A biotech firm involved in developing drugs for fighting hospital superbugs yesterday backed a £305 million takeover by pharmaceuticals giant Novartis.
The proposed deal for Neu-Tec Pharma will earn windfalls for the couple who set up the business at the University of Manchester less than ten years ago.
Professor James Burnie and Professor Ruth Matthews will earn about £21 million from their combined seven per cent holding, should the deal go through.
The biotech firm, which employs 20 people, has two drugs at the later stages of development but does not have an attachment to a larger pharmaceutical company in order to fund the roll out of the drugs.
The first potential product is Mycograb - an anti-fungal drug which helps fight invasive thrush - one of the most common and life-threatening hospital infections. It is currently awaiting European clearance.
The second is Aurograb, currently under clinical trials, for the treatment of superbugs like MRSA. However, it will not be submitted for approval until 2010.
NeuTec, which was founded in 1997 and has yet to make a profit, said the proposed takeover would give it the power to access and penetrate the market more quickly.
Daniel Vasella, chairman and chief executive of Novartis, said the deal would strengthen the Swiss group's pipeline of biological drugs, as well as boosting its antiinfective portfolio.
Novartis is offering 1050p for each NeuTec share, an increase of 108.9 per cent on Monday's closing price of 5023/4p, valuing the company at around £305.1 million.
"We believe this is a good and full offer after having completed due diligence," Novartis spokesman John Gilardi said. NeuTec's board is recommending the offer and Novartis already has the approval of 39.1 per cent of shareholders.
The deal highlights the type of price big pharmaceutical companies are prepared to offer for biotechnology assets.
In May, AstraZeneca agreed to pay a 67 per cent premium to acquire Cambridge Antibody Technology Group in a £700 million deal and last year Pfizer paid £1.02 billion - an 84 per cent premium - for anti-infectives firm Vicuron Pharmaceuticals.
Dresdner Kleinwort Wasserstein analysts said in a note that while the deal might look expensive, Novartis was only paying around one times likely sales of Mycograb.
On Tuesday Novartis unveiled a separate, £273 million deal to boost its antiviral-drug pipeline by buying rights to the hepatitis C drug Albuferon from US biotech company Human Genome Sciences.
The deals - which follow one in March worth £283 million with US biotech company Idenix Pharmaceuticals for another experimental hepatitis C treatment - underscore Novartis's reputation as an aggressive acquirer of medicines developed by smaller companies.
Shares closed up 155p at 1080.