Powderject accepts US bid

A US biotech group is taking over Powderject Pharmaceuticals, the company caught up in a cash for political favours row last year.

Chiron's £543m ($879m) offer values Powderject's shares at 550p; they closed on Friday at 530p.

The company's best known treatment is the Fluvirin vaccine, which is the world's second best-selling flu jab.

The deal comes six months after Oxford-based Powderject pulled out of takeover talks when industry sources said Chiron was offering about £455m.

Biological attack

Last year Powderject became one of the few British biotech firms to make a profit.

But it also hit the headlines when it landed a contract to supply smallpox vaccine to the government just weeks after chief executive Paul Drayson made a £50,000 donation to the Labour Party.

Powderject said it won the contract because it was the only company that could meet the standards set down by the government and make the vaccine in the UK.

Vaccine makers have become increasingly in demand because of scares about biological attacks by terrorists, and the outbreak of the deadly Sars virus.

Bigger business

There had been speculation that other firms were interested in Powderject and reports suggested it was considering a merger with Swiss vaccine maker Berna Biotech.

But Powderject said Chiron's offer was "fair and reasonable" and said shareholders should accept it.

"We believe that the combination of Powderject with Chiron offers a great opportunity for the business and its employees, providing growth both in terms of products and geographical reach," said Dr Drayson.

"Our objective has been to create a broader base to Powderject's business, balancing the company's dependence on flu vaccine, and the board believes that the offer from Chiron provides the best alternative to achieve that goal."

Chiron said it had acceptances from nearly 20% of Powderject's shareholders.