Europe South Asia Asia Pacific Americas Middle East Africa BBC Homepage World Service Education

Front Page



UK Politics







Talking Point

In Depth

On Air

Low Graphics

Wednesday, June 16, 1999 Published at 07:11 GMT 08:11 UK

Business: The Company File

Pharmaceutical giants join forces

The two firms hope to save money by merging

Celltech and Chiroscience have announced a £700m ($1.12bn) merger to create Europe's biggest biotech company.

The deal will bring together more than 400 scientists working on potential medicines to treate a range of diseases including asthma, cancer, osteoporois and arthritis.

The agreed merger, which is subject to approval by shareholders, is widely expected to spark rapid consolidation in the rest of the fragmented biotech industry.

Plan to boost profits

Celltech chairman John Jackson said: "Celltech was the first dedicated biotechnology companies in the UK. This merger between two high quality British companies creates one of Europe's leading biopharmaceutical companies."

[ image: Europe's biggest biotech group will bring together 400 scientists]
Europe's biggest biotech group will bring together 400 scientists
The new company will be called Celltech Chiroscience.

Chiroscience investors will receive 62 Celltech shares for every 100 shares they hold in Chiroscience.

Based on Celltech's Tuesday's closing price, the deal values Chiroscience shares at 287p or £324.5m.

The merger will leave Celltech shareholders holding a slim majority - 53% - of the enlarged group, with Chiroscience shareholders owning the remainder.

Chiroscience chairman Hugh Collum said: "We have always advocated that consolidation within our sector of the pharmaceuticals industry was essential to provide the critical mass necessary to build sustainable profits and cashflow."

Celltech's latest results showed the group reporting a pre-tax loss of £3.1m in the year to September 1998. Chiroscience reported pre-tax losses of £16.2m in the year to February 1999.

Consolidation fever

The merger marks the biggest step to date in the consolidation of Britain's lifescience sector which many analysts have been predicting in recent months.

"It provides a broad platform for technology and skills, overall it looks a good deal," said Stephen McGarry, analyst with Rabobank.

The UK boasts over 200 biotech companies, most of them spun off from research teams in Oxford, Cambridge and Scotland.

But the industry has suffered a series of setbacks in recent years with several high profile clinical failures leading to a sharp decline in investor confidence - and share prices.

Julie Simmons, analyst with Beeson Gregory, said she expected the group to look for opportunities in the US which would complement Chiroscience's existing operations in Seattle.

Advanced options | Search tips

Back to top | BBC News Home | BBC Homepage | ©

The Company File Contents

Relevant Stories

23 Apr 99 | The Company File
GM food bosses face roasting

04 Mar 99 | The Company File
Biotechnology giant stalks the countryside

Internet Links



The BBC is not responsible for the content of external internet sites.

In this section

Microsoft trial mediator welcomed

Vodafone takeover battle heats up

Christmas turkey strike vote

NatWest bid timetable frozen

France faces EU action over electricity

Pace enters US cable heartland

Mannesmann fights back

Storehouse splits up Mothercare and Bhs

The rapid rise of Vodafone

The hidden shopping bills

Europe's top net stock

Safeway faces cash demand probe

Mitchell intervenes to help shipyard

New factory creates 500 jobs

Drugs company announces 300 jobs

BT speeds internet access

ICL creates 1,000 UK jobs

National Power splits in two

NTT to slash workforce

Scoot links up with Vivendi

New freedom for Post Office

Insolvent firms to get breathing space

Airtours profits jump 12%

Freeserve shares surge

LVMH buys UK auction house

Rover - a car firm's troubles