<PAGE>
- --------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
Date of Report (Date of earliest event reported)
November 23, 1999 (November 23, 1999)
ABGENIX, INC.
-------------
(Exact name of registrant as specified in its charter)
DELAWARE
--------
(State or other jurisdiction of incorporation or organization)
000-24207 94-3248826
--------- ----------
Commission File Number (I.R.S. Employer Identification Number)
7601 Dumbarton Circle
Fremont, California 94555
--------------------------
(Address of principal executive offices)
(510) 608-6500
(Registrant's telephone number, including area code)
- --------------------------------------------------------------------------------
<PAGE>
ABGENIX, INC.
FORM 8-K
NOVEMBER 23, 1999
ITEM 5. OTHER EVENTS
Set forth below is an updated description of the business of Abgenix, Inc.
("Abgenix" or the "Company").
BUSINESS
Overview
Abgenix is a biopharmaceutical company that develops and intends to
commercialize antibody therapeutic products for the treatment of a variety of
disease conditions, including transplant-related diseases, inflammatory and
autoimmune disorders, and cancer. The Company has developed XenoMouse
technology, a proprietary technology which it believes enables quick
generation of high affinity, fully human antibody product candidates to
essentially any disease target appropriate for antibody therapy. Abgenix
intends to use XenoMouse technology to build and commercialize a large and
diversified product portfolio through the establishment of corporate
collaborations and internal product development programs.
The Company has established collaborative arrangements to use its
XenoMouse technology to produce fully human antibodies for twelve partners
covering at least eighteen antigen targets. Pursuant to these
collaborations, the Company and its partners intend to generate antibody
product candidates for the treatment of cancer, inflammation, transplant
rejection, cardiovascular disease, growth factor modulation, and infectious
diseases. Its collaborative partners include Pfizer, Schering-Plough, BASF,
Genentech, Amgen, Millennium BioTherapeutics, Centocor, Research Corporation
Technologies, Japan Tobacco, Cell Genesys, AVI BioPharma, and the U.S. Army.
Of these collaborative partners, Pfizer, Genentech, Millennium
BioTherapeutics, Cell Genesys and the U.S. Army have each entered into
collaborations with Abgenix specifying additional antigens for XenoMouse
antibody development. The financial terms of the XenoMouse technology
collaborations typically include upfront payments, potential license fees and
milestone payments payable to the Company by the collaborative partner
assuming the partner takes the product candidate into development and
ultimately to commercialization. Additionally, if a product receives
marketing approval from the FDA or an equivalent foreign agency, Abgenix is
entitled to receive royalties on any future product sales by the
collaborative partner.
The Company has entered into a multi-antigen research license and option
agreement with Genentech. Under the agreement, Abgenix granted Genentech a
license to utilize XenoMouse technology in its antibody product research
efforts and an option to obtain product
<PAGE>
licenses for up to ten antigen targets. Included in the ten are two
previously identified antigen targets under previous collaboration
arrangements with Genentech. The agreement can be renewed for up to an
additional four targets over a subsequent three year period. The Company
believes that this license will allow Genentech to integrate the use of
XenoMouse technology much earlier in its research and development efforts,
allowing a more complete realization of the advantages of XenoMouse
technology.
The Company also has four antibody product candidates that are under
development internally. Its lead product candidate, ABX-CBL, is an
in-licensed mouse antibody. Abgenix completed a multi-center confirmatory
Phase II clinical trial for ABX-CBL for the treatment of a transplant-related
disease known as graft versus host disease. Its other three antibody product
candidates were generated using XenoMouse technology. Abgenix completed a
Phase I clinical trial for its fully human antibody product candidate in
psoriasis, ABX-IL8, and recently completed a Phase I/II clinical trial in
psoriasis. In addition, the Company entered a Phase I clinical trial for
ABX-IL8 in rheumatoid arthritis in January 1999. The Company initiated a
Phase I clinical trial for ABX-EGF in cancer in November 1999 and patient
enrollment is ongoing. The Company is in preclinical development with one
other fully human antibody product candidate, ABX-RB2, for use in the
treatment of chronic immunological disorders.
The results of the Company's multi-center confirmatory Phase II clinical
trial for ABX-CBL in graft versus host disease support the safety and
efficacy data seen in previously published clinical trials conducted by third
parties. The trial was conducted at nine sites on 27 patients. Data from 23
of the 27 patients was evaluated for efficacy at four dosing levels. A
response rate of 73% was reported among the 15 patients in the three highest
dose groups. The remaining eight patients reported a 38% response at the
lowest dose. Abgenix believes the treatment was safe and well tolerated
except for temporary muscle pain. In May 1999 it reported additional data
from this trial regarding survival. Among patients in the three higher dose
cohorts, 56% (10 of 18) survived at least 100 days from the start of
treatment with ABX-CBL. This compared favorably to a 22% (2 of 9) survival
rate in the low dose cohort. Abgenix has submitted a proposed trial design to
the FDA and, if approved, expect to commence a registration clinical trial
for ABX-CBL in late 1999.
In October 1999, the Company completed a Phase I/II multi-center,
multi-dose, dose escalating, placebo-controlled clinical trial with ABX-IL8
including 45 moderate to severe psoriasis patients. Preliminary findings of
this study indicate that ABX-IL8 was safe and well tolerated at all dose
levels tested. In addition, a preliminary review of multiple activity
measures all indicated improvement with ABX-IL8 treated patients in a dose
dependent manner. Further details of study results are expected to be
presented at the PSORIASIS: FROM GENE TO CLINIC meeting in London on December
2, 1999. Extensive additional clinical trials will be required to establish
efficacy. Abgenix plans to conduct additional Phase II trials in 2000.
Background
THE NORMAL ANTIBODY RESPONSE
<PAGE>
The human immune system protects the body against a variety of
infections and other illnesses. Specialized cells, which include B cells and
T cells, work in concert with the other components of the immune system to
recognize, neutralize and eliminate from the body numerous foreign
substances, infectious organisms and malignant cells. In particular, B cells
generally produce protein molecules, known as antibodies, which are capable
of recognizing substances potentially harmful to the human body. Such
substances are called antigens. Upon being bound by an antibody, antigens can
be neutralized and blocked from interacting with and causing damage to normal
cells. In order to effectively neutralize or eliminate an antigen without
harming normal cells, the immune system must be able to generate antibodies
that bind tightly (i.e., with high affinity) to one specific antigen (i.e.,
with specificity).
All antibodies have a common core structure composed of four subunits,
two identical light (L) chains and two identical heavy (H) chains, named
according to their relative size. The heavy and light chains are assembled
within the B cell to form an antibody molecule that consists of a constant
region and a variable region. An antibody molecule may be represented
schematically in the form of a "Y" structure.
The base of the "Y," together with the part of each arm immediately next
to the base, is called the constant region because its structure tends to be
very similar across all antibodies. In contrast, the variable regions are at
the end of the two arms and are unique to each antibody with respect to their
three-dimensional structures and protein sequences. Because variable regions
define the specific binding sites for a variety of antigens, there is a need
for significant structural diversity in this portion of the antibody
molecule. Such diversity is achieved in the body primarily through a unique
mode of assembly involving a complex series of recombination steps for
various gene segments of the variable region, including the V, D and J
segments.
The human body is repeatedly exposed to a variety of different antigens.
Accordingly, the immune system must be able to generate a diverse repertoire
of antibodies that are capable of recognizing these multiple antigen
structures with a high degree of specificity. The immune system has evolved
a two-step mechanism in order to accomplish this objective. The first step,
immune surveillance, is achieved through the generation of diverse
circulating B cells, each of which assembles different antibody gene segments
in a semi-random fashion to produce and display on its surface a specific
antibody. As a result, a large number of distinct, albeit lower affinity,
antibodies are generated in the circulation so as to recognize essentially
any foreign antigen that enters the body. While capable of recognizing the
antigens as foreign, these lower affinity antibodies are generally incapable
of effectively neutralizing them.
This limitation of the immune surveillance process is generally overcome
by the normal immune system in a second step called "affinity maturation."
Triggered by the initial binding to a specific antigen, the small fraction
of B cells that recognize this antigen is then primed by the immune system to
progressively generate antibodies with higher and higher affinity through a
process of repeated mutation and selection. As a result, the reactive
antibodies develop increasingly higher specificity and affinity with the
latter being potentially a hundred to a thousand times higher than those
generated in the previous immune surveillance process. These
<PAGE>
more specific, higher affinity antibodies have a greater likelihood of
effectively neutralizing or eliminating the antigen while minimizing the
potential of damaging healthy cells.
ANTIBODIES AS PRODUCTS
Recent advances in the technologies for creating and producing antibody
products coupled with a better understanding of how antibodies and the immune
system function in key disease states have led to renewed interest in the
commercial development of antibodies as therapeutic products. According to a
recent survey by the Pharmaceutical Research and Manufacturers of America,
antibodies account for over 20% of all biopharmaceutical products in clinical
development. As of September 30, 1999, the Company was aware of eight
antibody therapeutic products approved for marketing in the United States.
These products are Orthoclone, ReoPro, Rituxan, Zenapax, Herceptin, Synagis,
Remicade and Simulect. These products are currently being marketed for a
wide range of medical disorders such as transplant rejection, cardiovascular
disease, cancer and infectious diseases.
Abgenix believes that, as products, antibodies have several potential
clinical and commercial advantages over traditional therapies. These
advantages include the following:
- faster product development;
- fewer unwanted side effects as a result of high specificity for the
disease target;
- greater patient compliance and higher efficacy as a result of
favorable pharmacokinetics;
- delivery of various payloads, including drugs, radiation and toxins,
to specific disease sites; and
- ability to elicit a desired immune response.
