The Northwest Biotech Survival Index 2: Companies Scraping By in Downturn

3/25/09Follow @xconomy

When I last crunched the financial numbers of the Northwest’s life sciences companies in November, the local contingent was taking a beating, and it has only continued. Just three of the 12 publicly-traded life sciences companies in the Northwest—Seattle Genetics, SonoSite, and Dendreon—were really well-positioned to weather this downturn with more than $100 million in cash heading into this year. Six of the 12 are in a far more vulnerable position, with less than $20 million in cash left on their books.

It’s not exactly a news flash that these lean times have led to some painful moments of layoffs, scrapped R&D projects, and even the death of one company here in the Northwest (Northstar Neuroscience). But this quarter had bright spots too. ZymoGenetics and Seattle Genetics both took important steps to shore up their finances in ways that could sustain them for years.

This quarter I’ve beefed up the analysis a bit from last quarter by adding one new drug developer from the south, Portland, OR-based AVI Biopharma, and one medical device company, Bothell, WA-based Sonosite (which I overlooked last time). I’ve already run the financial numbers on 44 public life sciences companies in Boston and 23 in San Diego, for those of you who want to see how the local biotech cluster stacks up in terms of financial health (not all that well, frankly). Here’s the Northwest list in alphabetical order:

AVI Biopharma (NASDAQ: AVII). This Portland, OR-based biotech company, which is betting on antisense technology for treating Ebola virus and other horrific infectious pathogens, closed the year in a weak position, having burned through $13.6 million in cash during 2008, with just $11.5 million left heading into this year. But then, good fortune struck at the end of January. AVI was one of the rare biotechs to successfully hit up investors for more money, raising $16.5 million from select institutional funds. The company isn’t saying how long the new money will last.

Cell Therapeutics (NASDAQ: CTIC)). This Seattle company’s financial woes have been well-documented. It had about $10.7 million in cash heading into this year, and warned at one point in February that it had run down to its last few weeks of cash. The company has responded by closing down its research center in Italy with 62 employees, selling its ownership stake in its lone marketed drug for non-Hodgkin’s lymphoma, and cutting 34 more jobs. That leaves it with enough cash to run through May, when it hopes to revive its fortunes by presenting data on another drug, pixantrone, to researchers attending the American Society of Clinical Oncology’s annual meeting. The company has about 85 employees left.

Dendreon (NASDAQ: DNDN). Seattle-based Dendreon was one of the lucky ones in the past quarter, having pulled in $20 million in an October stock offering. This actually enabled the company to enter this year with $109 million squirreled away, a smidge more than the $107 million it said it had in the bank three months earlier. Dendreon is facing another important judgment day next month, when it expects to report the final analysis of a clinical trial that looks at whether its immune-boosting drug, Provenge, can help men with terminal prostate cancer to live longer, with minimal side effects. If this trial is successful, … Next Page »

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