Biotech Investors Confident: Industry Sees Big VC Spending in 2011

Before you go, we thought you'd like these...
Before you go close icon

It seems that investors are still optimistic on the returns that new biotech firms can bring. A new report from PricewaterhouseCoopers and the National Venture Capital Association says that venture capital investments in biotech increased 22% to $4.7 billion in 446 deals.

The report, called the MoneyTree Report, said that the life sciences sector accounted for 27% of all venture capital dollars spent nationally in 2011, leading an overall 22% increase in venture capital spending compared to 2010 (via The Boston Globe).

Partner at Polaris Venture Partners Alan Crane told The Boston Globe that the large inflows of venture capital into biotech firms represents "a maturation of some promising companies that are now at the stage where they can attract significant dollars."

But Crane also said that early stage biotech firms were having difficulty attracting funding.

"That's a concern," he said, "because those young companies, just emerging from university labs, are the lifeblood of the industry."

Business section: Investing ideas
Despite concern over the youngest companies, these numbers indicate that investors are clearly excited about the prospects of biotech. Will this optimism extend to publicly traded companies?

For a look at the biotech stocks with the most investor optimism, we ran a screen on the industry for stocks rallying above their 20-day, 50-day, and 200-day moving averages for those with the greatest net institutional purchases over the current quarter.

List sorted by net institutional purchases as a percent of share float. (Click here to access free, interactive tools to analyze these ideas.)

1. VIVUS (NAS: VVUS) : Engages in the development and commercialization of therapeutic products for underserved markets in the United States. Market cap of $1.06B. The stock is currently trading 9.40% above its 20-day moving average, 14.26% above its 50-day MA, and 37.50% above its 200-day MA. Net institutional shares purchased over the current quarter at 9.9M, which is 17.28% of the company's 57.30M share float.

2. Bacterin International Holdings (NAS: BONE) : Develops, manufactures, and markets biologics products in the United States and internationally. Market cap of $116.90M. The stock is currently trading 14.35% above its 20-day moving average, 17.29% above its 50-day MA, and 8.35% above its 200-day MA. Net institutional shares purchased over the current quarter at 2.3M, which is 9.13% of the company's 25.20M share float.

3. Infinity Pharmaceuticals: Engages in the discovery and development of medicines for the treatment of cancer and other conditions in the United States. Market cap of $264.67M. The stock is currently trading 11.22% above its 20-day moving average, 12.80% above its 50-day MA, and 29.89% above its 200-day MA. Net institutional shares purchased over the current quarter at 982.8K, which is 7.42% of the company's 13.25M share float.

4. Seattle Genetics (NAS: SGEN) : Focuses on the development and commercialization of monoclonal antibody-based therapies for the treatment of cancer and autoimmune diseases in the United States. Market cap of $2.03B. The stock is currently trading 3.77% above its 20-day moving average, 7.26% above its 50-day MA, and 0.26% above its 200-day MA. Net institutional shares purchased over the current quarter at 7.1M, which is 6.26% of the company's 113.40M share float.

5. Achillion Pharmaceuticals (NAS: ACHN) : Engages in the discovery, development, and commercialization of treatments for infectious diseases. Market cap of $642.31M. The stock is currently trading 15.12% above its 20-day moving average, 40.78% above its 50-day MA, and 63.87% above its 200-day MA. Net institutional shares purchased over the current quarter at 2.7M, which is 5.62% of the company's 48.05M share float.

6. Idenix Pharmaceuticals (NAS: IDIX) : Engages in the discovery and development of drugs for the treatment of human viral and other infectious diseases in the United States and Europe. Market cap of $1.46B. The stock is currently trading 43.80% above its 20-day moving average, 73.69% above its 50-day MA, and 145.42% above its 200-day MA. Net institutional shares purchased over the current quarter at 2.7M, which is 4.25% of the company's 63.49M share float.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.


Kapitall's Alexander Crawford does not own any of the shares mentioned above. Institutional data sourced from Fidelity.

At the time this article was published Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners