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As filed pursuant to Rule 424(b)(4) under the
Securities Act of 1933 Registration No. 333-70631
1,146,300 SHARES
ABGENIX, INC.
COMMON STOCK
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The selling stockholders identified in this prospectus are offering
1,146,300 shares of Abgenix, Inc.'s common stock. Abgenix's stock is traded
on the Nasdaq National Market under the symbol "ABGX." The last reported sale
price for the common stock on the Nasdaq National Market on August 12, 1999
was $26.875 per share. We advise you to obtain a current market quotation for
our common stock. We will not receive any of the proceeds from the sale of
shares by the selling stockholders and we are not offering any shares for
sale under this prospectus. See "Plan of Distribution" for a description of
sales of the shares by the selling stockholders. In this prospectus,
references to "Abgenix," "we," "us," and "our" refer to Abgenix, Inc., and
its subsidiaries.
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INVESTING IN THE COMMON STOCK INVOLVES RISKS.
SEE "RISK FACTORS" BEGINNING ON PAGE 4.
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THE SECURITIES AND EXCHANGE COMMISSION AND STATE SECURITIES
REGULATORS HAVE NOT APPROVED OR DISAPPROVED THESE SECURITIES, OR DETERMINED
IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS AUGUST 19, 1999
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TABLE OF CONTENTS
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PAGE
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Where You Can Find Additional Information.............................. 2
Information Incorporated by Reference.................................. 2
Forward Looking Information............................................ 3
The Company............................................................ 4
Risk Factors........................................................... 4
Use of Proceeds....................................................... 19
Plan of Distribution.................................................. 20
Legal Matters......................................................... 21
Experts............................................................... 21
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WHERE YOU CAN FIND ADDITIONAL INFORMATION
We file annual, quarterly and special reports and other information
with the Securities and Exchange Commission. You may read and copy any
document that we file at the Securities and Exchange Commission's public
reference rooms in Washington, D.C., New York, New York and Chicago,
Illinois. Please call the Securities and Exchange Commission at
1-800-SEC-0330 for further information on the public reference rooms. The
Securities and Exchange Commission filings are also available to the public
on the Securities and Exchange Commission's Internet web site at
http://www.sec.gov.
We have filed with the Securities and Exchange Commission a
registration statement on Form S-3 under the Securities Act with respect to
the common stock offered hereby. This prospectus, which is part of the
registration statement, does not contain all of the information set forth in
the registration statement. Certain parts of the registration statement are
omitted from the prospectus in accordance with the rules and regulations of
the Securities and Exchange Commission. You should review the registration
statement and its exhibits and schedules for further information regarding
Abgenix and the common stock offered hereby. This prospectus contains
descriptions of some of our contracts and other documents. These descriptions
are not complete. We encourage you to review the complete copies of these
contracts and other documents that have been filed as exhibits to our reports
and other information filed with the Securities and Exchange Commission
pursuant to the Exchange Act or registration statements filed with the
Securities and Exchange Commission pursuant to the Securities Act.
INFORMATION INCORPORATED BY REFERENCE
The Securities and Exchange Commission allows us to "incorporate by
reference" the information we file with it, which means that we can disclose
important information to you by referring you to those documents. The
information incorporated by reference is considered to be part of this
prospectus, and information that we file with the Securities and Exchange
Commission later will automatically update and supersede this information. We
incorporate by reference our documents listed below and any future filings
made by us with the Securities and Exchange Commission under Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act until the offering of securities under
this prospectus is terminated.
- The description of our common stock contained in our Registration
Statement on Form 8-A filed with the Securities and Exchange
Commission on May 5, 1998;
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- Annual Report on Form 10-K for the year ended December 31, 1998;
- Quarterly Report on Form 10-Q for the quarter ended March 31, 1999;
- Current Report on Forms 8-K dated March 30, 1999;
- The description of our preferred share purchase rights contained in
our Registration Statement on Form 8-A filed with the Securities and
Exchange Commission on June 15, 1999; and
- Quarterly Report on Form 10-Q for the quarter ended June 30, 1999.
