LOTS of news - including MERGER!
Dow Jones Newswires -- June 15, 1999
Dow Jones Newswires
Chiroscience To Merge With Celltech; CEO Leaving
By PANAGIOTIS PYLAS
LONDON -- Chiroscience Group PLC (U.CCC) has landed a merger
partner in Celltech PLC (U.CEL) and a new marketing deal for long-acting local anesthetic Chirocaine, but it will lose its chief executive.
The two companies agreed Tuesday to a merger that will create one of
Europe's leading biopharmaceutical companies.
The all-share offer will be made on the basis of 62 new Celltech shares for every 100 Chiroscience shares and values each Chiroscience share at 293 pence based on Monday's closing prices. The company is valued at around GBP331 million.
Even though the deal values Chiroscience at a 13.1% premium and Celltech directors will dominate the new board, Celltech Chairman John Jackson insisted it is a "merger of equals." Celltech shareholders will own around 52.4% of the merged company, to be called Celltech Chiroscience, and Chiroscience shareholders will own 47.6%.
"The thought of takeover has never been involved in this," he told Dow Jones Newswires. "It is not a useful idea in a people-based business."
Celltech Chief Executive Peter Fellner, who will take the helm at the new company, said structures are being put in place to encourage people to stay. "The major thing to emphasize to them is that their prospects are enhanced by the merger process," he said.
The new company will have more than 400 research and development staff and current combined annual research and development expenses of some GBP51 million. It will have GBP80 million in cash and liquid investments.
The enlarged company will possess one of the strongest new product
portfolios within the European biopharmaceutical sector, with one product approved, a further three in advanced stage of development another eight that are in clinical or preclinical development.
It will have a broad range of alliances with some of the industry
heavyweights, including American Home Products Corp. (HAP),
Schering-Plough , Bristol-Myers Squibb CO. (BY) and AstraZeneca PLC
(AN).
Chiroscience has added a further two to the list Tuesday after finalizing global marketing arrangements for Chirocaine. The group has licensed Chirocaine to Purdue Pharm. for the U.S. and Abbot International for all markets outside the U.S. and Japan. In Japan Chirocaine has been licensed to Maurice Pharmaceutical.
Chiroscience Chief Executive John Padfield, who will leave the company to take up a job at Nycomed Amersham PLC (U.NAM), said the
combination of these deals should allow Chiroscience to achieve "optimal returns for its shareholders from the commercialization of Chirocaine once it gets regulatory approval." It is in the final stages of discussing Chirocaine with the U.S. Food and Drug Administration.
Padfield said Nycomed Amersham had approached him earlier this year to take up the position of chief executive at its imaging division and have a seat on the board, but he had to accomplish two things before he took it.
"One was to find a new home for Chirocaine and enhance prospects going forward," he said.
Hugh Column, chairman of Chiroscience and deputy-chairman designate at the merged entity, said informal discussions between Chiroscience and Celltech had been going on for quite a while but had only got to the nitty-gritty "in the last few weeks."
The deal, he said, represented "a more realistic psychology in the sector."
Two years ago, biotechs were seen as gung-ho, go-it-alone minnows with mind-blowing stock valuations and a rich future. Now many of the players that took that path have seen their shares free fall.
The healthy biotech now is a low-risk, multi-product company already
earning revenues through deals with major pharmaceutical companies.
This deal, the participants say, will only enhance those prospects.
-By Panagiotis Pylas: 44 171 842 9291; |
