By Mary Welch
In a deal worth about $20 million, Abgenix Inc. extended its collaboration with Pfizer Inc. to generate antibodies against two more antigen targets.
Under the agreement, Fremont, Calif.-based Abgenix will use its XenoMouse technology to generate fully human antibodies to two antigen targets named by Pfizer. The two companies now are working on five product candidates, all in the oncology field.
¿It¿s an interesting deal. While a lot of other companies are trying to break through to Pfizer, Pfizer has re-upped three times, now a fourth, with Abgenix. It¿s clearly sending some signals,¿ said Thomas Dietz, director of research at Pacific Growth Equities Inc. in San Francisco.
¿It shows that Pfizer is sticking with the XenoMouse technology instead of spreading its eggs in different baskets,¿ Dietz said. ¿Clearly, they are finding something interesting in the collaboration and are willing to put more money into it. Also, Pfizer is not a biologics company and they are spending a lot of money in biologics, which is pretty significant.¿
¿It goes to show that Abgenix continues to not only dominate the class of those generating new antibodies, but to have a distinguished, prestigious list of partners,¿ said Jay Silverman, senior analyst with Robertson Stephens Inc. in New York. ¿No other company in the field can match Abgenix¿s partners. It also shows that Pfizer is stepping up its interest in the antibody field ¿ more than any other pharmaceutical company. Five antibodies is a pretty strong testament to its interest.¿
Kurt Leutzinger, Abgenix¿s vice president and chief financial officer, agreed with Silverman¿s assessment.
¿I think the extension speaks for itself,¿ Leutzinger said. ¿It¿s very significant in that we¿ve been working together since 1997 and Pfizer is increasing its use of the technology to make fully human antibodies. Obviously there is great satisfaction on how the technology is performing. It¿s also evident that they are becoming increasingly interested in fully human antibodies as an alternative to small molecules.¿
Pfizer, Leutzinger said, ¿is clearly carving out a place for more research for antibody development, much more than the rest of the pharmaceutical industry. Antibodies have arrived and are finally getting a lot of respect. Pfizer isn¿t abandoning small molecules, but they are looking closely at antibodies.¿
The companies¿ collaboration dates back to late 1997 when Pfizer agreed to pay up to $30 million for Abgenix to generate antibodies against up to three undisclosed antigen targets. Pfizer made an equity investment as well as paid research costs and license fees. The company also will provide royalties from sales of any products manufactured from the alliance. (See BioWorld Today, Jan. 5, 1998, p. 1.)
As with the original agreement, New York-based Pfizer will be responsible for product development, manufacturing and marketing. Under this agreement, Abgenix will receive a fee to extend the agreement and could receive research and license fees and milestone payments.
¿They pretty much are the exact agreements,¿ Leutzinger said. ¿Essentially it¿s about $10 million per antibody.¿
Ten months after the first agreement, Pfizer asked Abgenix to generate the second antibody (see BioWorld Today, Oct. 27, 1998, p. 1). In late 1999, Pfizer exercised its option for a third antigen target. Although Pfizer is directing the program, Leutzinger said it is his understanding that an investigational new drug application will be filed this year for at least one of the antibodies developed in the collaboration.
Although Pfizer made an up-front equity payment, it does not represent a large percentage of the company, Leutzinger said. Pfizer owns about 160,000 shares and, as of Feb. 29, there were about 20 million shares of Abgenix stock outstanding.
Abgenix¿s XenoMouse technology genetically rebuilds mice so that the genes that produce antibodies are shut down and replaced with human antibody-producing genes. The mice then produce fully human antibodies that, as immune system proteins, can combat many diseases. The company can make fully human antibodies ready for manufacturing scale-up in two to four months after immunization.
Abgenix¿s stock (NASDAQ:ABGX) closed Tuesday at $322.125, up $35.375, or 12 percent.