LONDON - PowderJect Pharmaceuticals plc confirmed that it is in discussions to buy the vaccines manufacturing arm of Celltech Group plc, a move that would turn PowderJect, set up to commercialize needle-free injection technology, into an integrated vaccines company.

Terms have not been finalized but Celltech put a price tag of #40 (US$59 million) to #60 million (US$88 million) on the facility when it announced plans to dispose of it last year. Celltech, based in Slough and the UK's largest biotechnology company, acquired the business when it bought the pharmaceutical company Medeva plc.

The vaccine manufacturing plant in Liverpool employs 600, and is one of the most advanced in Europe, having pioneered the large-scale manufacture of Hepagene, a genetically engineered vaccine against hepatitis B that recently gained European marketing approval. It also manufactures a genetically engineered yellow fever vaccine that is approved in Europe, and recently succeeded in Phase III trials in the U.S. carried out by Peptide Therapeutics Group plc, which licensed U.S. rights from Medeva.

In 1998 the plant had turnover of #60 million, but sales fell to #35 million in 1999, following problems in the manufacture of a flu vaccine.

Celltech is retaining the marketing operations of Medeva Vaccines and also has said it may seek to retain marketing rights to Hepagene.

From PowderJect's perspective, buying the vaccines business would give it immediate revenue from the existing vaccine products. The business includes a pilot manufacturing plant, and this could be used to develop powder formulations of conventional vaccines for use with PowderJect's needleless injection system, which propels drug particles through the skin with a supersonic jet of gas.

It also would allow PowderJect, based in Oxford, to move into the manufacturing of DNA vaccines, an area where it has an extensive collaboration with Glaxo Wellcome plc, and where it believes its injection system is particularly appropriate.

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