AstraZeneca entered antibody biotechnology Thursday through a collaboration that could land partner Abgenix Inc. $500 million, all for discovering and developing fully human monoclonal antibodies to treat cancer.
The deal is a major coup for Abgenix, the Fremont, Calif.-based company that discovered and partnered ABX-EGF, a Phase II cancer antibody, with Seattle-based Immunex Corp., now a wholly-owned subsidiary of Thousand Oaks, Calif.-based Amgen Inc. (See BioWorld Today, July 28, 2000.)
With the same technology used to discover ABX-EGF, Abgenix will look for up to 36 cancer targets to be commercialized worldwide exclusively by AstraZeneca plc, a London-based company.
"We've done it once with ABX-EGF, now we've just go to do it 36 times with AstraZeneca," Raymond Withy, Abgenix's president and CEO, told BioWorld Today.
Financially, AstraZeneca agreed to invest $100 million in Abgenix preferred stock, initially convertible into Abgenix common stock at $30 per share. On reaching certain milestones, Abgenix may require AstraZeneca to invest an additional $60 million in Abgenix convertible preferred stock. Other milestones, Withy said, could reach about $50 million each.
As per the agreement, Abgenix will be responsible for conducting early clinical trials, process development and clinical manufacturing, as well as commercial manufacturing during the first five years of commercial sales. AstraZeneca will reimburse Abgenix for those activities and will be responsible for conducting late-stage clinical development. Abgenix would receive royalties on sales.
"When you start adding it up and put in standard attrition rates, it is conceivable that Abgenix could realize $500 million," Withy said.
For AstraZeneca, the deal is strategic. "They have the right technology and it's the right opportunity for us," Steve Brown, spokesman for AstraZeneca in London, told BioWorld Today. "This is additive to our oncology work. In other words, we have developed a leading position in hormonal treatments, and we are starting to develop a leading position in new treatments within oncology, away from hormonals. However, we need to broaden our oncology activities into what Abgenix has, i.e., large monoclonal antibody technology."
But it's more than that, Withy said.
"Not only do we use our XenoMouse and XenoMax technologies to create the products, we are able to do everything that is antibody specific, [such as] process development, manufacturing," he said. "All of the stuff that is unique to the development of antibodies, Abgenix has integrated into a platform and can go from target to market to launch out of our facility."
AstraZeneca, on the other hand, does not have facilities to support such work. "They wanted to make a strategic move into biologics and chose antibodies as the drug platform," Withy said. "They chose Abgenix because we have the integrated platform, so they don't have to replicate it - they can just bring their extensive oncology experience to the table, and we can provide them with the antibody solution. That's why they came to us and that's why the deal is so valuable."
He added that snagging a deal with the likes of AstraZeneca validates Abgenix's technology platform and its partnership model.
Both Withy and Brown said it is too early to discuss specific cancers that the research will target. Withy said neither company has set timelines related to entering Phase I trials.
As part of the agreement, though, AstraZeneca may select initial antibodies from Abgenix's existing preclinical oncology portfolio and both companies also will propose additional targets for selection.
Abgenix's stock (NASDAQ:ABGX) closed Thursday at $13.29 down 19 cents.