Zoetis IPO Caps Strong Month for Life Sciences Financings

Zoetis IPO Caps Strong Month for Life Sciences Financings 
Companies Capitalize on Investor Enthusiasm to Raise Cash, Says
Burrill & Company 
SAN FRANCISCO, CA -- (Marketwire) -- 02/01/13 --  Life sciences
financing activity got a strong start in the new year as companies
raised $10.3 billion in January. The Pfizer animal health unit Zoetis
was responsible for more than half the activity through a debt
offering and the largest IPO since Facebook debuted in May 2012. The
robust activity dwarfed the $4.2 billion raised during the same
period a year ago, according to Burrill & Company. 
Companies raised more than $6 billion during the month through debt
offerings. This included Zoetis' heavily oversubscribed $3.7 billion
bond deal ahead of its IPO. It also included nearly $1.3 billion in
debt offerings from nine smaller therapeutics companies, as well as
nearly $700 million raised in two medical device company financings.  
The Zoetis IPO priced at $26, above its expected $22 to $25 range.
Three other companies, LipoScience, an in vitro diagnostic company;
Stemline Therapeutics, which is developing therapies that target
cancer stem cells; and KaloBios Pharmaceuticals, a developer of
next-generation antibodies, raised a combined $153 million through
initial public offerings. That compares to $135 million raised
through IPOs on U.S. exchanges a year ago. Almost $1.6 billion was
raised by follow-ons in January, tripling January 2012's total, and
reflecting the improved environment for public therapeutics companies
seeking to raise capital. 
"Enthusiasm in the market for life sciences has picked up following a
positive JPMorgan Healthcare Conference, a strong year of FDA
approvals capped with a flurry of activity in December, and the
impressive returns the sector provided in 2012," says G. Steven
Burrill, CEO of Burrill & Company, a global financial services firm
focused exclusively on the life sciences. "Though the activity is
encouraging, capital continues to be expensive and difficult to
access for many companies, particularly those that have not yet
commercialized products." 

BURILL INDICES                                                              
                         Month     Year      
Index                          12/31/2012   1/31/2013   Change    Change    
Burrill Select                     607.66      634.23      4.4%         4.4%
Burrill Large Cap                  736.90      759.90      3.1%         3.1%
Burrill Mid-Cap                    309.52      332.44      7.4%         7.4%
Burrill Small Cap                  105.99      119.39     12.6%        12.6%
Burrill Diagnostics                191.32      202.54      5.9%         5.9%
Burrill Personalized Medicine      119.22      127.48      6.9%         6.9%
Burrill Biogreentech               162.27      175.67      8.3%         8.3%
NASDAQ                            3019.51     3142.13      4.1%         4.1%
DJIA                             13104.14    13860.58      5.8%         5.8%
S&P 500                           1426.19     1498.11      5.0%         5.0%
Amex Biotech                      1547.03     1661.17      7.4%         7.4%
Amex Pharmaceutical                369.57      394.99      6.9%         6.9%

On the venture capital front, life sciences companies globally raised
nearly $1.1 million in January, about the same as a year ago. That
included the $294 million investment in Brazil-based GraalBio, which
will use the funding to develop cellulosic ethanol technologies at
its first commercial facility located in Alagoas, Brazil. The $709
million raised by U.S.-based companies in January, though, is down
about 14 percent from activity a year ago.  
Global M&A activity for January reached $4.5 billion, down 32 percent
from a year ago. Botox-maker Allergan's $958 million acquisition of
MAP Pharmaceuticals, its partner in developing the experimental
orally-inhaled migraine drug Levadex, was the largest transaction for
the month. The acquisition reflects an effort by Allergan to expand
its offerings to neurologists and pain specialists. The U.S. Food and
Drug Administration is expected to decide on whether it will approve
Levadex in April. 
Global partnering deals fell to $2.1 billion in January, a 56 percent
decline from levels a year ago. Gilead Sciences' collaboration with
MacroGenics -- worth up to $1.1 billion -- covers the development and
commercialization of bi-specific antibodies directed at four
undisclosed targets chosen by Gilead. The biotech's proprietary Dual
Affinity Re-Targeting platform, or DART, can engineer antibodies that
can target multiple antigens, an area of growing interest among drug
developers as they seek to increase the efficacy of their therapies
by hitting multiple targets at the same time. 
"The low numbers for partnering activity extend a downturn seen in
2012 in part because of fewer financial terms being disclosed," says
Burrill. "But it also reflects a shift among larger pharmaceutical
companies focusing more of their attention to academic and non-profit
research institutions as they look for discovery- and early-stage

