Biotech Stocks Hammered by March Madness

Falling Equity Markets Negate Effect of Rate Cut ... Investors Continue

To Be Skeptical



Apr 02, 2001, 01:00 ET from Burrill & Company

    SAN FRANCISCO, April 2 /PRNewswire/ -- March stock markets continued a
 plummet that began mid-January with biotech losing 15-25 percent of their
 value in March alone.  The NASDAQ fell below the 2,000 mark for the first time
 since December 1998.  On March 12th, the Dow suffered its worst loss in
 11 months and ended its worst performing quarter since 1960.  Just as reduced
 4Q 2000 corporate earnings sent February markets into a nosedive, warnings
 issued in March caused the decent to continue.  Talk of slower growth and
 lowered earnings came from all sectors of the market.  High-tech stars Nortel
 and Cisco announced major job cuts while biotech heavyweight Applied
 Biosystems (an Applera Corp. business) warned of slower growth.  Investors
 looked to the Fed for relief, but the half-point rate cut on March 20th had
 little if any effect.  With the Dow off 6 percent for the month and NASDAQ
 down 14 percent, Biotech stocks moved similarly.  The Burrill Biotech Select
 index lost 23 percent of its value in March, with the Burrill Life Science
 Composite off 12 percent.
    "Some biotech indices (particularly our genomics index) are now off as much
 as 80 percent from their highs of mid-March 2000, losing a large portion of
 this value since year end 2000.  At March 31st, the industry's market
 capitalization stood at $330 billion, down over 30 percent from its mid-March
 2000 high of $500+ billion.  Essentially, the markets are closed to IPOs
 ...  and investors are on the sidelines waiting for evidence the market has
 bottomed," said G. Steven Burrill, CEO of Burrill & Company, a
 San Francisco-based private merchant bank focused exclusively on life
 sciences.
     "Everyone is asking if the industry has bottomed.  With industry
 fundamentals strong (good cash position, good management, product success and
 sustainable business models) it is in much better shape than it was one year
 ago when the biotech frenzy was at its peak," commented
 G. Steven Burrill.  "With many companies now selling at almost no premium to
 cash value per share, we can't get much lower," added Burrill.
 
 
     A review of the Burrill Life Sciences Indices for March 2001 is as
     follows:
                  12/31/00      2/28/01      3/30/01 Percent Change   Percent
     Index          Value        Value        Value    for Month    Change YTD
 
     Burrill Life
      Sciences
      Composite
      Index            183.2     163.50        144.59     -11.57%     -21.08%
     Burrill Biotech
      Select Index    412.97     330.54        255.70     -22.64%     -38.08%
     Burrill
      LARGE-CAP
      Biotech Index   387.93     344.80        284.19     -17.58%     -26.74%
     Burrill
      MID-CAP
      Biotech Index   284.78     209.67        180.42     -13.95%     -36.65%
     Burrill
      SMALL-CAP
      Biotech Index   187.79     159.12        138.33     -13.06%     -26.34%
     Burrill Agbio
      Index            87.64      79.68         74.46      -6.55%     -15.03%
     Burrill Animal
      Health Index     96.87     105.38        102.44      -2.79%       5.75%
     Burrill
      Genomics
      Index           421.53     337.83        260.60     -22.86%     -38.18%
     Burrill
      Biomaterials/
      Bioprocess
     Index            132.04     124.19        112.89      -9.10%     -14.51%
     Burrill
      Diagnostics
      Index           100.00      82.04         71.45     -12.91%     -28.55%
     Burrill
      Nutraceuticals
      Index           105.36     121.66        119.39      -1.87%      13.32%
 
 
                  12/31/00       2/28/01      3/30/01 Percent Change  Percent
     Index         Value          Value        Value    for Month   Change YTD
 
     Burrill Life
      Science
      Composite      183.2        163.5       144.59      -11.57%     -21.08%
     NASDAQ        2471.43      2151.83      1840.26      -14.48%     -25.54%
     DJIA         10787.99     10495.28      9878.78       -5.87%      -8.43%
     Russell 2000   483.53       474.37       450.53       -5.03%      -6.82%
 
