By Matthew Willett

Abgenix Inc. turned a $77 million acquisition into revenue with the licensing of Immgenics Inc.-developed SLAM technology to Celltech Group plc. for $17 million in Celltech shares, plus royalties.

Fremont, Calif.-based Abgenix bought Immgenics in a 1-million-share transaction in September. Collaborative agreements were high in company officials' minds even then. (See BioWorld Today, Sept. 28, 2000.)

The deal for access to the SLAM (Selected Lymphocyte Antibody Method) technology allows Slough, UK-based Celltech to use the technology to identify proteins as drug discovery targets.

The company's monoclonal antibody production technology is said to represent a significant advance on the 1970s-era techniques in use, a hybridoma process that harvests antibody-producing B cells for fusion with an immortalized myeloma cell line to produce up to several thousand hybridomas, or small antibody factories.

The Immgenics technology was designed to circumvent the inefficiency of the fusion process, which represents only a small fraction of the antibody production capacity of the antigen-injected B cell.

The procedure allows for rapid scanning of the entire immune repertoire of an immunized animal, giving researchers the ability to quickly and efficiently select optimal antibodies from millions, not thousands, of antibody-producing B cells.

Celltech also has the right to use the technology in its research operations and in up to five antibodies per year entering preclinical development.

Abgenix gets an option to co-develop certain antibodies selected with the technology. The deal does not include access to Abgenix's XenoMouse technology for generating fully human antibodies.

Robertson Stephens research analyst Eric Shen called the deal a validation of the technology.

"It's a big deal, a $17 million up-front payment in the form of Celltech stock," Shen told BioWorld Today. "It validates this new technology which makes antibody generation more effective and efficient. In the future Abgenix will combine the technology with the XenoMouse technology for itself for development and to license the two combined."

He said the deal of the future might use SLAM to add value to the XenoMouse technology.

"We may not see many more deals exactly like this one," he said, "I think the deals will be more like XenoMouse deals, and they may be able to charge a premium to previous XenoMouse collaborators that did not include the SLAM technology."

Abgenix officials could not be reached for comment.

Abgenix's shares (NASDAQ:ABGX) rose $1.812 Tuesday, closing at $38.75.