Life Sciences Scorecard in USD M                                            
                                                YTD        YTD              
                                              1/31/13    1/31/12    Change  
Global Venture Capital                           1,144      1,064       7.5%
U.S. VC                                            795        826      -3.8%
IPOs (4 in 2013 vs 3 in 2012)                    2,253        262     759.9%
U.S. IPOs (4 in 2013 vs 2 in 2012)               2,253        135    1568.9%
Global PIPEs                                       184        158      16.5%
U.S. PIPEs                                         101         72      40.3%
Global Follow-ons                                1,585        477     232.3%
U.S. Follow-ons                                  1,585        477     232.3%
Global Other Equity                                 54        338     -84.0%
U.S. Other Equity                                   45        323     -86.1%
Global Debt Offerings                            5,783      2,593     123.0%
U.S. Debt                                        4,968      2,201     125.7%
Global Other Debt                                  263        338     -22.2%
U.S. Other Debt                                    226        334     -32.3%
Total Global Public Financings                  10,122      4,166     143.0%
Total U.S. Public Financings                     9,178      3,542     159.1%
Global Partnering                                2,082      4,713     -55.8%
U.S. Partner/Licenser                            1,889      2,676     -29.4%
Global M&A                                       4,859      6,720     -27.7%
M&A, U.S. Target                                 2,482      5,765     -56.9%

The FDA in January approved a trio of new drug treatments for type 2
diabetes. All three drugs, Nesina, Kazano, and Oseni will be
distributed by Takeda Pharmaceutical and include the new molecular
entity alogliptin, developed through a partnership between Takeda and
Furiex Pharmaceuticals. Alogliptin helps stimulate the release of
insulin after a meal, which leads to better blood sugar control.
Nesina tablets contain alogliptin alone, while Kazano combines
alogliptin with the already-approved metformin hydrochloride and
Oseni combines it with pioglitazone. 
The agency also approved Kynamro, a new injectable
cholesterol-lowering drug co-developed by Genzyme and Isis
Pharmaceuticals, despite liver safety concerns. Kynamro, also known
as mipomersen, is approved to treat people with homozygous familial
hypercholesterolemia, an inherited condition that causes high levels
of low-density lipoprotein cholesterol levels beginning at birth, and
heart attacks at an early age. The approval comes about one month
after Aegerion Pharmaceuticals won U.S. approval for Juxtapid,
another medicine for the disorder that comes in pill form. 
The European Commission announced the winners of its Future and
Emerging Technologies Flagship Initiative, the largest single science
competition to be held in Europe to date. Each will receive $1.36
billion (EUR 1 billion) over ten years. The Human Brain Project was
named as one of the winners. It will create the world's largest
experimental brain research facility and seeks to develop a detailed
model of the human brain so researchers can study how it works and
ultimately develop personalized treatments for neurological and
related diseases.  
The California Institute for Regenerative Medicine -- California's
stem cell agency backed by a $3 billion ballot initiative -- said its
board has adopted a framework of proposals that could "dramatically
change some aspects of its work." The proposals are aimed at
addressing criticism over potential conflicts of interest in the way
the board decides how to allocate grants and come in response to a
series of recommendations from the Institute of Medicine. The IOM
made those recommendations as part of a report requested by the
agency, which was seeking an independent assessment of its programs,
operations, strategies, and performance. 
"CIRM's funding is expected to last about four more years, but there
are many who hope it will have a life that extends well beyond that
period," says Burrill. "It's vital that it has credibility and the
public's trust if it is to continue its mission far into the future." 
About Burrill & Company 
 Founded in 1994, Burrill & Company is a
diversified global financial services firm focused on the life
sciences industry. With $1.5 billion in assets under management, the
firm's businesses include venture capital/private equity, merchant
banking, and media. By leveraging the scientific and business
networks of its team, Burrill & Company has established unrivaled
access and visibility in the life sciences industry. This unique
combination of resources and capabilities enables the company to
provide life sciences companies with capital, transactional support,
management expertise, insight, market intelligence, and analysis
through its investments, conferences, and publications. Headquartered
in San Francisco, the company oversees a global network of offices
throughout the United States, Latin America, Europe, and Asia. For
more information visit: www.burrillandco.com. 
Daniel Levine 
Managing Director 
Burrill & Company
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