Burrill: Biotech index in holding pattern in August

By Elaine Rigoli

Tampa, Fla., Sept. 1 - For the second straight month the Burrill Biotech Select Index remained flat despite the fact that most industrial sectors were on the upswing in the wake of the government releasing positive GDP growth numbers for the second quarter, which signaled a stronger economy.

The blue-chip Dow Jones Industrial Average closed the month up 1.75% and the Nasdaq rose even more to close up 4.4%.

"Investors still remain in a holding pattern as far as biotech is concerned. Hardly any groundswell emerged from the high-profile 16th International AIDS Conference held in Toronto this month," G. Steven Burrill, chief executive officer of Burrill & Co., a San Francisco-based life sciences company, said in a news release.

"While a lot of progress has been made in AIDS treatment thanks to biotech innovation, there remains a sense of impatience with why more isn't being done to stem the incidence of new infections, estimated to be about four million cases last year. This same sentiment seems to have pervaded biotech in general."

In addition to the AIDS conference, Burrill said there was positive news on the stem-cell front with Osiris Therapeutics making a successful initial public offering and Alameda, Calif.-based Advanced Cell Technology, Inc., reporting that it had successfully generated human embryonic stem cells using an approach that does not harm embryos.

"On an encouraging note, however, even though biotech's collective market cap gained only 0.7% in the month to stand at $457.5 billion, most of the Burrill indices finished the month in positive territory - something we haven't seen since the beginning of the year. This could signal the fact that the worst for biotech is now behind us," he added.

Burrill said Osiris bucked the trend of most of the biotech IPOs that got out in 2006 by not having to amend its pricing range. The company, which is developing stem-cell therapies for inflammatory, orthopedic and cardiovascular disorders, completed a 3.5 million share offering priced at $11 per share - the low end of its proposed $11 to $13 range - raising $39 million.

By the end of August, Osiris' share value was holding its own and closed at $10.94, Burrill noted.

Adding themselves to the IPO runway in August were Emergent BioSolutions, a biopharmaceutical company focused on immunobiotics; ActivBiotics, Inc., which is focused on the development of therapies for the treatment of inflammatory diseases and bacterial infections; Acologix, which is working in the osteo-renal disease area; and US BioEnergy, a Brookings, S.D.-based company operating and building biofuels plants on strategic sites, partnering with local farmers and communities to provide renewable fuels.

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