British Bio seeking German deal

CASH-RICH, product-poor biotechnology group British Biotech has confirmed it is in merger talks with a German pharmaceuticals group. The company, in a statement flushed out by a Sunday newspaper story, said it was 'in preliminary merger discussions with MorphoSys...which may or may not lead to an offer'.

MorphoSys, which specialises in antibody-based products, is listed on Germany's exchange for high-tech companies, the Neuer Markt. It is developing antibody technology for treatments for diseases including cancer - one of British Biotech's main interests. British Biotech declined to comment on how the combined operation would be run, or where it would be listed, should there be a merger.

British Biotech was the flagship of the UK biotech sector with a market value of almost £2bn before its fall from grace in 1998 amid allegations of misleading statements and insider dealing. Since then it has been hit by product disappointments. Today it is valued at £33m, thanks to its cash pile.

Chief executive Elliot Goldstein has been open about doing a deal. Last month he clinched a joint venture with US gene company Genesoft to develop antibiotics.