You may request a copy of these filings, at no cost, by writing or
telephoning us at: Abgenix, Inc., 7601 Dumbarton Circle, Fremont, California
94555, (510) 608-6500.
You should rely only on the information incorporated by reference
or provided in this prospectus. We have not authorized anyone else to provide
you with different or additional information. You should not assume that the
information in this prospectus is accurate as of any date other than the date
on the front of those documents.
FORWARD LOOKING INFORMATION
Certain of the matters discussed under the caption "Risk Factors"
and elsewhere in this prospectus or in the information incorporated by
reference herein may constitute forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. Such information may
involve known and unknown risks, uncertainties and other factors that may
cause our actual results, performance or achievements to be materially
different from any future results, performance or achievements expressed or
implied by such forward-looking statements.
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THE COMPANY
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, cardiovascular disease and cancer. We have developed
XenoMouse technology, which we believe enables quick generation of high
affinity, fully human antibody product candidates to essentially and disease
target appropriate for antibody therapy. We have collaborative arrangements
with multiple pharmaceutical and biotechnology companies involving our
XenoMouse technology. In addition, we have four proprietary antibody product
candidates that are under development internally, two of which are in human
clinical trials.
Our principal executive offices are located at 7601 Dumbarton Circle,
Fremont, California 94555, and our telephone number is (510) 608-6500.
RISK FACTORS
OUR XENOMOUSE TECHNOLOGY MAY NOT PRODUCE SAFE, EFFICACIOUS OR COMMERCIALLY
VIABLE PRODUCTS
Our XenoMouse technology is a new approach to the generation of
antibody therapeutic products. We have not commercialized any antibody
products based on XenoMouse technology. We are not aware of any
commercialized, fully human antibody therapeutic products that have been
generated from any technologies similar to ours. Our antibody product
candidates are still at a very early stage of development. We have begun
clinical trials with respect to only two fully human antibody product
candidates, ABX-IL8 and ABX-EGF. We cannot be certain that XenoMouse
technology will generate antibodies against all the antigens to which it is
exposed in an efficient and timely manner, if at all. Furthermore, XenoMouse
technology may not result in any meaningful benefits to our current or
potential collaborative partners or be safe and efficacious for patients. If
XenoMouse technology fails to generate antibody product candidates that lead
to the successful development and commercialization of products, our
business, financial condition and results of operations will be materially
adversely affected.
CLINICAL TRIALS FOR OUR PRODUCT CANDIDATES WILL BE EXPENSIVE AND THEIR
OUTCOME IS UNCERTAIN
Conducting clinical trials is a lengthy, time-consuming and
expensive process. Before obtaining regulatory approvals for the commercial
sale of any products, we must demonstrate through preclinical testing and
clinical trials that our product candidates are safe and effective for use in
humans. We will incur substantial expense for, and devote a significant
amount of time to, preclinical testing and clinical trials.
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 biologics have 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 may delay, limit or prevent regulatory approval. In
addition, regulatory delays or rejections may be encountered as a result of
many factors, including changes in regulatory policy during the period of
product development.
As of July 31, 1999, three of our product candidates, ABX-CBL,
ABX-IL8 and ABX-EGF are 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
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not support an application for regulatory approval without further clinical
trials. Clinical trials conducted by Abgenix or by third parties on our
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 us to
undertake any additional clinical trials for our product candidates.
In addition, our other product candidates are in preclinical
development, and we have not submitted investigational new drug applications
nor begun clinical trials for such product candidates. Our preclinical or
clinical development efforts may not be successfully completed. We may not
file further investigational new drug applications. Our 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. Our
commencement and rate of completion of clinical trials may be delayed by many
factors, including:
- inability to manufacture sufficient quantities of materials used for
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.
We have limited experience in conducting and managing clinical
trials. We rely on third parties, including our collaborative partners, to
assist us in managing and monitoring clinical trials. Our reliance on such
third parties may result in delays in completing, or failing to complete,
such trials if they fail to perform under our agreements with them.
Our product candidates may fail to demonstrate safety and efficacy
in clinical trials. Such failure may delay development of other product
candidates, and hinder our ability to conduct related preclinical testing and
clinical trials. As a result of such failures, we may also be unable to
obtain additional financing. Our business, financial condition and results of
operations will be materially adversely affected by any delays in, or
termination of, our clinical trials.
