Chiroscience Group to Sell ChiroTech Chemistry Division

Strategic Insights -

Chiroscience Group, a top biotechnology company, is planning to sell its ChiroTech chemistry division in a move that could generate up to £80 million. The sale comes after the company received strong interest from potential buyers just a few weeks after putting ChiroTech on the market. ChiroTech, which made up 64% of Chiroscience's revenue in the first half of 1997, is a profitable subsidiary that operates independently and specializes in "chiral" chemistry, a growing field in drug research.

Key Takeaways:

  • Chiroscience Group plans to sell its ChiroTech chemistry division, which could generate up to £80 million.
  • ChiroTech made up 64% of Chiroscience's revenue in the first half of 1997, with £5.9 million in sales in the six months to August 1997.
  • ChiroTech operating profit surged to £2.3 million in the first half of 1997 from £200,000 a year earlier.
  • Chiroscience will use the proceeds from the sale to offset its spending rate of around £2 million a month, reducing the need for fund-raising efforts.
  • ChiroTech focus on compiling "libraries" of molecules used to discover new drugs, and produces refined "chiral" base chemicals for clinical trial programmes.
  • Potential buyers for ChiroTech include financial buyers who may spin it off, or another drug company looking to expand into "chiral" chemistry.
  • The sale comes after Celltech's sale of its "biologics" contract drug-making unit to Alusuisse-Lonza Holdings for £42 million in 1996.

Statistics:

  • ChiroTech generated £5.9 million in sales in the six months to August 1997.
  • ChiroTech operating profit surged to £2.3 million in the first half of 1997, up from £200,000 a year earlier.
  • Chiroscience's operating loss was £15.8 million at the half year.
  • Chiroscience has a spending rate of around £2 million a month.

Sources:

  • "Chiroscience founder to sell off ChiroTech division". The Independent. [No date available]
  • Alusuisse-Lonza Holdings. "Alusuisse-Lonza Holdings announces acquisition of Celltech Biologics". [No date available, released in 1996]