Biotech Survival Index 2: Boston Life Sciences Companies Squirrel Away More Cash for Long Winter

3/17/09Follow @xconomy

When I last crunched the numbers on the financial health of the Boston area’s public life sciences companies, back in November, I noted that 15 of them had more than $100 million stockpiled. These firms, I reasoned, were likely in a decent position to weather the economic storm. Now with quarterly financial reporting through December now in the books for most of the firms in the sector, I came to a surprising conclusion. There are now even more companies, 19, in that position of relative financial strength. Infinity Pharmaceuticals, Momenta Pharmaceuticals, Hologic, and Bruker are all newcomers to the $100 million club as of December 31.

Then again, in my review of the new numbers I also spotted 16 companies that likely had less than $50 million in the bank at year’s end (I say “likely” because three haven’t reported their numbers). That sign of thin reserves suggests those companies will face tough choices ahead.

Here’s the full rundown, in alphabetical order, of the 44 Boston-area life sciences companies for which I tracked down end-of-year financial figures.

Abiomed (NASDAQ: ABMD). The Danvers, MA-based medical device company had $63.8 million in cash and investments at the end of December, and a $7.7 million net loss in the quarter. That’s more cash than it had socked away at the end of September—$50.6 million.

Acusphere (OTCBB: ACUS). This biotech company has cut about two-thirds of its workforce, or 40 jobs, and consolidated all its facilities in a manufacturing plant in Tewksbury, MA. It has avoided making a formal financial report to the SEC, although it says the cuts will help it stretch its cash into the third quarter of 2009, which it hopes will buy enough time to come up with “financing alternatives.” The stock is down to 3 cents. Acusphere is a newcomer to the list, which I overlooked last time.

Alkermes (NASDAQ: ALKS). This Cambridge, MA-based company has maneuvered itself into position of financial strength, with $423 million in cash and investments at the end of the year, and with a $112.3 million profit in the quarter. As I mentioned last month, Alkermes has potential for revenue growth this year if Eli Lilly and Amylin Pharmaceuticals win FDA approval for once-weekly exenatide for diabetes, which is based partly on a technology license from the Massachusetts firm.

Alnylam Pharmaceuticals (NASDAQ: ALNY). This Cambridge, MA-based biotech company doesn’t have to worry about cash, with $512.7 million at the end of 2008, and a relatively skinny net loss in the quarter of $9.4 million. It expects to burn through no more than $77 million of its cash this year, ending 2009 with more than $435 million. Indeed, rather than fretting over finances, CEO John Maraganore is thinking about how to prioritize opportunities, as he told me last month.

Altus Pharmaceuticals (NASDAQ: ALTU). Alarm bells must be going off at Waltham, MA-based Altus. This company used almost $90 million of its cash reserves in 2008, and closed the year with $48.6 million left in the bank. Even after cutting 107 jobs, or three-fourths of its workforce, Altus still expects to spend $50 million to $60 million for operations this year. It says it has enough cash to run “into the fourth quarter” and that it will try to raise more capital in the next three to six months. … Next Page »

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