| PROFITING FROM GLOBAL OPPORTUNITIES IN THE LIFE SCIENCE INDUSTRY--Opportunities exist now for companies to build upon the positive outlook for biotechnology. Equally, US firms may find benefits in raising capital on the Alternate Investment Market (AIM) of the London Stock Exchange.
In the article below, "Architects of a FOCUS Atlantic BioBridge: Profiting from Global Opportunities in the Life Science Industry,” Gerald Turner, a FOCUS Partner, teams with Ms. Rowan Gardner of BioLauncher Ltd., to describe the 2006 outlook for healthcare and biotechnology sectors, and to announce a new FOCUS service, the FOCUS Atlantic BioBridge.
Prior to joining FOCUS, Mr. Turner co-founded and chaired Potomac Capital Group, LLP, a Northern Virginia based M&A firm. For over ten years, he was active in the MBO/MBI arena in the UK. He also served as Vice President and Chief Financial Officer and then Executive Vice President, Tarmac America Inc., a $600 million division of UK based Tarmac PLC where he raised over $100 million for the UK parent from divestitures. Also, for twenty years, Mr. Turner enjoyed a diverse career with the American Can Company.
Rowan Gardner, a founder and principal of BioLauncher Ltd, was involved in the growth phases of two UK bioinformatics companies: Oxford Molecular Group and Synomics. At Oxford Molecular, she participated in 12 company acquisitions, and at Synomics was one of the founding management team who raised £5.3 Million of venture capital funding.
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Active FOCUS
Deals
With over 24 years of experience across many verticals, FOCUS currently has over 30 active transaction engagements in its four offices in Atlanta, Chicago, San Francisco and Washington, DC in the following specific business sectors:
- Business Services
- Call Center Software
- Construction (multiple assignments)
- Consulting
- Government Contracting (multiple assignments)
- Healthcare Business Services
- Information Management
- IT Outsourcing (multiple assignments)
- IT Services (multiple assignments)
- Leisure
- Library Services
- Media
- Medical Devices
- Networking Home Automation
- RFID Technology
- Security (multiple assignments)
- Software
- Transaction Management Services
Our transaction process provides us with up-to-the-minute market knowledge in these sectors. Are any of them of corporate development interest to you? Give us a call or drop us a note.
Inquiries should be addressed via e-mail to info@focusbankers.com, by telephone to 202-785-1961 or by fax to 202-785-9413.
Architects of a FOCUS Atlantic BioBridge: Profiting from Global Opportunities in the Life Science Industry
By Rowan Gardner, BioLauncher Ltd., and Gerald Turner, Partner, FOCUS Enterprises, Inc.
The life science industry is dominated by the US which accounts for 78 percent of $54.6 Billion of 2004 revenues. Consequently, successful European companies must access the US market in order to maximize their valuation. In addition, the majority of management expertise and risk capital available to finance the sector is located in the US. Management teams that are able to build international businesses can deliver substantial shareholder value.
By the same token, US companies that can look beyond their backyard for innovation gains are impressed by the quality of science in Europe. The fact that many European biotechs have been capital constrained means that valuations are depressed when compared to those achievable in the US. M&A, licensing, and joint ventures provide a route to expand the business and broaden the company’s science base.
The UK has the largest number of Nobel laureates per head of population, and Cambridge is a thriving center for European life science research and development. The BioLauncher team is very well connected in the UK and rapidly can identify European businesses that may have strong synergy with a client’s operations.
Alternate Investment Market (AIM) of the London Stock Exchange Offers Benefits to US Firms
Equally, US management teams may find that seeking to raise capital on the AIM of the London Stock Exchange can be a straightforward and tractable alternative to a series C or D venture round. An AIM listing can be achieved in four to six months without imposing the same reporting burdens on the company as in a US-based IPO. In addition, a company with a $300M market capitalization, which would struggle to get analysts’ attention on NASDAQ, would attract substantial stock coverage on AIM.
Commenting in Science/Business Roundtable in London in January, 2006, Christian Rohlff, CEO, Oxford Genome Sciences, said: “There is currently a unique opportunity on AIM to possibly get a better valuation than you may get from VC investors.”
AIM’s appetite for new listings has been noticed by a number of US healthcare companies including Entelos, Inc., Foster City, CA – a leader in predictive biosimulation -- whose intention to list on AIM was reported in The London Times in January 2006. FOCUS has experience in bringing US clients to London, and can leverage the corporate finance expertise and City of London connections within Atlantic BioBridge.
US Biotechnology Outlook is Positive
In 2006, the outlook for biotechnology is positive. In the US, two aspects of biotech investment had a good 2005 and promise well for the future: the first is partnering – up 58 percent to $17 Billion in 2005 – and the second is M&A.
The pharmaceutical industry is in-licensing drug discovery programs from biotechnology companies at earlier stages in the product development cycle. This means that the value of early stage opportunities is rising, and biotechnology companies wishing to in-license a program, creating the critical mass to support a liquidity event, are finding it tough to do deals in such a competitive market. Increasingly, competitive advantage for biotechnology businesses is being delivered through connections with discrete networks that know of opportunities that have not been featured at often threadbare industry partnering events.
Recent International Deals Demonstrate the Possibilities
Amgen / Abgenix -- In December 2005, Amgen, the world’s largest biotechnology company, acquired Abgenix, a company developing therapeutic antibodies against cancer. The deal provided Amgen with full ownership of panitumumab (with potential as a first-line treatment of metastatic colorectal cancer), and eliminated a royalty on denosumab, with potential in a broad range of bone loss conditions.
The Amgen-Abgenix M&A deal could mark a break away from established upfront, milestone payments, and royalty associated with partnering deals, towards deals that capture the innovation capability of a partner and avoid the obligation to pay royalties on future sales.
