UK biotechs feeling the chill from investors

One of the analysts at Seymour Pierce has been pondering the ice-cold attitude of investors to biotech stocks in the UK. Despite some big licensing news for the likes of Renovo, Antisoma and Oxford BioMedica in '07, Zhining Xu remarks that the British biotechs have dramatically underperformed. Other analysts note that while a host of biotechs are trading at a discount, they're likely to face some strong headwinds as they go back out this year to raise more money. It could be that investors just aren't patient enough to stick with a drug developer in the long dry spells between big announcements. Only nine of the 47 biotechs on the UK index made gains last year. Big losers: Vernalis, down 90 percent, and CeNeS, down 70 percent.

Still, says Xu, companies like Renovo, Antisoma and Oxford BioMedica may not be performing well, but they are positioned for a comeback. "All three of these companies have a solid cash position and have their lead programs covered by their partners so they are in a position to push ahead with early stage drug development projects," adds Xu.

- read the report from the Financial Times

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