Acambis acknowledges merger talks, but says discussions are over now

By Ronda Fears

Nashville, July 8 - Biodefense concern Acambis plc extended gains Friday on the heels of a strong rise Thursday following the terrorist attacks in London, even as the company said that while merger discussions have taken place, they are over now without a deal being inked.

"Acambis plc notes press speculation that the company is in discussions about the acquisition of a significant vaccines business," the company said in a prepared statement. "The board confirms that discussions have taken place although they are not currently ongoing."

Cambridge, U.K.-based Acambis specializes in developing vaccines for infectious diseases such as the West Nile virus and typhoid, plus is under contract with the U.S. National Institutes of Health to develop a new smallpox vaccine. Acambis also develops and conducts clinical trials of vaccines against yellow fever, Japanese encephalitis, and dengue fever.

Acambis shares in London rose 4p, or 1.72%, to 237p and in the United States added 19 cents, or 2.28%, to $8.54 on Friday, after marking a roughly 3% increase on Thursday.

Acambis has made several small acquisitions in the past few years, and in 2000 established a strategic alliance with a unit of Baxter International Inc. The company said in its annual report that although Baxter no longer has an equity stake in Acambis and a joint manufacturing agreement was terminated in 2004, "the strength of the relationship means that the two companies continue to work very closely in these other key operational areas," namely the smallpox vaccine.

But the company also made it clear that it is on the hunt.

"As part of the group's efforts to develop a more predictable revenue stream, Acambis are pursuing opportunities to acquire, in-license or co-market products," the company said in its annual report on file with the SEC.

"The group has the balance sheet strength, particularly from its cash and short-term investments balance of more than £100 million at Dec. 31, 2004, to give it considerable flexibility in pursuing such opportunities."

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