When cash piles up

Ebb & Flow

While biotech companies are great spenders, a select few have done a good job accumulating cash, thanks to a steady flow of product/royalty revenue. Amgen (AMGN), Alza (AZA) and Genentech (GNE), for example, are three biotech companies with cash balances over $1 billion as of June 30. GNE and AMGN lead the pack, each with $1.2 billion in cash, cash equivalents and long-term investments. AZA is third with $1.02 billion.

AZA's ranking may change this quarter, as it has an option to buy back R&D spinoff Therapeutic Discovery (TDCA) for $100 million. If the option is exercised, AZA would be obligated to funnel $300 million into a new spinoff, Crescendo Pharmaceuticals.

In general, companies are "legally free to invest their money in anything they want,"

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