28 Apr Pfizer-Pharmacia Fallout Gives Celltech A CEO
New York, NY – One certain consequence of the nearly $60 billion acquisition of Pharmacia by Pfizer: executive-suite cleaning. The first bigwig out the door is Dr. Göran Ando, who headed up Peapack, N.J.-based Pharmacia’s research and development operations. Today, Celltech, one of Europe’s biggest biotechnology companies, announced Ando as its new chief executive.
“You will see that the entire senior management of Pharmacia is leaving Pfizer,” Ando says. “They only need one CEO, one head of research.”
For some, Celltech (nyse: CLL) might seem a less-than-obvious choice. The company is relatively large, with more than $400 million in annual revenue and a market capitalization of $2.5 billion. But Berkshire, England-based Celltech is thinly traded and little talked about in the U.S. Lately, it has mostly made it into the press because of a bidding war with Cambridge Antibody Technology (nasdaq: CATG) for proteomics pioneer Oxford Glycosciences. At this point, Celltech appears to have won.
Ando says he didn’t know much about Celltech until Pharmacia struck a deal to co-develop a rheumatoid arthritis drug with the British firm. Celltech’s low U.S. profile is a problem, he admits. “The U.S. to me is the market,” Ando says. “That’s where you need to succeed.”
Already, he thinks Celltech has the building blocks for that success. One of them is CD870, the rheumatoid arthritis drug Ando’s division licensed for Pharmacia and will be developing with the new Pfizer (nyse: PFE). CD870 works in the same way as popular rheumatoid arthritis medicines like Amgen (nasdaq: AMGN)’s Enbrel and Johnson & Johnson (nyse: JNJ)’s Remicade. Right now, it appears it will have to be injected less often than those drugs. It is in late-stage clinical trials in the U.S.
Another potential winner: a drug called a PDE-4 inhibitor for asthma. The drug inhibits an enzyme related to the one blocked by impotence pills like Pfizer’s Viagra. It is in mid-stage clinical trials, and is being co-developed by Merck (nyse: MRK). A drug licensed into Pharmacia’s pipeline from Altana (nyse: AAA) will compete directly with Celltech’s asthma product.
Celltech’s sales come mainly from aging products–the biggest is a cough medicine–that it bought to allow it to keep running without infusions of venture capital. “A couple of years ago Celltech made the strategic decision to be a self-financed company,” Ando says. “Of course, especially in hindsight, that was a very inspired move.”
Ando may be the first executive out the door at Pharmacia, but he is unlikely to be the last. Chief Executive Fred Hassan is widely rumored to be up for the top job at Schering-Plough (nyse: SGP). Meanwhile, Ando says that Pharmacia employees are a bit shaken up by the months of uncertainty brought on by the Pfizer acquisition. “I think the mood is much better than it was a week ago,” he says. “There’s always some sadness of seeing Pharmacia, your company, disappear. But people move on. Everybody moves on.”