Abgenix Case Study

Topics: Clinical trial, New Drug Application, Food and Drug Administration Pages: 5 (1197 words) Published: November 15, 2012
A. Introduction:

Abgenix was a company founded in California who had a unique method for generating antibodies useful in treating a number of diseases, one of which was cancer. They named this unique method XenoMouse. Abgenix spent 7 years and $40 million to produce XenoMouse which was a genetically engineered mouse which could produce antibodies that would treat illnesses like cancer, transplant rejection and inflammation.

B. Abgenix Ways To Generate Revenue:

Abgenix generated revenues in two different ways:

1- It licensed XenoMouse technology to numerous corporate collaborators including leading pharmaceutical companies. A collaborator paid an upfront fee, agreed to payments as the drug development program reached certain milestones and a royalty on sales should the drug be commercialized.

2- The second way Abgenix hoped to generate revenues was by pursuing the early stages of XenoMouse-based drug development, meeting with some success and then selling off the rights to develop and market the drug.

C. Abgenix XenoMouse Generated Drugs in various stages of the FDA Process:

First of all we have to mention the Food and Drug Administration (FDA) processes. Before testing in humans was permitted, Preclinical Trials had to show sufficient evidence of safety and desired biological activity to gain FDA approval. Testing then proceeded through three phases with humans. Phase I focused on safety, Phase II on effectiveness against designated diseases and Phase III was large scale testing with the doses to be prescribed when product was sold commercially.

Abgenix had four XenoMouse generated drugs in different stages of the FDA process: These are:
1-ABX-CBL used in graft versus host disease in Phase III
2-ABX-IL8 used in psoriasis and rheumatoid arthritis in Phase II
3-ABX-EGF used in dependent cancers in Phase I
4-ABX-RB2 used in organ transplant rejection in preclinical phase.

D. Abgenix Business Model:

Abgenix conceptualized the antibody product development value chain to have eight steps. These steps are as follows: 1- Target discovery
2- Target validation
3- Antibody creation
4- Preclinical development
5- Clinical development
6- Process development
7- Manufacturing
8- Marketing

In terms of this value chain model, Abgenix’s two businesses were just including some of the steps. When we recall them; these two businesses were technology licensing of XenoMouse and proprietary product development programs. Technology licensing of XenoMouse was solely doing Step 3 (Antibody Creation). Proprietary product development programs were doing Step 3 and Step 4 and some but not all of Step 5. (Antibody Creation, Preclinical Development and some part of Clinical Development)

Abgenix four development programs had proceeded to different stages although Abgenix had not yet even neared the point of filling a New Drug Application with the FDA for any of them. The licensing process had no risk at all. Investigational New Drug applications filed with the FDA to get approval for human testing and Phase I trials were not big deal for antibody therapies like Abgenix because Abgenix methods had no safety problems. Phase II was the inflection point where you get the big bump in value. Intrinsically there were still things to work out in Phase III and with FDA but Abgenix believed that once you handled Phase II you could come over Phase III as well and captured a lot of value.

E. Status of ABX-EGF and ABX-EGF Decision:

ABX-EGF performance in preclinical trials with animals was outstanding. Mice as the treatment subjects were injected with human epidermal cancer cells. No treatment was administered initially and the cancer tumors began to grow. After about two weeks, the test mice were injected with ABX-EGF twice a week for three weeks. Mice received no other cancer treatment; thus this was a test of ABX-EGF as a monotherapy rather than as a complement...
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