Biocompatibles May Be Discussing Possible Offer With Bayer, Analysts Say

Biocompatibles International Plc, a U.K. developer of cancer treatments, may be a target for Bayer AG as the German company looks to expand in cancer, analysts from Finncap and Edison Investment Research Ltd. said.

Biocompatibles makes gel beads loaded with cancer drugs that deliver medicine in a more controlled manner to tumors. The Farnham, England-based company also produces devices to deliver drugs to treat prostate tumors. Biocompatibles has a partnership with Bayer to develop a treatment for liver cancer, a combination of the drug-eluting beads and Bayer’s Nexavar.

Biocompatibles said Oct. 28 that it was in “advanced talks” with an unidentified potential bidder. Bayer is seeking to expand its drug unit and would be able to finance a deal as big as the 17 billion-euro ($23.8 billion) takeover of Schering AG, said Chief Executive Officer Marijn Dekkers, at a Sept. 28 press dinner. The Leverkusen, Germany-based company is looking to buy drug assets in cardiology, oncology and women’s health.

“It might be Bayer,” Keith Redpath, a Finncap analyst, said in a phone interview. “They’ve got this deal with beads with Biocompatibles -- that is actually in some serious clinical trials now -- which is an adjunct to Nexavar.”

Anna Keeble, a spokeswoman for Biocompatibles, declined to comment. Christian Hartel, a Bayer spokesman, declined to comment.

Biocompatibles fell 10 pence, or 2.9 percent, to 332.5 pence at the 4:30 p.m. close in London trading. The company has climbed 45 percent this year, giving it a market value of 130.9 million pounds ($210.5 million).

‘Four-Pound Mark’

“Bayer might be interested,” John Savin, an analyst for Edison, said in a phone interview. “The market is indicating that it would accept something possibly about the four-pound mark” for Biocompatibles, he said. “Whether that’s a reasonable bid for a high-growth stock is for the shareholders to decide.”

Nomura Code Analyst Michael King on Oct. 26 cited Biocompatibles’ partners Terumo Corp., AngioDynamics Inc. and SciClone Pharmaceuticals Inc., as well as London-based BTG Plc, as possible interested parties in an interview last month. Biocompatibles also has a partnership with AstraZeneca Plc in Type 2 diabetes and obesity.

Savin said that Angiodynamics and BTG were the “obvious logical” suitors for Biocompatibles, which he valued at 520 pence a share, according to a Sept. 9 note.

Abigail Baron, an AstraZeneca spokeswoman, and Ana Kapor, a SciClone spokeswoman, said their companies don’t comment on market speculation. E-mailed requests for comment to BTG, Tokyo- based Terumo and Angiodynamics weren’t immediately returned.

To contact the reporter on this story: Chris Spillane in London at cspillane3@bloomberg.net.

To contact the editor responsible for this story: Colin Keatinge at ckeatinge@bloomberg.net.

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