 
     The Burrill Large-Cap Biotech Index fell 18 percent during the month,
 largely the result of Immunex (IMNX) dropping 56 percent after halting studies
 on the use of Enbrel for the treatment of chronic heart failure.  Other
 significant decliners included Affymetrix (AFFX) down 51 percent and
 Invitrogen (IVGN) down 32 percent, amid a broad devaluation of biotech
 equipment/reagent suppliers dependent on customers who are putting a clamp on
 spending.  The Burrill Genomics Index was similarly trashed, down 23 percent
 for the month with the excitement and frenzy to own "genomics" stocks having
 already "cooled off."  Only 1 of 10 genomics companies tracked posted a gain
 in share price.  The Burrill Mid-Cap Biotech Index fell 14 percent, and more
 significantly, has lost 37 percent of its value for the year.  Those companies
 experiencing the largest decline were Orchid Biosciences (ORCH), Pharmacyclics
 (PCYC) and Maxygen (MAXY) down 33, 38 and 24 percent, respectively; all with
 no negative news ... just the market losing interest in biotech stocks.  The
 Burrill Small-Cap Biotech Index lost 13 percent of its value, led by
 Intrabiotics (IBPI), down 51 percent on news that their Phase III trial of
 Ramoplanin would be delayed due to slow patient enrollment.
     The Burrill Animal Health Index, down 3 percent, and the Burrill
 Nutraceuticals Index, down 2 percent, were driven lower by the general market
 downtrend.  A 9 percent decrease in the Burrill Biomaterials Index was led by
 Invitrogen (IVGN) and Corning (GLW), down 32 and 25 percent respectively.
 Corning fell after analysts lowered target prices and earning estimates based
 on the company's recent lowering of expected 2001 earnings.
     The Burrill Agbio Index lost 7 percent of its value.  Hardest hit was
 Large Scale Biology (LSBC), down 36 percent due to their genomics-based
 business model and a current negative investor attitude toward this sector.
 The Burrill Diagnostics Index fell 13 percent, Digene (DIGE) led decliners,
 down 54 percent, causing them to withdraw their registration for a secondary
 public offering.
     The Burrill Life Sciences Composite Index, an average of the other
 Burrill & Company indices, dropped over 12 percent in March, falling right
 in-between the 14 and 6 percent decline of the NASDAQ and Dow, respectively.
     "The Biotech Select Index fell 23 percent for the month and 38 percent for
 the year to date, reflecting the substance of the biotech sell off.  When the
 markets are working against you, even the best companies can't buck the
 trend," commented Burrill.
 
     Burrill Life Sciences Indices Definitions
     The Burrill Life Sciences Composite Index is the average of all of the
 other Burrill Life Sciences indices, except for the Burrill Biotech Select
 Index and the Burrill Genomics Index.
     The Burrill Biotech Select Index is a price-weighted index, representing
 some of biotech's best (the biotech "blue chips").  This index tracks
 20 companies and is similar to the Dow Jones Industrial Average, which tracks
 30 "blue chip" U.S. stocks.  The companies tracked through the Burrill Biotech
 Select Index have been selected on the basis of long-term growth potential-not
 necessarily on the highest market capitalizations (though many of the highest
 market cap companies are included in this index).
     The Burrill Large-Cap Biotech Index tracks the performance of the top
 12 biotech companies with market caps greater than $1 billion.
     The Burrill Mid-Cap Biotech Index represents 20 mid-tier biotech companies
 with market caps between $300 million and $1 billion.
     The Burrill Small-Cap Biotech Index is comprised of 75 small biotech
 companies with market caps less than $300 million.
     The Burrill Genomics Index is comprised of 10 biotech companies with
 technologies spanning the field of genomics.
     The Burrill Agbio Index tracks the performance of 15 agbio companies.
     The Burrill Animal Health Index tracks 10 public animal health-focused
 companies.
     The Burrill Biomaterials/Bioprocess Index tracks 20 companies, most of
 which are large chemical companies, that use biotech in their development and
 product base.
     The Burrill Nutraceuticals Index tracks 20 companies in the
 nutraceuticals, supplements, and medical and functional foods arenas.
     The Burrill Diagnostics Index tracks 15 companies whose technologies and
 products enable clinical and R&D diagnostics.
 
     Burrill & Company
     Burrill & Company is a private merchant bank, focused exclusively on life
 science companies (biotechnology, pharmaceuticals, diagnostics, human
 healthcare, related medical technologies, agricultural technologies, animal
 health, nutraceuticals, and biomaterials/bioprocess).
 
     Venture Capital
     The Burrill family of venture capital funds, with over $250 million under
 management, include the Burrill Biotechnology Capital Fund, the Burrill Agbio
 Capital Fund, and the Burrill Nutraceuticals Capital Fund.
 
     Strategic Partnering
     Burrill & Company assists life science companies identify, negotiate and
 close strategic partnerships providing access to resources, technologies or
 collaborations essential for executing their business plans.  We have
 completed more than 20 strategic partnerships with a value in excess of
 $1 billion.
 
     Spin-outs/Spin-ins
     Burrill & Company works with major life science companies to spin-out
 internal assets and capitalize on their value, ranging from the outright sale
 of products or businesses to creation of new companies to exploit these
 assets.  We also use our extensive network to help companies identify, assess
 and capture ("spin-in") products and companies strategic to building their
 businesses.
     For more information, please visit Burrill & Company's website at
 www.burrillandco.com.
 
