UK biotechnology bellwether Celltech has emerged victorious in the bidding battle for Oxford GlycoSciences. OGS reluctantly gave in to Celltech's pressure on April 11, after the latter firm bought additional holdings which brought its stake in OGS to just under 50 per cent. This brings to a conclusion the first bidding battle ever to have involved the European biotech industry.
OGS has been a prized takeover target because it is still sitting on hefty cash reserves - around £120 million (€195 million), but reportedly with a burn rate of around £3 million a month - raised when the capital markets were more favourable to the biotech sector. Cambridge Antibody Technology started off the bidding war with an all-share approach in January, but was unable to top Celltech's higher offer. Meanwhile, life sciences venture capital fund Merlin Biosciences had also made noises about bettering Celltech's deal but, in the end, no bid was forthcoming.
"Due to the unfortunate decline of the CAT share price, the absence of any other credible bidders and the sale of significant blocks of shares to Celltech, we feel that the only alternative is for shareholders to accept the current offer by Celltech," commented OGS' chief executive David Ebsworth.
OGS' acceptance of the deal, which values it at £101 million, ends speculation that other bidders were set to come forward with higher offers. The deal effectively gives Celltech access to OGS' assets in a cash-neutral manner (once the costs of winding down the firm are taken into account), broadening Celltech's technology base and providing an opportunity to sell off non-core activities.