LIMITATIONS OF CURRENT APPROACHES TO DEVELOPMENT OF ANTIBODY PRODUCTS
Despite the early recognition of antibodies as promising therapeutic
agents, most approaches thus far to develop them as products have been met
with a number of commercial and technical limitations. Initial efforts were
aimed at the development of hybridoma cells, which are immortalized mouse
antibody-secreting B cells. These hybridoma cells are derived from normal
mouse B cells that have been genetically manipulated so that they are capable
of reproducing over an indefinite period of time. They are then cloned to
produce a homogeneous population of identical cells that produce one single
type of mouse antibody capable of recognizing one specific antigen
("monoclonal antibody").
While mouse monoclonal antibodies can be generated to bind to a number
of antigens, they contain mouse protein sequences and tend to be recognized
as foreign by the human immune system. As a result, they are quickly
eliminated by the human body and have to be administered frequently. When
patients are repeatedly treated with mouse antibodies, they will
<PAGE>
begin to produce antibodies that effectively neutralize the mouse antibody, a
reaction referred to as a Human Anti-Mouse Antibody, or HAMA, response. In
many cases, the HAMA response prevents the mouse antibodies from having the
desired therapeutic effect and may cause the patient to have an allergic
reaction. The potential use of mouse antibodies is thus best suited to
situations where the patient's immune system is compromised or where only
short-term therapy is required. In such settings, the patient is often
incapable of producing antibodies that neutralize the mouse antibodies or has
insufficient time to do so.
Recognizing the limitations of mouse monoclonal antibodies, researchers
have developed a number of approaches to make them appear more human-like to
a patient's immune system. For example, improved forms of mouse antibodies,
referred to as "chimeric" and "humanized" antibodies, are genetically
engineered and assembled from portions of mouse and human antibody gene
fragments. While these chimeric and humanized antibodies are more
human-like, they still retain a varying amount of the mouse antibody protein
sequence, and accordingly may continue to trigger the HAMA response.
Additionally, the humanization process can be expensive and time consuming,
requiring at least two months and sometimes over a year of secondary
manipulation after the initial generation of the mouse antibody. Once the
humanization process is complete, the remodeled antibody gene must then be
expressed in a recombinant cell line appropriate for antibody manufacturing,
adding additional time before the production of preclinical and clinical
material can be initiated. In addition, the combination of mouse and human
antibody gene fragments can result in a final antibody product which is
sufficiently different in structure from the original mouse antibody leading
to a decrease in specificity or a loss of affinity.
The HAMA response can potentially be avoided through the generation of
antibody products with fully human protein sequences. Such fully human
antibodies may increase the market acceptance and expand the use of antibody
therapeutics. Several antibody technologies have been developed to produce
antibodies with 100% human protein sequences. One approach to generating
human antibodies, called "phage display" technology, involves the cloning of
human antibody genes into bacteriophage, viruses that infect bacteria, in
order to display antibody fragments on the surfaces of bacteriophage
particles. This approach attempts to mimic IN VITRO the immune surveillance
and affinity maturation processes that occur in the body. Because phage
display technology cannot take advantage of the naturally occurring IN VIVO
affinity maturation process, the antibody fragments initially isolated by
this approach are typically of moderate affinity. In addition, further
genetic engineering is required to convert the antibody fragments into fully
assembled antibodies and significant manipulation, taking from several months
to a year, may be required to increase their affinities to a level
appropriate for human therapy. Before preclinical or clinical material can
be produced, the gene encoding the antibody derived from phage display
technology must, as with a humanized antibody, be introduced into a
recombinant cell line.
Two additional approaches involving the isolation of human immune cells
have been developed to generate human antibodies. One such approach is the
utilization of immunodeficient mice that lack both B and T cells. Human B
cells and other immune tissue are transplanted into these mice which are then
subsequently immunized with target antigens to
<PAGE>
stimulate the production of human antibodies. However, this process is
generally limited to generating antibodies only to nonhuman antigens or
antigens to which the human B cell donor had previously responded.
Accordingly, this approach may not be suitable for targeting many key
diseases such as cancer, and inflammatory and autoimmune disorders where
antibodies to human antigens may be required for appropriate therapy. The
other approach involves collecting human B cells that have been producing
desired antibodies from patients exposed to a specific virus or pathogen. As
with the previous approach, this process may not be suitable for targeting
diseases where antibodies to human antigens are required, and therefore is
generally limited to infectious disease targets which will be recognized as
foreign by the human immune system.
The Abgenix Solution-XenoMouse Technology
The Company's approach to generating human antibodies with fully human
protein sequences is to use genetically engineered strains of mice in which
mouse antibody gene expression is suppressed and functionally replaced with
human antibody gene expression, while leaving intact the rest of the mouse
immune system. Rather than engineering each antibody product candidate,
these transgenic mice capitalize on the natural power of the mouse immune
system in surveillance and affinity maturation to produce a broad repertoire
of high affinity antibodies. By introducing human antibody genes into the
mouse genome, transgenic mice with such traits can be bred indefinitely.
Importantly, these transgenic mice are capable of generating human antibodies
to human antigens because the only human products expressed in the mice (and
therefore recognized as "self") are the antibodies themselves. Any other
human tissue or protein is thus recognized as a foreign antigen by the mouse
and an immune response will be mounted. Abnormal production of certain human
proteins, such as cytokines and growth factors or their receptors has been
implicated in various human diseases. Neutralization or elimination of these
abnormally produced or regulated human proteins with the use of human
antibodies could ameliorate or suppress the target disease. Therefore, the
ability of these transgenic mice to generate human antibodies against human
antigens could offer an advantage to drug developers compared with some of
the other approaches described previously. A challenge with this approach,
however, has been to introduce enough of the human antibody genes in
appropriate configuration into the mouse genome to ensure that these mice are
capable of recognizing the broad diversity of antigens relevant for human
therapies.
To make its transgenic mice a robust tool capable of consistently
generating high affinity antibodies which can recognize a broad range of
antigens, Abgenix has equipped the XenoMouse with approximately 80% of the
human heavy chain antibody genes and a significant amount of the human light
chain genes. The Company believes that the complex assembly of these genes
together with their semi-random pairing allows XenoMouse to recognize a
diverse repertoire of antigen structures. XenoMouse technology further
capitalizes on the natural IN VIVO affinity maturation process to generate
high affinity, fully human antibodies. In addition, the Company has
developed multiple strains of XenoMouse, each of which is capable of
producing a different class of antibody to perform different therapeutic
functions. The Company believes that its various XenoMouse strains will
provide maximum flexibility for drug developers in generating antibodies of
the specific type best suited for a given disease indication.
<PAGE>
XenoMouse Technology Advantages
The Company believes that its XenoMouse technology offers the following
advantages:
PRODUCING ANTIBODIES WITH FULLY HUMAN PROTEIN SEQUENCES. The Company's
XenoMouse technology, unlike chimeric and humanization technologies, allows
the generation of antibodies with 100% human protein sequences. Antibodies
created using XenoMouse technology are not expected to cause a HAMA response
even when administered repeatedly to inmmunocompetent patients. For this
reason, antibodies produced using XenoMouse technology are expected to offer
a better safety profile and to be eliminated less quickly from the human
body, reducing the frequency of dosing.
GENERATING A DIVERSE ANTIBODY RESPONSE TO ESSENTIALLY ANY DISEASE TARGET
APPROPRIATE FOR ANTIBODY THERAPY. Because a substantial majority of human
antibody genes has been introduced into XenoMouse, the technology has the
potential to generate high affinity antibodies that recognize more antigen
structures than other transgenic technologies. In addition, through immune
surveillance, XenoMouse technology is expected to be capable of generating
antibodies to host any medically relevant antigen, human or otherwise. For a
given antigen target, having multiple antibodies to choose from could be
important in selecting the optimal antibody product.
GENERATING HIGH AFFINITY ANTIBODIES THAT DO NOT REQUIRE FURTHER
ENGINEERING. XenoMouse technology uses the natural IN VIVO affinity
maturation process to generate antibody product candidates usually in two to
four months. These antibody product candidates may have affinities as much as
a hundred to a thousand times higher than those seen in phage display. In
contrast to antibodies generated using humanization and phage display
technology, XenoMouse antibodies are produced without the need for any
subsequent engineering, a process that at times has proven to be challenging
and time consuming. By avoiding the need to further engineer antibodies, the
Company reduces the risk that an antibody's structure and therefore
functionality will be altered between the initial antibody selected and the
final antibody placed into production.
ENABLING MORE EFFICIENT PRODUCT DEVELOPMENT. In contrast to
humanization or phage display, which require the cloning of an antibody gene
and the generation of a recombinant cell line, the B cells generated in
XenoMouse can be turned directly into hybridoma cell lines for human antibody
production. Therefore, a supply of monoclonal antibodies can be produced
quickly to allow the timely initiation of preclinical and clinical studies.
Furthermore, since XenoMouse technology can potentially produce multiple
product candidates more quickly than humanization and phage display
technology, preclinical testing can be conducted on several antibodies in
parallel to identify the optimal product candidate that will be tested in
clinical trials.
