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Biotech / Medical : PFE (Pfizer) How high will it go? -- Ignore unavailable to you. Want to Upgrade?

To: Anthony Wong who wrote (7785)	6/3/1999 2:15:00 PM
From: Anthony Wong	Read Replies (2) \| Respond to of 9523

FEATURE-Biotechs bet on medicine-making mice By Laney Salisbury NEW YORK, June 3 (Reuters) - Two biotech firms have separately developed specially engineered mice that are essentially tiny factories -- and hopefully money-making machines -- for cranking out powerful medicines against a wide range of human diseases. The companies, Abgenix Inc. <ABGX.O> and Medarex Inc. <MEDX.O>, have spent millions of dollars and years of research developing the mice, which are hot items among drug makers hoping to tap into what is expected to be a multibillion dollar industry of medicines based on antibodies. Scientists have been trying for years to harness these powerful natural disease fighters made by our immune systems but only recently have they made significant progress. In the last two years, Abgenix and Medarex have signed some 14 licensing partnerships between them. Revenues from the total antibody therapeutic market in 1999 are expected to reach $1.3 billion, up 336 percent from 1997 and 63.1 percent from 1998. By 2002, revenues could total $3.1 billion from 19 different products, according to Richard van den Broek, a drug analyst at Hambrecht & Quist. Currently there are about eight antibody products on the market, including Genentech Inc.'s <GNE.N> Herceptin for breast cancer. But those products are part mouse and part human, so-called hybrid antibodies. Abgenix and Medarex would distinguish themselves by being "fully human." The bioengineered mice, which look like normal cute rodents, are more than meet the eye. Their own genes for making disease-fighting antibodies have been eliminated and replaced with human ones that make fully human antibodies. The products from these mice could herald the start of a new age of antibody-based therapies to treat disease with minimal side effects, said analysts. These mice are "cheaper, faster and better than traditional methods. They will be rapidly adopted as the standard platform for developing monoclonal antibodies going forward," said Van den Broek. Monoclonal antibodies are large quantities of an antibody that bind very selectively with a foreign invader, such as cancer, without harming healthy neighboring cells. Scientists have been trying to harness the potential therapeutic power of antibodies since the early 1980s, with little success until the newer hybrid antibodies came along in the last two years. Typically, drug makers create hybrid antibodies out of genetically engineered combinations of human and mouse gene fragments. But because these antibodies contain small bits of mouse protein, they trigger an immune response, which can include potentially fatal fever. What Abgenix and Medarex did was to create a better mouse -- one that would produce antibodies with only human components. "This is state of the art," New-Jersey-based Medarex Chief Executive Donald Drakeman told Reuters. "They are the fulfillment of the original antibody dream." To make the desired antibody, scientists inject the mouse with an antigen, such as a protein from a specific type of cancer. The mouse then produces an immune response -- a specific antibody that attacks the foreign protein. Since the antibodies are human they carry little or no risk of causing immune reaction and theoretically can be administered again and again to treat chronic conditions, according to company officials. Such pharmaceutical powerhouses as Pfizer Inc. <PFE.N>, Schering-Plough Corp. <SGP.N> and Novartis AG <NOVZn.S> have been hoping to tap into the growing antibody market and the potential revenue power of these mice. The three industry giants are among the more than 14 partnerships Abgenix and Medarex have formed in the past two years, and more are on the way. "We expect to have five to six licensing deals per year" in 1999 and beyond, said Kurt Leutzinger, chief financial officer of California-based Abgenix. Each licensing partnership commands about $8 million in upfront and milestone payments, plus royalties on potential sales of therapies produced from the antibodies generated by the mice. Both companies say most of their larger expenses are behind them. Abgenix spent seven years and $45 million to produce its XenoMouse. Drakeman declined to give specifics for Medarex's HuMab-Mouse but did concede it's "a breed 'em, feed 'em, ship 'em operation now." "It's a great business model," said Joe Silverman, analyst at BancBoston Robertson Stephens. "They get payments upfront and about 5 percent royalties down the road and don't spend anything." In addition to partnerships, both companies have their own drugs in trials, which, when partnered with manufacturers and distributors, could rack up significantly higher upfront and royalty payments because of their late-stage development. Abgenix has a 17-antibody portfolio, four of which the company is developing on its own. Its proprietary ABX-IL8 treatment for psoriasis and rheumatoid arthritis is the farthest along, in Phase II mid-stage human trials, said Leutzinger. ABX-IL8 is expected to hit the market in 2003, which would make it the first fully human antibody product to reach U.S. medicine chests. Its success -- or failure -- could determine whether these are the mice that truly roar. moneynet.com@NEWS-P2&Index=0&HeadlineURL=../News/NewsHeadlines.asp&DISABLE_FORM=&NAVSVC=News\Company