By Donald Zuhn --
It has not been a great year for the biotech/pharma industry. In February, BIO President and CEO Jim Greenwood noted that almost a third of BIO's membership had less than six months of cash on hand, 45% had less than one year of cash remaining, and only 10% of the 370 publicly-traded biotechnology companies reported a positive income (see "BIO Meets the Press"). In April, the National Venture Capital Association (NVCA) and PricewaterhouseCoopers announced that venture capitalists had invested $3.0 billion in 549 deals in the first quarter of 2009, a 47% decrease in terms of dollars invested and a 37% decrease in terms of the number of deals as compared with the fourth quarter of 2008 (see "First Quarter Venture Capital Funding at 12-Year Low"). The NVCA noted that venture funding had dropped to levels not seen since 1997. The first quarter drop followed a 2008 drop in venture funding, the first yearly decline in total investments since 2003 (see "NVCA Study Shows Decline in 2008 Investment; BIO Study Predicts Biotech Rebound in 2009"). However, all of these negative indicators may be giving way to some more positive signs.
On Monday, Nashville-based Cumberland Pharmaceuticals announced that 5,000,000 shares of its common stock would begin trading on the NASDAQ Global Select Market on Tuesday. Cumberland's stock opened at $17 per share -- about $2 lower than earlier projections -- and closed at $16.83 on the first day of trading. Despite the lower opening price, Cumberland CEO AJ Kazimi said the company was "delighted to be able to lead the reopening of the IPO market." According to a report in the Nashville Business Journal, Cumberland became the first U.S. drug company to go public in nearly two years. And it appears that Cumberland will soon be joined by a number of other biotech and pharma companies.
On Monday, Seattle Genetics, of Bothell, WA, announced a proposed public offering of its common stock. On Tuesday, the biotech company announced that on or about August 17th, 11,000,000 shares of its common stock would be made available at an opening price of $10.75 per share. Seattle Genetics expects the gross proceeds of the sale to be approximately $118.2 million.
Earlier this month, Inspire Pharmaceuticals announced that it had filed a registration statement with the Securities and Exchange Commission (SEC) for a public offering of its stock. The biopharmaceutical company, based in Durham, NC, intends to offer $80 million of its common stock in the IPO. According to a report in the Charlotte Observer, another North Carolina biotech company, Talecris Biotherapeutics, is also thinking about an IPO -- this one for $1 billion. Talecris first filed for its IPO in 
June 2007, but called off the offering due to the economic slowdown and a $3.1 billion merger offer from Australia's CSL (the deal subsequently ran into trouble with U.S. regulators).
In addition to the recent rise in biotech/pharma IPOs, venture funding also appears to be in recovery mode. Last month, FierceBiotech noted that a VentureSource study showed a rebound in second quarter venture funding. In particular, the study determined that biopharmecutical investing jumped from $709 million in the first quarter to $1.22 billion in the second quarter, a 72% increase.
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