OGS: Going, Going, Gone
OGS-once one of European biotech's leading players-recently sold to compatriot Celltech for less than cash value. The deal shows that in the current climate, even bidding wars don't always push up acquisition prices, and cash remains king.
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Recent M&A activity may have led to fewer top ranking UK biotech firms, but far from weakening the sector, it's actually providing opportunities for a newer generation of companies. Chroma Therapeutics Ltd. provides a good illustration of how experienced UK management talent is moving to lead younger, often private firms.
A look at twenty European biotech companies' cash holdings as a percentage of their market values. Thanks to strengthening investor sentiment in European biotech, certain firms are enjoying bumper years, while others continue to slump with market caps below the value of their cash holdings.
Critics charge that Cambridge Antibody's lack of involvement to date in the clinical fate of its antibodies has caused it to stagnate and opened up a significant gap in the firm's pipeline. The recent renegotiation of its anti-TGF-beta deal with Genzyme, however, demonstrates CAT's willingness to take increased risks, and that it recognizes the need to take a greater stake in the development of its own product candidates. Once CAT begins to buy in the products necessary to invigorate its pipeline it will be easier to look past the firm's lackluster dealmaking and a royalty dispute with Abbott over Humira. After all, CAT has an industry-leading technology platform and an ample cash-pile, and there have been recent signs of life in the antibody licensing market.