By Karen Pihl-Carey

Share prices of Medarex Inc. and Biosite Diagnostics Inc. climbed Thursday on news that the companies formed an alliance to accelerate drug research using Trans-Phage Technology, a combination of the HuMAb-Mouse and Omniclonal phage display capabilities.

Medarex's stock (NASDAQ:MEDX) closed at $49.125, up $3.625, while Biosite's stock (NASDAQ:BSTE) rose about 28 percent to close at $28.765, up $6.265.

Under the alliance, Medarex will supply $3 million in research funding per year over the next eight years to Biosite, for a total of $24 million. If any products are generated through the collaboration, Medarex also will pay Biosite for milestones reached and royalties on sales, and Biosite will receive diagnostic rights to targets identified. Medarex, of Princeton, N.J., expects payments from third-party collaborators to offset its own payments to Biosite. Further financial terms were not disclosed.

"This is an opportunity to offer our customers, especially genomics companies and those companies that have access to genomic databases, an opportunity to screen with a very enriched screening tool using human antibodies to validate targets from which they can develop fully human antibody products," said Michael Appelbaum, executive vice president of Medarex.

Biosite has used its phage display technology to develop four diagnostic products that are on the market: The Triage Drugs of Abuse Panel, the Triage Cardiac System, the Triage Micro C. Difficile Panel and the Triage Micro Parasite Panel. While its technology will provide Medarex with the ability to generate drug candidates, Biosite will remain focused on diagnostics in the collaboration.

"We're seeking to gain access to targets that can be applied to diagnostics," said Nadine Padilla, director of investor relations and corporate communications at San Diego-based Biosite.

The two companies believe the combined technology will enable scientists to quickly make large volumes of fully human antibodies to almost any disease target. The process is expected to allow for validation of a higher number of targets, increasing the chances of discovering successful targets.

"It actually combines the best of both worlds in that it combines transgenic and phage display technologies," Appelbaum told BioWorld Today. "It's not just faster, but it's a high-throughput method for developing antibodies for screening, and certainly for commercial development." He described the collaboration to be "if not the best, the most robust engine of antibody development in existence."

Appelbaum said Medarex already has spoken with a number of potential third-party collaborators about the alliance with Biosite. The company has several other partnerships of its HuMAb-Mouse technology - 19 in all - with companies such as Centocor Inc., of Malvern, Pa.; Regeneron Pharmaceuticals Inc., of Tarrytown, N.Y.; and Eos Biotechnology Inc., of South San Francisco.

The alliance with Biosite gives Medarex's partners access to the phage display technology, Appelbaum said.

Both Padilla and Appelbaum said it's too early to tell when either company might move a potential product into clinical trials.

"We are already in discussions with partners, so we have already started marketing this service," Padilla said. "But it's premature to say as to when we'd have a deal in place and when we'd have targets coming to fruition."

The HuMAb-Mouse technology enables the creation of fully human antibodies, avoiding the need for humanization or genetic engineering. When HuMAb-Mice are immunized with a target protein, their immune systems create an array of antibodies.

Biosite's Omniclonal antibody technology employs phage display capabilities and an efficient antibody expression and purification process to generate custom antibody libraries from the array of antibodies created by HuMAb-Mice. The company has methods to select large numbers of different antibodies, each of which exhibits high affinity for the target protein.

Together, the two technologies - called Trans-Phage Technology - are expected to rapidly produce high-affinity antibodies with substantial diversity.