Performance Still Sought From US Biotech Stocks

The US biotechnology industry realized around $1.4 billion in publicofferings and venture funding in the first quarter of 1997, up almost $46 million compared to the last quarter of 1996, according to figures calculated by analysts at Burrill & Co. This represents an increase of 3.2%, it was noted. Public offerings alone accounted for $914 million in funds in the first quarter, while disclosed amounts for partnering agreements were $393 million compared to the $422 million of the previous quarter.

The figures are especially encouraging, according to B&C's Steven Burrill, because Wall Street is still digesting the record amount of offerings completed in 1996. Shareholders are also continuing to look for performance from the companies they already own before they dip back into the market, he said, but there is still significant activity in follow-on public offerings and in the private markets, he added.

Companies with higher market capitalization are viewed differently to earlier-stage firms, said Mr Burrill, with negative R&D news from smaller companies no longer affecting trading in the top-tier firms, which are being judged more by business and operating results. Innovative non-traditional financings such as Cephalon's $30 million private placement in senior convertible notes, he pointed out, have re-emerged.