By Mary Welch

Genzyme Transgenics Corp. signed a manufacturing agreement with Abgenix Inc. to use its transgenics technology to produce ABX-IL8, a fully human monoclonal antibody now in Phase II trials for psoriasis.

Under the terms of the agreement, Genzyme Transgenics (GTC) will develop transgenic goats that express ABX-IL8 in their milk. Terms were not disclosed, although Genzyme will receive fees and milestone payments.

Thomas Dietz, director of research at Pacific Growth Equities Inc., in San Francisco, estimated the value of the financial arrangement to be in the $5 million to $10 million range.

"This is an important deal for us for a number of reasons," said Sandra Nusinoff Lehrman, president and CEO of GTC. "We are pleased to have another quality partner like Abgenix to work with, and this deal shows that our technology is important and complementary, not competitive, to Abgenix's technology. It also shows that we can play an important role in the production of important therapeutics for commercialization and clinical trials."

This deal "underscores the fact that this is not a technology in search of applications," said Bill Tanner, vice president of SG Cowen Securities Corp., in New York. "This is providing a commercially valuable product. With their partners, and the quality of their partners, Genzyme is making a case for building the utility of the technology. It's a great deal."

Both Abgenix, which is based in Fremont, Calif., and GTC have technologies that center on transgenic animals. Abgenix generates numerous fully human antibodies to a given target using its XenoMouse strain of transgenic mice. From this pool of different antibodies, Abgenix then selects the optimal antibody and its corresponding gene for product development.

For its part, GTC can engineer the gene encoding the selected antibody into transgenic goats that will produce the antibody in their milk. The antibody is then purified from the goat's milk. With a small herd of such transgenic goats, sufficient volume of an antibody could theoretically be produced to meet even large market needs.

"We believe this agreement may lead to an additional transgenic production contract between the two companies, as Genzyme Trangenics' technology is a complementary fit with Abgenix's development efforts on human monoclonal antibodies," Elise Wang, first vice president of PaineWebber Inc. in New York, wrote in a research paper. "In our opinion, Genzyme Transgenics is the leader in applying transgenic technology to the development of therapeutic proteins with its lead compound, transgenic ATIII, successfully completing one of two pivotal Phase III trials."

GTC, which is headquartered in Framingham, Mass., applies transgenic technology to the development and production of monoclonal antibodies and other recombinant proteins for therapeutic and biomedical uses.

It has collaborations with eight partners on 11 different monoclonal antibodies and immunoglobulin fusion molecules.

Currently, GTC has five products in Phase II trials:

¿ D2E7, a fully human monoclonal antibody for rheumatoid arthritis that is moving into Phase III;

¿ Antegren, another humanized monoclonal antibody, for neurological disorders;

¿ CTLA4Ig, an immunoglobulin fusion/soluble receptor for rheumatoid arthritis;

¿ PRO542, a CD4/immunoglobulin fusion antibody for HIV and AIDS; and

¿ an unnamed immunoglobulin fusion protein for organ transplant rejection and autoimmune disorders.

The company, along with Genzyme General, of Cambridge, Mass., recently reported positive Phase III data for transgenically produced recombinant human antithrombin III (rhATIII). The drug is designed to restore sensitivity to the anticoagulant heparin in patients who are resistant and who undergo elective heart surgery that requires cardiopulmonary bypass. (See BioWorld Today, Jan. 11, 2000, p. 1.)

Manufacturing Deal A First For Abgenix

The deal with GTC is Abgenix's first for commercial transgenic manufacturing; the company needed to move now because it takes about two years to establish a productive herd of animals, which is in line with ABX-IL8's regulatory timetable.

Abgenix, which raised $630 million in a recent follow-on public offering, started a Phase II trial with ABX-IL8 earlier this month. The multicenter, placebo-controlled trial is expected to enroll 90 patients with moderate to severe psoriasis. An interim review of data is possible by the end of the year. Future additional Phase II trials are under consideration for psoriasis and other indications, including rheumatoid arthritis and cancer.

ABX-IL8 is a fully human monoclonal antibody developed using Abgenix's XenoMouse technology. ABX-IL8 targets the interleukin-8 cytokine, which can cause unwanted inflammation. There is evidence that IL-8 contributes to a number of inflammatory diseases, including psoriasis, rheumatoid arthritis and inflammatory bowel disease.

ABX-IL8 may intervene at multiple steps in the disease pathology by blocking IL-8, the company said.

Genzyme Transgenics' stock (NASDAQ:GZTC) closed Tuesday at $20.937, up 43.75 cents. Abgenix's stock (NASDAQ:ABGX) closed Tuesday at $98, down $6.