AstraZeneca has agreed to buy Cambridge Antibody Technologies in a deal that values the biotech at 702 million pounds ($1.3 billion) in a move expected to boost the Anglo-Swedish pharmaceutical giant's thin product pipeline.

AstraZeneca said it would offer 1,320 pence a share ($24.98) in cash for Cambridge Antibody Technologies, a premium of around 67% to CAT's closing price last Friday.

The company already owns around 20% of CAT, which lowers the amount that AstraZeneca will have to pay out to 567 million pounds. AstraZeneca said that it made the offer because it is planning to make CAT the cornerstone of its biological therapeutics research and development plans and to boost its product pipeline.

Some analysts have expressed concern that the company's pipeline could be considered thin compared to peers such as GlaxoSmithKline and Roche, after the company's failures with drug candidates including lung cancer medication Iressa and blood thinner Exanta.

AstraZeneca said that Cambridge Antibody's capabilities, when combined with its development and marketing expertise, will deliver an expanded pipeline of novel biological therapeutics in disease areas including respiratory and inflammation, oncology and infection, neuroscience, cardiovascular and gastro-intestinal.

Cambridge Antibody is a biopharmaceutical company which develops human therapeutic antibodies to treat diseases such as cancer and rheumatoid arthritis.

"It is our intention to both expand and broaden the scope of our discovery and development pipeline and we expect that, by 2010, up to a quarter of our candidates for full scale development will be biological therapeutic agents," said David Brennan, chief executive officer of AstraZeneca.

CAT will also provide AstraZeneca with several other substantial assets, including a royalty stream on the sales of Humira - which CAT developed in partnership with Abbott Laboratories.