By Randall Osborne

West Coast Editor

Gliatech Inc.¿s routine-seeming antibody deal almost two years ago with the transgenic mouse company Abgenix Inc. has yielded a larger deal ¿ this one worth up to $40 million for Gliatech.

¿They¿re clearly intending to take it forward in multiple indications,¿ said Steven Basta, president of Cleveland-based Gliatech, noting that Abgenix, of Fremont, Calif., is buying an exclusive license to develop and commercialize anti-properdin antibody therapies for all indications, and will handle clinical development, regulatory activities, manufacturing, marketing and sales.

Such a partnership is ¿one of the steps we promised investors at the first of the year,¿ he added. Wall Street cheered Friday, sending Gliatech¿s stock (NASDAQ:GLIA) up 68 cents, or 106 percent, to close at $1.32.

The agreement gives Abgenix worldwide rights to human monoclonal antibody therapies against properdin, a complement protein. Gliatech gets an up-front license fee of $1.5 million, with the rest to come in the form of a future equity investment, potential milestone payments, and research funding for two years. It also would get royalties.

The complement pathway ¿ triggered at the wrong time, such as during cardiopulmonary bypass surgery ¿ can damage tissues. It¿s also believed to be implicated in the autoimmune response of rheumatoid arthritis patients.

Gliatech and Abgenix began their collaboration at the start of 2000, and used the XenoMouse technology to make antibodies targeted at the properdin antigen. Gliatech had been working in the properdin area for several years, having gained a notice of allowance on its patent covering the target. (See BioWorld Today, Jan. 19, 2000.)

¿We¿re not an antibody company, so we wanted to partner [properdin] out, prior to going into the clinic,¿ Basta told BioWorld Today. ¿Abgenix said, If you¿re interested in talking to partners, we¿d like to play.¿¿ An investigational new drug application is expected next year, he said.

The nod from Abgenix is especially good for up-and-down Gliatech, which took a hit last month when a second look at magnetic resonance imaging data for Adcon-L found it wanting. In January, the firm voluntarily discontinued distribution of Adcon-L and its product for tendon and nerve surgery scarring, Adcon-T/N, because of a recall by the supplier of the raw material used in making the gels. (See BioWorld Today, Oct. 16, 2001.)

MRI films from the pivotal trial that put Adcon-L on the U.S. market in May 1998 were evaluated again by two neuroradiologists to score the amount of post-operative scarring evident for each patient six months after their surgery. Gliatech had hoped its ¿corrective action plan¿ (of which the MRI re-check was the last step) would please the FDA and allow for a re-launch.

But the plan didn¿t work, and the firm¿s stock tumbled 69 percent. Adcon-T/N was not part of the re-launch effort.

Gliatech¿s stock usually ¿trades on the profile of Adcon, but what that overlooks is our pharmaceutical program,¿ Basta said. ¿We really have two business units. One is the biosurgery unit, and the other is pharmaceutical, a much more traditional biotech organization,¿ which has, among others, a product for attention deficit hyperactivity disorder in Phase II trials.

¿I would estimate 30 percent of our staff is focused on R&D in pharma programs,¿ Basta said.