NEW PRODUCT PIPELINE

CMA 676 – Acute Myeloid Leukaemia

• Promising new results were reported at the American Society for Clinical Oncology Meeting on 16th May 1999 with this novel treatment for acute myeloid leukaemia (AML), developed by Celltech and American Home Products. In a multi-centre US pivotal study, an overall remission rate of 36% was achieved in the initial 59 patients treated with CMA 676, with complete clearance of clinically evident leukaemic cells. Preliminary results from over 100 patients treated in the pivotal and two supporting Phase II studies are closely comparable, with remission rates in these studies being between 36% and 44%. The product's excellent safety profile, compared with current chemotherapy, was maintained.
• A US NDA submission, seeking marketing authorisation, is in preparation and is expected to be filed during Q3 1999.
• A new study in relapsed paediatric patients has begun. Further studies are planned in induction of first remission in AML, in myelodysplastic syndrome and in chronic myeloid leukaemia.

CDP 571 – Crohn's Disease

• Two Phase IIb double-blind placebo-controlled multi-centre studies in Crohn's disease are ongoing in the US, Canada and the UK, involving a total of 240 patients. In the main study, treatment for six months with CDP 571 is being evaluated in 170 patients with active disease. The treatment phases of these studies have been completed, and initial results are expected to be available during Q3 1999. Patients completing these studies are eligible to enter a follow-on six month open safety and efficacy study, and a high proportion of the patients have done so.
• Results in the major study can be utilised as pivotal data if supported by satisfactory safety and efficacy data from the other studies. A US Biologics Licence Application is currently expected to be filed in 2000.

Other products in Celltech's development pipeline are continuing to progress, including:

• CMB401 – Ovarian Cancer

• CDP 870 – Rheumatoid Arthritis

FINANCIAL RESULTS FOR SIX MONTHS ENDED 31 MARCH 1999

• Licensing income from Celltech's antibody technology nearly doubled on a like for like basis to £5.3 million net (1998 £2.7 million, excluding a Centocor licence access payment), due to recently launched antibody products.
• Celltech's net loss for the period increased to £5.7 million (1998 £2.9 million, excluding an exceptional profit item), due to significantly higher R&D investment of £11.5 million
• 
  (1998 £9.4 million) arising from the ongoing CDP 571 studies.
• The Company's cash position remained strong at £34.3 million, following a cash outflow of £5.9 million.

Enquiries:
 
 

INTERIM REPORT FOR THE SIX MONTHS ENDED 31ST MARCH 1999
 

Celltech's two leading product candidates have now reached key stages in their paths to registration, following further substantial progress during the past six months. A US NDA is in preparation, and is expected to be filed during the third quarter of 1999 for CMA 676, Celltech's novel treatment for acute myeloid leukaemia.

Important new results with CMA 676 were presented at the American Society of Clinical Oncology Meeting on 16th May 1999, showing that in 59 first relapse patients treated in a US pivotal study an overall remission rate of 36% was achieved. Preliminary results in over 100 patients in the pivotal and two supporting studies are closely comparable with remission rates of between 36% and 44%. The product's excellent safety profile was maintained.

Also expected during the next quarter are key results from potentially pivotal Phase IIb studies with CDP 571 in Crohn's disease.

A further candidate, CDP 870, in earlier Phase II studies for rheumatoid arthritis, has also made significant progress.

In addition to the advances with its new product pipeline, Celltech's licensing income, arising from its antibody technology, nearly doubled on a like for like basis to
£5.3 million net (1998 £2.7 million, excluding a Centocor license access payment) due to the rapid growth of recently introduced third party antibody products.

Overall, Celltech recorded a net loss for the six month period of £5.7 million (1998 loss £2.9 million, excluding an exceptional profit arising from the sale of its remaining share of Biologics). The higher loss was due to the large R&D investment of £11.5 million (1998 £9.4 million) which was increased significantly by the ongoing CDP 571 clinical studies. The cash position remained strong at £34.3 million, with a cash outflow of £5.9 million.
 

