Got a banker?

The accelerating wave of consolidation in the banking industry has moved beyond changing a few analyst faces and a few familiar Wall Street names to a fundamental rearrangement of the financing machinery underlying the biotech community.

The combination of UBS Securities and SBC Warburg Dillon Read (already a combination of previously separate banks) has probably taken UBS out of the biotech business. Other banks that have been combined include CIBC Oppenheimer, Salomon Smith Barney, Morgan Stanley Dean Witter, BT Alex. Brown, Furman Selz (acquired by ING), BancAmerica Robertson Stephens and NationsBanc Montgomery Securities.

The latest move is the combination announced last week between BankAmerica and NationsBank, which will bring together the investment banking firms Montgomery Securities and Robertson Stephens, both of which have been major players in biotech financings. At the end of the day, it is highly unlikely that there will be two separate groups at the merged bank doing biotech banking and providing analyst coverage.

In the U.S., the near-term implication for biotech is that it will be harder for companies to raise equity, particularly those with lower market capitalizations wanting to do smaller financings, and harder to achieve a critical mass of analyst coverage. In Europe, it appears that the consolidation will have far less impact, as the U.S. banks that are being acquired had not yet made many inroads into the market.