Celldex / Lorantis / Alteris Therapeutics -- In October 2005, Celldex Therapeutics, Inc. of Bloomsbury, NJ acquired Lorantis Ltd., Cambridge, UK as well as assets of Alteris Therapeutics, Inc. The acquisitions bring important resources that will enhance and broaden Celldex’s development pipeline.
Lynx / Solexa -- Also in 2005, Solexa Ltd., Cambridge, UK, and Lynx Therapeutics, Inc., Hayward, CA combined to become Solexa, Inc., reversing into a NASDAQ quoted company. The company announced plans to dramatically reduce the cost of whole genome DNA sequencing and gene expression measurement, and moved management to the West Coast to gain US market entry for new equipment.
Pharmagene / Asterand -- The expected January 2006 merger of Pharmagene PLC and Asterand Inc. will create a leading company in human tissue supply and human tissue-based research services with a tissue supply network of over 70 sites in the US, UK, Western, and Eastern Europe and a biorepository of approximately 300,000 samples. The merger created a transatlantic research services company allowing a US company, Asterand, to get European and Japanese market entry.
More Transatlantic Healthcare Mergers Expected in 2006
M&A will continue to be a significant trend in healthcare during 2006, and we expect to see more transatlantic mergers in 2006. In particular, these are likely to be between companies keen to strengthen management and achieve the critical mass to support an IPO.
To capitalize on this promising potential, FOCUS has teamed with Rowan Gardner of BioLauncher, Cambridge, UK, to offer a new transatlantic business development, M&A, and fund raising service to the biotechnology sector. Called the FOCUS Atlantic BioBridge, the new initiative provides life science management teams with access to extensive industry networks both in the United States and Europe.
BioLauncher helps growing life science technology businesses maximize their commercial aspirations, providing opportunity analysis, business planning, research management, commercial services, and interim management.
New FOCUS Atlantic BioBridge Supplies Access and Implementation
The FOCUS Atlantic BioBridge team has direct experience of growing and exiting life science businesses and is well-placed to provide strong aftercare services to management teams. Tailored to each client company’s needs and objectives, the FOCUS Atlantic BioBridge approach provides clients with extensive consulting, business development, capital raising, and transaction support. The team’s capabilities include:
- Project management skills
- Knowledge of financial instruments and the life science industry
- Strong understanding of future evolution of the pharmaceutical industry
- Strong understanding of life science business value drivers
- Capability to undertake the transaction
- Experience of post transaction management
- Support for management
- Flexibility
- Discretion and confidentiality
Aiming to partner with clients for global life science enterprise, FOCUS Atlantic BioBridge enables management teams to scale their capacity, capture the value associated with an M&A transaction, and broaden available windows of opportunity.
To find out more about how FOCUS Atlantic BioBridge can help your business grow, contact Gerald Turner, FOCUS Partner, in the Washington DC office at 202.470.1972 or via email at gerald.turner@focusbankers.com.
Dr. Michael Sherman, M.D. Joins FOCUS Headquarters as Senior Advisor
FOCUS Enterprises, Inc., an investment banking firm providing merger, acquisition, and corporate finance services to middle market companies is adding a new Senior Advisor, Dr. Michael Sherman, M.D., who will be working with the firm’s Washington DC office.
“With the debut of the new FOCUS Atlantic BioBridge service, adding a seasoned medical professional like Michael Sherman to our team places the firm is an outstanding position for future success,” says Marshall Graham, Chairman of FOCUS. “Dr. Sherman’s expertise expands the firm’s capabilities as a time when the global climate for healthcare and biotechnology transactions is improving and expanding,” says Mr. Graham.
About Michael Sherman
Prior to joining FOCUS as a Senior Advisor, Dr. Michael Sherman was a radiologist with 33 years of experience, including unique expertise in the business of medicine. In 1995, Dr. Sherman conceived and implemented the simultaneous merger of five separate radiology groups to form Advanced Radiology, PA, and subsequently took the group public as part of radiology services company, Radiologix ®. Previously, while serving as Chairman of Radiology at Franklin Square Hospital, Baltimore, Dr. Sherman joined the Board of Directors of Helix Health, and, in 1998, represented Helix as the lone physician on the four-person committee which completed the merger with Medlantic to form Medstar Health, a multi-hospital system serving the Baltimore/Washington DC region.
FOCUS Web Watch: WEALTH TRANSITION ADVISORY SERVICES
In January 2006, FOCUS initiated a new Wealth Transition Advisory service. Starting at the Home Page, a full description of the new service is found on the red navigation bar under SERVICES—second from the left. On the drop-down menu, a link to the new service is the seventh or bottom link: http://www.focusbankers.com/services/wealthtransitionadvisory.asp.
The page also includes a companion sheet -- in handy PDF format ready for printing -- of a Wealth Transition Advisory Services sheet listing specific characteristics of successful middle market transitions as well as the characteristics of transition failures.
In addition, a newsletter article describing the new service can be found at http://www.focusbankers.com/publications/newsletter_2006_january.asp.
About FOCUS Enterprises,
Inc.
Headquartered in Washington DC, with offices in Atlanta, Chicago, and San Francisco, FOCUS provides a range of investment banking services tailored to the needs of middle market companies. FOCUS specializes in serving businesses with revenue or transaction sizes between $5 million and $300 million, serving entrepreneurs, corporate owners, public companies, private companies or operating units, and various types of investors.
For 24 years, FOCUS has successfully integrated corporate development consulting and transactional expertise with its extensive research capability. The firm has long standing experience in completing mergers, acquisitions, divestitures, capital formation assignments, corporate development consulting projects, and financial advisory engagements.
Over twenty FOCUS Partners and Principals provide over two centuries of C-level operating experience in a variety of industries.
Please contact us at: info@focusbankers.com
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