12:00 AM
 | 
Mar 24, 2003
 |  BioCentury  |  Finance

Ebb & Flow

Echoing a trend seen on the company side, banks both big and small continue to search for the headcount sweetspot in the midst of the bear market. Last week's choppers included merchant banker Thomas Weisel and Banc of America.

Weisel quietly let go 100 employees, reducing its headcount to 500. The cuts come a little more than a month after the firm agreed to pay a $12.5 million fine to settle claims made by state and federal regulators that it misled investors with stock recommendations to win investment banking business. Weisel was the remaining holdout of the 12 Wall Street firms that U.S. regulators originally targeted.

The good news for biotech is that aside from a junior analyst on the medical devices side, insiders say the firm's biotech bankers and analysts were unaffected.

Meanwhile, Banc of America Securities joined the parade of institutions making cuts in Europe, closing its research, trading and equity sales operations in London. The cutbacks of 100 jobs include Karl Keegan, head of European biotechnology research, and biotech analyst Mike Booth. BofA Securities, which has about 2,500 employees in Europe, will continue its London-based U.S. equity sales business and will cover some European equities from the U.S.

The London cutbacks follow the paring of healthcare teams at Deutsche Bank and West LB Panmure (see BioCentury, March 17).

Big money trickles out

Anglo-German company Cellzome last week closed the largest biotech venture capital round in Europe this year, raising E30 million ($32.2 million) in a series C round led by Invesco Private Capital. The round gives Cellzome a post-money valuation of about E122 million ($131 million) and enough cash to last through 2005, assuming additional income from partnership deals.

Even if the medicinal chemistry and proteomics company fared well at the end, the process was hardly painless. "We began seeking funds mid-last year," said CEO David Brown. "The fundraising became harder as the year moved on."

Cellzome, which was founded in 2000, scans the human proteome with existing drugs and drug-like molecules using its pulldown technology to identify new targets and lead pairs. Other investors in the round included Biofrontier Partners; SG Asset Management; Yamanouchi Venture Capital; Advent International; Atlas Venture; Index Ventures; Heidelberg Innovation; Schroder Ventures Life Sciences; Sofinnova Partners; and SG Cowen Vice Chairman Stelios Papadopoulos. The company has raised E71 million ($76 million) to date.

Hypnion, which is developing sleep disorder therapeutics, raised $47.5 million in a series B round led by Forward Ventures and MPM Capital. Like Cellzome, the deal took some time to close. While the Hypnion deal was 2.5-times oversubscribed, it took the better part of three quarters to get the deal done. Deal watchers note that VCs simply are taking more time on due diligence with the IPO window non-existent.

Other investors included Advanced Technology Ventures; S.R. One; JAFCO; Coastview Capital; Oxford Bioscience Partners; Flagship Ventures; and GIMV. Hypnion said it will use the proceeds to start clinical trials of its compounds for sleep disorders and circadian rhythm abnormalities (see Technology Briefing, A9).

Finally, Targacept - a spinout of tobacco...

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