Cytokinetics Inc. at NewsMakers in the Biotech Industry - Final.

Original Source: FD (FAIR DISCLOSURE) WIRE

ERIC PIERCE, PUBLISHER, BIOCENTURY: Good morning, everyone. I'm Eric Pierce with BioCentury. Welcome to NewsMakers, our 15th anniversary of this meeting. On behalf of my colleagues, Karen Bernstein, Chairman and Editor-in-Chief of BioCentury; David Flores, President and CEO of BioCentury; and BioCentury's Vice President of Commercial Operations, Tom Carey; and [Robert Rand], Director of the Thomson Biotech Surveillance Group; and our colleagues of Thomson Reuters and BioCentury, we welcome you to the 15th anniversary gathering of NewsMakers.

I'd like to begin this year's meeting with a quote from BioCentury. Quote -- this fall season of the year brings with it a renewal of energy and hope that biotech's dog days are finally behind it. Stock prices are up. And the pipeline is chock-a-block with companies nearing the completion of late-stage milestones. Some really good companies and corporate partnerships have been launched. And time is running out for this to be the year of the oft-predicted industry consolidation -- end quote.

That was the opening for BioCentury's Back-to-School Edition on September 6, 1994, the week of the first NewsMakers in the Biotech Industry Investor Conference. So here we are again 15 years later in the hopes that the dog days have once again passed since we've assembled future leaders in March of 2008. During the first half of 2008, the biotech space has traded lower with the broader markets as the credit crunch caused investors to become much more risk averse and much more less willing to invest in high-data sectors.

But biotech started to diverge from the broader markets at the end of the second quarter. And now both the NASDAQ Biotech Index and the AMEX Biotech Index have outperformed every major index so far this quarter. So stock prices are definitely up. At least one blockbuster partnership has been announced this week by a NewsMakers company. And as witnessed at this year's meeting, the sector is in fact chock-a-block with upcoming news.

The renewed interest in the biotech space is evidenced by the fact that we have a record number of people, more than 850, preregistered for this year's conference. So what's changed?

At first blush, it would be easy to jump on the M&A theme as the reason behind the recent run. But while it is true that M&A deals started to dominate the headlines with the Takeda-Millennium deal announced in mid-April, Thomson Reuters and BioCentury would argue that global pressures have forced funds to review their asset allocations during the third quarter of this year to the benefit of biotechnology.

The underperformance of the financial and energy sectors as well as the global market, particularly the BRIC countries, have hit generalist investors that were overexposed to these sectors, forcing them to rethink their asset allocation. Now Thomson Reuters surveillance indicates that a number of institutions that have been dormant in the sector for some time have now become active, while others who have been absent have suddenly decided to step in.

This includes a number of large-growth oriented investors, such as TIAA-CREF and the European-based KBC Asset Management. Significant inflows are also coming from index investors. This has been particularly evident with the Spider S&P Biotech ETF, managed by State Street Global Advisors, and the iShares NASDAQ Biotech Index, managed by Barclays.

The Spider more than doubled its exposure to the sector, adding roughly $325 million to the space during July and August, while the iShares added $660 million during the same time for over a total of $1 billion into biotech during that time.

The bottom line is that we are seeing heavy asset inflows as investors with different investment styles create broad-based exposure to the group versus more selective investing. This is important for both biotech companies and specialist investors to understand and take advantage of this changing landscape. We believe this conference provides the forum to do just that.

You will see a slate of presenting companies whose aggregate performance easily eclipsed the biotech group as a whole. Indeed, through last Friday, the NewsMakers class of 2008 had collectively gained 36% since the beginning of the year, offering an agenda of upcoming news flow that will provide more inflection points for investors.

These companies, which are focused on pain, obesity, cancer, infectious diseases, autoimmune and cardiopulmonary disorders already have a combined market of 19 products on the market. They have nine compounds that are under FDA review -- four at the EMEA, five with near-term PDUFA dates.

The class of 2008's pipeline includes 24 ongoing Phase III clinical …