Celltech expects pounds 180m float value: British & Commonwealth administrators should raise pounds 40m from selling part of stake

CELLTECH, which claims to be Europe's biggest biotechnology company, expects to command a stock market value of pounds 180m after its flotation later this month, when it hopes to raise up to pounds 35m of fresh capital.

This will mean the company has doubled in value over the last year. Celltech's shares are already traded under the Stock Exchange's matched bargain rule.

The administrators of British & Commonwealth, the insolvent financial services group, should raise nearly pounds 40m from selling about three-quarters of its 36 per cent stake. Two other founding shareholders, Prudential and a Midland Bank subsidiary, Montagu Equity, will also reduce their holdings.

Celltech was founded in 1980 with the backing of the National Enterprise Board and the Medical Research Council. Since 1990, Peter Fellner, chief executive, and his management team have narrowed Celltech's research effort, concentrating on seeking treatments for septic shock, rheumatoid arthritis, cancer and asthma.

The company, chaired by John Jackson, has still to make a profit and expects to make losses for at least another three years. But profits from Celltech Biologics, the manufacturing arm that makes antibodies for Celltech and other drug companies, enabled the group to reduce losses by 21 per cent to pounds 5.9m in the year to 30 September.

Celltech was also helped by pounds 6.1m of payments from Bayer and the other large pharmaceutical companies with which it is collaborating on research. It was this year's partnership deals with American Cyanamid and Roche that gave a boost to Celltech's share price.

David Bloxham, Celltech's director of research and development, described progress with Bayer's septic shock drug, to which Celltech owns some of the European rights. He said tests on the Bayer antibody, developed from a mouse, showed its effectiveness in treating the condition.

In the first few days after treatment, deaths reduced by nearly half, falling to a 17 per cent success rate after 28 days. 'For every six people who would have died, we are saving one of them,' Dr Bloxham said.

Celltech expects its own septic shock product - which could also help to combat arthritis - to be even more effective, but this is not expected to be ready to market until 1997.

An independent review of Celltech's portfolio of research by Professor Glyn Tonge, of PA Consulting Group, concludes that it has 'excellent commercial potential based upon the diseases targeted, their size and the fit of Celltech's science to the diseases'.

However, Celltech's pathfinder prospectus carries the familiar biotech warning that an investment in the company is highly risky.

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