Ebb & Flow
At the halfway mark for the quarter, follow-on money has far outpaced the second quarter's performance. Indeed, with the completion of a $50.4 million deal last week by Exelixis (EXEL), nine U.S. biotechs have sold $736.6 million of new paper this quarter, compared to only four companies raising $429.4 million in the second quarter. The key question is whether the flow can continue, as the after-market performance for the latest deals has been anemic.
Four of the six August offerings were from Phase II plays, with CuraGen (CRGN) and ZymoGenetics (ZGEN) now down by 16% and 10% from their respective follow-on prices, although the other two Phase II companies that sold paper this month have fared better. Cancer company Ariad (ARIA) is up 4% from its offering price and infectious disease play Anadys (ANDS) is unchanged. The Phase III stories - EXEL and Alexion (ALXN) - are off marginally (see "Summertime Blues"). ...