Cambridge Biotech Corp. announced Tuesday that it plans toacquire an initial 15 percent stake in ImmuCell Corp. for$600,000, with an option to gain controlling interest.
Both companies spoke Tuesday of a mutually complementaryfit of technologies and product development. Although talksbetween Cambridge Biotech of Worcester, Mass., and ImmuCellof Portland, Maine, about technology sharing are still in theearly stages, both see possible linkage. They cited, for example,a collaboration involving Cambridge Biotech's patentedadjuvant, Stimulon, and ImmuCell's passive immune therapy,which uses monoclonal antibody technology to directly targetpathogens in the body.
"There is a significant synergy between the interests of bothcompanies," said Patrick J. Leonard, Cambridge Biotech'spresident and chief executive officer. "Ultimately, we see thisrelationship as the foundation on which to build two significantbusiness opportunities."
Cambridge Biotech sees in ImmuCell attractive technology inImmuCell's passive immune therapy and a potentially quickerentry into veterinary products, where ImmuCell has oneproduct on the market. Besides a potential technology partner,ImmuCell sees in the pact a needed financial infusion.
"Joining forces with Cambridge should allow us to pursue otherhuman applications of our passive antibody technology," saidThomas C. Hatch, ImmuCell's president and chief executiveofficer.
In trading Tuesday following the announcement, Cambridge'sstock (NASDAQ:CBCX) dipped 6 percent in value, whileImmuCell (NASDAQ:ICCC) jumped 37 percent. CBC finished theday at $6.38 a share, down 37.5 cents; ImmuCell closed at$1.88 a share, up 50 cents.
Under the general terms outlined in a letter of intent, CBC is toacquire approximately 340,000 newly issued ImmuCell sharesfor $600,000, or close to $1.75 a share. The deal is subject tonegotiation of a final agreement and approval of a majority ofImmuCell shares voted at a special meeting scheduled for Aug.24.
Cambridge Biotech's option to increase its ownership ofImmuCell to more than 50 percent is in the form of warrants topurchase ImmuCell shares in mid-1993 and again in mid-1994,according to Michael Brigham, ImmuCell's chief financialofficer. No trigger price has been established yet on thewarrants.
The companies have had no history of collaboration and differgreatly in size and scope of research.
ImmuCell has raised less than $10 million during its 10-yearhistory and has 18 employees. It has focused on antibodyresearch and relies on the proprietary nature of its productionprocess to ward off competitors. At Tuesday's closing stockprice, the company's existing 2 million shares outstanding havea market value of about $3.75 million.
Cambridge Biotech was founded in 1981, has raised more than$60 million and has 370 employees. Its initial focus was indeveloping bacterial and viral diagnostics, and in 1986 itobtained exclusive license from Harvard University to thegp120 protein envelope protein to the HIV. Cambridge's 22million shares outstanding have a market valuation of about$140 million, valued at Tuesday's closing stock price.
ImmuCell has one product in Phase I clinical trials, a treatmentfor cryptosporidiosis in AIDS patients, which is beingdeveloped in conjunction with Univax. In the veterinary area,ImmuCell last fall launched First Defense, a capsule to preventscours in calves. "We hope to get 50 percent of a $4 millionmarket," Brigham said. That project is excluded from anypotential collaboration with Cambridge Biotech.
Cambridge Biotech, which develops and distributes a range ofviral diagnostic products using recombinant technology, is nowtesting a feline immunodeficiency vaccine and a canine Lymedisease vaccine.
-- Ray Potter Senior Editor
(c) 1997 American Health Consultants. All rights reserved.