Hype about the swine flu vaccines, pent-up demand for cash and a push by major drugmakers to boost their flagging research pipelines has helped lift biotechnology fund-raising 36 percent so far this year.

Biotech firms have raised $5.7 billion through an assortment of 39 debt and share offerings, according to data from Thomson Reuters. Follow-on offerings have been the most prevalent form of fund-raising, with 29 such transactions, the data showed.

Amgen Inc led the fund-raising with debt offerings that generated proceeds of $1.99 billion, according to Thomson Reuters data.

It's an opportunistic time to raise money -- there's a lot of attention on vaccines, cancer and emerging drugs to fill drug pipelines, said one healthcare investment banker who declined to be named because he was not authorized to speak to the media.

Goldman Sachs Group Inc and Bank of America Merrill Lynch led the league tables in terms of biotech fund-raising activity. Morgan Stanley followed as No. 3 in terms of bookrunning, the data showed.

Some of the activity was driven by pent-up demand after weakness in financial markets made it difficult to raise money last year, and eroded many biotech's cash cushion.

Last year a combination of depressed valuations, limited investor appetite for risk and illiquid trading profiles created a scenario where many biotech companies were within one years worth of cash remaining, said Jim Cooney, managing director of Equity Capital Markets at Bank of America Merrill Lynch.

Traditionally a biotech company would access the equity markets well in advance of eighteen months of cash remaining. When market sentiment improved and investors appetite for risk increased, a scenario was created for these companies to issue equity in an accelerated manner, Cooney said.

The wave of follow-ons in the sector comes at a time biotech stocks have surged. The Nasdaq Biotech Index .NBI is up 33.9 percent since March lows.

If market performance continues the way we expect it to, with the demand we've seen, the activity we'll see in the next 18-24 months will make this wave we've had seem de minimis in nature, Cooney said.

Some capital raising came in the wake of excitement over H1N1 (swine flu) vaccines as several small companies used positive data trials as springboards for share offerings.

One strong study can set the stage for a new round of fund-raising or venture capital money, the investment banker said.

For example, Vical Inc announced on May 21 that it had advanced the development of its H1N1 vaccine. The next day, Vical said it would sell shares worth $15.4 million. Four days after that, it said it would sell shares and options worth an additional $4.6 million.

Inovio BioMedical in July also followed on the success of its H1N1 vaccine in animal studies with news it would sell shares and warrants worth $30 million.

IPOs SHOW MIXED RESULTS

Biotech and pharma IPOs have been less prevalent and have had mixed results.

Cumberland Pharmaceuticals Inc, which broke a nearly two-year drought for IPOs in the drug sector, raised $85 mln in August, but its stock has dropped 9.1 percent since its debut.

Meanwhile, shares of Talecris Biotherapeutics Holdings Corp gained 11.3 percent in their first day of trading last week -- marking the largest biopharmaceuticals IPO in three years.

Unlike most IPOs in the sector, Talecris already has products on the market in addition to those in development, allowing it to attract more interest, analysts said.

Its products are used to treat a number of diseases, including immune deficiencies, bleeding disorders, infections and severe trauma.

The IPOs by Talecris and Cumberland Pharmaceuticals were able to come because both companies have approved products and have stable revenues -- investors might not quite be ready yet for more speculative biopharma IPOs, said Bill Buhr, IPO Strategist with Morningstar Inc's IPO Service.

Investors will gravitate towards the defensive healthcare industry and that will contribute to interest in a certain type of pharma IPO, according to Buhr.

BIOTECH M&A SLUMPS

Overall mergers and acquisitions in the biotech sector have fallen amid the general slump in dealmaking. Worldwide M&A for biotech has fallen 84.6 percent this year to $8.4 billion, according to data from Thomson Reuters. U.S. merger activity in the sector is down 90.6 percent, data showed.

Goldman Sachs, JP Morgan and Citigroup lead the list of advisers for biotech M&A, according to Thomson Reuters.

The largest biotech deal of the year was Bristol-Myers Squibb Co's acquisition of antibody technology specialist Medarex for $2.4 billion, which marked a 90 percent premium, according to Thomson Reuters.

Investors have bid up shares of similar companies such as Regeneron Pharmaceuticals Inc and Seattle Genetics Inc in the wake of the rich Medarex deal in hopes other mergers will surface.

The next-largest deals in biotech were Johnson & Johnson's purchase of cancer drug developer Cougar Biotechnology Inc for $970 million and its $885 million purchase of an 18.4 percent stake in Irish drugmaker Elan Corp Plc.

Big pharma has been behind the curve in building their biopharma capabilities and have been making acquisitions. But there's still very limited appetite for very early stage companies, said a second health care investment banker who declined to be named.

(Reporting by Jessica Hall and Phil Wahba; Editing by Richard Chang)

Investment Goldman sachs Morgan Stanley