Superbug drugs firm backs takeover by Novartis

A biotech firm involved in developing drugs for fighting hospital superbugs today backed a £305m (€444m) takeover by pharmaceuticals giant Novartis.

The proposed deal for NeuTec Pharma will earn windfalls for the couple who set up the business at the University of Manchester less than 10 years ago.

Professor James Burnie and Professor Ruth Matthews will earn around £21m (€30.5m) from their combined 7% holding, should the deal go through.

The biotech firm, which employs 20 people, has two drugs at the later stages of development but does not have an attachment to a larger pharmaceutical company in order to fund the rollout of the drugs.

The first potential product is Mycograb – an anti-fungal drug which helps fight invasive thrush – one of the most common and life-threatening hospital infections. It is awaiting European clearance.

The second is Aurograb, currently under clinical trials, for the treatment of superbugs like MRSA.

NeuTec said the proposed takeover would give it the power to access and penetrate the market more quickly, while allowing Novartis the chance to expand their range of speciality medicines.

Novartis is offering 1050p for each NeuTec share, an increase of 108.9% on Monday’s closing price of 502.75p, valuing the company at around £305.1m (€444m). NeuTec’s board is recommending the offer and Novartis already has the approval of 39.1% of shareholders.