Celltech Group plc has received a $10 million milestone payment from Pharmacia Corporation, relating to the initiation of Phase III clinical development with CDP 870 in rheumatoid arthritis during October 2002. This payment will be reflected as other operating income in Celltech's second half financial results.

Under the terms of Celltech's collaboration on CDP 870 with Pharmacia, announced in March 2001, it could receive further milestone payments of up to $220 million subject to 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.

CDP 870 is a high-affinity humanised PEGylated antibody fragment targeting TNF-alpha, a key mediator of inflammation, being developed in collaboration with Pharmacia under a worldwide co-development and co-promotion agreement announced in March 2001. Pharmacia made an upfront payment of $50 million to Celltech following signature of this deal. In October 2002 Pharmacia initiated a large Phase III clinical development programme with CDP 870 as a treatment for rheumatoid arthritis.

Celltech is currently finalising plans for Phase III clinical development of CDP 870 as a treatment for Crohn's disease, expected to commence during 2003.