Summary
Talecris Biotherapeutics and its two private equity owners -- Cerberus Capital Management and Ampersand Ventures -- are counting on the third time being the charm with their new IPO slated to sell 44.7 million shares at a target price of $18 to $20 each.
About $515 million of these funds are earmarked to pay off loans, with the balance available to bolster commercialization activities, advance the company's ambitious R & D pipeline and help fund capacity expansion.
Analysis
Unfavorable market conditions forced Talecris to withdraw an IPO in 2007, and a 2008 proposed $3.1 billion merger with the Australian plasma products giant CSL Limited was abandoned this May after the FTC announced it would sue to block the deal.
But with a strong gross margin on 2008 revenues of $1.4 billion, a large and expanding plasma collection and fractionation capacity, and a solid history of product innovation, Talecris has much to recommend it. Much of the company's robust sales growth in 2008 was attributable to its Gamunex intravenous immunoglobulin (IVIG) product, which currently accounts for more than 15% of all IVIG supplied worldwide.
As (1) Gamunex sales account for fully one-half of Talecris' revenues and (2) industry competitors have disclosed ambitious capacity expansion plans, a key question will be what U.S. and international IVIG unit demand can be expected look like over the next several years.
The IVIG demand picture over the near term (about 2 years) will be be driven by factors not entirely in the control of Talecris or its competitors. In the longer term, prospects are excellent for very strong growth in demand for immunoglobulins and certain other human plasma-based products. And as we have seen in the past, robust new product demand growth can be expected to boost the fortunes of Talecris, CSL, Baxter International, Grifols, Octapharma and other significant players in this unusually dynamic plasma fractionation industry.
Keith Berman consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
