The accompanying table includes 52 companies with market caps below the $150M minimum for inclusion in the ETF Innovators [ETFI] Emerging Bio-Pharma Index. While the performance is terrible with an average loss of nearly 50%, keep in mind that several buyouts in the out-of-favor micro-cap biotech space have been announced over the past year with 100%-plus takeover premiums, including under-the-radar names such as:
1.) SGX Pharma (SGXP) was acquired for $64M cash by Eli Lilly (LLY) for its cancer drug discovery platform
2.) Kosan Biosciences (KOSN) was acquired by Bristol-Myers (BMY) for its cancer drug pipeline
3.) Barrier Therapeutics (BTRX) was acquired by privately-held Stiefel Labs
4.) Pfizer's (PFE) $164M cash buyout of cancer drug developer Coley Pharma (COLY)
5.) The most recent and extreme example includes GlaxoSmithKline's (GSK) $57M buyout of Genelabs (GNLB) for an astounding premium of over 400% for the latter's hepatitis C clinical development assets
The common theme for these buyouts includes spending a very small amount of money relative to the huge size of the acquiring big pharma companies to acquire assets and expertise for early stage drug discovery and development – with three of the five aforementioned deals focused on cancer drug development. As a starting point for further investment research, companies on the list of 52 with market caps below $150M which have cancer drug candidates and/or discovery platforms include Cytokinetics (CYTK), ArQule (ARQL), Immunomedics (IMMU), Infinity Pharma (INFI), Ardea Biosciences (RDEA), Xoma Ltd. (XOMA), SuperGen (SUPG), Ariad Pharma (ARIA), Celldex Therapeutics (CLDX), and Vical (VICL).
Via ETF Innovators, LLP:
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