In the wake of its purchase of Oxford GlycoSciences in May, Celltech of Slough, UK, eliminated two key bioinformatics-related activities last week: a target discovery facility in Seattle; and protein database firm Confirmant — a joint venture between OGS and British telecom Marconi.
In an announcement declaring the completion of the OGS integration process, Celltech said that it had carried out an “extensive marketing process” for OGS’s proteomics business, but was unable to find a buyer. Therefore, the OGS proteomics group — along with Confirmant — will be closed down.
Celltech acquired OGS for its oncology research programs — a £101.4 million ($173 million) purchase that led directly to the elimination of the Seattle research facility. Last week, Celltech said in a statement that it plans to direct its resources toward its development pipeline and will therefore “cease in-house target discovery activities and will focus on in-licensing of targets from academia and other companies. In this regard, Celltech acquired six novel oncology targets following its acquisition of Oxford GlycoSciences.”
The Seattle facility, which currently employs around 90 people, will close in early 2004. Bioinformatics activities currently based there will be transferred to Celltech’s UK operations, the company said.
Celltech’s Seattle target discovery group started life in 1991 as Darwin Molecular, founded by Lee Hood. Darwin Molecular was acquired in 1996 by Chiroscience, which was itself acquired by Celltech in 1999.
Despite the “exceptional” quality of the research conducted at the site, Celltech CEO Goran Ando said, “it has proven challenging to generate a sustained flow of novel targets from a relatively small group.” The company expects to save £11.5 million ($20 million) annually by closing the facility.
The Confirmant closure is a bit more complicated. Marconi and OGS each contributed £15 million cash when the company was launched in 2001 [BioInform 06-25-01]. Last week, Marconi — which has been financially struggling over the past year and a half as a result of the tough telecom market — sold its share of the business back to OGS for a substantial loss at £4 million. “Our strategic decision is that we will focus on our telecom business. Therefore, anything that is non-telecom is non-core to us at the moment, and that was the reason why we sold our interest,” Marconi spokesman Joe Kelly told BioInform.
Richard Bungay, Celltech’s director of corporate communications, explained to BioInform via e-mail that it was necessary to buy back OGS’s share of Confirmant “whether we sold or closed the proteomics business, since this was an important part of the overall proteomics business proposition.” If Celltech had found a buyer for the proteomics business, the sale would have included Confirmant, he said.
Celltech has mined Confirmant’s Protein Atlas database for information of interest to its in-house research programs, and “naturally we would be prepared to sell the remaining database to any interested parties,” Bungay said. However, he added, the company has not fully explored the possibility of selling the database business separately, “since we were hoping to sell the whole business as a going concern.”
Confirmant’s remaining cash holdings will be used to cover the costs of closing OGS’s proteomics business.
Confirmant employed 20 people as of January 2003, and the Protein Atlas database contained 16,495 protein-coding genes that it identified by mapping experimentally derived peptides from human samples back to the genome. The company’s business was built on the strength of this experimental approach, which it claimed would generate extremely high-quality data, and be too expensive for public-sector efforts to duplicate.
Confirmant signed only one paying customer — the University of Pennsylvania — since its launch. The Penn deal closed just weeks before OGS entered a whirlwind of takeover negotiations early this year, however — first with Cambridge Antibody Technologies, and then with Celltech — followed by seven months of uncertainty while Celltech mulled the fate of the OGS proteomics group.
It remains unclear whether Confirmant would have been able to secure more customers for its database under more stable circumstances.