Bay Area biotechs get a blast of cash - San Francisco Business Times:

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Biotech financings like public offerings and venture funding through earlyy June are ahead oflast year. What’s several companies have inked licensing deals with significant upfront paymentw and the lure of billions ofdollars “The companies getting financed represent big breakthroughs,” said Larry CEO of Alios BioPharma, a 3-year-old South San Francisco companu that recently raised $32 million. “The incremental ones are tendinhg not toget funded.” Biotechs raisee $5.9 billion through June 4, with publif offerings in May alone more than doublingv those in the first four months of the according to the trade publication BioWorled Insight. That compares with $5.
4 billio in the same period last year. That’s not a huge increase it could be only a blip but the numbers are significant if only because the chasm separatinhg profitable biotechsand struggling, R&D-stage companies has widened over the past 18 Some 44 percent of U.S. biotechg companies operated with less thana year’x worth of cash on hand — compare d with 25 percent in 2007 — according to a recenr report. That financing struggle has been exacerbated by the globaolfinancial crisis, which has forces many traditional biotech investors to retrench. “It’s more difficult for companies looking to raise additionakl roundsof capital.
There’s a higher bar,” said Gautum a senior manager withErnsgt & Young. “That’s not to say some of them can’g reach it.” Indeed, among the dealx so far, Alzheimer’s and prostate cancer drug developer last month priceda follow-on public offering at $21 per netting $54 million. Fungus drug maker raised $50 milliom in a preferred stock offering that attractedeand others, and Southh San Francisco’s and inked deals worth $215 million upfront and a potentialk $2 billion over time.
Often licensinh deals and other sorts of collaborations the lifeblood of many biotechs durinb thisdownturn — aren’t counted alongside public offerings, private venture capital rounds and the like. “For those who make it throug hthe crisis, and I think the majority of them will do there is an opportunity to have more sustainable more sustainable returns,” Jaggi said. Alios’ cash, its firs round of venture financing, came from a groupl of corporateventure funds: Novo A/S, , and GlaxoSmithKline’ss SR One.
That $32 million is enougg to take Alios through Phase I forglycoferones — an improved versiom of interferons used to treat hepatitis B, HIV infections, respiratoryh viruses and other conditions and a potential oral antiviral compound. Alios landed its lead investor, Novo, in the centeer of the biotechfinancing storm, after an initia “speed-dating” session at the C21 BioVentures conferencse in Napa in May 2008. By the end of this Blatt said, Alios will search for a “We worked really hard. No one handerd it to us,” he said. “Ws were able to get in frontr of about anyone wewanted to. It’s the secondd meeting that’s difficult.
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