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12:00 AM
Mar 29, 2004
 |  BioCentury  |  Finance

Europe: Less beef on the bull

Europe has seen significant gains in both biotech valuations and investor confidence over the last 12 months since the market low of March 7, 2003. Over the 12-month period, the BioCentury London index was up 43%, while the BioCentury Europe index gained 140%. As in the U.S., some of these gains have been scaled since the first week of March, but with two IPOs now through the window, the sentiment remains generally upbeat.

While gains in London were only about half the U.S. advance of 80% in the first year of the bull, the push in Europe began from a very low base, caused primarily by the failure of Germany's Neuer Markt in 2002. The low valuations provided a nice entry for investors.

European value movers in the year since March 7 include 9 companies that ballooned more than 500%, 27 that rose more than 200% and 48 that gained more than 100%. The increased interest of investors also can be measured in daily share volume. The average number of shares traded per day increased by about 30% over the 12 months.

The major milestones pushing the European sector were from the U.S., but several events in Europe were notable. In particular, investors saw that European companies have enough valuable technology to garner significant partnerships.

On the private side, Biovitrum AB (Stockholm, Sweden) signed its blockbuster deal with Amgen Inc. (AMGN, Thousand Oaks, Calif.) for Biovitrum's BVT.3498 lead compound, which is in Phase II testing for Type II diabetes. The deal included an $86.5 million upfront payment and up to $435 million in milestones (see BioCentury, Sept. 15, 2003).

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