US mid-cap biotech stocks post solid gains in February, says Burrill report

During a relatively quiet month, the US biotechnology industry managed to outperform the markets with the Burrill Biotech Select Index up 4.5%, while the Nasdaq finished down 1% and the Dow Jones was up 1%. In addition, the biotechnology sector reached a significant milestone in its comparatively short history, with its collective market capitalization topping the $500.0 billion mark for the first time.

"However, the unfolding story continues to be the excellent performance of the mid-cap biotech companies," said Steven Burrill, chief executive of Burrill & Co, a San Francisco-based venture capital, merchant banking and media group focussed on life sciences. The almost 30% gain, and 13% in February, in the Burrill Mid-Cap Biotech Index since the beginning of the year demonstrates that investors believe there is plenty of upside in these emerging companies.

"With US spending on prescription drugs projected to more than double in the next decade, to $446.0 billion from $188.0 billion, according to the US Centers for Medicare and Medicaid Services' latest estimate, the future looks bright for these biotechs. Drug sales, bolstered by Medicare coverage, is expected to keep rising and biotechs will certainly capture a significant portion of this increase," noted Mr Burrill.