Monday, July 17, 2000
Biotech's mid-cap space is a closely watched sector because
it serves as a feeder pool for tomorrow's top tier companies. Of the 30 companies
that began the year as mid-cap plays - defined by BioCentury as market valuations
between $700 million and $3 billion - nine had graduated by the end of the second
quarter into the large cap space occupied by companies valued above $3 billion.
Some companies made it through organic growth, while others did it by combining
stables. The latter group includes Shire (LSE:SHP; SHPGY) through its January
merger with Roberts Pharmaceutical, and Celltech (LSE:CCH;CLL), which acquired
Medeva and Chiroscience.
The other keys for moving up in the first half were to have
reached the market or to be antibody plays. Of the nine, eight have products
on the market, while two - Abgenix (ABGX) and Protein Design (PDLI) (which also
has a marketed product) - have MAb platforms. Another MAb developer - Medarex
(MEDX) - was knocking on the big cap door with a $2.97 billion valuation at
Other companies on the cusp of the $3 billion threshold were
structural drug design play and HIV drug marketer Vertex (VRTX); specialty biological
manufacturer and distributor Techne (TECH) and genomics informatics play Incyte
Only PowderJect (LSE:PJP) dropped into the lower tier. The
developer of needleless technologies to deliver pre-filled dry powers saw its
market cap fall to $453.7 million from $980.7 million in the first half after
merger rumors with Peptide Therapeutics (LSE:PTE) didn't pan out, and
then it posted bigger losses than anticipated for its year ended March 31.