From Abelson's column, a mention of what sounds like a nifty little Merrill Lynch report - Bio-Stats. If anyone would like to share a copy, my email is stromberg@sympatico.ca
++++++++++++++++++
IT'S AGAINST THE FINANCIAL JOURNALIST'S creed to make more than one mention of any brokerage firm in a given week (except in a negative sense). But just this once we're prepared to violate that injunction (the penalty is quite severe -- being forced to read all of that firm's research output for the past six months). Mark us down as brave or reckless, but here goes.
Merrill Lynch has a new periodical, or at least it's new to us, called Bio-Stats, and its principal progenitor is Eric Ende, an M.D. who overcomes that handicap neatly with some savvy data and commentary. To judge by the issue that bears the June 1 publication date, Bio-Stats contains a wealth of info on biotechnology companies -- more, to tell the truth, than we want to know, but fascinating stuff.
We were particularly taken by things like supply and demand in the biotech sector, the burn rate for biotech companies, IPO statistics, including expiration of lockups (when the insiders are free to dump their cheapie stock), and which biotechs are selling at low ratios of cash (a few may be bargains; more than a few look like hazardous-waste candidates).
Why don't we give some illustrative bio-stats? So far this year, $6.3 billion worth of new biotech issues has been floated and potential supply at last count was $6.7 billion.
Expiring lockups in the next couple of months include Eyetech Pharmaceuticals, 28 million shares (there are 38.5 million outstanding); Renvois, 10.7 million shares (23.6 million outstanding); Corgentech, 21 million shares (25.1 million outstanding) and Dynavax Technologies, 15.6 million shares (23.7 million outstanding).
Burn rate: Some 54% of the biotech companies listed, Ende notes, have less than two years of cash, 26% less than a year. Companies that have run through their cash on the Merrill list include International BioChemical, GeneMax, Millennium Biotechnologies Group [my note: this is the BB stock MBTG trading near $0.65, not MLNM) and Vitro Diagnostics. A few of the better-known names with less than two years of cash include Xoma, Icos and Genta.
Biotechs with stock selling for less than one times cash and trading at $5 a share or more include CuraGen and CV Therapeutics. Biotech stocks selling at less than two times cash and trading at $10 or more include Applera Corp.-Celera Genomics Group (with a name like that it needs plenty of cash), InterMune, Human Genome Sciences and Regeneron Pharmaceuticals. Before you drool too much, check the debt; it can be ponderable.
All in all, both in conception and execution, Bio-Stats is quite a nifty proposition. |
