Skyepharma snapped up by Vectura in £440m merger

The drug landscape has been dramatically reshaped over the past two years due to a takeover frenzy

A Skyepharma inhaler

The global drug merger boom came to the quiet market town of Chippenham when local biotech firm Vectura agreed to buy big city UK rival Skyepharma in a £440m deal.

The takeover by the FTSE 250 firm will create a £1bn British company generating more than £150m of sales a year. Vectura, which was part formed from a spin-out from the University of Bath, develops inhalable dry-powder drugs to treat lung diseases such as emphysema and chronic bronchitis. London-based Skye makes similar products.

James Ward-Lilley, Vectura’s chief executive, will take the same role at the combined group; Skye’s chief executive, Peter Grant, will leave the company.

Skye shareholders will get 2.79 Vectura shares for every share they own, equivalent to 410.15p per share – a near-14 per cent premium to the current share price.

Shareholders can also take 15 per cent of the overall offer in cash if they choose. Skye’s top shareholder. HBM Healthcare Investments, which owns 28.5 per cent, and Aviva, a top six investor in Skye and top 10 in Ventura, both support the deal.

“It will lead to a global leader with a wider suite of products and further highlights the accelerated impetus new CEO James Ward-Lilley has brought to Vectura Group,” said Trevor Green of Aviva.

The drug landscape has been dramatically reshaped over the past two years due to a takeover frenzy, as firms seek to offset slowing sales from off-patent drugs by pooling their depleting strengths.

According to data from Dealogic, last year set a record for the highest ever level of healthcare deals, led by the $160bn (£106bn) tie-up between Pfizer and Allergan, following on from a previously record-breaking 2014.

The Vectura-Skye deal is smaller but no less important for Britain’s burgeoning biotech scene, which is growing strongly in intellectual hotbeds such as Cambridge and Oxford. The tie-up will lead to £10m of savings per year by 2018, as the new firm cuts duplicated roles.