Patent, Staff, Tax Issues Vetted Before Amgen Bought Tularik
WALL STREET WEST
Due diligence is a necessary, if usually routine, part of any merger. But when it comes to biotech companies, sizing up an inventory of patents and products in mid-research can become the very heart of the deal.
For last week’s $1.3 billion acquisition of Tularik Inc., a far smaller biotech firm still without a product, Amgen Inc. hired 18 attorneys from Latham & Watkins LLP to advise it. And that was just Amgen’s side of the deal.
The team included specialists in tax law, intellectual property, employee benefits, real estate, Securities and Exchange Commission regulations all supplemented by Amgen’s own inside counsel.
“It’s very complicated stuff and when you are buying a company and spending $1.5 billion you want to be sure about the details,” said lead counsel Charles Ruck, who drew in attorneys from the firm’s Los Angeles, Orange County, San Francisco, Silicon Valley, San Diego and Washington offices.
Aside from intellectual property, a big concern was leasing and real property issues. Also, since the Tularik unit will function as a company within a company, Amgen wants to ensure that researchers at Tularik remain. The deal’s all-stock structure raised tax liability issues as well.
Advising Tularik was the Bay Area law firm of Cooley Godward LLP and investment banker Goldman Sachs. Absent were investment bank services provided to Thousand Oaks-based Amgen.
Ruck said that given the deal’s relatively small size for the biotech giant, Amgen executives apparently decided they didn’t need a banker.
“It’s not that unusual for a large, more sophisticated company to do transactions without the benefit of an investment banker,” he said. “It depends on the board’s desire to have additional comfort.”
Latham isn’t disclosing how much it earned on the deal. Ruck noted that Amgen is a regular client and was charged each attorney’s regularly hourly rate though he acknowledges he probably spent at least 200 hours on the deal himself, mostly in the last few months.
Laurence Darmiento
Latin Lessons
Venture capitalists have often complained that Los Angeles needs a more supportive environment to nurture its startup companies. Aside from the Tech Coast Angels and Larta, whose Venture Forum was held last week at the Beverly Wilshire Hotel, such programs have been few and far between.
Now the Latin Business Association is getting into the act. The group is launching a series of workshops for its 1,300 members, who are closely tied to a growing ethnic marketplace that’s garnering increasing attention from the world of finance.
Many Latino businesspeople are unfamiliar with how to position their companies for an equity investment, said Martha Montoya, board secretary and finance chair of the LBA. In addition, she said, there are cultural obstacles to overcome, such as the desire to leave the company to one’s children, or mistrust of business counterparts the owner hasn’t known for years.
“We need to create a pre-boot camp where people can say, ‘Yes, you haven’t met this gentleman but he is a very successful venture capitalist and maybe he can take you to the next level,’ ” Montoya said.
The LBA program, created with the help of Newport Beach-based Engage Capital, will include pitch sessions that bring investors together with entrepreneurs. The first event is scheduled for April 13 at the L.A. City Club.
The program is “extremely important” to Los Angeles given the diverse and geographically dispersed economy, said Rohit Shukla, chief executive of the private, non-profit Larta.
L.A.’s small-business economy is something the city should celebrate, Shukla said, even as its ties to the world economy shape the way those businesses are run.
“How do you deal with the fact that you’re going to be an entrepreneur in the most globally diverse market in North America?” Shukla said. “(Entrepreneurs) are going to need to have places where they can go to be refreshed and develop their skill sets.”
Anthony Palazzo
