Vector Securities International Inc. announced Thursday thatVaughn Bryson, former president and chief executive officer ofEli Lilly & Co., will join the investment banking firm as vicechairman and member of the executive committee.
Effective April 1, Bryson will be chiefly responsible for capital-raising initiatives and financial advisory assignments inVector's Investment Banking Department. He also will beinvolved in the Deerfield, Ill., firm's later-stage equity fund, a$75 million private partnership that essentially providesmezzanine financing for emerging life science companies.Bryson will advise clients on strategic alliances and mergersand acquisitions, particularly between emerging biotechnologycompanies and large pharmaceutical companies, a Vectorrepresentative said. He will also provide clients with corporatevaluations of life sciences companies.
Although Bryson's duties will not be limited to biotechnologycompanies, they will represent a significant portion of hisactivities, he told BioWorld. Vector specializes in the lifesciences industry, including biotechnology, pharmaceutical,medical device and health-care services companies.
Bryson left Lilly last June in what was officially termed a"retirement" prompted by "differences in managementphilosophy." He has made it clear that he did not leavevoluntarily, however, and his ouster was widely seen as havingbeen orchestrated by Lilly's former chairman, president andCEO, Richard Wood, who remained chairman during Bryson's20-month tenure. Wood and Bryson reportedly clashed overmanagement styles, although Bryson's departure was alsoattributed to the company's fourth-quarter 1992 losses -- thefirst ever reported by Lilly up to that time. Bryson wasreplaced at Lilly by Randall Tobias.
Bryson was also criticized for Lilly's $100 million investment inCentocor Inc., which appeared at the time of his departure tohave been a disappointing venture.
But Bryson cited his experience in alliances and acquisitions asa major asset he would bring to Vector. He pointed out that in1992, his only full calendar year as the company's chief, "Lillydid 11 strategic alliances with biotech and device firms, so Igained some insight in that area." Bryson said he expects to bebusy in this area on behalf of Vector, saying he expects to seefurther consolidation through mergers and acquisitions orstrategic alliances in the "highly fragmented" health-careindustry.
Calling Bryson's experience in mergers and acquisitions and theformation of strategic alliances "outstanding," D. TheodoreBerghorst, Vector's chairman and CEO, said, "He understandsthe transaction-orientation of what we do."
Bryson's acumen in picking strategic alliances may in hindsightappear more keen to some investors than it did six months ago.Although Vector maintains a "neutral" rating on Centocor'sstock, for example, the Malvern, Pa., company was picked byHambrecht & Quist at its annual life sciences conference as oneof the top current biotechnology stocks. In December, MerrillLynch analyst Stuart Weisbrod upgraded his rating of Centocorfrom neutral to "above average" for both the short- and long-term.
While Centocor's stock (NASDAQ:CNTO) hovered between $5and $7 for much of the first half of 1993, by Thursday it hadclimbed back to $12.62 a share, making up roughly half thedistance it fell when the company halted trials of its anti-sepsisMAb HA-1A.
When Centocor discontinued the Centoxin trials, Vector analystPatricia Padgett Lea observed that Lilly would ultimately begetting CentoRx for its $100 million investment -- less than itwould have cost the company to develop the heart drug. Shealso was reportedly critical of Lilly's decision to oust Bryson.
According to Berghorst, Vector first approached Brysonimmediately after he left the Indianapolis pharmaceuticalgiant. Bryson said that during the six months since he left Lillyhe has been approached concerning executive positions at largepharmaceutical and biotechnology companies. He said heregards the Vector position as "an opportunity to do somethingcompletely different and, hopefully, have some fun."
-- Karl A. Thiel Associate Editor
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