PROVIDING FLEXIBILITY IN CHOOSING MANUFACTURING PROCESSES. Once an
antibody with the desired characteristics has been identified, preclinical
material can be produced either directly from hybridomas or from recombinant
cell lines. Humanized and phage display antibodies, having been engineered,
cannot be produced in hybridomas. In addition to potential timesaving,
<PAGE>
production in hybridomas avoids the need to license certain third party
intellectual property rights covering the production of antibodies in
recombinant cell lines.
Abgenix Strategy
The Company's objective is to be a leader in the generation, development
and commercialization of novel antibody-based biopharmaceutical products.
Key elements of its strategy to accomplish this objective include the
following:
BUILDING A LARGE AND DIVERSIFIED PRODUCT PORTFOLIO. Utilizing its
XenoMouse technology, Abgenix intends to build a large and diversified
product portfolio, including a mix of out-licensed and internally developed
product candidates. The Company is targeting serious medical conditions
including cancer, inflammation, transplant rejection, cardiovascular disease
and growth factor modulation. For its internal programs, Abgenix intends to
collaborate with leading academic researchers and companies involved in the
identification and development of novel antigens. The Company believes the
speed and cost advantages of its technology will enable it to make
cost-effective use of available human and capital resources. The Company can
thus pursue multiple product candidates in parallel as far as completion of
the Phase II clinical stage before entering into a corporate collaboration to
complete clinical and developmental stages and to bring the product candidate
to market. Thus, Abgenix believes it can create a package that includes
antigen rights, human antibodies, and preclinical and clinical data for use
by Abgenix or for marketing to potential collaborative partners.
LEVERAGING XENOMOUSE TECHNOLOGY THROUGH TECHNOLOGY COLLABORATIONS. The
Company intends to diversify its product portfolio and generate revenues by
licensing XenoMouse technology to numerous pharmaceutical and biotechnology
companies interested in developing antibody-based products. It expects to
enter into multiple XenoMouse technology collaborations each year. These
agreements typically allow its collaborative partner to generate fully human
antibodies to one or more specific antigen targets provided by the
collaborative partner. In most cases, the Company provides its mice to
collaborative partners who then carry out immunizations with their specific
antigen target. In other cases, the Company immunizes the mice with the
collaborative partner's antigen target for additional compensation. As an
extension of this concept, Abgenix has granted one multi-antigen research
license to Genentech, allowing Genentech to incorporate XenoMouse technology
into early stages of its antibody product research. The Company plans to
pursue similar multi-antigen research licenses with new or existing
collaborative partners. Its collaborative partners will also need to obtain
product licenses for any antibody product they wish to develop and
commercialize.
The financial terms of its XenoMouse technology collaborations often
include upfront payments, potential license fees and milestone payments plus
royalties on any future product sales. Abgenix has established collaborative
arrangements with twelve partners covering at least eighteen antigen targets.
To date, five of these collaborative partners have each entered into
collaborations specifying additional antigens for XenoMouse antibody
development.
<PAGE>
ESTABLISHING COLLABORATIONS FOR PROPRIETARY PRODUCT CANDIDATES. Abgenix
also intends to build its product portfolio and generate revenues by
licensing proprietary product candidates. These proprietary product
collaborations would involve antibodies made to antigen targets that it
sources. After generating antibody product candidates and self-funding
clinical activities to determine preliminary safety and efficacy, the Company
intends to enter into development and commercialization agreements with
collaborative partners for these proprietary product candidates that it
created. For most of its products, the Company may enter into proprietary
product collaborations before entering the Phase III clinical development
stage allowing the collaborative partner to complete development and to
market the product. For other products, it may develop the product through
clinical trials and license the product candidate to a collaborative partner
for marketing.
Current antibody candidates for potential proprietary product
collaborations include ABX-CBL, ABX-IL8, ABX-EGF and ABX-RB2. The financial
terms of these product collaborations could include license fees upon
signing, milestone payments, and reimbursement for research and development
activities that the Company performs plus royalties on future product sales,
if any. Given its greater investment in creating a proprietary product
candidate, Abgenix expects that an arrangement for these product candidates
could afford higher payments and royalty rates than a typical XenoMouse
technology collaboration.
Proprietary Product Development Programs
Abgenix is currently developing antibody therapeutics for a variety of
indications. The table below sets forth the development status of its
product candidates as of September 30, 1999:
Product
Candidate Indication Status(1)
--------- ---------- ---------
ABX-CBL GVHD Phase II Completed
ABX-IL8 Psoriasis Phase I/II Completed
Rheumatoid Arthritis Phase I
ABX-EGF EGF-Dependent Cancers Phase I
ABX-RB2 Transplant Rejection Preclinical
Autoimmune Disease Preclinical
(1) "Phase II" indicates safety, dosing and efficacy testing in a limited
patient population. "Phase I" indicates safety and proof of concept testing
in a limited patient population and toxicology testing in animal models.
"Preclinical" indicates that the product candidate selected for development
has met predetermined criteria that the Company selects for potency,
specificity, manufacturability and pharmacologic activity in animal and IN
VITRO models.
ABX-CBL
<PAGE>
The CBL antigen is selectively expressed on activated immune cells
including T cells, B cells and natural killer cells. To accelerate its
commercialization plans, Abgenix obtained an exclusive license to ABX-CBL in
February 1997. It believes that a mouse antibody can be utilized to treat
GVHD patients because their immune system is either non-functioning or
severely suppressed and, therefore, no HAMA responses should be generated.
The Company believes ABX-CBL has the ability to destroy activated immune
cells without effecting the rest of the immune system.
GRAFT VERSUS HOST DISEASE. Abgenix is developing ABX-CBL to reduce
unwanted immune responses that occur in GVHD. GVHD is a life-threatening
complication that frequently occurs following an allogeneic bone marrow
transplant ("BMT"). BMTs are used in the treatment of patients with end
stage leukemia, certain other serious cancers and immune system disorders.
An allogeneic BMT procedure involves transferring marrow, the graft, from a
healthy person into an immunosuppressed patient, the host. The transplant is
intended to restore normal circulating immune cells to a patient whose own
immune system is functionally deficient or has been damaged by the treatment
of an underlying disease such as cancer and therefore does not have the
ability to mount a sufficient immune response. Often a portion of the graft
recognizes the host's own cells as foreign, becomes activated and attacks
them, resulting in GVHD. It typically involves damage to multiple organ
systems, including the skin, liver and intestines. GVHD causes extreme
suffering and is the primary cause of death in allogeneic BMT patients. It
is estimated that approximately 12,000 allogeneic BMTs were performed
worldwide in 1998, and this number has been growing at about 15% per year.
GVHD occurs in approximately 50% of allogeneic BMT; and the treatment costs
for GVHD in the United States are estimated to be about $80,000 per patient.
Based on a published clinical study, it is estimated that roughly 50% of
patients with GVHD fail to respond to current treatments, which consist of
steroid and other drug treatments to suppress the grafted immune cells. Less
than 15% of steroid-resistant GVHD sufferers survive for more than one year.
Abgenix believes that a safer and more effective treatment for GVHD could
result in increased use of BMTs.
CLINICAL STATUS. Abgenix completed a multi-center confirmatory Phase II
clinical trial for ABX-CBL for the treatment of steroid-resistant, grade
II/IV GVHD. The trial studied four escalating intravenous dose regimens. It
was conducted at nine sites and involved 27 patients evaluated for safety, 23
of which were also evaluated for efficacy end points. A clinical response
was defined as a two-grade improvement in the International Bone Marrow
Transplant Registry GVHD Severity Scale. GVHD is graded based on clinical
symptoms from grade 1, which is the mildest form, to grade IV, which is the
most severe form. Three of eight patients responded in the lowest dose
cohort. Eleven of 15 patients responded among the three highest doses.
Temporary muscle pain during the infusions determined the maximum tolerated
dose. Abgenix believes the treatment was safe and well tolerated except for
the observed muscle pain.
In May 1999 the Company reported additional data from this trial
regarding survival. Among patients in the three higher dose cohorts, 56% (10
of 18) survived at least 100 days from the start of treatment with ABX-CBL.
This compared favorably to a 22% (2 of 9) survival rate in the low dose
cohort.
<PAGE>
As an extension to the original Phase II trial protocol, Abgenix filed
for and received permission from the FDA to enroll additional patients. Its
application to the FDA to begin a registration clinical trial contained the
original Phase II data plus all additional data then available from the
extension protocol. There can be no assurance that the results of the
extension protocol will be favorable or will extend the findings of the
original Phase II study. In addition, the FDA may view its application as
insufficient and require additional clinical trials before allowing it to
commence a registration clinical trial. Even if the Company conducts a
randomized, controlled registration study, there are several issues that
could adversely affect the results, including lack of standard therapy for
GVHD patients in the control group, unforeseen side effects, variability in
the number and types of patients in the study and response rates required to
achieve statistical significance in the study. In addition, its clinical
trials are being conducted with patients who have failed conventional
treatments and who are in the most advanced stages of GVHD. During the
course of treatment, these patients can die or suffer adverse medical effects
for reasons that may not be related to ABX-CBL. Such adverse effects may
affect the interpretation of clinical trial results. Additional clinical
trials will be extensive, expensive and time-consuming.
In four separate clinical studies conducted prior to Abgenix obtaining
an exclusive license to ABX-CBL, a total of 25 patients with GVHD were
treated with the antibody. No safety concerns with ABX-CBL were identified
in these studies. One such trial, which has been published, was conducted on
eleven patients at St. Jude Hospital in Memphis, Tennessee. In this trial,
ten patients with steroidresistant, Grade III to IV GVHD were treated with
daily doses of ABX-CBL for up to six weeks. The publication reported that
five of ten patients had a complete remission of GVHD, while four of ten had
at least a two-grade improvement in their GVHD score. Only one patient did
not respond to the therapy. Another patient who was treated at St. Jude
Hospital after publication of the study experienced a two-grade improvement
in the patient's GVHD score without adverse side effects. Six additional
patients with GVHD were treated at the University of Wisconsin and Cook-Ft.
