Astra agrees £702m biotechnology deal

Pharmaceuticals giant AstraZeneca today announced it is to acquire one of the UK’s biggest biotechnology groups in a deal worth £702m (€1bn).

In a statement the firm said Cambridge Antibody Technology (CAT) will become central to AstraZeneca’s plans to “establish a major international presence in the research and development of biological therapeutics”.

AstraZeneca, which is 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 that agreement AstraZeneca paid £75m (€110m) for a 19.9% stake in CAT, and the two groups agreed to spend at least £100m (€145m) on 25 drug discovery projects, focusing on respiratory disease and other inflammatory disorders.

CAT closed at 796.5p on Friday valuing it at £420m (€617m). Today’s proposed deal, which has been agreed with CAT’s board, is a 67% premium to that price.

David Brennan, chief executive of AstraZeneca, said the deal would bring "an opportunity to introduce more medicines that will deliver real benefits to patients world-wide".

Dr Paul Nicholson, chairman of CAT, said the firm’s board unanimously decided to recommend the offer to shareholders.

He added: “The offer recognises CAT’s leading position in the discovery and development of new antibody medicines and provides shareholders with an attractive premium through a cash offer.”