Drugmaker Astrazeneca is to buy British biotechnology firm Cambridge Antibody Technology in a deal valued at £702 million (€103 billion).
Astrazeneca announced today it had agreed to pay 1,320 pence a share in cash for Britain's biggest biotech company, 67 per cent above Cambridge Antibody Technology's (CAT) closing price on Friday.
AstraZeneca which already owns 19.2 per cent of CAT from a research deal in 2004, said buying the rest of the shares would cost it £567 million (€832 million), and would not affect its earnings guidance or share buyback programme.
CAT, which has yet to make a profit, is a world leader in making drugs from antibodies, the body's natural immune defences. These generally have fewer side-effects than conventional, chemistry-based medicines.
Major pharmaceutical firms are battling to strengthen their position in the fast-growing market for biological drugs such as antibodies, with analysts forecasting sales of antibody-based drugs will more than double by 2010 from €10.9 billion in 2005.
Analysts welcomed AstraZeneca's drive into biological medicines and said the hefty premium paid to buy CAT was in line with US group Amgen's recent purchase of US antibody specialist Abgenix.