AstraZeneca pays £75m for CAT stake

DRUGS GIANT AstraZeneca is splashing out £75m on a near-20% stake in troubled biotech Cambridge Antibody Technology in a bid to bolster its pipeline of new treatments.

Just days after its shares tumbled on concerns about the safety of its cholesterol-buster Crestor, Astra said the two companies were setting up a five-year drug development alliance. They plan a minimum of 25 programmes, mainly in the field of inflammatory disorders.

AstraZeneca also has the right to opt into or jointly develop other projects. It is buying just over 10m shares at 734p each, a 30% premium to CAT's opening price of 563&frac34p today.

AstraZeneca chief executive Sir Tom McKillop said: 'I see this alliance as a major component of AstraZeneca's strategy to develop new therapeutics for inflammatory and respiratory diseases.'

The premium paid reflects the company's need to plug a hole that is appearing in its drug development pipeline.

The deal is perfect timing for CAT, whose royalties dispute with US giant Abbott Laboratories goes to the High Court today. CAT claims it should receive more royalties for work on arthritis treatment Humira than Abbott is willing to pay, and the outcome is crucial to the group's future revenues.

Results from CAT today showed pre-tax losses shrank by £3.7m to £38m in the year to 30 September.