CAT-OGS: Making it work
The proposed merger of Cambridge Antibody Technology Group plc and Oxford GlycoSciences plc would create the first European biotech company with a cash balance competitive with the larger U.S. players - indeed, the combined company would have the most cash of any European biotech. Given CAT's need to beef up its late-stage pipeline, an area where OGS provides little help, it is likely that the cash will be used to buy more mature products.
The closing is not entirely a foregone conclusion, as CAT's below cash-value offer may leave room for a hostile competitive bid. But saving that contingency, the transaction looks to mirror an earlier move to create scale by swapping stock for cash, when Exelixis Inc. (EXEL, South San Francisco, Calif.) bought Genomica Corp. (Boulder, Colo.) and its $110.8 million in cash and investments with $110 million in EXEL stock (see BioCentury, Dec. 3, 2001). ...