Biotech Values

[DewDiligence]

Talecris IPO/SPO Expected This Week

[Insiders want to cash out under the cover of an IPO and, consequently, this IPO includes a large concurrent secondary offering in which insiders are selling their own shares (wallstarb please take note :- )).

Please see the prologue of #msg-39979601 for background on the company and its competitors.]

http://finance.yahoo.com/news/Talecris-Biotherapeutics-apf-2826935900.html?x=0&.v=2

›Tuesday September 29, 2009, 2:47 pm EDT

NEW YORK (AP) -- Talecris Biotherapeutics Inc. is expected to go public this week after a two-year pause, potentially giving the two private equity firms behind the biotechnology company a payday while allowing Talecris to pay debt.

The Research Triangle Park, N.C.-based maker of protein therapies is offering 28.9 million shares for $18 to $20 apiece, while stockholders are offering 15.8 million shares, according to a Securities and Exchange Commission filing. The company said it would use about $515 million in proceeds to pay loans, and shareholders Cerberus Capital Management and Ampersand Ventures will raise $300 million by selling their own stock.

The offering is expected to be the largest this week, as a growing number of companies are once again turning to the equity market for capital now that the financial crisis seems to have abated. Talecris, which originally planned to go public in 2007, pulled the IPO in December that year due to uncertainties regarding future plasma supplies.

Morningstar analyst Damien Conover said the "window" for biotech IPOs seems to be opening again as the market improves and companies search for capital. The downturn in the market was especially hard on biotech IPOs which are already considered high-risk stocks.

Talecris, though, is already an established biotech operation, with about 4,800 employees and $1.4 billion in revenue last year. Founded in 2005, Talecris makes a range of plasma-derived protein therapies, including intravenous treatments for immune system conditions and lung conditions. In its SEC filing, the company said it ranks third in the world, with about 12 percent of the market, behind leader Baxter International Inc., Deerfield, Ill., and CSL Behring of King of Prussia, Pa.

In June, CSL Behring parent CSL Ltd. of Australia pulled out of its plan to buy Talecris for $3.1 billion, less debt, following a challenge by the Federal Trade Commission.

A key revenue driver for Talecris is Gamunex IGIV, which is used to boost the antibodies of patients with compromised immune systems because of issues ranging from genetic conditions to chemotherapy treatment side effects. Gamunex had about 21 percent of the U.S. market in 2008.

The market itself for plasma-derived protein therapies was worth about $9.7 billion in 2007 and has been growing at a compound annual rate of about 8 percent, the company said. For Talecris, expansion into international markets is a key strategy. Last year, 80 percent of its sales came from North America, while the region represented only about 40 percent of the global market for plasma product sales.

Baxter, CSL Behring, and Talecris also compete in the A1PI market with products aimed at boosting a protein that protects the lungs from inflammation. [A1PI is another name for alpha-1 antitrypsin.] Talecris said its A1PI Prolastin product had a 67 percent share of sales in the U.S. in 2008 and 90 percent in the European Union.

Lawrence D. Stern, 52, has been the CEO of Talecris since 2007 and a director since 2005. He is also chairman. Chief Financial Officer John M. Hanson, 57, has held the position since 2005.

Risks the company faces include shifts in government and insurance company reimbursement policies, as Talecris' products are primarily used in hospital or physician settings. If payors reduce reimbursement, that could prompt customers to stop administering the product, cut the doses, or to substitute lower cost products, the company said.

Underwriters for the IPO are Morgan Stanley, Goldman Sachs, Citi, and JPMorgan Securities.

The company will be listed on the Nasdaq Global Market under the symbol "TLCR."‹