'Prudent' move By Eric Pierce
& Shaun Brown
Staff Writers

The health care banking consolidation continues as Prudential Securities announced plans to acquire Vector Securities International in an effort to create a health care powerhouse. The resulting company will be known as Prudential Vector Healthcare, and will consist of 36 investment bankers and 27 research professionals who will provide coverage of nearly 120 health care companies - well over half of them in the biotech sector.

The acquisition could be viewed as Prudential's effort to reestablish itself as a player in the biotech space. While Prudential does have a biotech analyst - Caroline Copithorne covers roughly a dozen biotech names - and it is underwriting VaxGen's IPO, the firm did have a larger biotech presence in the early 90s when its team included sellside analysts Joe Edelman (now on the buyside with Paramount Capital Asset Management's Aries Fund) and Robert LeBoyer (now working with Marc Ostro on M&A deals at KPMG).

Prudential's institutional and retail sales force will provide a nice distribution channel for deals. The firm's 6,500 financial advisors make it the fifth largest on Wall Street, according to Vincent Pica, president of Prudential Securities' Capital Finance Group. And plans are to make Vector's institutional sales force solely dedicated to the distribution of health care securities.

Prudential also hopes the combined entity will provide Vector's biotech clients with more products, such as fixed income and convertible debt securities.

"We'll use the deal to combine each company's existing securities experience into a world class operation in the life sciences and health care sector, while maintaining Vector's boutique-like focus and integrity," said Paul Scura, executive vice president and head of Prudential's investment banking group.

D. Theodore Berghorst, founder and CEO of Vector Securities, will become a managing director of Prudential Securities and head of health care investment banking and will report to Scura. Prudential Vector Healthcare will be headquartered at Vector's Deerfield, Ill., offices.

Better off?

After receiving a $50 million "lost-profit" payment from Hoechst to settle a year-old patent battle over a generic angina drug, Andrx (ADRX) appears to be better off financially from its decision to postpone the launch of its version of Hoechst's Cardizem CD diltiazem hypertension and angina product than if ADRX had been allowed to sell the product following FDA approval.