https://rodman.bluematrix.com/docs/pdf/36d81d3c-d822-451e-afde-5a5339c30...

The BTK index had a change of -1.15% last week, closing at 860.36, compared to the NASDAQ’s change of 1.10%, while the NBI was down -2.31%, closing at 792.47 The profitable biotechs trade at 21 times the FY09 consensus EPS estimates, vs. the historical mean of 44.6 times forward earnings. The PEG on FY09 earnings is 1, below the historical mean of 1.6 and well below the historical high of 2.9, while the group’s 2008-2011 CAGR is 18.7%.

Notable news from last week (August 3- August 7)

Biotech earnings the main story last week, too: This past week was yet another busy earnings week for small and mid cap biotech, including a number of companies from our coverage universe: MannKind (MNKD Market Outperform), Alnylam (ALNY Market Outperform), OncoGenex (OGXI Market Outperform), Poniard (PARD Market Outperform), Momenta (MNTA Market Outperform), and Infinity (INFI Market Perform). Companies of interest outside our coverage universe that reported last week included Onyx (ONXX Not Rated), Isis (ISIS Not Rated), and Regeneron (REGN Not Rated).

From Ren Benjamin’s coverage universe, we had Vical (VICL Market Outperform) and Oncolytics (ONCY Market Outperform) report this past week, while from Elemer Piros’ coverage universe, it was Arena (ARNA Market Outperform), Acorda (ACOR Market Outperform), Xenoport (XNPT Market Outperform) and Novavax (NVAX Market Outperform).

Another strong week on the financing front as well: Last week we continued to see promising signs in the biotech sector, with investors willing to go back into small and mid-cap biotech. The largest offering of the week was the financing by Onyx, which proposed an offering of 4M shares at $30.50, and $200M in convertible notes, for a total of $322M, which could increase to $370M, if the underwriters exercise the overallotment in shares and notes to the fullest.

MannKind (MNKD Market Outperform) raised approximately $55M in an offering of 7.4M shares this week, including 1M shares that were purchased by company founder and CEO Alfred Mann, while in the small-cap space, we had the $15M raise by Oncothyreon (ONTY Market Outperform), and the $22M raise by Idenix (IDIX Not Rated).

What’s coming up this week? (August 10– August 14)

More earnings and Denosumab FDA advisory meeting: This next week we will see a number of biotechs in our coverage universe report earnings, including GTx (GTXI Market Perform), CytRx (CYTR Market Outperform), Array (ARRY Market Outperform) and Oncothyreon (ONTY Market Outperform). On the regulatory front, we will have the August 13th FDA Advisory panel meeting for the BLA for Amgen’s (AMGN Not Rated) Denosumab, a sc injection for the treatment of post-menopausal osteoporosis and for treating and preventing bone loss in patients undergoing hormone ablation for either prostate or breast cancer. The briefing documents for advisory panel will be available on Tuesday.

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Biotechnology Simos Simeonidis, Ph.D. - Senior Biotechnology Analyst (212-430-1790) Elemer Piros, Ph.D. - Senior Biotechnolo

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