By Randall Osborne
West Coast Editor
In a bid to find the fairest way of distributing antibodies for clinical development as part of their new collaboration, Abgenix Inc. and Corixa Corp. said they will hold a closed auction for rights to pursue each antibody.
"It's a mechanism to determine which of us wants it most," said Kurt Leutzinger, vice president and chief financial officer of Fremont, Calif.-based Abgenix.
The deal is otherwise structured along traditional lines. Seattle-based Corixa will contribute three targets at first, and up to three targets per year during the six-year pact. Abgenix, of Fremont, Calif., will use its transgenic XenoMouse technology to generate, screen and characterize human monoclonal antibodies for Corixa's antigens.
Determining whether the characterized antibodies are effective in tissue culture will be the job of Corixa, and in some cases Abgenix.
When both firms agree an antibody is ripe for investigation, they will hold an auction for development rights to it, and the company with the winning bid will pay that amount to the other. The winner will be responsible for costs and decisions from that point forward, providing milestone payments to the other firm, along with small royalties on product sales.
"In a more informal way, people go through the same process of dividing up property that the two companies have joint interests in," Leutzinger told BioWorld Today. "This just defines the process more precisely." He said he didn't know how common a formal auction might be, but said he had never heard of it elsewhere in biotech, and declined to explain the auction method that will be used.
"It's hard to say [this agreement] is similar to other deals we've done," he added. "It's different, but similar in the sense that it provides access to these targets that we can develop candidates to."
Other terms were not made public. "We've disclosed as much as we're allowed," Leutzinger said.
Earlier this month, Abgenix signed a XenoMouse agreement worth $100 million or more plus royalties with Cambridge, Mass.-based Millennium Pharmaceuticals Inc., the latest in a string of collaborators for Abgenix. (See BioWorld Today, March 8, 2000, p. 1.)
Corixa, which said it hopes to file a biologics license application for its melanoma vaccine by the end of 2000, also had partnering news earlier this month, when it teamed up with QLT Therapeutics Inc., of Vancouver, British Columbia, in a pact to try photodynamic therapy in disease areas where its use has been unexplored previously. Terms were not disclosed. (See BioWorld Today, March 6, 2000, p. 1.)
Last summer, Corixa paid $56 million for Ribi ImmunoChem Research Inc., of Hamilton, Mont., and also acquired Anergen Inc., of Redwood City, Calif., for $7.1 million, and GenQuest Inc., of Seattle, for $12 million. Corixa recently said it plans to sell 2 million shares of common stock. (See BioWorld Today, March 9, 2000, p. 1; and June 11, 1999, p. 1.)
Abgenix's stock (NASDAQ:ABGX) closed Tuesday at $201.375. Corixa's shares (NASDAQ:CRXA) ended the day at $33, down $17.875.