Monday, July 19, 1999
Merger mania is still gripping the U.K. biotech sector. Thus
rumors that Shire (LSE:SHP, SHPGY) had failed to land Medeva (LSE:MDV)
did little to dampen enthusiasm for MDV, which gained 20.5p (18 percent) to
133p on the week, adding £70 million in market cap to £454 million ($704 million).
Concomitantly, SHP shares traveled south from 613p to 579p
at week's end, trimming its market cap by £49 million to £830 million ($1.3
Although both companies would neither confirm nor deny the
market speculation, Ebb & Flow understands that talks ground to a halt over
a disagreement on the price tag. MDV is thought to have rejected a cash and
paper offer in the 190p ballpark.
While it was said that the aborted acquisition would have been
fully underwritten, The City consensus is that MDV would continue to balk at
any bid less than 200p as CEO Bill Bogie believes that the company is undervalued.
Indeed, the shares are at about half the company's 330p peak.
SHP CEO Rolf Stahel has made no secret of where his ambitions
lie. Stahel is keen to acquire a European sales force, which MDV does possess,
as well as a profitable status. But whether Stahel is keen to acquire access
to a bunch of research projects remains to be seen.
MDV and SHP are both in attention deficit hyperactivity and
while MDV's methylphenidate is going backwards, SHP's Adderall and DextroStat
are selling like gangbusters. On the other hand, Bogie believes that MDV's Hepagene
hepatitis B vaccine could turn round the company's fortunes once it gets European
and U.S. approval.
SkyePharma (LSE:SKP; SKYEY) gained 7.25p (16 percent)
to 53.25p upon announcing that it too had been approached but is not in merger
talks now. The drug delivery company was also talking to U.S. investors last
week. SKP has a market cap of £251 million ($389 million).
Money on platforms
Privately held discovery companies continue to attract big
money from the venture crowd. Maxygen, which is developing DNA shuffling
technology to introduce new properties into single genes, raised $20 million
from a group of investors that include Technogen Associates, Lombard Odier,
Invemed Fund, CMEA Life Sciences