Worth Hospital. The reports from these sites indicated that these patients
showed similar results to those described in the published trial conducted at
St. Jude Hospital, with four of the six patients showing at least a two-grade
improvement in their GVHD score. In addition, eight other GVHD patients
received treatment at Stanford University and four of the patients were noted
to have some improvement in their GVHD score, despite using a dose of less
than one-tenth of that employed at the other sites. Immune reaction to the
mouse antibody was assessed in several patients and no HAMA response was
detected clinically. Furthermore, no adverse clinical responses consistent
with an antibody-induced allergic reaction were observed. In addition, a
number of patients were followed after the conclusion of the study for as
long as one year and no adverse ABX-CBL events were observed. There can be no
assurance that the results of its ABX-CBL clinical trials will demonstrate
the same levels of safety and efficacy as those shown by the clinical trials
completed prior to Abgenix obtaining an exclusive license to ABX-CBL.
<PAGE>
ABX-IL8
IL-8, an important inflammatory cytokine produced at sites of
inflammation, attracts and activates white blood cells that mediate the
inflammation process. A number of preclinical studies suggest that excess
IL-8 may contribute to the pathology and clinical symptoms associated with
certain inflammatory disorders. Clinical studies have demonstrated
significantly increased levels of IL-8 in plasma or other bodily fluids of
patients with certain inflammatory diseases, including psoriasis, rheumatoid
arthritis, reperfusion injury and inflammatory bowel disease. Antibodies to
IL-8 have been shown to block immune cell infiltration and the associated
pathology in animal models of several of these diseases. Using its XenoMouse
technology, the Company has generated ABX-IL8, a proprietary fully human
monoclonal antibody that binds to IL-8 with high affinity. Abgenix
in-licensed ABX-IL8 from Xenotech in March 1996. In exchange for a license
fee and royalty payments on future product sales, it received an exclusive
license to ABX-IL8 within the United States, its territories and possessions,
Canada and Mexico and a co-exclusive license (subsequently broadened to be an
exclusive license) in the rest of the world, excluding Japan, Taiwan and
South Korea. The Company is evaluating ABX-IL8 for possible use in the
treatment of psoriasis and rheumatoid arthritis.
PSORIASIS. Psoriasis is a chronic disease that results in plaques, a
thickening and scaling of the skin accompanied by local inflammation. The
disease effects approximately four to five million patients in the United
States and can be debilitating in its most severe form. Approximately
500,000 psoriasis patients suffer from a severe enough form of the disease to
require systemic therapy with immune suppressants and ultraviolet
phototherapy. The risk of serious adverse side effects associated with these
therapies often requires the patients to alternate these various therapeutic
modalities as a precautionary measure.
Scientific studies have shown that IL-8 concentrations can be elevated
by a factor of 150 in psoriatic plaques when compared to normal tissue.
Abgenix believes that IL-8 may promote psoriasis by contributing to three
distinct disease-associated processes. First, IL-8 is produced by a type of
skin cell called keratinocytes, and is a potent growth factor for these skin
cells. It may therefore contribute to the abnormal keratinocyte
proliferation in psoriatic plaques. Second, IL-8 attracts and activates
immune cells that contribute to the inflammation of the psoriatic plaque.
Finally, IL-8 promotes angiogenesis that augments the blood supply necessary
for growth of the psoriatic plaque.
CLINICAL STATUS. Abgenix has completed a Phase I dose-escalating human
clinical trial examining the safety of administering a single intravenous
infusion of five different doses of ABX-IL8 to patients with moderate to
severe psoriasis. There were no serious or unexpected drug-related adverse
events. In October 1999, the Company completed a Phase II multi-center,
multi-dose, dose escalating, placebo-controlled clinical trial with ABX-IL8
including 45 moderate to severe psoriasis patients. Preliminary findings of
this study indicate that ABX-IL8 was safe and well tolerated at all dose
levels tested. In addition, a preliminary review of multiple activity
measures all indicated improvement with ABX-IL8 treated patients in a dose
dependent manner. Further details of study results are expected to be
presented at THE PSORIASIS: FROM GENE
<PAGE>
TO CLINIC meeting in London on December 2, 1999. Extensive additional
clinical trials will be required to establish efficacy. Abgenix plans to
conduct additional Phase II trials in 2000.
RHEUMATOID ARTHRITIS. Rheumatoid arthritis is a chronic disease marked
by inflammation and pain in joints throughout the body. The disease effects
over two million people in the United States. Elevated levels of IL-8 in the
synovial fluid of rheumatoid arthritis patients have been reported to
correlate with the number of infiltrating immune cells. Third-party
published studies have reported that the injection of non-human antibodies to
IL-8 into a rabbit model of rheumatoid arthritis blocked immune cell
infiltration and synovial membrane damage.
CLINICAL STATUS. Because of the similarity in the histopathology of the
inflamed joint and that of the psoriatic plaque, Abgenix entered a Phase I
clinical trial for ABX-IL8 in rheumatoid arthritis in January 1999. ABX-IL8
will be administered by injection to the inflamed knee joints of arthritis
patients who have undergone a pre-dose biopsy and a high-resolution
ultrasound scan.
ABX-EGF
Tumor cells that overexpress epidermal growth factor receptors ("EGFr")
on their surface often depend on EGFr's activation for growth. EGFr is
overexpressed in a variety of cancers including lung, breast, ovarian,
bladder, prostate, colorectal, kidney and head and neck. This activation is
triggered by the binding to EGFr by EGF or Transforming Growth Factor alpha
("TGFa"), both of which are expressed by the tumor or by neighboring cells.
Abgenix believes that blocking the ability of EGF and TGFa to bind with EGFr
may offer a treatment for certain cancers. ABX-EGF, a fully human monoclonal
antibody generated using XenoMouse technology, binds to EGFr with high
affinity and has been shown to inhibit tumor cell proliferation IN VIVO and
cause eradication of EGF dependent human tumors established in mouse models.
Abgenix in-licensed ABX-EGF from Xenotech in November 1997. In exchange for
a license fee and royalty payments on future product sales, the Company
received an exclusive worldwide license to ABX-EGF. Abgenix is conducting
preclinical studies and assessing which tumor types to pursue as possible
targets for treatment with ABX-EGF Studies have shown that ABX-EGF can
inhibit growth of EGF-dependent human tumors cells in mouse models. ABX-EGF
has also demonstrated the ability to reverse cancer cell growth and cause
eradication of established tumors in mice even when administered after
significant tumor growth has occurred. Furthermore, in these models where
tumors were eradicated, no relapse of the tumor was observed after
discontinuation of the antibody treatment.
CLINICAL STATUS. In November 1999, Abgenix initiated a Phase I
dose-escalating human clinical trial examining the safety of administering a
single intravenous infusion of seven different doses of ABX-EGF in the
treatment of a variety of cancers, and patient enrollment is ongoing.
ABX-RB2
In certain immunological diseases where chronic administration of a drug
targeting the CBL antigen is desirable, it may be important to use a fully
human antibody to avoid the risk of a
<PAGE>
HAMA response. Such diseases include organ transplant rejection, primarily
kidney and corneal transplant rejection, as well as autoimmune disorders.
Using its XenoMouse technology, Abgenix has generated ABX-RB2, a fully
human antibody that targets the CBL antigen, and the Company is conducting
preclinical studies on this product candidate. While no human data is
available on ABX-RB2, several clinical trials have been performed using
ABX-CBL prior to Abgenix obtaining an exclusive license to ABX-CBL, the first
generation mouse antibody to the CBL antigen, for the treatment of kidney and
corneal transplant rejection. Although there can be no assurance that the
data observed with ABX-RB2 in these indications will demonstrate the same
degree of efficacy as the data observed with ABX-CBL, the Company believes
the ABX-CBL studies may assist in the design of preclinical and clinical
protocols for future development of ABX-RB2.
ORGAN TRANSPLANT REJECTION. Each year there are approximately 11,000
kidney transplants in the United States. Depending upon a variety of patient
risk factors, many of these procedures result in the patient's immune system
rejecting the organ. Current therapy for kidney transplant rejection
involves administering steroids or other immune system modulators to suppress
the immune system. These therapies suffer from suboptimal efficacy profiles
or dose limiting toxicities.
Prior to Abgenix obtaining an exclusive license to ABX-CBL, three
clinical trials had been conducted using ABX-CBL for the treatment of kidney
transplant rejection. In two trials conducted at Sendai Shakai Hoken
Hospital in Japan, ABX-CBL was administered intravenously daily for nine days
to 41 patients whose kidney transplant rejections were resistant to steroid
therapy. In the first trial, organ rejection was reversed in 17 of 19
patients. In the second trial, organ rejection was reversed in a
dose-dependent fashion in 18 of the 22 patients treated. A third clinical
trial was conducted at the University of California at Los Angeles. In this
study, 13 of the 18 patients had cadaveric donor transplants. This more
refractory population responded to nine days of ABX-CBL treatment with an
overall response rate of 50%. Subset analysis indicated that of the patients
treated prior to severe renal failure, as many as 75% experienced reversal of
the kidney rejections. No serious treatment-related side effects were
observed in any of the patients in these three trials.
