SOURCE: Celtic Pharma

June 24, 2005 02:02 ET

Celtic Pharma announces Launch of New $300m Pharmaceutical Investment Fund

Hamilton, Bermuda -- (MARKET WIRE) -- June 24, 2005 --



                              Celtic Pharma

             Launch of New $300m Pharmaceutical Investment Fund

 Private equity fund led by Stephen Evans-Freke and John Mayo makes first
                   investment with agreed takeover of Xenova
New York, London & Bermuda - 24 June 2005 - Celtic Pharmaceutical Holdings, LP, a newly formed private equity investment fund targeting the pharmaceutical industry, today announces the launch of the fund and its first investment with the agreed takeover of the UK biotechnology company, Xenova PLC (see separate press release issued today), for a total consideration of approximately GBP20 million.

Led by Stephen Evans-Freke and John Mayo, both of whom have outstanding track records of delivering high returns to investors in the pharmaceutical industry, Celtic Pharma has been formed to invest directly in the acquisition of pharmaceutical products which are in the final stages of their development and regulatory approval. It will target small biotechnology companies, public or private, that have commercially attractive, novel drugs in late Phase II or Phase III clinical development, as well as buying Phase III products from pharmaceutical or biotech companies or divisions of such companies. In some cases, Celtic Pharma will buy geographical rights to products (for example, in the US, Europe or Japan) where the rights are not being exploited in these markets.

Acquisitions will be funded through a combination of fund equity, mezzanine financing and the securitisation of royalties on already licensed products. Celtic Pharma's objective is to assemble a diversified portfolio of 12-18 late stage drug development programmes which it will fund and manage through the final stages of clinical and regulatory approval, including establishing manufacturing arrangements and other preparations for market launch. Products that have been approved, or prior to approval but ready for pre-marketing, will then be auctioned to established pharmaceutical companies.

Celtic Pharma's management intends to run the fund on a rigorous "virtual" outsourcing model, managing and controlling the various programmes in-house but using outsourced providers in the management of clinical trials, manufacturing, QC/QA and other specialist services where required.

Celtic Pharma has assembled an exceptionally strong in-house team with the requisite skills in both product evaluation and late stage pharmaceutical programme management, as well as in business development, mergers and acquisitions and finance. In addition to the in-house team, Celtic Pharma has also gathered a number of leading experts from the worlds of business and pharmaceutical product development to join its Business Advisory and Medical Advisory Boards.

To date, some $125 million has been committed and closed into the Celtic Pharma fund from investors around the world, with significant further indicated amounts to be closed in over the coming months. It is Celtic Pharma's objective to grow this to $300 million by the end of this year and to over $1 billion in the 2006/ 07 timeframe.

Commenting on today's announcement, Stephen Evans-Freke, Managing General Partner of Celtic Pharma, said:

"Celtic Pharma is an entirely new business model for a private equity firm, which seeks to position itself between cash-starved biotech companies and earnings-pressured big pharma, providing the capital and product development skills to take biotech programmes through to approval and then delivering marketable products to big pharma. The fund thus addresses a real need in today's challenging pharmaceutical market conditions and, as well as generating attractive returns for investors, will also bring benefits to patients by enabling more innovative products to reach the market."

John Mayo, Managing General Partner of Celtic Pharma, added:

"Celtic Pharma's first acquisition, announced today, is a good example of the type of investment the fund will seek to make. Xenova has several very interesting products for the treatment of cancer and drug addiction. Each product is a novel and commercially attractive opportunity but which requires significant cash resources and product development expertise to reach the market.

"This chronic need for late stage development financing and management is the gap in the market we are targeting. Our aim is to build a broad portfolio of late stage products across multiple therapeutic categories, thereby minimising, managing and spreading the risks associated with pharmaceutical product development."

Enquiries at:

Celtic Pharma
Stephen Evans-Freke 
- on day of announcement                  Tel: +44 (0)20 7831 3113
- thereafter                              Tel: +1 212 755 9411

John Mayo - on day of announcement        Tel: +44 (0)20 7831 3113
          -thereafter                     Tel: +44 (0)20 7786 5555

Financial Dynamics
David Yates/Davina Langdale               Tel: +44 (0)20 7831 3113

Notes to Editors

Celtic Pharma is a unique global private equity firm focused on the pharmaceutical industry. Celtic Pharma is based in Bermuda, and also maintains offices in New York and London. The Company was founded by its two Managing General Partners, Stephen Evans-Freke and John Mayo. Celtic Pharma is seeking to acquire late stage pharmaceutical programmes, and entities that are in pursuit of the necessary resources for such projects and are attracted to Celtic Pharma's model of a broadly diversified, late stage development platform are invited to make contact. Further information can be found on the company website at

Details of the team at Celtic Pharma follows below:

Stephen Evans-Freke, Managing General Partner

Stephen Evans-Freke was the Founder, Chairman and CEO of SUGEN, Inc., until its sale for $720mm to Pharmacia in 1999. He also co-founded Selectide Corporation, Fibrogen Inc., Royalty Pharma AG, and other successful biotechnology companies. He is also a former Managing Director and Board Member of Painewebber, Inc. where he was the lead investment banker to Genentech, Amgen, Centocor and other leading biotechnology companies for which he established and managed over $600 million of successful investment partnerships to fund product development.

John Mayo, Managing General Partner

John Mayo is a former Director of S.G Warburg, the leading London Investment Bank, and investment banker to Burroughs Wellcome, ICI and many other UK and Irish companies. He directed the spin-off of ICI's Life Sciences Operations as Zeneca Group plc and thereafter served as Zeneca's Finance Director from 1992 to 1997, during which time its market value increased from GBP6bn to GBP24bn. He also managed the tax free spin-off of the defence business of GEC to its shareholders (and its simultaneous merger with BAe Systems plc) as its Finance Director, prior to becoming Finance Director and then Deputy CEO of the remaining communications business, Marconi plc.

Dr. Radomir Julina, Managing Director

Dr Radomir Julina was a co-founder and Head of Commercial Operations and Performance Planning at Protodigm Ltd., Hoffman-La Roche's Virtual Pharma venture. Prior to joining Protodigm he was the Head of New Molecular Entity Planning, Pharma Operations at Hoffman-La Roche, Inc.

Dr. Stephen Parker, Managing Director

Dr Stephen Parker was the Finance Director of Oxford GlycoSciences Plc prior to its takeover by Celltech plc and a former Life Sciences Banker at SBC Warburg.

Averill Powers, Managing Director

Averill Powers was a General Counsel of JP Morgan's Investment Banking and Private Equity Divisions in Europe and a former Davis Polk & Wardwell Attorney in New York and Hong Kong.

Lisa Rhoads, Business Strategy and Intellectual Property

Lisa Rhoads was a Senior Director of Consumer Marketing at the Pharmaceutical Division of Bristol-Myers Squibb and a former BDN Consultant who advised on commercial and marketing strategy to all J&J and BMS Companies around the world.

Ellen Lubman, Associate

Ellen Lubman was a biotechnology analyst at Robertson Stephens and formerly worked at Roche, Amgen and Genentech.

Andrew Sayre, Associate

Andrew Sayre was a life sciences analyst at Credit Suisse First Boston who has extensive experience in financial modeling and decision support in the pharmaceutical industry.

Kathy Armstrong, Investor Relations Manager

Kathy Armstrong was a Marketing and Investment Service Manager at Harbor Capital Management and most recently a member of Pfizer's marketing team.

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