UCB makes friendly offer for Celltech
to buy UK biotechnology firm Celltech for £1.53 billion (€2.25bn)
in a move seen as a way of getting hold of the latter's much-touted
arthritis drug.
UCB had already entered into a licensing deal for the compound, called CDP 870, but the merger with Celltech would allow it to reap the most benefit should it reach the market and remove its reliance on partners. CDP 870 is currently in Phase III clinical trials involving patients with rheumatoid arthritis.
The Belgian firm has made no secret of the fact that it wanted to buy a small company with products that could be handled by a small, specialised salesforce. Moreover, it is considered to have a slightly thin near-term pipeline, and the acquisition of Celltech as a good way of rounding this out.
UCB has been hit by competition to its blockbuster antihistamine drug Zyrtec (cetirizine) after patent expiries in Europe, although it has high hopes for Keppra (levetiracetam) a drug for epilepsy which made €314 million last year and is tipped to put in 40 to 50 per cent growth in 2004. But Keppra itself is facing generic competition in the US, where challenges have been filed by India's Dr Reddy's Laboratories, among others.
The acquisition would create one of the largest biotechnology companies in the world, according to UCB, with strong positions in specialty therapeutic areas such as central nervous system disorders (e.g. epilepsy, multiple sclerosis, and Parkinson's disease), inflammation and cancer.
It will also marry Celltech's biotechnology expertise, particularly in monoclonal antibodies, with UCB's pharmaceutical chemistry strengths.
UCB said it will finance the acquisition through bank loans and said it is expected that the transaction will be earnings after the second year. The deal should also lay to rest speculation that Pfizer had been gearing up to buy UCB's pharmaceuticals business.
The company, headquartered in Brussels, had a turnover of approximately €3 billion in 2003 and employs over 11,500 people. Its flagship pharmaceutical business had a turnover of €1.5 billion and an EBIT of €397 million last year. Meanwhile, Celltech employs some 1,900 people and had turnover in excess of €510 million in 2003.
