Celltech Group plc and Pharmacia Corporation announced an agreement for the co-development and co-promotion of Celltech's proprietary compound CDP 870.
CDP 870 belongs to a new therapeutic class of medicines that inhibit tumor necrosis factor), a key mediator in certain autoimmune and inflammatory diseases; alpha (TNF- CDP 870 is being developed as a new treatment for rheumatoid arthritis (RA) and Crohn's disease. It may also have an important potential in the treatment of other serious disorders, including congestive heart failure.
The terms of the agreement stated in the press release include the following:
- Pharmacia receives exclusive, worldwide rights to develop and market CDP 870 as well products as other Celltech proprietary, antibody-based, anti-TNF
- Pharmacia will book sales for CDP 870 in all markets and for all indications.
- In the United States, Japan and all major European Union markets, Celltech will have limited rights to co-promote CDP 870 with Pharmacia in RA. Profits from RA sales in these territories will be shared according to an agreed formula. In other countries, Celltech will receive royalties on sales.
Pharmacia will manage future development and fund the majority of development costs for RA and other indications, excluding Crohn's disease. Celltech will lead the development and fund the majority of development costs for Crohn's disease, and will be primarily responsible for promotion of CDP 870 in this indication. Profits from sales in the United States, Japan and major European Union markets will be shared according to an agreed formula.
- Pharmacia will provide upfront payments totalling $50 million and will make additional payments to Celltech of up to $230 million based on the achievement of certain development and sales milestones. The significant majority of these milestone payments will be based on the achievement of certain sales levels.
- Pursuant to a separate agreement between the parties, Celltech will co-promote the Pharmacia product Arthrotec (diclofenac/misoprostol), a treatment for arthritis and other disorders in the United Kingdom and France.
CDP 870 is a third generation, humanized antibody fragment, which binds with high affinity to TNFa. It is manufactured with Celltech's proprietary low-cost bacterial fermentation technology and is chemically modified (PEGylated) to provide a long half-life in patients.
CDP 870 is in an ongoing Phase IIb dose-ranging study in more than 200 patients with active rheumatoid arthritis. The results of the placebo-controlled phase are expected in mid-2001 and will be used to select one or more doses for evaluation in Phase III studies.
Celltech also initiated an international, Phase II dose-ranging study in Crohn's disease earlier this year.
Peter Fellner, chief executive officer of Celltech, commented, "We are delighted to have secured this agreement with Pharmacia. Their global marketing and development strengths will provide a crucial competitive advantage in the rapidly expanding anti-TNFa therapy field and fully address the clinical and market opportunity for CDP 870. We see this agreement not only as validation for the potential for CDP 870, but also of our proprietary antibody fragment technology."
In relation to the agreement, Pharmacia's upfront payment will result in a first quarter charge of two cents per share. Excluding the upfront payment, the agreement will have no impact on Pharmacia's full-year earnings in 2001 or thereafter, as development costs for CDP 870 will be absorbed under existing operations.
This transaction is subject to a number of conditions to closing set forth in the agreement, including making necessary antitrust filings and expiration or early termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.