For at least 9 months, Biotech has been buffeted by headwinds associated with the Great Economic Crisis. But now, a streak of positive trial results and some good-looking deals seems to have revivified the sector. At least a little.
The latest heartening development comes from Exelixis, which announced that it has licensed 2 experimental oncology drugs to Sanofi-Aventis in a deal notable for an upfront payment of $140 million to the South San Francisco-based company.
That followed last week’s announcement by MAP Pharmaceuticals that late stage results from a trial of its migraine drug were strongly positive.
In other news, Amgen agreed to exercise its option on Cytokinetics’ experimental heart-failure drug, a decision worth $50 million to the Biotech company, and J & J agreed to pay $900 million to Cougar Biotechnology for its experimental prostate-cancer drug.
That’s not even counting Dendreon, which raised $221 million in a secondary stock offering after astounding most observers with strongly positive results on Provenge, its prostate-cancer vaccine.
The uptick follows a prolonged slump prompted by the economic swoon which cut Biotech’s umbilical cord into the financial markets. Particularly hard hit were small, undercapitalized companies.
Many thought Big Pharma would snap up such companies, but what little M & A activity did transpire in recent months featured drug giants feasting on themselves instead, as exemplified by Pfizer’s acquisition of Wyeth and Merck’s merger with the Plough.
“The process we’ve been going through has been painful for the small companies,” Barclays Capital’s Jim Birchenough told the Wall Street Journal. Maybe we’re seeing “the beginning of a better environment,” added the analyst, who recently upgraded his rating on the sector from neutral to positive.