Richard Wachman reports
McKenna & Co has clinched another three City deals on behalf of emerging companies specialising in biotechnology and pharmaceutical research.
The transactions mark another milestone in the career of the firm's veteran biotech partner Julian Thurston.
Thurston cut his teeth on one of the earliest biotech companies to float on the stock market, Celltech, listed in 1980 and now with a market value of £480 million. Since then, the number of biotech groups coming under his wing has grown quickly. "You need to be a specialist when it comes to these kind of companies because they can be high risk investments; you need to know what you are doing," said Thurston.
One of Mckennas' deals was for Vanguard Medica Group, which it represented in its stock market flotation that valued the company at £111.5 million. Another transaction involved PPL Therapeutics, floated with a price tag of £100.6 million and raising £33 million. McKennas also acted for Cantab Pharmaceuticals on a placing of new shares to raise about £25.7 million net of expenses.
Biotech and pharmaceutical research companies tend to be newly-formed groups whose future depends on the selling power of new medical products or medicines. Many products need to gain regulatory approval. Thereafter, alliances with major drugs companies are often necessary because only large groups have the financial muscle to market new drugs successfully.
Thurston said a growing number of biotech companies have come to the market since 1993. This is because the London Stock Exchange has relaxed rules that previously obliged biotech companies to produce a three-year financial record as a condition of listing.
Some of the smaller biotech companies have taken advantage of AIM, the junior stock market for smaller companies which was launched a year ago.
Thurston, a commercial partner at McKennas, has worked in recent years with Dick Tyler on the corporate finance side to establish a multi-disciplinary team dealing with the biotech sector. Tyler said: "Emerging biotech companies have been one of the most active and best performing sectors of the market in recent months. A number of companies have gained recognition as their products have advanced through the various stages of clinical trials."
