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Local Tech Wire
RESEARCH TRIANGLE PARK, N.C. – Blood plasma therapeutics giant transfused some excitement into Wall Street’s struggling IPO market Thursday with a smashing stock debut.
Shares in the RTP-based firm soared 14 percent above its opening price of $19.50 to $21.71 in afternoon trading. By the close, Talecris (Nasdaq: TLCR) closed at $21.15, up $2.15 or 11 percent.
Talecris, investors and shareholders sold 50 million shares at $19, and the stock opened to the general public at $19.50 Thursday morning. The initial public offering generated $950 million, the second biggest such offering this year and the largest biotechnology IPO in three years.
To help celebrate the Talecris debut, Chairman and Chief Executive Officer Larry Stern will ring the opening bell at the New York-based Nasdaq on Friday.
Formed in 2005 when private investors bought Bayer’s RTP-based drug business, Talecris will use $515 million of the offering to pay debt and will invest other money in a new manufacturing facility, Stern told Reuters.
Asked why Talecris was successful in the IPO, Stern told the news service: "Because we are well established, with good revenues and leading products, we found good receptivity.”
Talecris had planned to sell 44.7 million shares.
The stock had been priced at between $18 and $20.
The successful IPO, which Bloomberg reports is the second largest on Wall Street this year, follows a rebuff of an earlier IPO attempt in 2007 for $1 billion. The IPO was pulled due to slumping market conditions.
This time, Wall Street investors were ready to buy.
"Talecris Biotherapeutics has developed a strong position in its plasma-derived protein therapy niches," Morningstar analyst Meera Venu said Tuesday, according to Reuters. He priced Talecris shares at $23.
Earlier this year, Talecris also failed in a merger attempt with Australian-based CSL after U.S. regulators objected to the deal. Talecris received a $75 million merger termination fee from CSL.
Talecris focuses on plasma-derived therapies. One of its treatments, called Gamunex, targets chronic inflammatory demyelinating polyneuropathy (CIDP), a disorder that leads to muscle weakness and fatigue and impairs motor skills. Gamunex is a liquid immune globulin intravenous (IGIV) therapy.
Cerberus Capital Management and Ampersand Ventures, the largest investors in Talecris, sold stock worth some $300 million.
Much of Talecris’ funds will be used to pay debt.
The largest IPO this year was the $1.04 billion raised by Shanda Games, according to Bloomberg.
CSL is the world’s second-largest supplier of blood plasma-based therapies. Talecris is the third-largest supplier. Baxter International Inc. of Deerfield, Ill. is the No. 1 provider in a $15 billion global market.
The company has some 2,000 employees in North Carolina and operates several plasma collection centers in the state.
In 2008, Talecris generated revenues of $1.4 billion and profits of $65.8 million.
Through June 30 of this year, Talecris said in the filing that revenues were up 20 percent from a year earlier at $747.4 million with a profit of $116.7 million. The revenues include the termination fee.
In its filing, Talecris projected that the plasma-derived product market would continue to grow.
“The human plasma-derived products industry has demonstrated revenue growth at a compound annual rate of approximately 8% globally over the past 21 years with worldwide sales of approximately $9.7 billion in 2007 based on MRB data,” Talecris said. “U.S. sales have grown at a compound annual rate of approximately 10% over the past 18 years with sales of $4.0 billion in 2008, representing a 13.5% increase over 2007, according to the MRB U.S. Book.”
Talecris forecast long-term growth of between 6 and 8 percent a year. It cited the following factors:
• Population growth;
• Discovery and approval of new applications and indications for plasma-based products;
• Growth of diagnosed cases;
• Increased treatment of untreated but diagnosed patients;
• Increased patient compliance and appropriate dosing levels for diagnosed, treated patients; and
• Geographic expansion.