Biotech Tracker News - Cambridge and Oxford Unite
January 24, 2003 Cambridge Antibody Technology Group (CAT, NASDAQ: CATG) and Oxford Glycosciences (OGS, NASDAQ: OGSI) announced plans yesterday to merge, citing advantages that the combined company will have over two smaller companies. The two British companies are among the largest European biotechs, and both have been involved in the development of marketed drugs.  CAT is a leader in the development of fully human antibodies, using its phage display technology. CAT developed the anti-TNFa antibody Humira, which was licensed to Abbott (NYSE: ABT) and recently approved in the U.S. for the treatment of rheumatoid arthritis. CAT has developed several other antibodies for partners, including an anti-BlyS antibody called LymphoStat-B being developed by Human Genome Sciences (NASDAQ: HGSI). CAT is also developing its own antibody therapeutics. CAT-152 is an anti-TGFb2 antibody currently in phase III trials for the prevention of excessive post-operative scarring in patients undergoing surgery for glaucoma and cataracts. Although CAT-152 phase II data have been mixed, the program received a boost in May 2002 with positive data presented at the Association for Research in Vision and Ophthalmology (ARVO) 2002 Annual Meeting. Although close in location, OGS is quite different from CAT in terms of therapeutic focus and scientific expertise. OGS’s lead drug is Zavesca, which was approved in Europe last year for the treatment of type I Gaucher disease. Zavesca, an oral agent, is both more convenient and less costly than Genzyme’s (NASDAQ: GENZ) Cerezyme. However, Zavesca’s overall risk/benefit ratio and its cost-effectiveness profile remain unclear, and significant limitations on its use were included in the European Zavesca label. In June 2002, OGS received a “not approvable” complete response letter from the FDA indicating that additional trials would be necessary to demonstrate the safety and efficacy of Zavesca. OGS plans to amend Zavesca’s NDA in the near future, and has stated that discussions with the FDA suggest that an appropriate risk / benefit profile can be achieved via restricted use. We expect the restrictions to be similar to or even more extensive than the limitations on the European Zavesca label. CAT’s market capitalization is approximately twice that of OGS’s. According to the terms of the merger, each share of OGS stock will be converted to 0.362 shares of CAT stock. The companies cite potential synergies in terms of both development and marketing, but greater benefits could come from combining the two companies’ cash and streamlining operations.
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