Select Index is a price-weighted index, representing some of biotech's best (the biotech ``blue chips''). This index tracks 20 companies and is similar to the Dow Jones Industrial Average, which tracks 30 ``blue chip'' U.S. stocks. The companies tracked through the Burrill Biotech Select Index have been selected on the basis of long-term growth potential -- not necessarily on the highest market capitalizations (though many of the highest market cap companies are included in this index).

The Burrill Large-Cap Biotech Index tracks the performance of the top 12 biotech companies with market caps greater than $1 billion.

The Burrill Mid-Cap Biotech Index represents 20 mid-tier biotech companies with market caps between $300 million and $1 billion.

The Burrill Small-Cap Biotech Index is comprised of 75 small biotech companies with market caps less than $300 million.

The Burrill Genomics Index is comprised of 10 biotech companies with technologies spanning the field of genomics.

The Burrill Agbio Index tracks the performance of 15 agbio companies.

The Burrill Animal Health Index tracks 10 public animal health-focused companies.

The Burrill Biomaterials/Bioprocess Index tracks 20 companies, most of which are large chemical companies, that use biotech in their development and product base.

The Burrill Nutraceuticals Index tracks 20 companies in the nutraceuticals, supplements, and medical and functional foods arenas.

The Burrill Diagnostics Index tracks 15 companies whose technologies and products enable clinical and R&D diagnostics.

Burrill & Company

Burrill & Company is a private merchant bank, focused exclusively on life science companies (biotechnology, pharmaceuticals, diagnostics, human healthcare, related medical technologies, agricultural technologies, animal health, nutraceuticals, and biomaterials/bioprocess).

Venture Capital

The Burrill family of venture capital funds, with over $250 million under management, include the Burrill Biotechnology Capital Fund, the Burrill Agbio Capital Fund, and the Burrill Nutraceuticals Capital Fund.

Strategic Partnering

Burrill & Company assists life science companies identify, negotiate and close strategic partnerships providing access to resources, technologies or collaborations essential for executing their business plans. We have completed more than 20 strategic partnerships with a value in excess of $1 billion.

Spin-outs/Spin-ins

Burrill & Company works with major life science companies to spin-out internal assets and capitalize on their value, ranging from the outright sale of products or businesses to creation of new companies to exploit these assets. We also use our extensive network to help companies identify, assess and capture (``spin-in'') products and companies strategic to building their businesses.

For more information, please visit Burrill & Company's website at www.burrillandco.com.

SOURCE: Burrill & Company
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