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Celltech Reveals Plans for OGS: Proteomics Unit to be Divested, Parts of Oncology to Stay

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After winning the bidding war for Oxford GlycoSciences in April, Celltech announced its proteomics division will be divested, in presenting its plans for the company at its annual general meeting last month. Meanwhile, the integration of OGS’ business is going full steam ahead.

As of last week, Celltech was close to owning 90 percent of OGS’ shares, according to Richard Bungay, Celltech’s director for corporate communications and strategic planning. Once the company owns 90 percent of the shares, it can force the remaining shareholders to sell.

In the meantime, Celltech has taken over executive responsibility for OGS’ business and has been in control for several weeks now. “We have essentially removed the OGS board [and] we have put our own board in,” Bungay said. Ian Nichelson, Celltech’s director of business development, has taken the helm as interim CEO, replacing OGS’ CEO David Ebsworth, and several Celltech staff are currently working on the integration, both at OGS’ and Celltech’s sites.

So who’s in and who’s out? The fate of the proteomics contract service business — created only last year as an independent unit of OGS — appears to be sealed: Celltech is looking to divest this part of the business “because it doesn’t really fit in with what Celltech is trying to do in its own business,” said Bungay. The company is trying to sell the unit — which employs about 80 of the 200 OGS staff, depending on how support functions are counted — either to another firm, or through a management buyout, and is currently pursuing both options in parallel in order to obtain the best value. Bungay said that Celltech is talking to more than one potential buyer at the moment.

According to a report issued by stockbroking firm Williams de Broë last month, an MBO team has already been formed, but Bungay would not confirm who of OGS’ former management is part of that group. Most recently, the OGS proteomics unit was headed by Andrew Lyall, director of protein discovery. Other key managers of the unit included Christian Rohlff, director of proteome research collaborations, and Thakor Patel.

Ongoing contracts of the proteomics unit — which recently signed a new agreement with Pfizer (see PM 01-13-03) — are remaining intact while divestment efforts are ongoing. “It’s business as usual as far as our existing customers go,” said Bungay.

While it is clear that proteomics will not become part of Celltech, the company yet needs to decide what will happen to Confirmant, a 50-50 joint venture between OGS and telecommunications firm Marconi that was launched in June of 2001 (see PM 03-04-02).

Confirmant sells a database, Protein Atlas of the Human Genome, which provides protein data mapped onto the genome and is based on experimental data from OGS’ proteomics unit. Celltech still needs to assess whether or not Confirmant fits into its business, said Bungay. “If not, we will either divest it, or, if we don’t perceive a future for it, potentially, with Marconi’s agreement, may look to shut it down.”

Keeping the Targets, Not the Technology

In terms of OGS’ intellectual property portfolio, Celltech has decided to keep a number of patents covering oncology targets that were discovered using the proteomics platform. “Oncology is an area where we have been looking to build our own capabilities,” said Bungay, “so that’s a very neat set for us.” These targets are suitable for developing therapeutic antibodies and small molecules, both approaches Celltech is pursuing, he added. However, Celltech is not interested in keeping the proteomics platform for the discovery of new oncology targets.

Apart from these targets, the company will review OGS’ oncology research programs and plans to carry forward a number of them. This would include taking on a number of the OGS staff in this area.

Antifungal targets, on the other hand, are not a core area for Celltech, and it will “potentially look to spin out the IP and some very early-stage research programs,” Bungay said.

With regard to OGS’ storage disorder unit, Celltech plans to retain the royalty stream it receives from Zavesca, a drug for type 1 Gaucher disease, and OGS’s first drug on the market. However, Celltech will also consider potential bids for the drug from OGS’ marketing partners, Actelion and Teva Pharmaceutical Industries. Celltech is currently assessing whether or not it will further develop OGT-923, an analogue of Zavesca that is currently in phase I clinical trials.

OGS also has ongoing drug development collaborations with antibody companies Medarex, based in the US, and BioInvent in Sweden. While Celltech, which has its own in-house antibody capabilities, will probably not initiate any new projects, it plans to evaluate the existing projects and decide which of them to take forward, Bungay said.

It is also not clear yet how many OGS employees will join Celltech, but the company is interested in recruiting researchers from the oncology unit, as well as bioinformaticists, which Bungay acknowledged are hard to find in the UK. “There are clearly some very good-quality scientists there, and it would be a shame to see them drift away,” he said.

Celltech anticipates to complete the integration of OGS by September and to present further details with its half-year results, which it plans to announce in early September.

— JK

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