The deal ends months of speculation surrounding the independence of Medeva. Yesterday it confirmed that talks between the company and its rival, Shire Pharmaceuticals, collapsed in July, and subsequent discussions with Elan, the Irish pharmaceutical group, were aborted in September. Medeva is believed to have made the first move in yesterday's deal a month ago.
Celltech, which is currently loss-making, said the deal gave it a fine marketing partner for its pipeline of products, the first of which were due on the market next year. Dr Peter Fellner, who remains as chief executive of the group, said: "This is a defining moment for us. The Celltech-Chiroscience deal was about gaining critical mass in research and development. What we are trying to do here is turn ourselves into a biopharmaceuticals company in the top tier."
Dr Bill Bogie, chief executive of Medeva, will join the group as a non- executive. He is to receive compensation thought to exceed pounds 0.5m for termination of his 18-month contract. He declined to comment yesterday, but a spokesman for Medeva said: "It's Celltech's day."
Dr Fellner added the group planned to dispose of its non-core activities, which would likely include Medeva's manufacturing facilities. Both Medeva's hepagene hepatitis drug, which has obtained disappointing results in trials, and its methylphenidate hyperactivity treatment would be core at least until the publication of further clinical trial data.
Medeva's operations are to be renamed Celltech Medeva and will be headed by Medeva's current finance director, Gary Watts. Celltech is offering 34 shares for every 100 Medeva shares, valuing Medeva at pounds 563m on Wednesday's closing price and representing a 16 per cent premium to its share price before the bid talks were revealed last month. Celltech shares closed down 7.5p at 477.5p yesterday. Medeva shares closed up 3p at 156.5p.