THE CLINICAL SUCCESS OF ABX-CBL IS UNCERTAIN
We recently completed a multi-center confirmatory Phase II trial in
graft versus host disease, or GVHD. As of June 30, 1999, ABX-CBL had been
administered to a total of only 162 patients for GVHD and organ transplant
rejection indications. ABX-CBL was administered to a total of 85 of these 162
patients by third parties prior to Abgenix obtaining an exclusive license to
ABX-CBL. In our clinical trials, we administered ABX-CBL to only 77 of these
patients, 27 of which were used for our preliminary Phase II report submitted
to the FDA. We cannot rely on data obtained from patients studied prior to
our obtaining an exclusive license to ABX-CBL to support the efficacy of
ABX-CBL in an application for regulatory approval. In addition, our 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
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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.
As an extension to the original Phase II trial protocol, we filed
for and received permission from the FDA to enroll additional patients at a
single dose. Our application to the FDA for approval to advance to
registration clinical trials will contain 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 our application as insufficient and require additional clinical
trials before allowing us to commence a registration clinical trial.
Additional clinical trials will be extensive, expensive and time-consuming.
If ABX-CBL fails to receive regulatory approval, our business, financial
condition and results of operations may be materially adversely affected.
SUCCESSFUL DEVELOPMENT OF OUR PRODUCTS IS UNCERTAIN
Our development of current and future product candidates is subject
to the risks of failure inherent in the development of new pharmaceutical
products and products based on new technologies. These risks include:
- delays in product development, clinical testing or manufacturing;
- unplanned expenditures in product development, clinical testing or
manufacturing;
- failure in clinical trials or failure to receive regulatory
approvals;
- emergence of superior or equivalent products;
- inability to manufacture product candidates on a commercial scale;
- inability to market products due to third-party proprietary rights;
- election by our collaborative partners not to pursue product
development;
- failure by our collaborative partners to successfully develop
products; and
- failure to achieve market acceptance.
Because of these risks, our research and development efforts or
those of our collaborative partners may not result in any commercially viable
products. To date, none of our collaborative partners has exercised its right
to obtain a product license. If a significant portion of these development
efforts is not successfully completed, required regulatory approvals are not
obtained, or any approved products are not commercially successful, our
business, financial condition and results of operations will be materially
adversely affected.
WE ARE AN EARLY STAGE COMPANY
You must evaluate us in light of the uncertainties and complexities
present in an early stage biopharmaceutical company. Our product candidates
are in early stages of development. We will require significant additional
investment in research and development, preclinical testing and clinical
trials, regulatory and sales and marketing activities to commercialize
current and future product candidates. We
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cannot assure you that such product candidates, if successfully developed,
will generate sufficient or sustainable revenues to enable us to be
profitable.
WE HAVE A HISTORY OF LOSSES
We have incurred net losses in each of the last four years of
operation, including net losses of approximately $8.3 million in 1995, $7.1
million in 1996, $35.9 million in 1997 and $16.8 million in 1998. We have
also incurred net losses of approximately $9.0 million in the six months
ended June 30, 1999. As of June 30, 1999, our accumulated deficit was
approximately $78.3 million. Our losses have resulted principally from:
- research and development costs relating to the development of our
XenoMouse technology and antibody product candidates;
- cross-license and settlement costs relating to our patent portfolio;
and
- general and administrative costs relating to our operations.
We expect to incur additional operating losses until at least the
year 2000 as a result of increases in our research and development costs,
including costs associated with conducting preclinical testing and clinical
trials. We expect that the amount of operating losses will fluctuate
significantly from quarter to quarter as a result of increases or decreases
in our research and development efforts, the execution or termination of
collaborative arrangements, or the initiation, success or failure of clinical
trials.
