Monday, March 15, 1999
As the apostles of consolidation have learned over the years,
biotechnology companies are nothing if not persistent.
That lesson has been reinforced by the recent flurry of regulatory, financial and restructuring activity at Scios Inc. (SCIO) as it awaits the FDA's decision on its first product in 15 years as a public company - Natrecor nesiritide for short-term treatment of de-compensated congestive heart failure.
The events at SCIO and the prospect of product news at several of the other greybeards of the sector prompted BioCentury to update the fates of the industry pioneers - companies that have been public for at least a decade.
The pioneers include 41 biotech companies that had gone public by the end of 1988. Of those, 27 continue to exist as stand-alone entities That tally excludes Agouron Pharmaceuticals Inc. (AGPH, La Jolla, Calif.) and Sequus Pharmaceuticals Inc. (SEQU, Menlo Park, Calif. - formerly Liposome Technology Inc.), which are being acquired by Warner-Lambert (Morris Plains, N.J.) and Alza Corp. (AZA, Palo Alto, Calif.), respectively.
In aggregate, the 41 companies have raised nearly $10 billion ($9.8 billion) in venture, equity and debt financing. Some have prospered, some have merged or morphed into new companies, and some just soldier on.
Of the 27 survivors, barely half (14) are profitable. Among them are industry bellwethers Amgen Inc. (AMGN, Thousand Oaks, Calif.), Biogen Inc. (BGEN, Cambridge, Mass.), Chiron Corp. (CHIR, Emeryville, Calif.), Genentech Inc. (GNE, South San Francisco, Calif.) and Genzyme Corp. (Cambridge, Mass.), which account for 35 percent of the $159 billion of aggregate market cap of the BioCentury 100.
Others have survived for a decade or more as public companies without revenues and sales, as a number of the pioneers have yet to get a major product on the market despite the money that investors have poured into them. Those companies include CytRx Corp. (CYTR, Norcross, Ga.), OSI Pharmaceuticals Inc. (OSIP, Uniondale, N.Y.), Repligen Corp. (RGEN, Cambridge, Mass.), Ribi ImmunoChem Research Inc. (RIBI, Hamilton, Mont.), SCIO and Xoma Ltd. (XOMA, Berkeley, Calif.).
SCIO and XOMA together account for $613 million raised (see A4). SCIO (Mountain View, Calif.) spun off Guilford Pharmaceuticals Inc. (GLFD, Baltimore, Md.) in a 1994 IPO after founding the neurological and cancer company the prior year. GLFD has a $236 million market cap.