BioWorld International Correspondent

LONDON - Celltech Group plc is taking back full rights to CDP 870 following Pfizer Inc.'s request last month to renegotiate financial terms of the $280 million deal agreed to in March 2001.

Celltech said it refused to make material changes to the contract, which was signed with Pharmacia Corp.

Peter Allen, Celltech's chief financial officer, told BioWorld International, "Pfizer has been very good and made a quick decision and that helped us a lot because there is less uncertainty." He added that he believed Pfizer was within its rights to ask to renegotiate and there was "no rancor or bitterness" on the part of anyone at Celltech. "We did the deal with Pharmacia before Pfizer bought them, and then [Pfizer] decided the terms of the deal weren't right."

Slough-based Celltech will not have to repay any of the $50 million up-front payment, milestones or Pfizer's development costs. "We are getting this back after two and a half years of development effort, which has been very expensive and very productive," Allen said. "Now we have the opportunity to take CDP 870 forward, not only in Crohn's but also in rheumatoid arthritis." Pfizer has indicated it will transfer all data during the 90-day notice period allowed for in the original contract.

Two Phase III trials in RA are under way, and Pfizer will continue to fund those during the 90-day period. Allen said the trials are largely complete. "There are no great cost implications of taking these on."

When it said it wanted to renegotiate the deal, Pfizer also announced a delay to the development program of about one year. Allen said, "There may not be quite the same delay now, but there will be some."

Celltech will decide in the next few weeks whether to complete development by itself or find another partner. "That depends on expressions of interest," Allen said. "We have already had interest from big pharma and from biotechs, and I expect more now that we've made this announcement."

Celltech recently held a U.S. investigator meeting to initiate trials of CDP 870 in Crohn's disease, and now intends to explore other indications in which anti-TNF-alpha inhibitors may be effective, such as psoriasis and ankylosing spondylitis. Under the Pharmacia collaboration, Celltech had no rights in those diseases.

"This is a great opportunity for us - it is not often you pick up a drug with so much expensive development work behind it," Allen said.

Celltech's director of development, Patrick Round, has been appointed to the newly created position of global director for CDP 870. He was replaced as director of development by Grahaem Brown, who joined the company after 20 years of drug development experience in pharmaceutical companies, including Pfizer and Pharmacia.

Celltech shares rose 13 pence to £3.64 Monday morning when the company announced it was getting back full rights to CDP 870.