Healthcare sector mergers and acquisitions comment – July 2008

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Antisoma’s acquisition of Xanthus Pharmaceuticals in May saw the UK drug developer take a huge leap in transforming itself into a major player in oncology products.

Its strategy is to focus on small molecule therapeutics which require smaller drug trials and a lighter regulatory approval process. Antisoma’s strategy for the acquisition of US-based Xanthus is to immediately gain critical mass and spread its investment risk across a multitude of new products in development. It is acquiring a business that replicates its model of focusing on the rapid commercialisation of early-stage drugs, managing the development of the products through pre-clinical testing and clinical trials. It will also be able to maximise the opportunities from the pipeline of products at Xanthus through its marketing partnerships with larger pharmaceutical companies such as Novartis.

Deals completed in the UK

Arthur Bradwell, a private investor, has acquired Binding Site Group Ltd, a developer and supplier of immuno-diagnostic kits and reagents, for an undisclosed sum. Binding Site is the developer of the Freelite tumour marker used in the diagnosis and monitoring of multiple myeloma, the second most common blood cancer after non-Hodgkin’s lymphoma.

Ultralase Ltd has acquired Cambridge Eye Laser Clinic Ltd, a provider of laser eye correction services, for an undisclosed sum. The deal expands Ultralase’s coverage in the UK following its 3i-backed buyout from Corporacion Dermoestetica SA of Spain earlier this year.

Sandik AB has acquired Eurocut Ltd, a manufacturer of medical instruments and implants. Sandvik has acquired the assets of Eurocut from The Medical House plc and as a result has reinforced its Materials Technology division’s expertise in the machining and production of medical devices.

Alliance Boots plc has acquired Hogan’s Pharmacy, an Irish pharmacy operator. The deal marks the beginning of Boots’ Irish acquisition activities and the group is considering other targets within the community pharmacy sector in Ireland.

Lambhill Court Ltd has acquired Peacock Medicare (Glasgow) Ltd, a nursing home operator. The deal includes Peacock Medicare’s Woodlands nursing home in Livingstone.

NeutraHealth plc has acquired Perrigo UK Ltd, a manufacturer and supplier of private label vitamins, minerals and supplements, for £6.4m. Perrigo UK, which will be renamed Brunel Healthcare Manufacturing, operates an MHRA approved manufacturing facility for the production of packaged medicines, minerals, supplements and vitamins for supply to major UK high street retailers including Sainsbury, Superdrug and Tesco. At the same time Neutrahealth has sold its OTC division to Perrigo Inc for £6.2m.

ECI Partners has completed the take-private of Premier Research Group plc, a provider of contract research services, for £60m. Premier Research is a fast-growing contract research organisation (CRO) which ECI intends to use as a vehicle for follow-on acquisitions in the sector.

Ampersand Care Ltd has acquired Swinton Hall Nursing Home Ltd, an operator of a 62-bed Manchester-based care home. The Group also acquired Shawe House Nursing Home Ltd, the operator of a 33-bed Manchester-based care home.

CareTech Holdings plc has acquired Valeo Ltd, an operator of care homes for people with learning difficulties, for £15.3m. CareTech now has over 180 residential care homes and 5 day centres across the UK with over 1,200 beds in residential services and 250 places in day services.

Antisoma plc has acquired Xanthus Pharmaceuticals Inc, a US developer of small-molecule therapeutics for the treatment of cancer and autoimmune disorders, for £26.8m. The transaction represents an exit for investors including HealthCare Ventures, GeneChem, Kestrel Ventures and Oxford Bioscience Partners and will give Antisoma a mature pipeline of oncology therapies.

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