Cancer Drugs Specialist Clinigen, Last Major UK Company to Close | Pharmaceutical industry

Cancer drug specialist Clinigen has agreed to a £ 1.2bn buyout deal from a London-based investment firm, becoming the last major UK firm to go private.

Triton Investment Management has offered to pay 883 pence for the company, whose main product is the acquired cancer drug Proleukin.

Clinigen, who is based in Burton-on-Trent, Staffordshire, said its board recommended the offer to shareholders, including New York-based hedge fund Elliott Management, with a 7.6% stake .

The news pushed Clinigen’s share price up to 15% early in the trading day, although it then leveled off at 901p, up 10.2%.

Elliott declined to comment. He is said to have called for the dismantling of Clinigen, but has never made his demands public – contrary to the pressure he has placed on drugmaker GSK and energy company SSE.

The hedge fund first publicly announced a 5.2% stake in Clinigen on September 10, when the share price was 659.5 pence, meaning it made a significant gain on his participation since.

Clinigen does not develop drugs itself, but acquires the rights to drugs from drug developers, produces them through contract manufacturers, and distributes them worldwide. A growing part of its business is providing services to other biotechnology and pharmaceutical companies, such as selling their drugs around the world and performing clinical trials for them. The group works with 34 of the 50 largest pharmaceutical companies.

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There has been a flurry of private equity buyouts in recent months. The Morrisons supermarket group was bought for £ 7 billion by US firm Clayton, Dublier & Rice, which beat SoftBank-owned Fortress Investment in a face-to-face auction.

David Cox, an analyst at investment bank Panmure Gordon, said the Clinigen buyout approach was inevitable after its shares fell earlier this year, when he warned that sales of its cancer drugs would be lower than expected due to the coronavirus pandemic. This mainly affected sales of Proleukin, which is given in hospitals as a drip or IV injection.

Clinigen, which employs over 1,000 people in 14 countries, was founded by Peter George from the merger of three healthcare companies in 2010. He floated the company on the London Stock Exchange two years later. George cashed in part of his stake for £ 16.5million in 2016, but retained a 3% stake at the time. It is not known whether he still owns Clinigen shares today.

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