Merrill Lynch says biotech pipeline supply still at all-time high, $1.6 billion worth of deals priced in June

By Lisa Kerner

Charlotte, N.C., July 5 - Biotech pipeline supply is at an all-time high of $10 billion, with $1.6 billion worth of deals priced in June, according to Merrill Lynch analyst Eric Ende in his monthly Bio-Stats report.

Merrill Lynch indexes were mixed for June and the analyst cautioned that biotechs historically perform poorly in the summer.

The current 4-week moving average funds flow is negative $192 million, compared to the prior month's moving average of negative $87 million.

During June, $1.6 billion of new supply came into the market - $1.0 billion due to MedImmune's convertible issue - compared to May's total of $1.1 billion.

Total supply in the pipeline is approximately $10.0 billion, up from last month's pipeline supply of $9.9 billion.

There are seven IPOs filed representing $540 million of new supply, with the remaining balance of shelf filings and follow-on offerings.

The Merrill Lynch Therapeutic index decreased 1.5% during June, while the Genomics/Tools Index increased 1.2%.

Merrill's Small-Cap Biotech Index decreased 3.1%; the Mid-Cap Biotech Index was up 0.6% and the Large-Cap Biotech Index was down 1.5%.

Of the biotech companies tracked by Merrill Lynch, Encysive Pharmaceuticals Inc. recorded the best return of 59.3% for June, while Curon Medical Inc. recorded the worst at negative 77.3%.

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