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12:00 AM
Sep 28, 2009
 |  BioCentury  |  Finance

Ebb & Flow

The pair of life sciences companies on IPO road shows may give investors and other companies clues on the opening of an IPO window. Profitable plasma-derived protein company Talecris Biotherapeutics Inc. may price this week, while Phase III pharmacosurgery play Omeros Corp. is looking to get out early in October.

Omeros is the first development stage company to test the waters, with a tentative IPO date around Oct. 8. The company has three clinical candidates, all of which are combinations of generics for use as additives to standard surgical irrigation solutions.

Omeros recently updated its S1 to sell 6.8 million shares at $10-$12. An $11 price would raise $75 million and value the company at $234.2 million. In January 2008, the company filed to raise up to $115 million (see "Tracking Omeros").

Its OMS103HP is in Phase III testing to improve postoperative joint function and reduce pain following arthroscopic anterior cruciate ligament (ACL) reconstruction surgery. The compound is a combination of ketoprofen, amitriptyline and oxymetazoline added to standard arthroscopic irrigation solution.

VP of Clinical Development Stephen Murray said the company has almost completed enrollment. The company expects to submit an NDA under section 505(b)(2) of the Food, Drug and Cosmetic Act in 2H10.

Next half, Omeros anticipates Phase II data in patients undergoing meniscectomy surgery.

Ophthalmology compound OMS302 is in Phase II trials and urology candidate OMS201 is in Phase I/II trials.

On the company's road show, co-founder, Chairman, President, CEO and CMO Gregory Demopulos said Omeros has issued patents covering delivery to a site during surgery of proprietary or generic agents. These expire in December 2014. However, pending patents could extend patent life to 2019 for OMS103HP; to 2023 for OMS302; and to 2026 for OMS201.

At June 30, Omeros had $10.4 million in cash and a 1H09 operating loss of $10.9 million. The company also has borrowed $17 million under a $20 million debt facility from BlueCrest Capital Finance. To June 30, Omeros had spent $109 million since its inception in 1994.

The company expects to spend $5.5 million of the IPO proceeds to complete the Phase III trial and FDA submission for OMS103HP; $30.5 million to launch and commercialize OMS103HP; and $11 million to develop OMS302 and OMS201 through Phase II.

The company said some money would go to its preclinical pipeline and some to repay its $17 million debt.

Underwriters are Deutsche Bank; Wedbush PacGrow Life Sciences; Canaccord; Needham; Chicago Investment Group; and National Securities.

Making more profits

Talecris, slated to go public about Sept. 30, hopes to use its new money to partially deleverage $1.1 billion in long term debt piled on by investors Cerberus Capital Management and Ampersand Ventures.

Talecris recently updated its S-1 to sell 28.9 million shares at $18-$20. A $19 price would raise $550 million and value the company at $2.3 billion.

Separately, Talecris Holdings, which is comprised of Cerberus and Ampersand, will seek to sell 15.8 million shares in a secondary offering. At $19, its take would be $300 million.

The company posted $1.4 billion in revenue in 2008, of which 72% came from two products: immunodeficiency disorder drug Gamunex immune globulin IV ($703 million) and Prolastin ($317 million), an alpha-1 proteinase inhibitor to treat alpha-1 antitrypsin deficiency-related emphysema.

Talecris plans to use its proceeds pay back $515 million of the long-term debt, which originally had been used to repay loans from Talecris Holdings and provide Cerberus and Ampersand with a $760 million cash dividend.

In 1H09, the company had $41.9 million in interest expense - 5.6% of total net revenue of $747.4 million. Operating income in 1H09 was $144.2 million, up from $80.3 million in 1H08.

Morgan Stanley; Goldman Sachs; Citigroup; JPMorgan; Wells Fargo; Barclays Capital; and UBS are the underwriters.

The company's S-1 remained on file even as it tried to merge with CSL Ltd. (ASX:CSL) a deal...

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