Feeling better

18 May 2004 By Robert Cyran Follow @rob_cyran

This is the first time shareholders in a major biotech company have got a cash exit. That is going to boost confidence, and should help to end the investment drought in the sector.

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Celltech has agreed to be acquiredby UCB for £1.5bn in cash. The Belgian drugs and chemicals company is offering 550p per share for the UK's largest biotech. This is a 28% premium to the prior day's closing price for Celltech shares.

Separately, the two groups agreed on a marketing agreement for Celltech's lead drug CDP870. UCB agreed to pay for clinical trials and commercial costs for any disease except the intestinal ailment called Crohn's disease in exchange for undisclosed royalty and milestone payments. Celltech will pay for the development of the drug in Crohn's disease and will retain rights for this indication in all major markets. UCB will have commercial rights in all minor markets. Pfizer holds rights to 20% of profits generated when used in treating Crohn's disease.

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