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Biotech financings on the rebound

Negative investor sentiment in the biotech sector could be turning the corner, as 12 drug developers and medical device companies have raised a total of $165-million in new equity since the beginning of November 2005.

Transition Therapeutics Inc. and Medicure Inc. have unveiled bought deals valued at $10.3-million and $10.1-million, respectively, while Oncolytics Biotech Inc. and LAB International Inc. have raised $16.5-million and $12.3-million, respectively, through private placements.

The latest flurry brings the 2005 tally of equity and debt to around $807-million, slightly ahead of $799-million last year, but still below $1.3-billion raised in 2003, according to figures compiled by Desjardins Securities.

The financing leaders this year were Aspreva Pharmaceuticals Inc., which closed a $91.1-million ( U.S.) initial public offering in March, and medical device developer Vasogen Inc., which floated $43.2-million of stock in February and $40-million of notes in October. They were followed by Neurochem Inc. and Cardiome Pharma Inc., with stock offerings of $61.2-million and $51-million, respectively, last March.

Investor perception deteriorated steadily throughout the year "to the point where even successful companies encountered difficulty getting meetings with fund managers in the third quarter. But recent successes have renewed interest in the sector.

An industry rebound next year will likely depend on clinical testing outcomes by Axcan Pharma Inc., Cardiome, Labopharm, Vasogen and YM Biosciences Inc., which are conducting mid- to late-stage drug studies.

(www.theglobeandmail.com)

 
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