January Market Jitters Fails to Derail Biotech

    SAN FRANCISCO, Feb. 1 /CNW/ -- Fears that the economy is not only heading
towards a recession but is also rapidly weakening had investors in a skittish
mood during January. However, biotech held steady with the Burrill Biotech
Select Index closing unchanged well ahead of the NASDAQ, which posted a
January loss of 9.9%, and the Dow, which closed down 4.6%.
    "Healthcare is usually able to ride out extremely volatile capital
markets with less damage because they are viewed as 'safe' stocks in recession
periods," said G. Steven Burrill, CEO of Burrill & Company a San Francisco
based global leader in life sciences whose principal activities are in Private
Equity, Venture Capital, Merchant Banking and Media, "and biotech, on a
relative basis, performed well in January." Helping the cause was the buzz
created around the JPMorgan's 26th Annual Healthcare Conference, which
continues to set records for attendance during the four day San
Francisco-based event. Many of the 300-plus companies, which presented at the
event were reporting updated clinical and year end results ... and the mood
was quite optimistic.
    Most notable was Pharmasset, whose shares surged to close the month up
87%. Early in January the company announced positive data from a short-term
Phase I study on its hepatitis C candidate, R7128.  The four-week trial
assessed two doses of Pharmasset's R7128 in combination with the standard of
care, Pegasys plus Copegus, in 50 chronically infected patients who hadn't
received prior treatment. Pharmasset said 85% of patients given the higher
dose, 1,500 milligrams, and 30% at the lower 500 milligram dose had
undetectable levels of the virus after four weeks. In comparison, only 10% of
patients on the placebo, which was standard of care alone, achieved
undetectable levels of the virus.
    Pharmasset was the only bright spot amongst a sea of decliners in the
Burrill Mid-Cap Biotech Index group as shares of these companies got dragged
down with the economic woes. The Index closed the month down 11%.
    "Investors also seemed to be satisfied with biotech fourth-quarter
results, noted Burrill, "although they weren't over-generous in their rewards
but they certainly were quick to penalize any companies falling short of
expectations." Amgen, for example, hit its projected numbers, but its 2008
outlook fell well below forecasts as sales of anemia drug Aranesp continue to
slow in the wake of stricter safety warnings and reimbursement rates. Amgen's
shares closed the month unchanged. Genentech reported solid quarterly results,
and its shares jumped 5% in January.
    On the other side of the coin, shares of Amylin Pharmaceuticals Inc. took
a major hit, dropping 20% in January on the news of a wider fourth-quarter
loss. Human Genome Sciences shares lost almost half its value (47%) on the
news that the company had scaled back dosing of its experimental hepatitis
drug, citing potential health risks. Patients in the final phase of testing of
Albuferon will now receive 900 microgram doses of the drug, instead of 1,200
micrograms. Human Genome Sciences is developing its Albuferon with Novartis
for the treatment of Hepatitis C. The company believes the drug is as
effective as Roche Holdings' Hepatitis C treatment, Pegasys, and would require
half as many monthly injections. The company said it continues to expect to
    have all phase III data available to support the filing of global
marketing authorization applications by fall 2009.
    Biotech IPOs on hold
    The tough economic environment kept biotech IPO "hopefuls" grounded on
the runway in January and only one company -- Phenomix, a biopharmaceutical
company focused on the development of novel small-molecule product candidates
for treatment of Type 2 diabetes and hepatitis C, filed with the SEC for an
    "We will see biotech IPOs continuing to getting done," noted Burrill,
"although valuations will still be problematic and timing challenging. Most of
those on file will await better market conditions before beginning their road
shows. We certainly expect over 30 IPOs will be completed in the US in 2008
(about the same as 2007), but most will get done in the second half of the

    Biotech Indices
                                                          % change  % change
    Index                     12/29/06 12/31/07  1/31/08     Month     Year
    Burrill Biotech Select      303.96   331.52   331.31    -0.06 %    -0.06 %
    Burrill Large Cap Biotech   424.56   437.71   438.87     0.27 %     0.27 %
    Burrill Mid-Cap Biotech     171.55   201.89   179.33   -11.17 %   -11.17 %
    Burrill Small Cap Biotech    143.6    137.6    148.3     7.78 %     7.78 %
    Burrill Genomics            101.69   104.29    93.64   -10.21 %   -10.21 %
    Burrill AgBio               124.52   198.83   193.82    -2.52 %    -2.52 %
    Burrill Industrial          150.85   158.66   146.41    -7.72 %    -7.72 %
    Burrill Diagnostic          122.79   159.43   151.53    -4.96 %    -4.96 %
    Burrill Nutraceutical       629.56   593.04   556.24    -6.21 %    -6.21 %
    NASDAQ                     2415.29  2652.28  2389.86    -9.89 %    -9.89 %
    DJIA                      12463.15 13264.82 12650.36    -4.63 %    -4.63 %
    Russell 2000                787.66   766.03    713.3    -6.88 %    -6.88 %
    Amex Biotech                754.25    786.5   749.38    -4.72 %    -4.72 %
    Amex Pharma                 345.06   338.52   316.45    -6.52 %    -6.52 %
    About Burrill & Company
    Founded in 1994, Burrill & Company is a San Francisco-based global leader
in life sciences with activities in Private Equity, Venture Capital, Merchant
Banking and Media. The Burrill family of venture capital funds has over $950
million under management and its merchant banking business is one of the
industry leaders in life sciences transactions. The company's 60 person
scientific and business team, supported by its 40-person Advisory Boards, the
strategic and financial network of its limited partners, and the close
relationships developed with numerous life sciences companies and management,
provide Burrill with unparalleled access and insight.
    Burrill is the creator, sponsor and facilitator of over a dozen leading
industry conferences worldwide and publishes a wide range of bio-intelligence
reports including: The Personalized Medicine Report, The Stem Cell Report, and
periodic newsletters covering Canada, China, Europe, India, Japan and
Partnering/M&A. In association with the California Healthcare Institute,
Burrill publishes The Journal of Life Sciences - a bimonthly magazine.
Burrill's flagship publication is its annual "State of the Industry" report,
the most recent 21st Edition being Biotech 2007: Life Sciences - A Global
Transformation. The 22nd Edition is entitled Biotech 2008: Life Sciences - A
20/20 Vision to 2020, available 1Q '08. These publications provide the latest
insight, intelligence and information on the life sciences industry.

For further information:

For further information: Peter Winter, Editorial Director of Burrill & 
Company, +1-415-591-5474, pwinter@b-c.com Web Site:

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