DEVELOPMENT PIPELINE

• CMA 676

• CDP 571

• CMB401

• CDP 870

• SCH55700

• CDP 860

• CDP 855

DISCOVERY PROGRAMMES

During the six month period a far-reaching reorganisation of Celltech Discovery has been implemented, and its programme portfolio has undergone an extensive review. The aim of the reorganisation was to optimise the allocation of resources to key programmes, and to put in place a new organisational structure that addresses fully and effectively the therapeutic areas and programmes which have been identified as key priorities. These programmes continue to be in the areas of immune and inflammatory disorders and in cancer. Key decision points and objectives for each programme within the current portfolio have been defined, for both pre-existing and new programmes.

Integrin receptor antagonists represent Celltech's largest unpartnered investment in small molecule drug discovery at this time. Other unpartnered programmes include KDR kinase inhibitors and antibody targeted gene therapy, both primarily aimed at cancer targets, and a novel approach to controlling allergy. Progress with the major current internal and partnered programmes is summarised below:
 

Integrin Antagonists

The largest programme in the integrin field, the VLA-4 antagonist programme, is focused upon identifying novel orally active treatments for airway inflammation in asthma. Substantial effort is continuing to both optimise the efficacy, oral activity and pharmacokinetics of compounds from several non-peptidic series.

Within the integrin receptor family, there is a range of potentially important targets, and Celltech is using its expertise in the integrin antagonist field to pursue a further programme to develop new treatments for inflammatory bowel disorders. It is also undertaking an exploratory programme targeted at osteoporosis.
 

Discovery Partnerships

Celltech's collaborative discovery programmes with major pharmaceutical companies have all achieved encouraging progress during the six month period, as follows:

• Phosphodiesterase IV Inhibitors for Asthma

• Aggrecanase Inhibitors for Osteoarthritis

• Antibody-Cytotoxic Drug Conjugates for Cancer

FINANCIAL RESULTS

In the six months ended 31st March 1999, the net royalties received by Celltech nearly doubled to £5.3 million from £2.7 million in 1998 (on a like for like basis, being £5.7 million less a licence access fee paid by Centocor). The actual licence income received amounted to £5.9 million, but this was reduced by £0.6 million as a result of royalty payments by Celltech to Genentech and the Medical Research Council, under the terms of cross-license agreements, representing a proportion of certain royalties received by Celltech. These arrangements will continue in the future and relate to the Boss patent. Licensing income has grown substantially during the period because there are now seven antibody products on the market licensed to Boss. Further growth in licensing income is anticipated, as the sales of these recently launched products continue to increase as the products mature.

Investment in research and development increased 22% to £11.5 million. Underlying this was an increase in external development expenditure, principally clinical trial costs and product purification for CDP 571, from £2.2 million in 1998 to £4.2 million in 1999. Internal costs advanced marginally to £7.3 million from £7.2 million in 1998. The costs of developing CDP 571 to the conclusion of the two large clinical trials which are currently ongoing will continue to impact external development costs until the end of the calendar year.

Other operating income of £0.7 million was at the same level as 1998 and for both years represented time-based payments received under the continuing Merck collaboration.

Overall the net loss for the six month period of £5.7 million increased from a loss of
£2.9 million in 1998 (excluding the £5.4 million exceptional profit on disposal in December 1997 of the remaining interest in the Biologics business).

The financial position of Celltech remained strong at the end of the period with cash of
£34.3 million, reflecting cash outflow of £5.9 million in the six month period.
 
 
 

Consolidated Profit and Loss Account

for the six months ended 31 March 1999
 
 

Note 1

The results have been prepared in accordance with the accounting policies set out in the Annual Report for the year to 30 September 1998. The results for the year to 30 September 1998 are an abridged version of the full accounts for that year which received an unqualified audit report and have been filed with the Registrar of Companies.

Note 2

Cost of sales comprises royalties payable under cross licences in respect of income generating patents, together with the costs of maintaining and defending the groups income generating patent position. No such costs arose in the year to 30 September 1998.
 
 
 

Consolidated Balance Sheet

at 31 March 1999
 
 

Consolidated Cash Flow Statement

for the six months ended 31 March 1999