The drugs giant is paying pounds 5m for the world-wide marketing and development rights for Cantab's DISC HSV vaccine for genital herpes and investing pounds 6m for a 4 per cent stake in the company. The shares, which have risen nearly 200p since the beginning of March, dived 60p to pounds 10.12p yesterday, but are still well up on the 560p at which they stood in October.
The deal with Glaxo, the world's leading herpes group, had been widely anticipated and analysts attributed the fall in the price to profit-taking. Duncan Moore at Morgan Stanley said it was a case of "buy on the rumour, sell on the news".
However, Jurek Sikorski, who joined Cantab as chief executive last August, welcomed yesterday's deal, which follows licensing deals for other potential drugs with Pfizer and SmithKline Beecham. "The signing of this agreement marks a significant step forward for Cantab," he said, "because all three are in the top 10 in the pharmaceuticals industry world-wide. I don't know any other biotechnology company which has more than three corporate partners in the top 10."
The results of UK phase I trials of the vaccine in 24 healthy volunteers will be announced at a strategy briefing today. If it reaches the market, expected early next century, HSV will represent the first vaccine in the Glaxo portfolio.