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INTERNATIONAL BUSINESS
It seemed a straightforward deal last month, when Cambridge Antibody Technology (CAT) agreed to acquire Oxford Glycosciences (OGS) for $175 million in an all-shares deal (C&EN, Jan. 27, page 18). Since then, however, new contenders have appeared on the scene. Celltech, the oldest and largest U.K. biotechnology company, is one of a handful of other potential suitors that have asked for information concerning OGS in order to put together a takeover offer. However, OGS--which has scheduled an extraordinary shareholders meeting for March 11--says it has not received any proposal regarding a potential offer other than CAT's. According to analysts, OGS is a relatively attractive acquisition candidate--but they don't see a strategic fit with either CAT or Celltech. The Oxford-based company has a cash pile of nearly $220 million, which would be particularly appealing to CAT but not to cash-rich Celltech. Other interested suitors, such as Xenova from the U.K. and Swiss biotech firm Actelion, are seen as having a better business case for buying OGS. Barry Middleton, a biotechnology specialist at consulting firm Ernst & Young, says the U.K. biotechnology industry has fared better than continental counterparts in the sluggish economy. U.K. companies, he says, have more products in Phase III clinical trials, and he predicts that regulatory approvals this year could bolster the market considerably. The industry is still under pressure to consolidate: Companies are running out of money, and they need products in the pipeline. But, Middleton predicts, there is too much managerial distrust of mergers and deals and too much economic uncertainty to carry forward the consolidation that many observers see as needed. |
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