CAT Gains from AZ Antibody Drive

Executive Summary

AstraZeneca PLC's November 22 drug development alliance with Cambridge Antibody Technology Group PLC was the Big Pharma's second major commitment to large molecules within little more than a year. AZ's desire to embrace biologicals-- evident since its October 2003 cancer deal with Abgenix Inc. --reflects a growing movement among many hitherto small molecule-focused pharma firms to bolster their anemic pipelines with specialty products. And given its lack of experience in protein development, AZ was prepared to accept a deal structure that was unusually favorable to the biotech. Both this and the deal's timing are good news for CAT.