Burrill: US biotech racked up impressive quarter to close 2005 in record fashion

Although the final quarter of 2005 was generally positive across all US industrial sectors, it was biotechnology that again led the way, with the Burrill Biotech Select Index posting a respectable gain of 5.6% and outperforming the Nasdaq, which posted a fourth-quarter gain of 2.5%, and the Dow, which closed up 2.25%. For December, it was a different story for the markets with both the Nasdaq and Dow finishing in negative territory at 1.2% and 0.82%, respectively, for the month. The Burrill Biotech Select Index, however, held firm and recorded a monthly gain of 3.1%.

"With uncertainty in the markets towards the close of 2005 about when the Feds [Federal Reserve Bank] will stop raising interest rates all of the gains made earlier in the fourth quarter essentially left December flat," said Steven Burrill, chief executive of Burrill & Co, a San Francisco-based life sciences group with principal activities in venture capital, merchant banking and media. "This type of one-step forward, one-step back has characterized the market movement for the full year," he added.

"Although biotech started out 2005 on a slow note, it has seen positive increases since April," said Mr Burrill, adding that "biotech's success in the capital markets has been led by the large cap companies with robust product pipelines and diversity. While we could single out individual, emerging growth companies that have performed above average, not enough of them have performed to dramatically effect their index. In 2005, it's the 'best of breed' biotech stocks that have pulled the biotech sector along."