Tuesday, January 2, 1996
It was a good year. Actually, it was a great year. Biotech companies in 1995 did just about everything biotech companies are supposed to do: they reported outstanding clinical data, they got products approved and they proved increasingly attractive to pharmaceutical companies, which stepped up to the plate for both alliances and acquisitions.
If 1994 seemed like the year of the failure - although it wasn't nearly as bad as the popular perception would have it (see BioCentury Jan. 3, 1995) - the last half of 1995 conversely may have left the impression that biotech could do no wrong.
If this wasn't entirely true, Wall Street chose to ignore the fine points. Witness The BioCentury 100: It closed the year at 1298.85, up 80 percent, easily beating the S&P 500, which rose 34 percent in 1995. Of the 267 stocks tracked by BioCentury in the year, 206 gained in value. Among those priced at $2.50 or more, prices more than doubled for 86.
The bottom line, as measured by The Carson Group's Life Sciences Indexes, was that the 11 large-cap biotechs gained $14.4 billion in market cap, to $33.3 billion, a 76 percent gain. The 190 smaller cap companies in the Carson index did even better, jumping 100 percent to $21.8 billion. The $10.9 billion gain more than erased the $7 billion drubbing of 1994.
Two key triggers in the second half were Cephalon Inc.'s announcement in June of positive Phase III data for Myotrophin IGF-1 in ALS, and, late in the year, Centocor Inc.'s announcement that two trials of its ReoPro platelet inhibitor in angioplasty were stopped early because of positive results. The former opened up the equity market, while the latter caused a mini-explosion of stock prices at the end of the year.
In addition, the market's reaction to AMGN's announcement in July of preclinical data for its leptin obesity protein - adding $735 million to its market cap - showed renewed willingness of investors to reward companies for the potential of biotech products.
In between, the stream of positive clinical and regulatory events seemed endless. Among the most significant of these in the second half, in addition to CEPH and CNTO, were positive Phase III data for Genzyme Corp.'s Seprafilm in abdominal and gynecological surgeries; Genentech Inc.'s Phase III trial of Activase tPA in stroke; Phase III data for DepoTech Corp.'s DepoCyt in neoplastic meningitis; Phase III results for acellular pertussis vaccines from Chiron Corp., Connaught and SmithKline Beecham; Phase III results for Guilford Pharmaceuticals Inc.'s Gliadel implant for malignant glioma; Cygnus Inc.'s results for its GlucoWatch transdermal device to monitor glucose; Phase III data on Neoprobe Corp.'s RIGScan CR49 to detect colorectal cancer; and Phase III results for Vivus Inc.'s MUSE alprostadil for erectile dysfunction.