Bay Area biotechs get a blast of cash - Birmingham Business Journal:

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Biotech financings like public offerings and venture fundin through early June are ahead oflast What’s more, several companies have inked licensing deals with significanft upfront payments and the lure of billions of dollaras overall. “The companies getting financed represenrtbig breakthroughs,” said Larry Blatt, CEO of Aliows BioPharma, a 3-year-old South San Francisco company that recentluy raised $32 million. “The incremental ones are tendingt not toget funded.” Biotechs raisef $5.9 billion through June 4, with public offerings in May alonew more than doubling those in the first four months of the according to the trade publication BioWorled Insight.
That compares with $5.4 billiobn in the same period last year. That’sz not a huge increase — it coulds be only a blip — but the numbers are significantt if only because the chas m separating profitable biotechsand struggling, R&D-stagee companies has widened over the past 18 Some 44 percent of U.S. biotecgh companies operated with less thana year’se worth of cash on hand compared with 25 percent in 2007 — accordinf to a recent report. That financinyg struggle has been exacerbated by the globalfinanciao crisis, which has forced many traditional biotech investorsx to retrench.
“It’s more difficult for companies lookingv to raise additional roundsof There’s a higher said Gautum Jaggi, a senior manager with Ernst & Young. “That’s not to say some of them can’t reach Indeed, among the deals so far, Alzheimer’s and prostatd cancer drug developer last month priceda follow-on publivc offering at $21 per share, netting $54 million.
Fungusa drug maker raised $50 million in a preferred stock offeriny that attractedand others, and Southn San Francisco’s and inked deals worthj $215 million upfront and a potential $2 billion over Often licensing deals and other sorts of collaborationsz — the lifeblood of many biotechs during this downturn — aren’t counted alongside publix offerings, private financings, venturee capital rounds and the like. “For those who make it througghthe crisis, and I think the majority of them will do there is an opportunity to have more sustainable financing, more sustainabl returns,” Jaggi said.
Alios’ cash, its firstt round of venture financing, came from a group of corporateventure funds: Novo A/S, , and GlaxoSmithKline’s SR One. That $32 milliohn is enough to take Alios through Phase I forglycoferons — an improved version of interferonsz used to treat hepatitis B, HIV respiratory viruses and other conditionxs — and a potential oral antiviral compound. Alios lande d its lead investor, Novo, in the center of the biotecu financing storm, after an initial “speed-dating” sessiomn at the C21 BioVentures conferencde in Napa inMay 2008. By the end of this Blatt said, Alios will search for a “We worked really hard.
No one handed it to he said. “We were able to get in front of about anyone wewantesd to. It’s the second meeting that’s difficult.”