In addition to the use of ABX-RB2 in kidney transplant rejection,
Abgenix is also exploring its potential use in corneal transplantation. In a
clinical trial conducted at the University of California at San Diego prior
to Abgenix obtaining an exclusive license to ABX-CBL, six patients were
treated with ABX-CBL after the onset of rejection and four showed graft
preservation. No serious adverse side effects related to the infusion of
ABX-CBL or to an immune response were observed in any of the six patients.
AUTOIMMUNE DISEASE. In autoimmune disease, a subset of the patient's
immune cells react abnormally to a natural component of the patient's own
tissue. Because the CBL antigen is selectively expressed on activated immune
cells including T cells, B cells and natural killer cells, the Company
believes that ABX-RB2 may be effective in treating autoimmune disease.
Abgenix
<PAGE>
intends to conduct preclinical studies in a series of animal models of
autoimmune disease, including rheumatoid arthritis, lupus, multiple
sclerosis, and diabetes.
XenoMouse Technology Collaborations
Abgenix has entered into multiple XenoMouse technology collaborations
with pharmaceutical and biotechnology companies. To date, Abgenix has
collaborative arrangements with twelve companies covering at least eighteen
antigen targets. These collaborations typically provide its collaborative
partners with access to XenoMouse technology for the purpose of generating
fully human antibody product candidates to one specific antigen target
provided by the collaborative partner. Some of these agreements involve
multiple antigen targets. In most cases, Abgenix provides its mice to
collaborative partners who carry out immunizations with their specific
antigen target. In other cases, the Company performs the immunizations for
the collaborative partner and receive additional compensation.
The structure of many of its XenoMouse technology collaborations is
similar. Generally, its collaborative partner first enters into a research
collaboration agreement. This agreement permits its collaborative partner to
conduct limited research on a specific antigen using its XenoMouse
technology. Its collaborative partner may then elect to enter into a research
license and option agreement, although in some cases its collaborative
partners may enter into this agreement without first entering into a research
collaboration agreement. If entered into, this agreement allows its
collaborative partner to conduct additional research to develop antibody
product candidates to a specific antigen target. Generally, a research
license and option agreement does not allow its collaborative partner to
initiate clinical trials with antibody product candidates. To initiate
clinical trials with antibody product candidates to a specific antigen
target, its collaborative partner must exercise the option to obtain a
product license. In most cases, this requires a collaborative partner to
enter into a separate product license agreement. If its collaborative
partner exercises its product license option, it has the right to conduct all
clinical trials and commercialize antibody product candidates. To date, only
one of its collaborative partners has exercised its option to obtain a
product license and none of these options has expired.
As an extension of this concept, Abgenix has granted one multi-antigen
research license to Genentech, allowing Genentech to incorporate XenoMouse
technology into early stages of its antibody product research efforts without
specifically knowing the antigens that it intends to target for XenoMouse
antibody generation. The Company plans to pursue similar multi-antigen
research licenses with new or existing collaborative partners. Its
collaborative partners will also need to execute product licenses for any
antibody product they wish to develop and commercialize.
The financial terms of its XenoMouse technology collaborations often
include upfront payments, potential license fee and milestone payments.
Based upon its current collaborative agreements, these fees and payments may
approximate $8.0 to $10.0 million per antigen target assuming its
collaborative partner takes the antibody product candidate into development
and ultimately to commercialization. In certain instances, the collaborative
partner could make
<PAGE>
reimbursement payments to Abgenix for research that the Company conducts on
behalf of such partner. Additionally, if a product receives marketing
approval from the FDA or an equivalent foreign agency, Abgenix is entitled to
receive royalties on future product sales by the collaborative partner, if
any. Generally, the collaborative partner is responsible for and bears the
costs of product development, worldwide manufacturing and marketing of
product candidates generated under these collaborations.
Abgenix' dependence on collaborative arrangements with third parties
subjects it to a number of risks. Agreements with collaborative partners
typically allow such partners significant discretion in electing whether to
pursue any of the planned activities. The Company cannot control the amount
and timing of resources its collaborative partners may devote to the product
candidates. Even if the Company fulfills its obligations under a
collaborative agreement, the collaborative partner can terminate the
agreement at any time following proper written notice. If any collaborative
partner were to terminate or breach its agreement with Abgenix, or otherwise
fail to complete its obligations in a timely manner, the Company's business,
financial condition and results of operations may be materially adversely
affected.
Of the Company's collaborative partners, Pfizer, Genentech, Millennium
BioTherapeutics, Cell Genesys and the U.S. Army have each entered into
additional collaborations specifying additional antigens for XenoMouse
antibody development. The following table lists its collaborations as of
November 10, 1999:
Partner Field Date
- --------------------------------------------------------------------
Amgen Undisclosed Apr 1999
AVI BioPharma Cancer Jan 1999
BASF Undisclosed Mar 1999
Cell Genesys Gene Therapy Nov 1997
Centocor Cardiovascular Dec 1998
Genentech Multiple Targets Jan 1999
Growth Factor Modulation Jun 1998*
Cardiovascular Apr 1998
Japan Tobacco Psoriasis Jul 1999
Millennium BioTherapeutics Inflammation Sep 1998
Inflammation Jul 1998
Pfizer Cancer Nov 1999
Cancer Oct 1998
Cancer Dec 1997
Research Corp. Technologies Transplant Rejection Dec 1998
Schering-Plough Inflammation Jan 1998
U.S. Army Poxviruses Oct 1999
Filoviruses Jul 1999
<PAGE>
________________
* These agreements were superseded by the January 1999
multi-antigen agreement.
GENENTECH. In April 1998, Abgenix entered into a research license and
option agreement with Genentech to produce fully human antibodies to an
antigen target in the field of growth factor modulation. In June 1998
Genentech expanded its research collaboration with the Company to include a
second antigen target in the field of cardiovascular disease.
In January 1999, Abgenix entered into a multi-antigen research license
and option agreement with Genentech. Under the agreement, the Company
granted Genentech a license to utilize XenoMouse technology in its antibody
product research efforts and an option to obtain product licenses for up to
ten antigen targets, but not more than two in any one year, over the
agreement's six year term. Included in the ten are the two previously
identified antigen targets under the now superseded research license and
option agreement at the new option, license fee and milestone payment levels.
The agreement can be renewed by Genentech for up to an additional four
targets over a subsequent three year period. Genentech acquired 495,356
shares of Abgenix common stock for an aggregate purchase price of $8.0
million. To renew the agreement at the end of the sixth year, Genentech must
purchase an additional $2.5 million of Abgenix common stock at a 50% premium
to the then current market price. Genentech, of South San Francisco,
California, is a leading biotechnology company with extensive efforts in
antibody-based products.
AVI BIOPHARMA: In January 1999, Abgenix entered into a research license
and option agreement with AVI to generate fully human antibodies to human
chorionic gonadotropin (hCG) for the treatment of various cancers. AVI has
reported that a therapeutic vaccine based on hCG has shown promise in Phase
11 clinical trials. AVI, of Portland, Oregon, is a publicly traded
biotechnology company.
CENTOCOR: In December 1998, Abgenix entered into a research
collaboration agreement with Centocor to generate fully human antibodies to
an undisclosed Centocor antigen in the cardiovascular field. Centocor, of
Malvern, Pennsylvania, is a leading developer and marketer of antibody-based
products.
RESEARCH CORPORATION TECHNOLOGIES. In December 1998, Abgenix entered
into a binding memorandum of understanding for a research collaboration
agreement with RCT to generate fully human antibodies to CD45rb. Resultant
antibody product candidates could potentially be used in treating organ
transplant rejection and autoimmme disorders. RCT, of Tucson, Arizona, is a
corporation involved in technology transfer between universities and
industry. Under the RCT agreement, Abgenix may receive either a percentage
of sublicense income received by RCT or milestone and royalty payments on
sales of products.
<PAGE>
PFIZER: In December 1997, Abgenix entered into a research collaboration
agreement with Pfizer to generate fully human antibodies to an antigen target
in the cancer field. In October 1998, Pfizer exercised its option to expand
its research collaboration with Abgenix to include a second antigen target in
the field of cancer. In November 1999, Pfizer exercised its option to expand
its research collaboration with Abgenix to include a third antigen target in
the field of cancer. Pfizer is paying Abgenix to perform the immunizations
and to undertake certain research activities. As part of this arrangement,
in January 1998 Pfizer purchased 160,000 shares of Abgenix series C preferred
stock for $1.3 million and received an option to collaborate with the Company
on up to three antigen targets. These shares converted into 160,000 shares
of common stock upon Abgenix initial public offering. Pfizer, of Groton,
Connecticut, is a leading global pharmaceutical company.
MILLENNIUM BIOTHERAPEUTICS: In July 1998, Abgenix entered into a
research collaboration agreement with Millennium BioTherapeutics to generate
fully human antibodies to an antigen target in the field of inflammation. In
October 1998, Abgenix entered into a research, license and option agreement
with Millennium BioTherapeutics covering the same antigen target. In
September 1998, Abgenix entered into a second research collaboration
agreement with Millennium BioTherapeutics covering a second antigen target in
the field of inflammation. Millennium BioTherapeutics, of Cambridge,
Massachusetts, is a subsidiary of a leading genomics company.
SCHERING-PLOUGH. In January 1998, Abgenix entered into a research
collaboration agreement with Schering-Plough to generate fully human
antibodies to an antigen target in the field of inflammation. Under this
agreement, Schering-Plough is paying the Company to perform the immunizations
and certain research activities. In September 1999, Schering-Plough
exercised its option for a product license. Schering-Plough, of Kenilworth,
New Jersey, is a leading global pharmaceutical company.
