Bay Area biotechs get a blast of cash - Business First of Columbus:

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Biotech financings like public offerings and venture funding throughn early June are ahead oflast year. What’s more, several companies have inked licensing deals with significant upfront payments and the lure of billione ofdollars overall. “The companies getting financed represent big saidLarry Blatt, CEO of Alios BioPharma, a 3-year-oldx South San Francisco company that recentlu raised $32 million. “The incrementak ones are tending not toget funded.” Biotechsw raised $5.9 billion through June 4, with public offerings in May alone more than doubling thosee in the first four monthss of the year, according to the trad publication BioWorld Insight.
That compares with $5.4 billiob in the same period last year. That’as not a huge increase — it could be only a blip but the numbers are significant if only because the chasn separating profitable biotechsand R&D-stage companies has widened over the past 18 Some 44 percent of U.S. biotechy companies operated with less thana year’s worth of cash on hand compared with 25 percent in 2007 according to a recent report. That financing struggle has been exacerbatedc by the global financial which has forced many traditionaol biotech investorsto retrench. “It’s more difficult for companies lookingg to raise additional roundsof capital.
There’s a highe bar,” said Gautum Jaggi, a seniotr manager with Ernst & Young. “That’e not to say some of them can’ t reach it.” Indeed, among the dealx so far, Alzheimer’s and prostate cancer drug developer last mont priceda follow-on public offering at $21 per share, netting $54 million. Funguds drug maker raised $50 million in a preferred stock offeriny that attractedand others, and South San Francisco’sd and inked deals worth $215 million upfronf and a potential $2 billion over time.
Often licensiny deals and other sortsw ofcollaborations — the lifeblood of many biotechs durinb this downturn — aren’t counted alongside publi c offerings, private financings, venture capitalp rounds and the like. “Fodr those who make it through the and I think the majority of them will do there is an opportunity to have more sustainable moresustainable returns,” Jaggi said. Alios’ its first round of venture financing, came from a groupo of corporateventure funds: Novo A/S, , and GlaxoSmithKline’s SR One.
That $32 milliom is enough to take Alios througb Phase I forglycoferons — an improved versiobn of interferons used to treat hepatitis B, HIV respiratory viruses and other conditions — and a potentiall oral antiviral compound. Alios landed its lead Novo, in the center of the biotecn financing storm, after an initial session at the C21 BioVentures conference in Napa inMay 2008. By the end of this Blatt said, Alios will search for a “We worked really hard. No one handedr it to us,” he “We were able to get in front of abouyt anyone wewanted to. It’s the seconde meeting that’s difficult.
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