Ebb & Flow
BioMarin (BMRN; SWX:BMRN) last week tapped the debt and equity markets to the tune of $267 million in a follow-on and senior subordinated note deal. The financings punctuate the end of BMRN's pediatric detour, and show that investors were ready to reward the company for progress with its enzyme therapy products.
BMRN's bumped-up note deal raised $150 million. The company proposed earlier last week to raise $125 million in that financing. The notes mature in 2013, bear 2.5% interest and convert into stock at $16.58, which would be a 24% premium to Friday's close of $13.32. In the follow-on, BMRN raised $117 million through the sale of 9 million shares at $13. Merrill Lynch was the book-running manager of both offerings, while Cowen; Leerink; Pacific Growth; and Rodman were co-managers.
BMRN went into a downward spiral in April 2004, when the company paid $175 million to buy the Ascent Pediatrics business of Medicis (MRX). Orapred prednisolone, a steroid for pediatric asthma that was the main driver of the deal, turned out to be vulnerable to generic competition. In a matter of months, then Chairman and CEO Fredric Price resigned, and by fall the market had shaved 50% off of the company's valuation (see "BioMarin Chronicles" ).
In 2005, BMRN said it wanted to return to its focus on genetic and metabolic disorders. The company was making good progress with this business, including U.S. and European approvals of Naglazyme to treat mucopolysaccharidosis VI (MPS VI) and a partnership with Serono(SWX:SEO; SRA) for Phenoptin to treat phenylketonuria (PKU).
Two weeks ago, BMRN continued its cleanup by licensing North American rights to the Orapred products to Alliant, while reporting positive Phase III data for Phenoptin to treat PKU (see BioCentury, March 20).
NitroMed's Tuesday press release regarding the departures of Michael Loberg as president, CEO and a director and Lawrence Bloch as CFO and CBO didn't provide any clues about