CELL GENESYS. In November 1997, Abgenix entered into the gene therapy
rights agreement (the "GTRA") with Cell Genesys. Cell Genesys received
certain rights to commercialize products based on antibodies generated with
XenoMouse technology in the field of gene therapy. Cell Genesys, of Foster
City, California, is a leading gene therapy company.
JAPAN TOBACCO. In June 1999, Abgenix entered into a collaboration
agreement on ABX-IL8 with Japan Tobacco, Inc., under which Japan Tobacco
could potentially receive the right to use clinical data generated by Abgenix
in its own regulatory filings in Japan, Taiwan and Korea.
BASF. In March 1999, Abgenix entered into a research collaboration
agreement with BASF Bioresearch Corporation to generate fully human
antibodies to an undisclosed antigen target. BASF, of Worcester,
Massachusetts, is a subsidiary of a leading global pharmaceutical company.
AMGEN: In April 1999, Abgenix entered into a research collaboration with
Amgen, Inc., to generate fully human antibodies to an undisclosed antigen
target. Under this agreement, Amgen is paying Abgenix to perform the
immunizations and certain research activities. Amgen, of Thousand Oaks,
California, is a leading biotechnology company.
<PAGE>
U.S. ARMY: In July 1999, Abgenix entered into a collaboration with the U.S.
Army Medical Research Institute of Infectious Diseases ("USAMRIID") to
generate fully human antibodies to filoviruses. In October 1999, USAMRIID
expanded the collaboration to include poxviruses. USAMRIID is the lead
medical laboratory for the U.S. Army Biological Defense Research Program.
Joint Venture with Japan Tobacco
XENOTECH
In June 1991, Cell Genesys entered into several agreements with JT
America for the purpose of forming an equally owned limited partnership named
Xenotech. In connection with the formation of Xenotech, both Cell Genesys and
JT America contributed cash, and Cell Genesys contributed the exclusive right
to certain of its technology for the research and development of genetically
modified strains of mice that can produce fully human antibodies. Cell
Genesys assigned its rights in Xenotech to Abgenix in connection with the
formation of Abgenix. As part of the Xenotech relationship, Abgenix provides
research and development on behalf of Xenotech in exchange for cash payments.
As of December 31, 1998, Abgenix has made capital contributions to Xenotech
of approximately $18.6 million and has received approximately $42.9 million
in funding for research related to the development of XenoMouse technology.
Abgenix is currently in preliminary discussions with Japan Tobacco
concerning the possible acquisition by Abgenix of some or all of Japan
Tobacco's interest in Xenotech in exchange for cash or Abgenix common stock
or a combination thereof. The structure and price of any such transaction
has not been agreed to. In connection with the possible acquisition, Abgenix
may enter into an agreement with Japan Tobacco, granting Japan Tobacco
certain rights to use XenoMouse technology and to commercialize products
generated therefrom. The discussions regarding these transactions are very
preliminary and a transaction may not be consummated.
PRODUCT RIGHTS
Under the master research, license and option agreement among Abgenix,
Japan Tobacco and Xenotech (the "MRLOA'), Abgenix and Japan Tobacco have been
provided with colonies of transgenic mice that have been developed for
Xenotech pursuant to Abgenix' research and development efforts on behalf of
Xenotech. Under the MRLOA, Abgenix and Japan Tobacco have the right to use
and transfer to third parties under certain conditions the transgenic mice
for research purposes. The right to commercialize medical products that
incorporate antibodies derived through the use of the transgenic mice can be
licensed from Xenotech by Abgenix and/or Japan Tobacco pursuant to a
nomination process. This process gives Abgenix and Japan Tobacco the right
to select a certain number of antigens per year and receive an option to the
commercial rights in antibodies that bind to the selected antigens. Both
Abgenix and Japan Tobacco are obligated to make royalty payments to Xenotech
on revenues derived from the sale of such antibody products. All payments to
Xenotech are then shared equally by Abgenix and JT America.
<PAGE>
During the nomination process, if either Abgenix or Japan Tobacco, but
not both, selects an antigen, the selecting party receives an option to
obtain an exclusive worldwide license. If both Abgenix and Japan Tobacco
select the same antigen at the same time, each party has an option to an
exclusive license in its home territory and a co-exclusive license in the
rest of the world. The MRLOA defines the home territory of Japan Tobacco as
Japan, Korea and Taiwan, and the home territory of Abgenix as North America.
In the former case where one party selects an antigen, the nonselecting party
has the opportunity to obtain an option to an exclusive license to the
selected antigen in the nonselecting party's home territory by exercising its
buy-in right within the allotted time. Each party has a limited number of
buy-in rights, and they cannot be exercised by the nonselecting party if the
antigen selected is subject to proprietary rights of a third party and the
third party is unwilling to license its rights to the antigen to the
nonselecting party.
Abgenix must obtain licenses from Xenotech to commercialize antibody
products generated by XenoMouse technology. If the Company has used its
yearly allotment of licenses to develop antigen targets and desire to acquire
a license to develop additional antigen targets, the Company may have to
negotiate with JT America or others to acquire such rights. Disputes with JT
America or its parent company, Japan Tobacco, may result in the loss of the
right to commercialize a product candidate by either party. Limits on
Abgenix' ability to acquire additional licenses to develop antigen targets or
disputes with JT America or Japan Tobacco will limit its ability to establish
collaborations and fully realize the commercial potential of XenoMouse
technology.
Gene Therapy Rights Agreement with Cell Genesys
As stated above, the GTRA provides Cell Genesys with certain rights to
commercialize products based on antibodies generated with XenoMouse
technology in the field of gene therapy. Under the GTRA, Cell Genesys has
certain rights to direct Abgenix to make antibodies to two antigens per year.
In addition, Cell Genesys has an option to enter into a license to
commercialize antibodies binding to such antigens in the field of gene
therapy. Cell Genesys is obligated to make certain payments to Abgenix for
these rights including reimbursement of license fees and royalties on future
product sales payable to Xenotech under the MRLOA, and Abgenix would then
receive a portion of such royalties from Xenotech. The GTRA also prohibits
the Company from granting any third-party licenses for antibody products
based on antigens nominated by Abgenix for its own purposes where the primary
field of use is gene therapy. In the case of third-party licenses granted by
Abgenix where gene therapy is a secondary field, the Company is obligated to
share with Cell Genesys a portion of the cash milestone payments and
royalties resulting from any products in the field of gene therapy.
On October 18, 1999, Genzyme General announced that it had entered into
a definitive agreement with Cell Genesys under which Genzyme will acquire
Cell Genesys. Following the completion of the acquisition, Genzyme will
acquire Cell Genesys' rights under the GTRA.
<PAGE>
Intellectual Property
Abgenix will be able to protect its proprietary rights from unauthorized
use by third parties only to the extent that its proprietary rights are
covered by valid and enforceable patents or are effectively maintained as
trade secrets. While Abgenix has additional pending patent applications in
the United States relating to XenoMouse technology, only one patent has
issued. The Company tries to protect its proprietary position by filing
United States and foreign patent applications related to its proprietary
technology, inventions and improvements that are important to the development
of its business. The patent position of biopharmaceutical companies involves
complex legal and factual questions and, therefore, enforceability cannot be
predicted with certainty. Patents, if issued, may be challenged, invalidated
or circumvented. Thus, any patents that Abgenix owns or licenses from third
parties may not provide any protection against competitors. Its pending
patent applications, those it may file in the future, or those it may license
from third parties, may not result in patents being issued. Also, patent
rights may not provide the Company with proprietary protection or competitive
advantages against competitors with similar technology. Furthermore, others
may independently develop similar technologies or duplicate any technology
that the Company has developed. The laws of certain foreign countries do not
protect its intellectual property rights to the same extent as do the laws of
the United States.
In addition to patents, Abgenix relies on trade secrets and proprietary
know-how. The Company seeks protection, in part, through confidentiality and
proprietary information agreements. These agreements may not provide
meaningful protection or adequate remedies for its technology in the event of
unauthorized use or disclosure of such information. The parties to these
agreements may breach them. Furthermore, Abgenix' trade secrets may
otherwise become known to, or be independently developed by, its competitors.
Research has been conducted for many years in the antibody field. This
has resulted in a substantial number of issued patents and an even larger
number of patent applications. Patent applications in the United States are,
in most cases, maintained in secrecy until patents issue. The publication of
discoveries in the scientific or patent literature frequently occurs
substantially later than the date on which the underlying discoveries were
made. Abgenix commercial success depends significantly on its ability to
operate without infringing the patents and other proprietary rights of third
parties. Its technologies may infringe the patents or violate other
proprietary rights of third parties. In the event of infringement or
violation, Abgenix and its collaborative partners may be prevented from
pursuing product development or commercialization. Such a result will
materially adversely affect the Company's business, financial condition and
results of operations.
In March 1997, Abgenix entered into a cross-license and settlement
agreement with GenPharm. to avoid protracted litigation. See "-Patent
Cross-License and Settlement Agreement with GenPharm."
<PAGE>
Abgenix has one issued European patent relating to XenoMouse technology
that is currently undergoing opposition proceedings within the European
Patent Office and the outcome of this opposition is uncertain.