 

SOURCE Burrill & Company
    SAN FRANCISCO, April 2 /PRNewswire/ -- March stock markets continued a
 plummet that began mid-January with biotech losing 15-25 percent of their
 value in March alone.  The NASDAQ fell below the 2,000 mark for the first time
 since December 1998.  On March 12th, the Dow suffered its worst loss in
 11 months and ended its worst performing quarter since 1960.  Just as reduced
 4Q 2000 corporate earnings sent February markets into a nosedive, warnings
 issued in March caused the decent to continue.  Talk of slower growth and
 lowered earnings came from all sectors of the market.  High-tech stars Nortel
 and Cisco announced major job cuts while biotech heavyweight Applied
 Biosystems (an Applera Corp. business) warned of slower growth.  Investors
 looked to the Fed for relief, but the half-point rate cut on March 20th had
 little if any effect.  With the Dow off 6 percent for the month and NASDAQ
 down 14 percent, Biotech stocks moved similarly.  The Burrill Biotech Select
 index lost 23 percent of its value in March, with the Burrill Life Science
 Composite off 12 percent.
    "Some biotech indices (particularly our genomics index) are now off as much
 as 80 percent from their highs of mid-March 2000, losing a large portion of
 this value since year end 2000.  At March 31st, the industry's market
 capitalization stood at $330 billion, down over 30 percent from its mid-March
 2000 high of $500+ billion.  Essentially, the markets are closed to IPOs
 ...  and investors are on the sidelines waiting for evidence the market has
 bottomed," said G. Steven Burrill, CEO of Burrill & Company, a
 San Francisco-based private merchant bank focused exclusively on life
 sciences.
     "Everyone is asking if the industry has bottomed.  With industry
 fundamentals strong (good cash position, good management, product success and
 sustainable business models) it is in much better shape than it was one year
 ago when the biotech frenzy was at its peak," commented
 G. Steven Burrill.  "With many companies now selling at almost no premium to
 cash value per share, we can't get much lower," added Burrill.
 
 
     A review of the Burrill Life Sciences Indices for March 2001 is as
     follows:
                  12/31/00      2/28/01      3/30/01 Percent Change   Percent
     Index          Value        Value        Value    for Month    Change YTD
 
     Burrill Life
      Sciences
      Composite
      Index            183.2     163.50        144.59     -11.57%     -21.08%
     Burrill Biotech
      Select Index    412.97     330.54        255.70     -22.64%     -38.08%
     Burrill
      LARGE-CAP
      Biotech Index   387.93     344.80        284.19     -17.58%     -26.74%
     Burrill
      MID-CAP
      Biotech Index   284.78     209.67        180.42     -13.95%     -36.65%
     Burrill
      SMALL-CAP
      Biotech Index   187.79     159.12        138.33     -13.06%     -26.34%
     Burrill Agbio
      Index            87.64      79.68         74.46      -6.55%     -15.03%
     Burrill Animal
      Health Index     96.87     105.38        102.44      -2.79%       5.75%
     Burrill
      Genomics
      Index           421.53     337.83        260.60     -22.86%     -38.18%
     Burrill
      Biomaterials/
      Bioprocess
     Index            132.04     124.19        112.89      -9.10%     -14.51%
     Burrill
      Diagnostics
      Index           100.00      82.04         71.45     -12.91%     -28.55%
     Burrill
      Nutraceuticals
      Index           105.36     121.66        119.39      -1.87%      13.32%
 
 
                  12/31/00       2/28/01      3/30/01 Percent Change  Percent
     Index         Value          Value        Value    for Month   Change YTD
 
     Burrill Life
      Science
      Composite      183.2        163.5       144.59      -11.57%     -21.08%
     NASDAQ        2471.43      2151.83      1840.26      -14.48%     -25.54%
     DJIA         10787.99     10495.28      9878.78       -5.87%      -8.43%
     Russell 2000   483.53       474.37       450.53       -5.03%      -6.82%
 
