Celltech: Building critical mass

Back-to-School Issue

Lesson: Cash is king, no matter what the source, and even mundane M&A can provide a transformational platform when it provides financial degrees of freedom.

Celltech (LSE:CCH; CLL, Slough, U.K.) has used acquisitions to build critical mass in the European environment, where it is much harder to access the capital to grow organically. Indeed, the company has raised money from the public equity markets only once, bringing in just under $50 million in its IPO at the end of 1993.

CCH has done five acquisitions over the past five years. The first two were strategic in the sense that they put the antibody company onto a new development curve, while the last three have filled in missing pieces or added interesting ones.

“The company had developed some very good science, but its business strategy was a little bit opaque,” said former CEO Peter Fellner, who is now chairman of both CCH and British Biotech plc (LSE:BBG; BBIOY, Oxford, U.K.).

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