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By Marie Daghlian

Talecris Biotherapeutics (NASDAQ:TLCR) raised $950 million in the biggest biopharma IPO in three years and the second largest U.S. IPO this year even as the stock market fell as declines in factory orders and increases in job cuts heightened concerns about the economy’s recovery. The capital markets seem to be opening up to life sciences companies with two IPOs, 15 PIPEs, four public offerings, and five debt offerings, contributing to close to $5 billion in capital raised during the week.

Research Triangle Park, North Carolina-based Talecris sold 50 million shares of its common stock at its mid-range price of $19 per share and began trading on October 1 on the Nasdaq Stock Market under the ticker symbol “TLCR.” Of the shares offered, 29.9 million were offered by the company and 21 million were offered by the selling stockholder, Talecris Holdings, which is owned by private equity firm Cerebrus-Plasma Holdings, the managing member of which is Cerebrus Partners, and limited partnerships affiliated with Ampersand Ventures. The underwriters have the option to purchase an additional 6 million shares. Talecris intends to use its share of the net proceeds to pay down debt. Morgan Stanley, Goldman, Sachs; Citigroup Global Markets, and J.P. Morgan Securities were the joint book-running managers of the offering, while Wells Fargo Securities, Barclays Capital, and UBS Investment Bank acted as co-managers.

Talecris is not a typical venture-backed biotech. The company makes protein therapies derived from blood plasma and is profitable, posting a net income of $65.8 million on $1.4 billion in sales in 2008. Being a fairly mature and profitable company, Talecris’ IPO does not necessarily provide a read on how private biotech companies may fair if they decide to test the public markets. And more interestingly, while most venture capitalists have come to say IPOs are financing events, not liquidity events, Talecris’ recent debut was at least a partial liquidity event for its major owners.

In keeping with the wide variety of life sciences companies testing the IPO waters, specialty hospital operator Select Medical Holdings (NYSE:SEM) successfully completed its IPO selling 30 million shares of its common stock at a price of $10 per share and began trading on the New York Stock Exchange on September 25 under the symbol "SEM." Select also intends to use the net proceeds from the offering to repay indebtedness and to make payments to executive officers. Goldman, Sachs; Morgan Stanley, B of A Merrill Lynch, and J.P. Morgan Securities acted as joint book-runners for the offering.

One of the most interesting financing transactions was Vertex Pharmaceuticals' (NASDAQ:VRTX) decision to sell $95 million of rights to potential future milestone payments that Vertex is eligible to receive from Janssen Pharmaceutica for the launch of Vertex’ hepatitis C treatment telaprevir in Europe in exchange for $35 million in cash. Vertex still has royalty rights and retains exclusive commercial rights to telaprevir in North America. The company will use this money along with a $120 debt offering to help push its promising HCV protease inhibitor toward approval.

Big pharma continued on a buying spree with companies announcing sizeable deals. The megadeal of the week went to Abbott Laboratories (NYSE:ABT) which won a bidding war with Swiss biotech Nycomed to acquire Belgium-based Solvay’s pharmaceuticals business for $6.6 billion in cash. The acquisition increases Abbott’s portfolio of pharmaceutical products and will result in a significant presence in key global emerging markets. The acquisition also includes full global rights to the fenofibrate cholesterol franchise for which Abbott currently pays royalties on U.S. rights. It also includes Solvay’s vaccines business, providing Abbott with an entry into the hot global vaccines market. Abbott has been on a buying spree, spending $540 million recently to buy cardiovascular medtech company Evalve and the nutrition units of India’s Wockhardt.

Sanofi-Aventis’ (NYSE:SNY) CEO Chris Viehbacher has been talking recently about making some targeted acquisitions to beef up its R&D pipeline and he delivered this week, snapping up a fellow French biotech Fovea Pharmaceuticals, focused on eye diseases, and in-licensing an antibody cancer program from Cambridge, Massachusetts biotech Merrimack Pharmaceuticals.

Sanofi’s acquisition of privately held Fovea marks its first foray into ophthalmology. Fovea has a portfolio of three clinical compounds, a unique technology platform and several discovery programs dedicated to back of the eye diseases. The $542 million deal includes an immediate upfront payment and subsequent milestone payments related to the progress of the clinical compounds. Fovea had previously completed two venture financing rounds.

In the second deal, Sanofi signed an exclusive worldwide licensing agreement with Merrimack Pharmaceuticals for the development and co-commercialization of MM-121, an antibody intended to block the ErbB3 receptor that is currently in phase 1 testing. The ErbB3 receptor is a novel target known to be a key mediator of signaling in the EGFR pathway.

Merrimack will receive $60 million upfront and be responsible for development through phase 2 proof of concept on each indication, after which Sanofi will pick up the development work. Merrimack is eligible for up to $470 million in milestones and has retained co-promotion rights in the United States.

Johnson & Johnson (NYSE:JNJ) staked a foothold in the hot global influenza vaccine market with the acquisition of an 18 percent stake in Dutch biotech Crucell for $444 million. The companies also entered into a strategic collaboration through its Ortho-McNeil-Janssen Pharmaceuticals subsidiary focusing on the development and commercialization of monoclonal antibodies and vaccines that are effective against all strains of influenza. The first focus will be on the development of a universal monoclonal antibody product for the treatment and prevention of influenza. In August, Crucell received a National Institutes of Health contract, worth as much as $69 million, aimed at advancing the development of monoclonal antibodies for the treatment of seasonal and pandemic influenza. This funding will be used for Crucell's work in the J&J collaboration.

GlaxoSmithKline (NYSE:GSK) also signed a vaccine deal, worth $2.2 billion over ten years, to supply its pneumococcal vaccine to Brazil at a significant discount to what it costs in Europe. Glaxo also agreed to match Brazil’s $51 million investment into an effort to develop a dengue fever vaccine.

Many small biotechs continue to struggle. Oscient Pharmaceuticals (OSCI) sold the rights for cholesterol drug Antara to India’s Lupin Pharmaceuticals for $38.6 million. Oscient had sued Lupin for patent infringement over the drug in January but bankruptcy has forced the company to offload the compound

Finally, biotech companies were part of the larger than expected U.S. job cuts occurring in September. At the end of the month, struggling molecular diagnostics company Decode Genetics announced that it was closing its Illinois facility and eliminating around 60 positions. Decode shares are in danger of being delisted from Nasdaq for failing to comply with the minimum bid price rule.

Source: Capital Markets Open Up to Biotechs