UK Big Pharma AstraZeneca is this week expected to unveil a deal to acquire Cambridge Antibody Technology (CAT), a smaller UK drug developer that is a rare biotech success story.
It is thought the deal could value CAT at more than £600m, a substantial premium to its stock-market value on Friday.
AstraZeneca, which is being advised in the talks by Goldman Sachs, already works closely with the smaller company, the two having embarked on a strategic development alliance in November 2004.
At the time, AZ paid £75m for a 19.9% stake in CAT, and the two partners committed themselves to spend at least £100m on 25 drug discovery projects, with a particular focus on respiratory disease and other inflammatory disorders.
The partnership has proceeded well — this year CAT said the alliance “is meeting our highest expectations”. But until recently neither side seemed interested in expanding the deal beyond the joint venture.
CAT’s biggest success to date was its role in developing Humira, the rheumatoid arthritis treatment that is the first blockbuster drug to emerge from the British biotech industry.
Humira, which is licensed for sale to Abbott Laboratories of America, achieved sales of $1.4 billion last year, and is expected to reach close to $2 billion this year. However, CAT receives a modest royalty of 2.688% on sales of Humira — and this was secured only last October after a long legal battle with Abbott.
Sunday Times
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