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Midwest small-cap life sciences turn in mixed third-quarter results

In a previous column, we took a look at how the large cap Midwest life science companies fared in the third quarter of 2004 amid an overall weak stock market. The results looked very positive for at least 75 percent of the companies, which exceeded by far the overall stagnant market growth.

On the negative side, some of the poor results in the Midwest life science sector came from some of our largest Big Pharma companies (namely Abbott Labs and Eli Lilly). As a reminder of the overall environment for stock performance for the first nine months of 2004, I am again displaying the results of the major indices:



Now that we know how the large caps did, let’s check out the much smaller cap realm of biotech and medical device companies to see what transpired. For those of you who follow this column regularly, you will note some changes in the usual listing of biotech companies:

  1. We have lost a few companies due to acquisition by a larger company (specifically CIMA Labs in Minnesota, which was acquired by Cephalon, and Esperion in Michigan, which was acquired by Pfizer).
  2. I have elevated at least one company (Dade-Behring) to the large cap realm due to its market cap size (which is greater than $2 billion) and development stage (sales of more than $1 billion).
  3. I have found a few more companies in the region that weren’t previously included (such as Aastrom Biosciences in Michigan). 4) Medical device company Stereotaxis in St. Louis successfully completed its IPO during the third quarter and is now publicly traded.

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It was a real mixed bag for the Midwest biotech sector in the third quarter with results almost evenly split between the top 20 companies. While there are clearly some spectacular Midwest biotech company stock growth results, there are some equally abysmal drops. Let’s take a look at the leaders and laggards:



The total value of the top 20 Midwest biotech companies reached $6.3 billion. If we look at the traditional biotech market cap tiers as a way of measuring our progress, the Midwest has:

  1. One company in the billion-dollar club (the top tier).
  2. Eight companies in the second tier ($200 million to $999 million).
  3. Seven companies in the third tier ($100 million to $199 million).
  4. Four companies in the fourth tier ($50 million to $99 million).
As many of the companies have not yet reported financial results for the third quarter, we will next week look at some of the underpinning reasons behind this volatile year for Midwest and U.S. biotech.

Disclaimer: This column is not a communication
to provide incentive to purchase or sell securities.


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Michael S. Rosen is president and CEO of Barbeau Pharma and a founder and board member of the Illinois Biotechnology Industry Organization (IBIO). He can be reached at rosenmichaels@aol.com. This article has been syndicated on the Wisconsin Technology Network courtesy of ePrairie, a user-driven business and technology news community distributed via the Web, the wireless Web and free daily e-mail newsletters. They can be found at www.eprairie.com.

The opinions expressed herein or statements made in the above column are solely those of the author, & do not necessarily reflect the views of The Wisconsin Technology Network, LLC. (WTN). WTN, LLC accepts no legal liability or responsibility for any claims made or opinions expressed herein.

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