By Randall Osborne
Abgenix Inc., the year-old subsidiary of Cell Genesys Inc., followed up a $20 million financing completed early last week with a potential $30 million deal with Pfizer Inc., for which Abgenix will generate antibodies against undisclosed antigen targets.
The infusion of money and the collaboration with Pfizer represent an endorsement of the technology developed by Abgenix, said Kathleen Glaub, senior vice president and chief financial officer of Cell Genesys, and Abgenix likely will file for an initial public offering next year.
"They will be in a good position to do that in the next six to 12 months," Glaub said.
With a platform technology called XenoMouse, which uses a strain of genetically engineered mice, Fremont, Calif.-based Abgenix can make fully human antibodies ready for manufacturing scale-up in two to four months after immunization.
That means antibody therapeutics can move more quickly to clinical trials. The collaboration with Pfizer, of New York, aims to develop antibodies for up to three undisclosed targets.
Under terms of the deal, Pfizer will make an equity investment that is part of an up-front payment, and other payments will be made as milestones are reached. Pfizer will pay research costs and license fees, and provide royalties from sales of any products, which will be manufactured and marketed by Pfizer.
Scott Greer, president and CEO of Abgenix, said more partnerships will be made, but the proportion of them in relation to independently developed products likely will change over time.
"It's a question that occupies our strategic thinking," Greer said. "The technology is easily leveraged through partnerships, so we will do a lot of them in the early years. But, for select opportunities, we will bring the drug all the way forward ourselves."
In the private placement completed earlier, Abgenix raised $20 million by issuing 3.1 million new shares of stock at $6.50 per share to a group of new investors. The number of shares is 800,000 more than the original offering, and was increased to accommodate oversubscription.
The investors are led by the Omega funds, which are members of the Robertson Stephens Funds family, and include Mehta and Isaly, of New York; Lombard Odier, of Zurich, Switzerland; New York Life; Forward Ventures, of San Diego; and SE Banken, of Stockholm, Sweden.
Proceeds from the placement will be used to pay for clinical trials, product development and technology licensing. Abgenix has three antibody products in development.
ABX-CBL is in Phase II trials for steroid-resistant graft-vs.-host disease, a fatal and untreatable complication of allogeneic bone marrow transplants. Glaub said data probably will be available in mid-1998.
ABX-IL8 targets inflammation. Abgenix plans to file an investigational new drug application for that drug early next year, and begin clinical trials in patients with moderate to severe psoriasis, with early data available by the end of next year.
ABX-EGF is Abgenix's lead cancer product, and blocks the action of growth factors in some solid tumors. "We expect to begin clinical trials in the second half of 1998," Glaub said.
BancAmerica Robertson Stephens, of San Francisco, served as agent for the private placement, and Lehman Brothers, of New York, was comanager.
Another company developing human monoclonal antibodies in mice is GenPharm International Inc., of Palo Alto, Calif., which uses what it calls the HuMab-Mouse strain. GenPharm was acquired by Medarex Inc., of Annandale, N.J., in October 1997. (See BioWorld Today, Oct. 28, 1997, p. 1.)
Greer said the two companies have cross-licensed intellectual property and patents, although they have different product development focuses. "Right now, it's a two-horse game," he said.
Cell Genesys' stock (NASDAQ:CEGE) closed Wednesday at $8.50, up $0.50. *