Celltech Group plc announced Friday that it intends to seek alisting on the London Stock Exchange (LSE).
While the exact details of the size and timing of the stockoffering are not yet finalized, the company said it expects toraise more than 30 million pounds (about U.S.$45.5 million)from the sale of new shares of common stock, which "will beopen to the public but focused on institutional investors,"explained Peter Allen, Celltech's finance director.
Baring Brothers & Co. Ltd. are the bankers for the transaction;the brokers will be Cazemove in the United Kingdom and SwissBanc Corp. in Europe. There are no plans currently to marketthe shares in the U.S., Allen told BioWorld.
Celltech is currently capitalized at 160 million pounds (U.S.$242million).
Celltech of Slough, England, is the third company in the UnitedKingdom to seek a listing on the LSE in the past year or so, butthe first that is not already trading shares on a U.S. exchange.For instance, Cantab Pharmaceuticals plc, which announcedSept. 22 that it had issued a preliminary prospectus for listingon the LSE, completed an initial public offering (IPO) in the U.S.in June 1992. The Cambridge, England, company's AmericanDepositary Shares (ADRs) trade on the NASDAQ Market Systemas CNTBY.
British Bio-technology Group plc was the first biotechnologycompany to be listed on the LSE. In June 1992, the Oxford,England, company offered its shares in a global IPO. The sharesare listed on the LSE and the ADRs trade on NASDAQ as BBIOY.
The LSE has been relaxing its guidelines to make it easier forbiopharmaceutical companies to gain access to public funding.Previously, the London exchange required that any companyseeking a listing show a five-year profit record, whicheffectively shut out all biotechnology companies.
The major shift in the listing rules is to allow companies thatdon't have any product sales to seek a listing. There are somecaveats, though: The company must be at least 3 years old andhave at least two drugs in clinical trials. Also, the companymust prove its worth by evidence of patents and collaborativeR&D agreements.
Celltech apparently satisfies the criteria. For one, its biologicsbusiness has been turning a profit for at least four years. "It'squite a substantial business," Allen said. For the last fiscal year,the biologics arm, which performs contract manufacturing ofmonoclonal antibodies, had a profit of 500,000 pounds(U.S.$757,600) on sales of 12.3 million pounds (U.S.$18.6million) and could make a profit of 2 million pounds (U.S.$3million) in the fiscal year just ended, Allen told BioWorld.
Although the other arm of Celltech's business, Celltech research,has yet to generate sales, it has already developed eighttherapeutic agents that are either in preclinical or clinicalstudies. These include a human monoclonal antibody to tumornecrosis factor.
Celltech has already conducted Phase II clinical trials on theantibody, known as CDP571, for treating septic shock, and itscollaborative partner, Bayer AG, recently exercised its option tolicense the product for further development.
As well, Celltech is in Phase I trials with CDP571 for treatinginflammatory bowel disease, Allen said, and is developing animaging agent for detecting ovarian cancer with its partnerAmerican Cyanamid Co.
-- Jennifer Van Brunt Senior Editor
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