Tuesday, January 2, 2001
Prudential's plans to overhaul its securities unit, which include a major reduction in its investment banking presence, has left the future of Prudential Vector Securities up in the air. Pru acquired Vector in 1999 to help re-establish itself in the biotech space (see BioCentury, June 14, 1999).
The driver behind the restructuring is Pru's hope to sell an IPO. The firm has been a mutual life insurance company (owned by its policyholders), but last month its board agreed to demutualize and become a stock life insurance company.
No official statement has been made about Pru's plans for Prudential Vector, but as they say, the firm is "assessing strategic options" for the unit. If Prudential drops biotech, this will be the second time it has done so - the first time being when Joe Edelman left the firm in the early 1990s.
Wall Street scuttlebutt is that the unit easily could be repackaged and sold to another bank, because Vector has done its part in contributing to Pru's top and bottom lines. Pru Vec was involved in $3.1 billion of biotech IPO and follow-on deals last year.
Still on Pru Vec's plate is CombiMatrix's IPO. The company, which develops customized biological array processors, is seeking to raise up to $100 million through a syndicate that also includes Salomon Smith Barney and J.P. Morgan.
Red sky in morning . . .
Cellomics, another Pru Vec deal, has postponed its IPO until it re-evaluates market conditions this quarter. The cell-based screening company filed in March to raise up to $100 million, then refiled in April to sell 6 million shares at $16-$18 in a deal underwritten by Pru Vec; ING Barings; and Dain Rauscher. In November, the company lowered the price range to $11-$13 and refiled again on Dec. 14 to sell the shares at $8-$10.
ImClone (IMCL) also blamed market conditions for its withdrawal of a Nov. 9 shelf registration covering the sale of up to 6 million shares. The cancer company, which had $312.5 million in cash at Sept. 30, closed the week at $44, up $6.313 (17 percent), but was off $15.438 (26 percent) from its Nov. 9 close.
But undaunted by the market, antibody play Medarex (MEDX) filed a shelf statement to sell up to $500 million of securities. MEDX closed Friday at $40.75, down $0.625 on the week.