Talecris pumps itself up

With IPO pending, the drug maker opens up about its operations

Talecris Biotherapeutics is gussying up for potential investors.

One of the Triangle's largest drug makers, Talecris filed plans to raise money in an initial public offering of stock nearly a year ago. That Wall Street debut has stalled as the credit crisis zapped investors' appetite for risk. And recent reports suggested the company's owners may be looking for a buyer.

Either way, Talecris needs to address some risks to its future: a large amount of debt, the possible loss of a critical contract and a rival's lawsuit.

So last week, Talecris took an unusual step for a company with an IPO pending: It reported that it had made strides in boosting collections of blood plasma, a key ingredient to make its drugs, and company representatives readily answered questions about operations.

For years, securities lawyers and regulatory restrictions forced companies into so-called quiet periods as they prepared to go public. But the Securities and Exchange Commission relaxed the rules about two years ago, and Talecris is making use of the wiggle room, said Jim Verdonik, a Durham securities lawyer.

"They want the positive information out, so they can get the buzz out, make deals, sell product," Verdonik said.

Wendy Wilson, a Talecris spokeswoman, acknowledged the news release was an update for people interested in the company.

Talecris could use some positive attention.

In February, debt ratings agency Moody's raised warnings about Talecris' ability to repay a whopping $1.3 billion in debt.

The delay of the IPO, which was targeted to raise as much as $1 billion and reduce debt, has triggered speculation that the two investment firms that own the company are considering a sale instead.

Add to that a lawsuit that larger U.S. rival Baxter International filed last month alleging that Talecris had infringed on patents Baxter holds for a method to test donated blood for infectious agents.

Supplies of blood plasma are critical for Talecris to weather the storm.

At its plant in Clayton, where the company employs about 1,500, Talecris turns blood plasma into treatments for immune deficiency disorders, hemophilia and other diseases. The company has about 2,100 employees in the Triangle, including those at its Research Triangle Park headquarters.

Demand for blood-based medicines is rising worldwide, according to analysts tracking the $7 billion industry. Talecris' sales increased to $1.2 billion last year, from $1.1 billion in 2006.

But Talecris' ability to ramp up production is hampered by a limited blood plasma supply. And it could get worse. A supply agreement with CSL Limited, an Australian rival, expires at the end of the year, and Talecris' chances to renew the agreement are slim.

That's why the company has been scrambling to establish its own network of collection centers.

Talecris was formed in 2005, when New York buyout firm Cerberus Capital Management and Ampersand Ventures, a Wellesley, Mass., venture capital firm bought the blood plasma business of German pharmaceutical giant Bayer for $303.5 million.

Bayer put the business unit up for sale after failing in its efforts to buy a rival that owned a network of blood plasma collection sites.

Blood-based medicines are made by only a handful of companies in the world. With about 30 percent of the market, Deerfield, Ill.-based Baxter is the largest. Talecris is third after CSL. Baxter and CSL have their own blood plasma collection networks.

Talecris tried to catch up two years ago by buying a national chain of plasma collection centers from a former supplier.