Abgenix is aware of at least two companies that each have a patent
claiming the use of antibodies to the EGF receptor in combination with
chemotherapy. The Company believes that its antibody product candidate
targeting the EGF receptor, ABX-EGF, may be effective without use in
combination with chemotherapy and is not covered by such claims. If clinical
trials demonstrate that combination therapy is preferable or necessary in the
treatment of patients, the Company may desire to or be required to obtain a
license under such claims from a third party in order to commercialize
ABX-EGF. The license might not be available on commercially reasonable
terms, if at all.
The biotechnology and pharmaceutical industries have been characterized
by extensive litigation regarding patents and other intellectual property
rights. The defense and prosecution of intellectual property suits, United
States Patent and Trademark Office interference proceedings and related legal
and administrative proceedings in the United States and internationally
involve complex legal and factual questions. As a result, such proceedings
are costly and time-consuming to pursue and their outcome is uncertain.
litigation may be necessary to:
- enforce the Company's issued and licensed patents;
- protect trade secrets or know-how that Abgenix owns or licenses; or
- determine the enforceability, scope and validity of the proprietary
rights of others.
If Abgenix becomes involved in any litigation, interference or other
administrative proceedings, it will incur substantial expense and the efforts
of its technical and management personnel will be significantly diverted. An
adverse determination may subject the Company to significant liabilities or
require it to seek licenses that may not be available from third parties.
Abgenix may be restricted or prevented from manufacturing and selling its
products, if any, in the event of an adverse determination in a judicial or
administrative proceeding or if the Company fails to obtain necessary
licenses. Costs associated with such arrangements may be substantial and may
include ongoing royalties. Furthermore, Abgenix may not be able to obtain
the necessary licenses on satisfactory terms, if at all. These outcomes will
materially adversely affect its business, financial condition and results of
operations.
PATENT CROSS LICENSE AND SETTLEMENT AGREEMENT WITH GENPHARM
In 1994 Cell Genesys and GenPharm, and, beginning in 1996, Abgenix
became involved in litigation primarily related to intellectual property
rights associated with a method for inactivating a mouse's antibody genes and
technology pertaining to transgenic mice capable of producing fully human
antibodies. Rather than endure the cost and business interruption of
protracted litigation, in March 1997 Cell Genesys, along with Abgenix,
Xenotech and Japan Tobacco, signed a
<PAGE>
comprehensive patent crosslicense and settlement agreement with GenPharm that
resolved all related litigation and claims between the parties. Under the
cross-license and settlement agreement, Abgenix has licensed on a
non-exclusive basis certain patents, patent applications, third-party
licenses and inventions pertaining to the development and use of certain
transgenic rodents including mice that produce fully human antibodies.
Abgenix uses its XenoMouse technology to generate fully human antibody
products and has not licensed the use of, and does not use, any transgenic
rodents developed or used by GenPharm. As initial consideration for the
cross-license and settlement agreement, Cell Genesys issued a note to
GenPharm due September 30, 1998, for $15.0 million payable by Cell Genesys
and convertible into shares of Cell Genesys common stock. Of this note,
approximately $3.8 million satisfied certain of Xenotech's obligations under
the agreement. Japan Tobacco also made an initial payment. During 1997
GenPharm achieved two patent milestones, and Xenotech was obligated to pay
$7.5 million for each milestone. Xenotech paid $7.5 million to satisfy the
first milestone and has recorded a payable to GenPharm for the remaining $7.5
million. Abgenix recorded a liability of approximately $3.8 million in its
balance sheet representing its equal share of the Xenotech obligation. The
obligation was paid in November 1998. No additional payments will accrue
under this agreement. Abgenix has recognized, as a non-recurring charge for
cross-license and settlement, a total of $22.5 million. The Company
concluded that the cost of the cross-license and settlement agreement was
properly expensed under Statement of Financial Accounting Standards No. 2,
"Accounting for Research and Development Costs" because the cross-license
received by it from GenPharm is non-exclusive and has no alternate future
uses for the Company. Abgenix also concluded that the $11.3 million was
properly allocated from Cell Genesys because it related to the technology
Cell Genesys contributed to Abgenix upon its organization. Abgenix does not
have any future financial obligations under the cross-license and settlement
agreement.
Government Regulation
Abgenix' product candidates under development are subject to extensive
and rigorous domestic government regulation. The FDA regulates, among other
things, the development, testing, manufacture, safety, efficacy, record
keeping, labeling, storage, approval, advertising, promotion, sale and
distribution of biopharmaceutical products. If its products are marketed
abroad, they also are subject to extensive regulation by foreign governments.
Non-compliance with applicable requirements can result in fines, warning
letters, recall or seizure of products, clinical study holds, total or
partial suspension of production, refusal of the government to grant
approvals, withdrawal of approval, and civil and criminal penalties.
Abgenix believes its antibody products will be classified by the FDA as
"biologic products" as opposed to "drug products". The steps ordinarily
required before a biological product may be marketed in the United States
include:
- preclinical testing,
<PAGE>
- the submission to the FDA of an investigational new drug
application ("IND"), which must become effective before clinical
trials may commence;
- adequate and well-controlled clinical trials to establish the safety
and efficacy of the biologic;
- the submission to the FDA of a Biologics License Application; and
- FDA approval of the application, including approval of all product
labeling.
Preclinical testing includes laboratory evaluation of product chemistry,
formulation and stability, as well as animal studies to assess the potential
safety and efficacy of each product. Preclinical safety tests must be
conducted by laboratories that comply with FDA regulations regarding good
laboratory practices. The results of the preclinical tests together with
manufacturing information and analytical data are submitted to the FDA as
part of the IND and are reviewed by the FDA before the commencement of
clinical trials. Unless the FDA objects to an IND, the IND will become
effective 30 days following its receipt by the FDA. If Abgenix submits an
IND, its submission may not result in FDA authorization to commence clinical
trials. Also, the lack of an objection by the FDA does not mean it will
ultimately approve an application for marketing approval. Furthermore, the
Company may encounter problems in clinical trials that cause it or the FDA to
delay, suspend or terminate its trials.
Clinical trials involve the administration of the investigational
product to humans under the supervision of a qualified principal
investigator. Clinical trials must be conducted in accordance with Good
Clinical Practices under protocols submitted to the FDA as part of the IND.
In addition, each clinical trial must be approved and conducted under the
auspices of an Institutional Review Board ("IRB") and with patient informed
consent. The IRB will consider, among other things, ethical factors, the
safety of human subjects and the possibility of liability of the institution
conducting the trial.
Clinical trials are conducted in three sequential phases that may
overlap. Phase I clinical trials may be performed in healthy human subjects
or, depending on the disease, in patients. The goal of a Phase I clinical
trial is to establish initial data about safety and tolerance of the biologic
agent in humans. In Phase II clinical trials, evidence is sought about the
desired therapeutic efficacy of a biologic agent in limited studies of
patients with the target disease. Efforts are made to evaluate the effects
of various dosages and to establish an optimal dosage level and dosage
schedule. Additional safety data are also gathered from these studies. The
Phase III clinical trial program consists of expanded, large-scale,
multi-center studies of persons who are susceptible to or have developed the
disease. The goal of these studies is to obtain definitive statistical
evidence of the efficacy and safety of the proposed product and dosage
regimen.
Historically, the results from preclinical testing and early clinical
trials have often not been predictive of results obtained in later clinical
trials. A number of new drugs and biologies have
<PAGE>
shown promising results in clinical trials, but subsequently failed to
establish sufficient safety and efficacy data to obtain necessary regulatory
approvals. Data obtained from preclinical and clinical activities are
susceptible to varying interpretations, which could delay, limit or prevent
regulatory approval. In addition, delays or rejections by regulatory
authorities may be encountered as a result of many factors, including changes
in regulatory policy during the period of product development.
Only three of Abgenix' product candidates, ABX-CBL, ABX-IL8, and ABX-EGF
are currently in clinical trials. Patient follow-up for these clinical
trials has been limited. To date, data obtained from these clinical trials
has been insufficient to demonstrate safety and efficacy under applicable FDA
guidelines. As a result, such data will not support an application for
regulatory approval without further clinical trials. Clinical trials
conducted by Abgenix or by third parties on its behalf may not demonstrate
sufficient safety and efficacy to obtain the requisite regulatory approvals
for ABX-CBL, ABX-IL8, ABX-EGF or any other potential product candidates.
Regulatory authorities may not permit the Company to undertake any additional
clinical trials for its product candidates.
The Company's other product candidates are still in preclinical
development, and it has not submitted INDs or begun clinical trials for these
product candidates. The Company's preclinical or clinical development efforts
may not be successfully completed. Further INDs may not be filed. Clinical
trials may not commence as planned.
Completion of clinical trials may take several years or more. The
length of time generally varies substantially according to the type,
complexity, novelty and intended use of the product candidate. Abgenix
commencement and rate of completion of clinical trials may be delayed by many
factors, including:
- inability to manufacture sufficient quantities of materials for use in
clinical trials;
- slower than expected rate of patient recruitment;
- inability to adequately follow patients after treatment;
- unforeseen safety issues;
- lack of efficacy during the clinical trials; or
- government or regulatory delays.
Abgenix has limited experience in conducting and managing clinical
trials. The Company relies on third parties, including its collaborative
partners, to assist it in managing and monitoring clinical trials. Its
reliance on third parties may result in delays in completing, or failing to
complete, clinical trials if they fail to perform under its agreements with
them.
