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AstraZeneca's

Published on 18/05/06 at 10:32am

AstraZeneca is to buy Cambridge Antibody Technology for 702 million pounds in a bid to expand its reach into biotechnology.

Cambridge Antibody Technology (CAT) is best known for discovering Humira, which has gone on to be UK biotech's first blockbuster drug. The drug was licensed to Abbott in 1993 and now earns sales of more than $1 billion a year, making it UK biotech's most successful product so far.

AstraZeneca hopes the purchase of CAT will help reinvigorate its own pipeline, which has suffered a number of serious blows with late-stage product failures. Most recently, the company announced its phase III diabetes drug Galida was to be abandoned because of safety concerns.

AstraZeneca has tried to remedy its pipeline problems with a flurry of drug in-licensing deals, but the CAT purchase is aimed at bringing biotech drug discovery in-house.

The deal to buy CAT, at a price of 13.20 pounds per share, comes as no surprise to analysts, as a merger was first mooted some years ago.

CAT's chief executive Peter Chambre changed tack in 2005 and opted instead for a strategic alliance with the pharmaceutical company, but he will now step down as the company is merged into AstraZeneca's operations.

The companys existing alliance focuses on a 75 million discovery programme agreed in November 2004 that involves the development of at least five antibody therapy candidates a year for five years.

AstraZeneca says CAT's expertise will make it central to its plans to launch the next generation of biotech products.

AstraZeneca's chief executive David Brennan, said: "This acquisition represents a major, long-term strategic investment by us in novel biological therapeutics."

He added: "It is our intention to both expand and broaden the scope of our discovery and development pipeline, and we expect that, by 2010, up to a quarter of our candidates for full-scale development will be biological therapeutic agents."

AstraZeneca said CAT's biotech research base will remain at its current Cambridge headquarters and will be distinct from its existing small molecule capability.

The company added that it was guaranteeing the jobs of existing CAT employees and had agreed a 5 million break fee with the company that is payable if the deal collapses.

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