 
     The Burrill Large-Cap Biotech Index fell 18 percent during the month,
 largely the result of Immunex (IMNX) dropping 56 percent after halting studies
 on the use of Enbrel for the treatment of chronic heart failure.  Other
 significant decliners included Affymetrix (AFFX) down 51 percent and
 Invitrogen (IVGN) down 32 percent, amid a broad devaluation of biotech
 equipment/reagent suppliers dependent on customers who are putting a clamp on
 spending.  The Burrill Genomics Index was similarly trashed, down 23 percent
 for the month with the excitement and frenzy to own "genomics" stocks having
 already "cooled off."  Only 1 of 10 genomics companies tracked posted a gain
 in share price.  The Burrill Mid-Cap Biotech Index fell 14 percent, and more
 significantly, has lost 37 percent of its value for the year.  Those companies
 experiencing the largest decline were Orchid Biosciences (ORCH), Pharmacyclics
 (PCYC) and Maxygen (MAXY) down 33, 38 and 24 percent, respectively; all with
 no negative news ... just the market losing interest in biotech stocks.  The
 Burrill Small-Cap Biotech Index lost 13 percent of its value, led by
 Intrabiotics (IBPI), down 51 percent on news that their Phase III trial of
 Ramoplanin would be delayed due to slow patient enrollment.
     The Burrill Animal Health Index, down 3 percent, and the Burrill
 Nutraceuticals Index, down 2 percent, were driven lower by the general market
 downtrend.  A 9 percent decrease in the Burrill Biomaterials Index was led by
 Invitrogen (IVGN) and Corning (GLW), down 32 and 25 percent respectively.
 Corning fell after analysts lowered target prices and earning estimates based
 on the company's recent lowering of expected 2001 earnings.
     The Burrill Agbio Index lost 7 percent of its value.  Hardest hit was
 Large Scale Biology (LSBC), down 36 percent due to their genomics-based
 business model and a current negative investor attitude toward this sector.
 The Burrill Diagnostics Index fell 13 percent, Digene (DIGE) led decliners,
 down 54 percent, causing them to withdraw their registration for a secondary
 public offering.
     The Burrill Life Sciences Composite Index, an average of the other
 Burrill & Company indices, dropped over 12 percent in March, falling right
 in-between the 14 and 6 percent decline of the NASDAQ and Dow, respectively.
     "The Biotech Select Index fell 23 percent for the month and 38 percent for
 the year to date, reflecting the substance of the biotech sell off.  When the
 markets are working against you, even the best companies can't buck the
 trend," commented Burrill.
 
     Burrill Life Sciences Indices Definitions
     The Burrill Life Sciences Composite Index is the average of all of the
 other Burrill Life Sciences indices, except for the Burrill Biotech Select
 Index and the Burrill Genomics Index.
     The Burrill Biotech Select Index is a price-weighted index, representing
 some of biotech's best (the biotech "blue chips").  This index tracks
 20 companies and is similar to the Dow Jones Industrial Average, which tracks
 30 "blue chip" U.S. stocks.  The companies tracked through the Burrill Biotech
 Select Index have been selected on the basis of long-term growth potential-not
 necessarily on the highest market capitalizations (though many of the highest
 market cap companies are included in this index).
     The Burrill Large-Cap Biotech Index tracks the performance of the top
 12 biotech companies with market caps greater than $1 billion.
     The Burrill Mid-Cap Biotech Index represents 20 mid-tier biotech companies
 with market caps between $300 million and $1 billion.
     The Burrill Small-Cap Biotech Index is comprised of 75 small biotech
 companies with market caps less than $300 million.
     The Burrill Genomics Index is comprised of 10 biotech companies with
 technologies spanning the field of genomics.
     The Burrill Agbio Index tracks the performance of 15 agbio companies.
     The Burrill Animal Health Index tracks 10 public animal health-focused
 companies.
     The Burrill Biomaterials/Bioprocess Index tracks 20 companies, most of
 which are large chemical companies, that use biotech in their development and
 product base.
     The Burrill Nutraceuticals Index tracks 20 companies in the
 nutraceuticals, supplements, and medical and functional foods arenas.
     The Burrill Diagnostics Index tracks 15 companies whose technologies and
 products enable clinical and R&D diagnostics.
 
     Burrill & Company
     Burrill & Company is a private merchant bank, focused exclusively on life
 science companies (biotechnology, pharmaceuticals, diagnostics, human
 healthcare, related medical technologies, agricultural technologies, animal
 health, nutraceuticals, and biomaterials/bioprocess).
 
     Venture Capital
     The Burrill family of venture capital funds, with over $250 million under
 management, include the Burrill Biotechnology Capital Fund, the Burrill Agbio
 Capital Fund, and the Burrill Nutraceuticals Capital Fund.
 
     Strategic Partnering
     Burrill & Company assists life science companies identify, negotiate and
 close strategic partnerships providing access to resources, technologies or
 collaborations essential for executing their business plans.  We have
 completed more than 20 strategic partnerships with a value in excess of
 $1 billion.
 
     Spin-outs/Spin-ins
     Burrill & Company works with major life science companies to spin-out
 internal assets and capitalize on their value, ranging from the outright sale
 of products or businesses to creation of new companies to exploit these
 assets.  We also use our extensive network to help companies identify, assess
 and capture ("spin-in") products and companies strategic to building their
 businesses.
     For more information, please visit Burrill & Company's website at
 www.burrillandco.com.
 
 SOURCE  Burrill & Company