Celltech Results in Line With Expectations; Merger Pact Reached With Cistron
--------------------------------------------------------------------------------
By David Luhnow
LONDON, Mar 23 (Reuters) - Shares in Britain's biggest biotechnology firm, Celltech Group Plc, slipped on Wednesday even though the company reported in-line results and a slew of news ranging from drug launches to new purchases and divestments.
The company, which this week became the first biotech firm to enter the FTSE 100, reported 1999 sales of 281 million pounds ($440.8 million) for its Medeva unit and an additional 18 million pounds in revenues for Celltech Chiroscience.
Medeva's operating profit was 42 million pounds, while Celltech Chiroscience reported an operating loss, excluding discontinued activities, of 38 million pounds.
Some in the market were disappointed that certain products were dropped, but analysts who have followed the company for some time said that there was nothing new. "As for the other products that have been dropped, they should come as no surprise. They were well flagged," analyst Bill Blair at Nomura Securities told Reuters.
Blair said that there was positive news about new products, and he remained upbeat about Celltech's prospects, with potential for short- and intermediate-term growth.
Celltech Chief Executive Peter Fellner said that the company did not highlight consolidated results because of the complicated financial effects from two mergers in the past year.
Celltech had good news about key products. It said that US partner Purdue Pharma launched anesthetic Chirocaine in the US market during the first months of this year. Analysts expect the drug to reach peak sales through partners of more than 100 million pounds per year by 2005.
"Chirocaine's sales will be significant in the long term, but I think its growth will be steady and its peak sales will probably occur after a number of years," Fellner told Reuters.
The company also said that European regulators recommended marketing approval for hepatitis B vaccine/treatment Hepagene, adding that it expects to launch the drug in several European countries this year. Celltech added that it has obtained further positive results from 6 months of open studies on Humicade, an antibody aimed at treating the inflammatory bowel disorder Crohn's disease.
"Everything seems to be going pretty well for the company. It was overall a good set of results," said analyst Max Hermann at Commerzbank in London.
Celltech shares lost 10% to close at 10.93 pounds, after having gained 3.62% or 44 pence to 12.59 pounds by mid-morning. This move was not unusual given the recent volatility in the sector, analysts said.
Celltech continued its recent growth by agreeing on Tuesday to buy US-based Cistron Biotechnology Inc. for $18 million, including $8.75 million for intellectual property and an additional $9.25 million that will remain within Cistron.
The firm said that it would issue to Cistron some 850,000 Celltech shares in ADR form at a price of 13.48 pounds per share, based on the 5-day average to March 20.
It also announced that it is in talks to divest three non-core businesses, principally a vaccines manufacturing plant at Speke. Fellner said that the company will focus on consolidating its recent mergers and will only be looking for small acquisitions in the near future.
"We are interested in individual products, in novel targets for discovery. In the mid- to long-term, we may make another acquisition," he said.
Fellner added that he did not think that sales of the company's anti-cancer drug Mylotarg would be hit by a US Food and Drug Administration panel decision last week to recommend that the drug be approved only for elderly leukemia patients.
"We have done our homework, and our view is that [the elderly] represent between 70% and 80% of the total patient group. That, together with some associated use by oncologists in younger patients...means that we've not revised estimates of commercial potential," Fellner said.
Reuters |
