Cantab is set to reveal that it is buying the two drugs, currently in clinical trials in the US, from the American biotechnology firm ImmunoLogic.
The acquisition will be funded through the issue of around two million Cantab shares at a slight premium to Friday's closing share price of 202.5p, leaving ImmunoLogic with nearly 6 per cent of the UK group.
The deal will give Cantab, which has a number of other vaccines in its pipeline, access to two potentially huge markets. Recent research shows that there are 50 million daily smokers in the US alone, 17 million of whom attempt to quit smoking each year. More than $350m is spent annually on prescription and over-the-counter drugs by people trying to give up nicotine in the US.
The cocaine vaccine will target the millions of heavy users of the drug. In the US, more than two million people use cocaine on a regular basis and 900,000 of them seek treatment each year.
The vaccines are designed to generate antibodies that neutralise the effects of the two substances. Experts believe they could have an edge over conventional treatments, which have a high relapse rate.
Cantab has also agreed to pay ImmunoLogic a further $11m if the two vaccines successfully complete Phase II clinical trials - the intermediate stage of drugs testing. In return, ImmunoLogic will transfer $6m in cash to Cantab to fund the development of the two compounds until the end of the year 2000.