1 of 18 DOCUMENTS
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`The Guardian (London)
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`August 20, 2003
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`Celltech hit by failure of Crohns disease drug
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`BYLINE: Simon Bowers
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`SECTION: Guardian City Pages, Pg. 14
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`LENGTH: 391 words
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` Celltech, one of Britain's few profitable biotech businesses, yesterday wrote off pounds 7.5m after abandoning its Crohn's disease
`treatment, its most advanced drug in development, 15 months after it was shown to have no discernible benefits for sufferers.
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`New chief executive Goran Ando yesterday said he had dismissed proposals for the drug - called CDP 571 - to be put through further
`trials in the hope that it could eventually be used to target specific patient groups. Crohn's disease is an increasingly prevalent chronic
`inflammatory bowel condition.
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`Mr Ando's decision to ditch the drug sharpens the focus on Celltech's successor product, CDP 870, which is expected to enter final
`stage Crohn's patient trials before Christmas. Celltech's CDP 870 development partner Pfizer has already started advanced patient trials
`to discover whether the drug is effective in the treatment of rheumatoid arthritis.
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`Jeffrey Holford, an analyst at Citigroup, said: "The majority of Celltech's future growth prospects and valuation resides in its ability to
`develop and commercialise new biotech drugs, (with) CDP 870 remaining the key long-term growth driver.
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`"Any significant delay (as has already occurred to CDP 571) could result in a significant fall in share price."
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`CDP 870 is expected to enter a class of rheumatoid arthritis treatments forecast to be worth Dollars 3bn (pounds 1.9bn) by 2006. It is
`also expected to take about half of the market for a class of Crohn's treatments currently worth about Dollars 600m.
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`The failure of CDP 570 follows a string of disappointing late stage trial results for Crohn's disease therapies. Abbott Laboratories,
`Immunex and a joint venture between Elan and Biogen, are among those to have faced setbacks with Crohn's treatments in recent
`times.
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`Yesterday Celltech shares fell 16p to 352p, after the company posted a decline in pre-tax profit for the six months to June 30 from
`pounds 11.9m to pounds 2.1m. The drop includes one-off costs of pounds 18.8m, relating mainly to the cost of writing off CDP 570
`and of cutting about 200 jobs, primarily among the group's US sales force.
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`Commenting on the group's acquisition earlier this year of Oxford GlycoSciences, Celltech finance director Peter Allen said: "We have
`derived a lot of value essentially at no cost at all."
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`LOAD-DATE: August 20, 2003
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`LANGUAGE: ENGLISH
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`Copyright 2003 Guardian Newspapers Limited
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