AstraZeneca Bids on UK Biotech

AstraZeneca has made a bid to acquire Cambridge Antibody Technology (CAT) in a deal valued at $1.3 billion. CAT, Britain’s largest biotech company, develops drugs from antibodies, the body’s natural immune defence, which generally have fewer side-effects than conventional, chemistry-based medicines. AstraZeneca currently owns 19.2% of CAT from a research agreement in 2004.

“This is part of transforming our long-term capabilities,” said John Patterson, AstraZeneca’s executive director of development. “From this, up to one in four of our later-stage molecules by 2010 will be from a biologicals background, whereas previously we’ve had little or no capability.” AstraZeneca has recently signed agreements potentially worth more than $2 billion in an effort to rebuild its pipeline. Mr. Patterson said the research project with CAT had met or exceeded all its targets and the two firms expected to select the first compound for development by the end of 2006.

With the purchase of CAT, AstraZeneca will not have to share the profits of any drugs resulting from the collaboration. AstraZeneca will take on CAT’s staff and provide special payouts to staff that stay on one year after the deal closes. CAT chief executive Peter Chambre, however, said he would leave the company.

The deal, which is expected to complete by the end of June, also gives AstraZeneca one product in Phase II trials, and another in Phase I, as well as CAT’s royalty of 2.7% on arthritis drug Humira, which sold $1.4 billion in 2005.