2008-09-02 22:49:01 -

- While the general markets managed to end August in positive territory as oil continued a sharp slide, biotech came back to earth after its stellar performance in July closing in negative territory. The Dow finished up 1.5%, the NASDAQ closed the month up 1.8% and the Burrill Biotech Select Index, a price-weighted index tracking 20 of biotech's "blue chip"

companies, was down 5%.

"With the big pharma bids for Genentech and ImClone being considered in their respective board rooms, investors' attention on biotech waned slightly in August," said G. Steven Burrill, CEO, Burrill & Company, a San Francisco based global leader in life sciences with activities in Venture Capital, Private Equity, Merchant Banking and Media. "While we haven't seen the end of blockbuster M&A deals in biotech they won't occur every month. In a quiet month for biotech news investors were left to worry about the uncertainties about the economy. We will continue to see these swings in the fortunes of biotech throughout the rest of the year. However, I expect that biotech's performance to improve upon its current 10% year-to-date gain in the final four months of 2008."

Pulling down the Burrill Biotech Select Index was Amylin Pharmaceuticals whose share price fell 30% in August following news that four more patients taking Byetta, which is used to treat type 2 diabetes, had died after bouts of pancreatitis. Amylin noted that diabetics in general also run a notably higher risk of developing pancreatitis than the general population.

Vertex Pharmaceuticals saw its share value drop 22% after Schering-Plough Corp. reported positive data from a trial of a hepatitis C drug, showing it could be a strong competitor to Vertex's drug candidate telaprevir. Acadia Pharmaceuticals also posted a 14% drop after reporting a wider-than-expected second-quarter loss and saying it would cut its work force by about half in a restructuring move. On the plus side, shares of Affymetrix jumped 9% in August. The FDA approved its product for in vitro gene expression diagnostic testing.

The Burrill Biotech Mid-Cap Index managed to remain unchanged in August following its 18% jump in July.

Market cap

The industry's market cap closed August at $507 billion, easing back from a record setting $520 billion mark posted mid-month. Genentech's market cap closed at $104.2B; Amgen remained in second spot at $66.5 billion with Gilead Sciences at $48.5B.

Biotech Indices -0- % % 12/31 7/31 8/29 change change Index 2007 2008 2008 Month Year Burrill Biotech Select 331.52 384.11 363.59 -5.34% 9.67% Burrill Large Cap Biotech 437.71 522.3 505.26 -3.26% 15.43% Burrill Mid-Cap Biotech 201.89 192.55 192.55 0.00% -4.63% Burrill Small Cap Biotech 137.6 119.5 119.21 -0.24% -13.36% NASDAQ 2652.28 2325.55 2367.81 1.82% -10.73% DJIA 13264.82 11378.02 11552.18 1.53% -12.91% Amex Pharma 338.52 303.72 303.96 0.08% -10.21%

Burrill & Company
Peter Winter, Editorial Director, 415-591-5474
pwinter@b-c.com