Market Sentiment Hard times – but the model is sound


While the European sovereign debt crisis keeps capital markets in a choke-hold, with potential negative effects on the financing situation in many industries – including biotech – there was encouraging news for drug-developing firms in the sector across the pond. Gilead wants to pay $11bn to acquire Pharmasset, a US-based clinical-stage pharmaceuticals developer (only three assets in clinical

trials between Phase I-IIb) with a focus on treatment options against viral infections (hepatitis C). This appears a very attractive price, at least at first glance. It also indicates in our view that demand for attractive pipeline assets among bio­pharmaceutical companies remains high. Even though capital markets are very unsettled, when it comes to financing, we regard news like this as encouraging.
However, the situation appears to be different for life science tool and equipment providers. Qiagen’s move to reduce its total headcount by around 10% is a good indicator in our view of the market environment for this branch of the sector. Q3 industry results have shown that demand from academic research institutions and pharma companies has continued to be as sluggish as it was in Q2. With the debt crisis in the Eurozone and the stressed debt situations in the US and the UK, we expect that the situation for publicly-funded R&D will also remain difficult throughout 2012. On the upside, some areas appear to have better growth perspectives. Qiagen is not just trying to improve its margins by reducing its cost base, but will also shift the resources that are freed up towards its key growth areas. That means Molecular Diagnostics in general, and Personalised Healthcare in particular. We continue to find the emerging Personalised Healthcare concept attractive. In this vein it is important to note that

Roche, one of the leading companies in the area, just announced that its cobas EGFR Mutation Test has received a CE mark for European marketing. The diagnostic is able to identify non-small cell lung cancer (NSCLC) patients that have mutations in the EGFR gene, and who might therefore benefit from treatment with

Roche’s Tarceva.

Financing environment remains challenging

While the financing environment for the biotechnology industry as a whole thus remains a challenging one, we believe the basic business model remains intact. The biopharmaceuticals industry is still searching for attractive new pipeline assets, and new markets continue to evolve in segments – like Molecular

Diagnostics – that are driven by innovation.



The first of February marked a milestone for Leverkusen-based Bio­frontera AG in more ways than one. It was the first day that Ameluz, the firm’s first approved product, could be sold in German pharmacies. It was also the date...



Darmstadt – German pharmaceutical and chemical company Merck KGaA has set a downbeat tone for 2012. CEO Karl-Ludwig Kley said the recently launched cost-cutting programme and tough economic conditions will weigh on profits this...



Mainz/Leuna – Two biotech concepts were amongst the winners of the recent third round of the Excellence Cluster initiative, which is funded by the German Ministry for Research. In Mainz the champagne corks popped especially loud...



German Merck KGaA has closed a licencing agreement with US-based Threshold Pharmaceuticals Inc. The cooperation centres around the hypoxia­-activated drug TH-302, which is currently being studied in a global Phase III study....



Munich – Looking back with satisfaction and bent on a prize for good behaviour, German biopharmaceutical company Wilex AG reported yesterday on the fiscal year 2011 and outlined the shores in sight. The 2011 total revenue was...



Brussels – European cartilage researchers intensify their cooperation. The 'gristle network' comprises scientists from Belgium, France, Germany and Luxembourg. Its members plan to meet regularly to exchange views and information...


Thousand Oaks/Munich - Bling bling for blinatumomab. It is a compliment for the European life sciences scene and sad news at the same time. Amgen Inc., the world's largest biotechnology company, agreed to buy Micromet Inc., an...



Martinsried - SHELTER is responsible for the fact that the stocks of 4SC behaved like a rodeo horse on Thursday. The shares rose in several stages up to 63%, only to settle at a mere 43% rise at the end of the day. SHELTER is a...



Ludwigshafen – BASF Plant Science GmbH, the agrochemistry and biotech arm of the world-largest chemistry company, thinks that it has outstayed its welcome in Europe. Over the next two years, most of the green biotechnology...



Munich - It is the accolade for Micromet. The German company, which is listed on the U.S. stock exchange, announced today that it has entered into a Cooperative Research and Development Agreement (CRADA) with the renowned US...

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