German biotechnology group MediGene AG says it is willing pay 50 million euros ($64.2 million) in shares to buy UK group Avidex Ltd.

Under the offer, which has majority backing, Avidex stockholders stand to gain around 8.2 million in MediGene shares, and the deal could be completed as early next month, the group said in a statement.

The move will enable MediGene to tap into Avidex’ portfolio of cancer and autoimmune diseases candidates, including its lead product RhuDex, an orally-available CD80 inhibitor in development for the treatment of rheumatoid arthritis. The agent is about to enter Phase II evaluation, and carries a peak sales forecast of 1.5 billion euros.

Commenting on the deal, MediGene’s Chief Executive Peter Heinrich said: “The acquisition of Avidex is a major step forward for MediGene and makes our portfolio one of the strongest among the European biotech companies. Avidex' autoimmune and cancer product portfolio nicely complements our pipeline and offers additional partnering opportunities."

Following the acquisition of Avidex, MediGene's revenues forecast for 2006 stays the same at 20-25 million euros, but its net loss expectation has widened from 10-15 million euros to 20 million euros. Earlier this year, the group was forced to trim down its sales target after US regulators extended their review of its genital warts cream to the end of October.