Celltech to quit Chirotech for pounds 59m

CELLTECH CHIROSCIENCE, the UK's leading biotechnology technology, is to exit compound manufacturing, after Ascot, a diversified holding company, exercised an option to acquire an outstanding stake in its ChiroTech subsidiary. The consideration is pounds 59m.

The move follows Ascot's acquisition of a 30 per cent stake, together with rights to acquire the remainder, of ChiroTech in September last year for pounds 30m. Celltech's shares fell 13.5p to 460p on the announcement, with analysts saying the price did not correspond with that of the initial 30 per cent stake.

Peter Allen, Celltech's chief operating officer, defended the price, however. "The initial pounds 30m was for an option over the remainder in addition to a 30 per cent stake." Although the initial deal obliged Celltech to sell its remaining stake to Ascot at a price decided by an independent valuer, the parties agreed to negotiate the consideration instead.

Celltech will retain liability for a lawsuit filed against ChiroTech by Resolution Chemicals, a UK pharmaceuticals company, which claims Chirotech breached a supply agreement.

Celltech, formed from the merger of Celltech and Chiroscience in June, said it could now focus on drug discovery and development.