By Matthew Willett

You could say Abgenix Inc. bought a better mousetrap with its acquisition of Immgenics Inc., a $77 million bet that the world will beat the proverbial path to its Fremont, Calif., door.

The stock-swap acquisition will net Abgenix, the pioneer of XenoMouse antibody production technology, a better trap for identifying and catching the fully human monoclonal antibodies its patented XenoMouse technology produces.

The deal for $77 million - about 1 million shares of Abgenix stock (NASDAQ:ABGX), which closed down 12.5 cents Wednesday at $79.625 - could mean increased lure for antibody-seeking potential partners and improved production facilities for internal development projects.

Tom Dietz, of Pacific Growth Equities Inc., said the merger will have more impact for Abgenix as a technology acquisition than on its Wall Street presence. He added that it could make the company more attractive to collaborators.

"Much of what the effect is going to be is going to be behind the scenes from the Wall Street perspective," Dietz said. "From the technology acquisition perspective, they're gaining a technology to take their technology up a notch. The strength of the antibodies will be better and the process of moving the company along will probably go much faster to the end game."

Immgenics' B-cell "trapping" technology is no Rube Goldberg contraption. 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, small antibody factories.

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

Vancouver, British Columbia-based Immgenics' 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 from, in Abgenix's case, the XenoMouse. By culturing the selected B cells, Abgenix can bypass the hybridoma fusion stage altogether, and with it the inherent inefficiencies.

Abgenix CEO Scott Greer agreed the Immgenics technology was the driving force behind his company's acquisition. He touted the Immgenics system's speed, effectiveness and scope, calling its ability to scan the entire immune response an advantage over the company's competition.

"Immgenics has a proprietary technology that fits beautifully with our own core XenoMouse technology," he said.

"The Immgenics technology, when added to our core XenoMouse technology, gives us the industry-leading technology for generating fully human antibodies," he added. "I think it enhances our ability to market to companies interested in making antibodies to their targets, and it plays an important role in our internal development interests when we use the technology for our own product purposes."

Issuing about a million shares of new Abgenix stock, he said, will give Immgenics shareholders a small to nominal percentage of Abgenix ownership, since the company has about 81 million shares outstanding, while creating very little dilution.

Other technology allows for the kind of quick antibody clone screening Immgenics specializes in, most notably phage display technology, but since it's not practical to immunize humans - the phage library is typically "non-immune" - the antibody response detected isn't highly specific or high-affinity.

Instead, it's most often a result of random combination and mutagenesis, Abgenix said, so antibodies derived from nonimmune human antibody phage displays are of substantially lower affinity than those derived from immunized donors such as the XenoMouse.

So does a better mouse trap catch better mice? Greer said it will, since the antibodies the XenoMouse will produce should be of a higher affinity and more specifically selected with his company's new Immgenics trap.

"The bottom line is more diversity: We're able to look at more antibodies before making a selection," he said. "Hybridoma works well for many of the antigens, but the advantage of the Immgenics system is that we'll see much more diversity, and in a way that's almost comparable to the phage display system, except that with the Immgenics technology we'll have the ability to look at antibodies that are specific for the antigen of your choice."