The Cambridge-based biotech firm has decided against selling itself, and has instead opted for a strategic alliance with US pharmaceutical giant Baxter. This tie-up also involves a £27.8m investment by Baxter in Peptide, which is planning to change its name to Acambis. A third major development is the news that OraVax, its US subsidiary, has been awarded a $343m contract from the US government to develop a smallpox vaccine. The contract, which is set to run for 20 years, is to allow the US government to build up a stockpile of the vaccine to counter a bioterrorist attack. Separately, the Arilvax yellow fever vaccine successfully passed Phase III trials and is set to be marketed by Baxter. The balance sheet is still strong with over £15.7m of cash. Overall, Peptide/Acambis is in rude health. A strong buy.