Taro Pharmaceutical Industries (Nasdaq: TARO) successfully held an issue on Wall Street Monday, after a week-long postponement due to the terrorist attack in New York. Taro was only the second issue carried out this year, following Verisity (Nasdaq: VRST) in March. 2001 was one of the worst years for the secondary market on Wall Street, affecting Israeli companies as well. Against this backdrop, Taro's issue is considered one of the greatest successes by an Israeli company on Wall Street in recent years.
Taro issued 3.2 million new shares at $34.30 per share, raising $110 million. Simultaneously, the company's main shareholders, chairman Dr. Barrie Levitt, his brother, president Aaron Levitt and VP Daniel Moros realized 1.8 million shares, earning $61.5 million. The total issue raised $171.5 million.
Merrill Lynch, Bear Stearns & Co., Banc of America Securities LLC, and CIBC Oppenheimer lead the issue, receiving an option to issue an additional 750,000 shares at the issue price. The option is valid for 30 days, and if exercised, will increase the capital raised by Taro by an additional $25.7 million.
Taro plans to use the proceeds of the issue to expand its R&D department and increase its sales and marketing abilities in order to sustain its growing business, which has surged in the past year. The growth was led by the launch of Taro's generic drug for Lotrisone, a treatment for skin diseases and fungi, which is expected to raise the company revenue by 40%, to over $140 million.
Taro rose 6.6% on the first trading day after the issue on a huge turnover of 4.15 million shares.
Given Imaging pricing its IPO
Given Imaging is scheduled to carry out the pricing stage of its IPO today. The company is planning to issue 5 million shares at $12-14, raising $60-70 million at a company value of $300-350 million. Given Imaging has developed an encapsulated miniature camera to aid in the diagnosis of small bowel gastrointestinal disorders and diseases.
Lehman Brothers, Credit Suisse First Boston, and Robertson Stephens are leading the issue. The underwriters have an option to issue an additional 750,000 shares, and the exercising of the options would increase the capital raised by an additional $9.5-10 million.
A year ago, Given Imaging completed a $30 million private placement at a company value of $75 million. The company's existing shareholders participated in the round, including Discount Investment Corporation, Elron (Nasdaq: ELRN) and Rafael Development Corporation. Orbimed Advisors LLC of the US, which specializes in investments in medical companies, led the round. As part of its planned IPO, Given Imaging has allocated 2% of its equity at the issue price to an Orbimed fund, Juniper Crossover Fund PW.
Given Imaging's capsule underwent successful clinical trials and testing by drug authorities around the world. It received US Food and Drug Administration approval for limited marketing two months ago.
Published by Israel's Business Arena on 3 October 2001