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Biotech / Medical : Oxford GlycoSciences Plc -- Ignore unavailable to you. Want to Upgrade?

To: nigel bates who wrote (341)	2/18/2003 9:52:53 AM
From: Ward Knutson	Respond to of 469

DJ Oxford Glycosciences May Become Object of Bidding War By Susannah Rodgers Dow Jones Newswires LONDON -- Oxford GlycoSciences PLC (OGSI) acknowledged that several companies have inquired about it, fueling speculation that there could be a bidding war for the biotechnology company. Oxford GlycoSciences, which agreed last month to merge with rival Cambridge Antibody Technology PLC (CATG), said one of the companies that approached it for information was Celltech Group PLC (CLL). As one of Europe's few profitable biotech companies, Celltech could easily top Cambridge's stock-swap offer with a larger cash offer, analysts say. Celltech declined to comment, saying it routinely reviews acquisition opportunities. Analysts also speculated that others will enter the ring before Oxford and Cambridge shareholders vote on the merger next month. "The offer was bound to attract other interested parties," said Samir Devani, analyst at Altium Capital. "It will probably only take one more bid to materialize for others to follow." Celltech's banking adviser Cazenove suspended trading in Oxford's shares, leading some observers to speculate that it was trying to avoid a situation where a conflict of interest could affect a future bid by Celltech. Cazenove also declined to comment. Cambridge agreed last month to merge with Oxford in a stock-swap that values Oxford at around 110 million pounds ($176 million). The deal would leave Cambridge shareholders owning around 65% of the combined company. The amount would be less than Oxford's cash pile of around 130 million pounds. Shareholders are due to vote March 11 on the Cambridge bid. If Oxford pulls out, the breakup fee is _-93_3;1.1 million, a relatively small price should a rival company offer a more lucrative deal. While Celltech could still outbid Cambridge, a deal makes more strategic sense for the latter. Celltech has several drugs on the market and a solid pipeline. Oxford has just one marketed drug, Zavesca for Gaucher's disease. The pick up would be a tiny revenue earner for Celltech, which has a portfolio that includes hyperactivity drug Metadate. Analysts were surprised Celltech is considering a move at the same time as Chief Executive Peter Fellner is set to leave, with no successor yet appointed. Cambridge, meanwhile, could use Oxford's cash holdings and employ its own antibody-drug technology to develop Oxford's 4,000 or patents. Combined, the two would have _-93_3;260 million in cash, two drugs on the market and a goal of profitability by 2008. If it bid, Celltech could divert attention from its other businesses, said Emma Palmer, analyst at WestLB Panmure. She said she will keep Celltech stock at a neutral rating until a new CEO is brought in. "No doubt there's an element of opportunism in Celltech's move. It doesn't make a huge strategic rationale," said Altium Capital's Ms. Devani. Mr. Devani said one of Oxford's U.S. collaborators, such as Nasdaq-listed Medarex Inc. (MEDX), would be more likely to join the fray with a second formal bid. Medarex CEO Donald Drakeman sits on the board of Oxford but hasn't taken part in merger discussions given his competing interests. "We've only received one approach, the approach is from CAT, and that's the only one we're considering at the moment," a Oxford spokeswoman said. She declined to say whether the company would be open to further offers. -By Susannah Rodgers, Dow Jones Newswires; 44 20 7842 9269; susannah.rodgers@dowjones.com (END) Dow Jones Newswires February 18, 2003 01:05 ET (06:05 GMT)