Celltech Group plc announced Thursday that German pharmaceuticalgiant Bayer AG has exercised its option to license the Britishcompany's human antibody to tumor necrosis factor (TNF), CDP571,for all clinical indications. Bayer will collaborate with Celltech forlater-phase clinical development of the antibody.

In conjunction with exercising its option, Bayer made a $6 millionmilestone payment to Celltech.

Bayer licensed Celltech's anti-TNF antibody in a $47.8 million deal inMay 1992. As part of the arrangement, Celltech retained marketingrights in certain European countries and Bayer obtained exclusiverights in the rest of the world. Celltech will also receive royalties onBayer's sales.

Including the most recent milestone payment, Celltech has received$12.1 million from Bayer.

Bayer intends to evaluate the potential of Celltech's geneticallyengineered human antibody in acute illnesses such as septic shockand in chronic immune-related disorders such as rheumatoidarthritis.

Celltech has already conducted Phase II clinical trials of the antibodyfor treating septic shock. Those multicenter European studiesdemonstrated that CDP571 was well-tolerated, displayed a longcirculating half-life and induced very low immune responses. Thehuman antibody also produced a reduction in circulating TNF levelsrelated to the dose of antibody administered.

A pilot Phase II study in patients with rheumatoid arthritis has justbegun at two facilities in the United Kingdom, the Middlesex Hospitaland Guy's Hospital Medical Schools. The study was approved by theDepartment of Health under a clinical trial exemption certificate.

-- Jennifer Van Brunt Senior Editor

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