Celltech, Britain's biggest biotechnology company, is laying off 140 staff in a big shake-up of its sales and manufacturing strategy.
Goran Ando, the company's new chief executive, also confirmed yesterday that he was dropping Celltech's treatment for Crohn's disease, a bowel disorder, which failed in human trials last year. And he rowed back from the company's earlier efforts to pursue merger-and-acquisition activity in what will be seen as a break with his predecessor, Peter Fellner, who remains chairman.
Mr Ando joined Celltech in April from Pharmacia, the US giant now owned by Pfizer. Around 100 jobs are going, half in the UK and half in France, as a result of changes to Celltech's salesforces, which will no longer target general practitioners but concentrate on selling the company's portfolio of existing medicines to specialists. Forty jobs will be shed at an underused manufacturing plant in California.
Mr Ando said he did not want his strategy review to be characterised as a cost-cutting exercise. "I am only trimming the business, making sure that we are spending money in the right places. I will be significantly increasing spending in other areas."
The shake-up of the European salesforces, which follows a similar exercise in the US last year, was welcomed by investors who said product sales had been the main disappointment in yesterday's interim results. Revenue from Celltech's marketed drugs was £111.4m in the six months to 30 June, down 4 per cent.
But the shares fell 16p to 352p, the worst performer in the FTSE 350, after better-than-expected underlying earnings were marred by one-off redundancy costs and other write-offs, which shaved £18.8m off the bottom line. Pre-tax losses widened to £44.7m from £34.9m last time.
The exceptional charges included the £7.5m write-off of stocks of Celltech's Crohn's disease treatment, CDP 571, once the most advanced of the drugs developed using Celltech's in-house technology.
The project has been mothballed since last July, when human trials failed to show it was effective.
CDP 571 has since been overtaken by another Celltech anti-inflammatory, CDP 870, which is already being trialled by Pfizer for rheumatoid arthritis, and which will also soon begin trials as a treatment for Crohn's disease.
Mr Ando said he was excited by the prospects for CDP 870 and four new products, which have moved or are moving into the earliest stage of human trials this year. He promised to devote resources and management time to developing in-house drugs rather than pursuing acquisitions of drugs or other companies.
"We need to develop these drugs very professionally, very fast, and we need to strengthen the drug-development area in terms of sheer numbers and in terms of skills," he said.Reuse content