The Weekly Dose - April 6, 2012
The Weekly Dose - April 6, 2012
Weekly Commentary - Financings seem to be the topic of the last few weeks. BioWorld published a great article, "Spring has Sprung: Venture funding in BioTech is up. From that article: "Based on BioWorld's data, the first three months of 2012 saw U.S. biotech venture rounds bringing in a rousing $391 million – a 34 percent increase compared to the same period last year.
In the cell therapy space we have just survived several raises. Aastrom, Athersys and NeoStem (just to name a few) all raised capital. Aastrom deal was creative with a long term debt note. The good news is they should be financed through PIII results now. Typically we do see stocks rise post financings as fundamentally the enterprise value is even more attractive. Does dilution matter ? It’s a great question but the answer in the world of biotech is not so simple. These companies are working to completely change the unmet medical need around usually novel indications. In the case of Aastom its CLI, Athersys is Ulcerative Colitis (&others) and NeoStem is cardiovascular disease (preservation of heart function). So in this regard if these companies demonstrate "proof of principal" in their P2 (NBS, ATHX) or P3 (ASTM), the dilution from these raises becomes "irrelevant.
biotech newsletter | Print Article Email Article Posted on Friday, April 6, 2012 at 6:08AM Permalink in Weekly Dose