<PAGE>
Abgenix' product candidates may fail to demonstrate safety and efficacy
in clinical trials. Such failure may delay development of other product
candidates, and hinder its ability to conduct related preclinical testing and
clinical trials. As a result of such failures, the Company may also be
unable to obtain additional financing. Its business, financial condition and
results of operations will be materially adversely affected by any delays in,
or termination of, its clinical trials.
Abgenix and its contract manufacturer also are required to comply with
the applicable FDA current good manufacturing practice ("cGMP") regulations.
cGMP regulations include requirements relating to quality control and quality
assurance as well as the corresponding maintenance of records and
documentation. Manufacturing facilities are subject to inspection by the FDA.
The facilities must be approved before they can be used in commercial
manufacturing of its products. Abgenix or its contract manufacturer may not
be able to comply with the applicable cGMP requirements and other FDA
regulatory requirements. If Abgenix or its contract manufacturer fails to
comply, its business, financial condition and results of operations will be
materially adversely affected.
For clinical investigation and marketing outside the United States,
Abgenix may be subject to the regulatory requirements of other countries,
which vary from country to country. The regulatory approval process in other
countries includes requirements similar to those associated with FDA approval
set forth above.
Competition
The biotechnology and pharmaceutical industries are highly competitive
and subject to significant and rapid technological change. Abgenix is aware
of several pharmaceutical and biotechnology companies that are actively
engaged in research and development in areas related to antibody therapy.
These companies have commenced clinical trials of antibody products or have
successfully commercialized antibody products. Many of these companies are
addressing the same diseases and disease indications as Abgenix or its
collaborative partners. Also, the Company competes with companies that offer
antibody generation services to companies that have antigens. These
competitors have specific expertise or technology related to antibody
development. These companies include Medarex, Cambridge Antibody Technology
Group plc, Protein Design Labs, Inc. and MorphoSys AG.
Some of Abgenix' competitors have received regulatory approval or are
developing or testing product candidates that may compete directly with its
product candidates. For example, SangStat Medical Corp. markets an organ
transplant rejection product that may compete with ABX-CBL, which is in
clinical trials. In addition, MedImmune, Inc. has a potential antibody
product candidate in clinical trials for graft versus host disease. The
Company is also aware that several companies, including Genentech, Inc., have
potential product candidates that may compete with ABX-IL8. Furthermore,
Abgenix is aware that ImClone Systems, Inc., Medarex and OSI Pharmaceuticals,
Inc. have potential antibody and small molecule product candidates already in
clinical development that may compete with ABX-EGF, which is in clinical
development. The Company may also compete
<PAGE>
with Japan Tobacco in supplying XenoMouse technology or antibody product
candidates to potential collaborative partners.
Many of these companies and institutions, either alone or together with
their collaborative partners, have substantially greater financial resources
and larger research and development staffs than Abgenix does. In addition,
many of these competitors, either alone or together with their collaborative
partners, have significantly greater experience than the Company does in:
- developing products;
- undertaking preclinical testing and human clinical trials;
- obtaining FDA and other regulatory approvals of products; and
- manufacturing and marketing products.
Accordingly, the Company's competitors may succeed in obtaining patent
protection, receiving FDA approval or commercializing products before it. If
Abgenix commences commercial product sales, it will be competing against
companies with greater marketing and manufacturing capabilities, areas in
which it has limited or no experience.
Abgenix also faces, and will continue to face, competition from academic
institutions, government agencies and research institutions. There are
numerous competitors working on products to treat each of the diseases for
which it is seeking to develop therapeutic products. In addition, any
product candidate that it successfully develops may compete with existing
therapies that have long histories of safe and effective use. Competition
may also arise from:
- other drug development technologies and methods of preventing or
reducing the incidence of disease;
- new small molecules; or
- other classes of therapeutic agents.
Developments by others may render the Company's product candidates
or technologies obsolete or noncompetitive. Abgenix faces and will
continue to face intense competition from other companies for
collaborative arrangements with pharmaceutical and biotechnology companies
for establishing relationships with academic and research institutions, and
for licenses to proprietary technology. These competitors, either alone or
with their collaborative partners, may succeed in developing technologies or
products that are more effective than the Company's.
Pharmaceutical Pricing and Reimbursement
<PAGE>
In both domestic and foreign markets, sales of Abgenix' product
candidates win depend in part upon the availability of reimbursement from
third-party payors. Third-party payors include government health
administration authorities, managed care providers, private health insurers
and other organizations. These third-party payors are increasingly
challenging the price and examining the cost-effectiveness of medical
products and services. In addition, significant uncertainty exists as to the
reimbursement status of newly approved healthcare products. Abgenix may need
to conduct post-marketing studies in order to demonstrate the
cost-effectiveness of its products. These studies may require it to provide
a significant amount of resources. The Company's product candidates may not
be considered cost-effective. Adequate third-party reimbursement may not be
available to enable the Company to maintain price levels sufficient to
realize an appropriate return on its investment in product development.
Domestic and foreign governments continue to propose and pass legislation
designed to reduce the cost of healthcare. Accordingly, legislation and
regulations affecting the pricing of pharmaceuticals may change before its
proposed products are approved for marketing. Adoption of such legislation
could further limit reimbursement for pharmaceuticals. If the government and
third party payors fail to provide adequate coverage and reimbursement rates
for its product candidates, the market acceptance of its products may be
adversely affected. If the Company's products do not receive market
acceptance, its business, financial condition and results of operations will
be materially adversely affected.
Manufacturing
Abgenix lacks the resources and capability to manufacture its products
on a commercial scale. The Company currently manufactures only limited
quantities of antibody products for preclinical testing. While it maintains
a limited inventory of antibody products, Abgenix depends on a sole source
contract manufacturer to produce ABX-CBL, ABX-IL8 and ABX-EGF under cGMP
regulations for use in its clinical trials. Its contract manufacturer has a
limited number of facilities in which the Company's product candidates can be
produced. Its contract manufacturer has limited experience in manufacturing
ABX-CBL, ABX-IL8 and ABX-EGF in quantities sufficient for conducting clinical
trials or for commercialization.
There are, on a worldwide basis, a limited number of contract facilities
in which Abgenix' product candidates can be produced under cGMP regulations
for use in pharmaceutical drugs. It can also take a substantial period of
time for a contract facility to begin producing antibodies under cGMP
regulations. Accordingly, the Company depends on its contract manufacturer to
produce its product candidates under cGMP regulations, which meet acceptable
standards for its clinical trials.
Contract manufacturers often encounter difficulties in scaling up
production, including problems involving production yields, quality control
and quality assurance and shortage of qualified personnel. Abgenix' contract
manufacturer may not perform as agreed or may not remain in the contract
manufacturing business for the time required by the Company to successfully
produce and market its product candidates. If the Company's contract
manufacturer fails to deliver the required quantities of its product
candidates for clinical use on a timely basis and at commercially reasonable
prices, and Abgenix fails to find a replacement manufacturer or develop its
own manufacturing
<PAGE>
capabilities, its business, financial condition and results of operations
will be materially adversely affected. Abgenix may decide to manufacture its
product candidates in quantities sufficient for conducting clinical trials or
for commercialization. If the Company makes this decision, it will face the
same risks and encounter the same difficulties as contract manufacturers.
In addition, Abgenix and its third-party manufacturer are required to
register manufacturing facilities with the FDA and foreign regulatory
authorities. The facilities will then be subject to inspections confirming
compliance with good manufacturing practice requirements established by the
FDA or corresponding foreign regulations. If Abgenix or its third-party
manufacturer fail to maintain compliance with the good manufacturing practice
requirements, its business, financial condition and results of operations
will be materially adversely affected.
Employees
As of September 30, 1999, Abgenix employed 68 persons, of whom 16 hold
Ph.D. or M.D. degrees and 11 hold other advanced degrees. Approximately 55
employees are engaged in research and development, and 13 support
administration, finance, management information systems and human resources.
The Company's success will depend in large part upon its ability to
attract and retain employees. Abgenix faces competition in this regard from
other companies, research and academic institutions, government entities and
other organizations. The Company believes that it maintains good relations
with its employees.
Scientific Advisory Board
Abgenix has established a Scientific Advisory Board to provide specific
expertise in areas of research and development relevant to its business. The
Scientific Advisory Board meets periodically with the Company's scientific
and development personnel and management to discuss its present and long-term
research and development activities. Scientific Advisory Board members
include:
Anthony DeFranco, M.D., Ph.D.....Professor, Biochemistry and Biophysics
University of California, San Francisco
John Gallin, M.D.................Director
Warren Grant Magnusen Clinical Center,
National Institute of Health
Raju S. Kucherlapati, Ph.D.......Professor and Chair, Molecular Genetics
Albert Einstein College of Medicine
Michel Nussenzweig, M.D., Ph.D...Professor, Molecular Immunology
The Rockefeller University
<PAGE>
This report on Form 8-K contains or incorporates forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended
and Section 21E of the Exchange Act of 1934, as amended. You can identify
these forward-looking statements by Abgenix' use of the words "believes",
"anticipates", "plans", "expects", "intends" and other similar expressions.
These statements are subject to a number of uncertainties that could cause
actual results to differ materially from the statements made, including risks
associated with the success of clinical trials, the progress of research and
product development programs, the regulatory approval process, competitive
products, future capital requirements and the extent and breadth of Abgenix'
patent portfolio. Please see Abgenix' public filings with the Securities and
Exchange Commission for information about risks which may affect Abgenix.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunder duly authorized.
ABGENIX, INC.
Date: November 23, 1999
/s/ KURT W. LEUTZINGER
--------------------------------------
Kurt W. Leutzinger
Vice President and Chief Financial Officer
