Pharmaceutical firm in €877m acquisition bid

PHARMACEUTICAL giant Astra Zeneca is this week expected to announce a deal to acquire smaller rival Cambridge Antibody Technology, it was reported today.

The move is expected to value Cambridge Antibody Technology (CAT) at more than £600 million (€877m), well up on the £420m (€614m) it is currently valued at after its shares closed at 796.5p on Friday, according to a Sunday newspaper report.

Astra Zeneca, which is reportedly being advised on the deal by investment bank Goldman Sachs, already has close ties with the Cambridge-based group after the pair agreed a strategic development alliance in November 2004.

Under the terms of the agreement Astra Zeneca paid £75m (€110) for a 19.9% stake in CAT, and the two groups agreed to spend at least £100m (€146) on 25 drug discovery projects, focusing on respiratory disease and other inflammatory disorders.

Astra Zeneca could not be contacted to comment, but CAT put out a statement confirming it was currently in discussions with Astra Zeneca which may or may not lead to an offer for the company.

It has spent £121m (€177) buying Cambridge-based biotech firm KuDOS Pharmaceuticals, and also agreed a deal worth up to £173m (€253m) with American firm Targacept to help develop a treatment for Alzheimer’s disease and schizophrenia.

Astra signed an agreement in November worth £195m (€285m) to licence septic shock treatment CytoFab from British rival Protherics, and most recently it paid £112m (€164m) to rival Abraxis BioScience in return for the right to promote jointly its Abraxane cancer therapy.

Last month the group increased its profits target for the full year after saying patients had used more of its five top medicines, including fat-busting Crestor and schizophrenia drug Seroquel.

It said sales of its quintet of blockbuster treatments grew by 25% to £1.68 billion (€2.45bn) – twice as fast as its pharmaceuticals portfolio as a whole.