Something like one-third of the public biotech companies are running with six months’ worth of cash or less, and it doesn’t look like San Diego companies are bucking this disturbing trend. When I last surveyed how much cash was available at San Diego’s public biotech companies in November, I found just 10 of 23 public companies had amassed $100 million or more to sustain them through the downturn.
But after reviewing the latest round of updated quarterly financial filings, one fell out of the $100 million cash reserve club—Orexigen Therapeutics. This time I again surveyed 23 publicly traded life sciences companies in the San Diego area, although I added diagnostics maker Quidel to the list and dropped ISTA Pharmaceuticals because it’s outside the local area in Irvine, CA. Looking over the numbers, I found there were six public companies with less than $50 million, which can’t be a good feeling for management teams in a recession, when it’s hard to raise new investment capital.
So to catch up on how your companies are doing, here’s the list in alphabetical order:
—Acadia Pharmaceuticals (NASDAQ: ACAD). This San Diego company, a developer of neurological drugs, burned through more than $66 million of cash during 2008, and entered this year with $60.1 million in the bank. It made some spending cuts last year that are designed to keep it going “into the first half of 2010.” That ought to be long enough to get a look at Phase III clinical trial results from its Parkinson’s drug candidate, pimavanserin, in the third quarter.
—Amylin Pharmaceuticals (NASDAQ: AMLN). This San Diego-based company cut 340 jobs at its local headquarters last fall after it saw demand fall off for its best-selling product, exenatide, (Byetta). The company had $816.8 million in cash stockpiled heading into this year, about $200 million less that it had stashed away a year ago. Amylin says its still expects to make the transition to become cash flow positive by the end of 2010.
—Anadys Pharmaceuticals (NASDAQ: ANDS). This San Diego-based company is in a much weaker cash position than a year ago. Its reserves dwindled from $56.5 million at the beginning of 2008 to $27.9 million at the beginning of this year. But this may be temporary, because Anadys has seen its stock triple since early January, on positive results from the first eight patients who took its ANA-598 drug for hepatitis C in a clinical trial. The combination of low cash reserves and a promising, late-stage drug candidate also could make Anadys a ripe acquisition target.
—Arena Pharmaceuticals (NASDAQ: ARNA). This San Diego drug developer, working on medicines for obesity and diabetes, has struggled to clamp down on its spending. The company began 2008 with $398 million in the bank, and it closed the year with $110 million. If clinical trial results of its lorcaserin drug for obesity are positive next month, the company will be in a stronger position to fatten up its reserves, either through investors or a corporate partnership.
—Cadence Pharmaceuticals (NASDAQ: CADX). This San Diego company had the good fortune to hit a home run in its clinical trial of intravenous acetaminophen, which prompted a group of venture investors to pump in $86 million in fresh capital, boosting its reserves to $124 million at the end of February. Then Cadence failed in a trial of its second product, a topical gel … Next Page »
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