BioWorld International Correspondent
LONDON - Celltech Group plc said Tuesday it was extending its £101.4 million (US$173 million) hostile cash offer for Oxford GlycoSciences plc after getting acceptance in respect to only 2.2 million, or 3.9 percent, of OGS shares by the first closing of March 31.
Combined with its previous purchase of 5.8 million OGS shares, Celltech now controls 14.4 percent of the issued share capital, and has extended its offer until April 15.
Other bids are now expected. Last week, Abingdon-based OGS issued a statement saying it had commenced discussions with three further interested parties regarding a potential offer for the company. The potential bidders were said to be an international pharmaceutical company, a U.S.-based biotechnology company and a European private equity house.
OGS said it expected the negotiations to reach a conclusion by the second week of April. CEO David Esbworth said, "We have previously promised our shareholders that we will seek the best value that we can for them and in doing so are seeking to have discussions with all interested parties."
Even before the emergence of the new potential bidders, Cambridge Antibody Technology Group plc's all-share offer for OGS was a dead duck. In an unfortunately timed announcement, Cambridge-based CAT last week was forced to reveal that Abbott Laboratories wants to review the terms of their royalty agreement for the newly launched rheumatoid arthritis drug Humira.
Abbott has told CAT that it wants to discuss invoking royalty offset provisions. While CAT claims these provisions do not apply, the possibility that it might receive lower than expected royalties for the antibody-based drug led to a 20 percent fall in the share price over the week, to £3.40. That further undermined CAT's offer for OGS, which was worth £110 million when it was made in January, but following last week's fall in the share price was worth less than £75 million.
Also last week, OGS announced it has submitted an amendment to its NDA for Zavesca, its oral treatment for Gaucher's disease, which the FDA ruled not approvable in June 2002. The drug won approval in Europe in November 2002 and was launched in the UK last month.
OGS had £136.4 million on Dec. 31, but is burning £2.5 to £3 million per month. Announcing it was extending its £1.82-per-share offer to April 15, Celltech said it was "increasingly generous."