Eek, a XenoMouse: Abgenix, Inc.

Abstract

The two things that make Abgenix stand out are a simple founding technology and an uncanny ability to extricate itself from unwanted contractual situations. The company's first and ongoing business achievement is the separation from its parent, Cell Genesys. The divorce began in 1996 when Abgenix was spun out. Cell Genesys now owns just 12% of Abgenix's stock after selling some holdings and dilution by further fund-raising. But, says Davis, “they have over $200 million in the bank because of the last financing, and they still have a stake in Abgenix. At this point I think everyone is happy.”Abgenix was originally spun out because its research did not fit with the new gene-therapy focus of Cell Genesys. “I doubt that the technology would have blossomed under one roof with non-complementary technologies,” says Davis. A similar rationale drove the separation from JT, which in December 1999 relinquished its 50% interest in XenoMouse intellectual property in return for what now seems a meager sum of $47 million. “It was a fantastic set of events for Abgenix,” says Kucherlapati. “That is the genius of [CEO] Scott Greer and [chief business officer] Ray Withy — how they were able to navigate through those waters.”The third challenge came from Lonberg and Robert Kay of GenPharm. They had independently conceived of and created their own version of the XenoMouse. Their injected plasmid constructs encoded fewer immunoglobulin variable regions than the Abgenix YACs, leading Davis to claim that the Abgenix technology is “superior.” But Lonberg claims that “the quality of the antibodies does not seem to be dependent on the size of the DNA that [goes] into the mice,” and notes that GenPharm now has mice with entire chromosome fragments.Although Abgenix initiated litigation against GenPharm, the two sides soon reached an agreement allowing both to operate. Abgenix had to pay up, but once again got off cheaply. Lonberg, for one, says he “didn't want to have a career in litigation.”So now that Abgenix is free from constraints and rolling in money, how does it feel for the man who started it all? Not wanting to crow too loudly, Kucherlapati goes for understatement. “I think,” he says, “we are happy.”