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Private equity in £1bn swoop on drugs firm: AIM-listed Clinigen soars

Clinigen has become the latest on the London stock market to be targeted by private equity predators.

Shares in the AIM-listed pharmaceuticals firm rocketed by a quarter after the approach from Triton Investment Management, valuing it at £1billion.

Clinigen, which is based in Burton-on-Trent in Staffordshire, sells a range of medicines and provides services to other companies during clinical trials.

Target: Clinigen, which is based in Burton-on-Trent in Staffordshire, sells a range of medicines and provides services to other companies during clinical trials

The firm – founded by industry veteran Andrew Leaver in 2007 – has been seen as vulnerable since it issued a shock profit warning in June.

The approach from Triton sent shares up 23.5 per cent, or 148p, to 778.5p, valuing Leaver’s stake at £31million.

Leaver and his wife have a fortune estimated at around £230million.

A slew of British companies have been snapped up since the Covid crisis began. Private equity firms have swooped on household names such as the AA, Morrisons and LV, as well as less well-known firms with cutting-edge technology and services, including Ultra Electronics and Aggreko.

But foreign rivals have targeted British groups as well.

The raid on UK plc continued this week with a £1.24billion bid for ground-breaking artificial intelligence firm Blue Prism by American software company SS&C.

Paul Marshall, chairman of hedge fund Marshall Wace, slammed the City for allowing the stock market to fall behind its rivals because investors are too obsessed with chasing dividends.

Shot in the arm for Walmsley

Trial boost: Glaxosmithkline boss Emma Walmsley

Glaxosmithkline boss Emma Walmsley got another boost after the drugs giant said its Covid antibody treatment is effective against Covid’s Omicron variant.

There were fears mutations in the strain could make sotrovimab less powerful. But the company said early data indicated it could tackle Omicron. 

GSK developed the drug with Vir Biotechnology whose boss George Scangos said that the treatment was ‘deliberately designed with a mutating virus in mind’.

Walmsley, 52, has been fending off a campaign against her from Elliott. The hedge fund wants her to reapply for her job when the consumer division splits from the pharma arm next year.

This is leaving companies undervalued and unnecessarily ripe for takeovers, and risks London becoming a ‘sort of Jurassic Park’ where fund managers ‘dedicate themselves to clipping coupons rather than encouraging growth and innovation’.

Speculation about Clinigen’s future has ramped up since activist hedge fund Elliott Advisors built a 5 per cent stake in September.

It has now increased this to around 7.6 per cent, making Elliott, which is led by financier Paul Singer, the company’s largest shareholder. 

Elliott was reported to have held talks with Clinigen over the summer about a radical break-up of the company, which could include selling one or both of its businesses.

Elliott is a feared investor on Wall Street and in the City, as it is known for using aggressive tactics to shake up companies.

Its targets have included miner BHP, Glaxosmithkline and Premier Inn-owner Whitbread. 

It is not known if Elliott was also pushing Clinigen for a full sale of the company or if it had anything to do with Triton’s offer.

Clinigen has more than 1,000 employees spread across 14 countries. The company’s pharmaceuticals arm buys the rights to niche commercial drugs and expands their distribution.

It also helps patients get access to treatments that are not licensed in their countries.

The services division aids drug makers running clinical studies, helping with medicine sourcing, distribution and packaging.

But the company has struggled this year and admitted in June that profits would be more than 10 per cent lower than forecasts.

It blamed the pandemic for delaying clinical trials and disrupting oncology treatments.

This meant demand for Proleukin, a cancer drug it bought from Novartis which is administered in hospitals, had been ‘significantly’ weaker than expected.