BioWorld International Correspondent

LONDON - Celltech Group plc announced it is closing Oxford GlycoSciences plc's flagship proteomics business, after failing to find a buyer for the unit, which it acquired when it took over Oxford GlycoSciences in April.

Peter Allen, Celltech's chief financial officer, told BioWorld International: "We spent six months trying to sell it, both to get value and to assist the staff. There was no interest, which tells everyone something about what type of business was built up by [Oxford GlycoSciences]."

The ax also will fall on Confirmant Ltd., a 50-50 joint venture between Oxford GlycoSciences (OGS) and the telecom equipment manufacturer Marconi Corp. plc. It was set up to provide hosting and management services for proteomics databases. Allen said the joint venture had no customers.

OGS and Marconi put £30 million into Confirmant when they founded it in June 2001. Celltech is paying Marconi more than £4 million (US$6.8 million) for its share, and says there is enough money left over to cover the cost of closing Confirmant and the proteomics business unit.

The move completes the integration of OGS into Slough-based Celltech, and Celltech said that, as promised, the acquisition was cash and earnings neutral.

After closing the proteomics business that was the heart of OGS, Celltech is left with six oncology programs in preclinical development, a royalty stream from Zavesca (OGS's marketed treatment for glycolipid storage disorders) and a Phase I development program, CDP923, in inherited storage disorders.

Allen said all six oncology programs are being worked on, and 40 OGS employees will be retained at a satellite facility in Oxford, UK, to progress development.

At the same time, Celltech said it is closing its U.S. target discovery facility in Seattle at which 90 people are employed, as part of a reorganization of its research and development activities. Allen said the company was spreading itself too thin by doing its own target discovery.

"We can source targets from elsewhere," he said. "We've got world-leading technology in the antibody field, and we've not found it difficult to attract licensers. As a package, our technology is compelling for people looking to license out targets."

The Seattle facility is based on Darwin Molecular Inc., acquired by Chiroscience plc in 1996 and subsequently taken over by Celltech when it bought Chiroscience in 1999. Support for Celltech's collaboration with Amgen Inc., of Thousand Oaks, Calif., in osteoporosis and the validation of targets discovered in Seattle will be transferred to Slough.

Allen said the closure would lead to cost savings of £11.5 million annually, which will be spent on accelerating Celltech's early stage development pipeline.

Celltech shares fell 8 percent to £3.40 last week. That is on top of a 15 percent fall a week earlier, after Celltech said Pfizer Inc. wanted to re-negotiate the license for CDP870 in the treatment of rheumatoid arthritis. (See BioWorld International, Nov. 19, 2003.)