San Diego-based biotech firms have weathered the recent economic downturn by cutting both employees and underperforming drug development programs. The city's public biotechs saw their net loss increase 38 percent to $589 million, while revenue rose 49 percent to $5.8 billion from 2008 to 2009, according to a report in the San Diego Business Journal.
The story appears roughly a week after Ernst & Young released a report stating the 2008/2009 economic crisis was so different, so widespread and so global that it has forever changed the way biotech and pharmaceutical companies look at drug development, bringing about a "new normal" for the industry. But last year wasn't all bad news for the industry. Companies demonstrated surprising resiliency in 2009; 14 percent of biotech companies closed their doors--far less than the 25 percent to 33 percent that was expected.
San Diego saw some companies on the brink of bankruptcy, such as Adventrx Pharmaceuticals (NASDAQ: ANX), survive by reducing their head count to just a couple of key employees. "We were prepared to wind it down," says Adventrx CEO Brian Culley. "We were able to identify the investors interested in making a bet." Last week, the company announced it has completed a previously announced sale of shares of its Series F convertible preferred stock, representing gross proceeds of approximately $19.2 million. Adventrx plans to use the net proceeds to fund the acquisition and development of additional candidates and its current lead products.
Other companies were sold a bargain prices. For example, Metabasis Therapeutics (NASDAQ: MBRX) was sold late last year to Ligand Pharmaceuticals for $3.2 million in cash. And some privately held biotechs also found eager investors despite the squeezed capital markets, including Zogenix, which was able to raise $71 million last year from a group of venture capitalists.
- see the Adventrx release
- read the report in the San Diego Business Journal