BioWorld International Correspondent

LONDON - Celltech plc was left as the only true contender in the race for Oxford GlycoSciences plc after OGS said Friday it was not expecting anyone else to make a bid for the company.

That followed the withdrawal of biotechnology entrepreneurs Chris Evans and Alan Goodman, who, following completion of their due diligence, concluded, "An offer at a value in excess of that currently offered by the outstanding offer from Celltech Group plc is not a viable proposition."

OGS responded by saying it would respond in due course, but later Friday recommended its shareholders accept Celltech's bid of £101.4 million (US$173 million). The OGS board said that after discussions with potential buyers it also looked at breaking up the business, but concluded it could not be sure that would provide more value than the Celltech offer.

"While the OGS board continues to believe that the offer by Celltech does not reflect fully the intrinsic value of the business and cash of OGS, in the absence of any other options for realizing value for shareholders in the near term, the OGS board, which has been so advised by Goldman Sachs International, recommends that shareholders accept the offer by Celltech," it said in a press release.

At the beginning of April OGS said it was in discussions with three interested parties (including Evans and Goodman) regarding a potential offer for the company. But the other two, an international pharmaceutical company and a U.S.-based biotechnology company, have also declined to make a bid.

OGS's prospects were further undermined Wednesday when it announced it was delaying the release of its annual results. The figures were to have been published Wednesday, but the company was granted an extension until May 6.

The reluctance of Evans/Goodman to make a higher offer than Celltech reflects OGS's cash burn of £2.5 to £3 million per month, plus the fact that the company has expensive leasehold commitments on its facilities. In addition, OGS's proteomics database business is tied to Confirmant, a joint venture with London-based Marconi plc, a telecommunications equipment manufacturer.

Announcing that they would not be bidding, Evans and Goodman added that "they intend to maintain a watching brief on the situation and reserve the right to make an offer for OGS should Celltech's offer lapse."

The bidding for OGS was sparked on Jan. 23. Cambridge Antibody Technology Group plc, of Cambridge, announced an agreed all-share offer. That was worth £110 million when it was made, but the news hit CAT's shares and the offer fell sharply in value. They have fallen from 540 pence on Jan. 22 to 349.5 pence on April 10.