OUR FUTURE PROFITABILITY IS UNCERTAIN
Prior to June 1996, our business was owned by Cell Genesys and
operated as a business unit. Since that time, we have funded our research and
development activities primarily from contributions from Cell Genesys,
private placements of our capital stock, the initial public offering of our
common stock, revenues generated from our collaborative arrangements,
equipment leaseline financings and loan facilities. We expect that
substantially all of our revenues for the foreseeable future will result from
payments under collaborative arrangements. To date, such payments have been
in the form of upfront payments, reimbursement for research and development
expenses and milestone payments, but may include license fees in the future.
Payments under our existing and any future collaborative arrangements will be
subject to significant fluctuation in both timing and amount. Our revenues
may not be indicative of our future performance or of our ability to continue
to achieve such milestones. Our revenues and results of operations for any
period may also not be comparable to the revenues or results of operations
for any other period. We cannot assure you that we will:
- enter into further collaborative arrangements;
- successfully complete preclinical or clinical trials;
- obtain required regulatory approvals;
- successfully develop, manufacture and market product candidates; or
- generate additional revenues or profitability.
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If we fail to achieve any of the above goals, our business,
financial condition and results of operations will be materially adversely
affected.
WE WILL NEED TO FIND COLLABORATIVE PARTNERS TO DEVELOP MANY OF OUR PRODUCT
CANDIDATES
Our strategy for the development and commercialization of antibody
therapeutic products depends, in large part, upon the formation of
collaborative arrangements with several collaborative partners. Potential
collaborative partners include pharmaceutical and biotechnology companies,
academic institutions and other entities. We must enter into these
collaborations to successfully develop and commercialize product candidates.
Such collaborations are necessary in order for us to:
- access proprietary antigens for which we can generate fully human
antibody products;
- fund our research and development activities;
- fund preclinical testing, clinical trials and manufacturing;
- seek and obtain regulatory approvals; and
- successfully commercialize existing and future product candidates.
Only a limited number of fully human antibody product candidates
have been generated pursuant to our collaborations. None of these
collaborative product candidates has entered clinical testing and may not
result in commercially successful products. Current or future collaborative
arrangements may not be successful. If we fail to maintain our existing
collaborative arrangements or to enter into additional collaborative
arrangements, our business, financial condition and results of operations
will be materially adversely affected.
Our dependence on collaborative arrangements with third parties
subjects us to a number of risks. Such collaborative arrangements may not be
on terms favorable to Abgenix. Agreements with collaborative partners
typically allow partners significant discretion in electing whether to pursue
any of the planned activities. We cannot control the amount and timing of
resources our collaborative partners may devote to the product candidates.
Our partners may not perform their obligations as expected. Business
combinations or significant changes in a collaborative partner's business
strategy may adversely affect a partner's willingness or ability to complete
its obligations under the arrangement. Even if we fulfill our obligations
under a collaborative agreement, our partner can terminate the agreement at
any time following proper written notice. If any collaborative partner were
to terminate or breach our agreement with it, or otherwise fail to complete
its obligations in a timely manner, our business, financial condition and
results of operations may be materially adversely affected. If we are not
able to establish further collaborative arrangements or any or all of our
existing collaborative arrangements are terminated, we may be required to
seek new collaborative arrangements or to undertake product development and
commercialization at our own expense. Such an undertaking may:
- limit the number of product candidates that we will be able to
develop and commercialize;
- reduce the likelihood of successful product introduction;
- significantly increase our capital requirements; and
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- place additional strain on management's time.
Existing or future collaborative partners may pursue alternative
technologies, including those of our competitors. Disputes may arise with
respect to the ownership of rights to any technology or products developed
with any current or future collaborative partner. Lengthy negotiations with
potential new collaborative partners or disagreements between Abgenix and our
collaborative partners may lead to delays or termination in the research,
development or commercialization of product candidates or result in time
consuming and expensive litigation or arbitration. If our collaborative
partners pursue alternative technologies or fail to develop or commercialize
successfully any product candidate to which they have obtained rights from
us, our business, financial condition and results of operations may be
materially adversely affected.
OUR JOINT VENTURE WITH AKROS PHARMA, INC. MAY LIMIT OUR ABILITY TO DEVELOP
PRODUCT CANDIDATES
In 1991, Cell Genesys and Akros Pharma, Inc. (formerly JT America,
Inc.) formed Xenotech, L.P., an equally-owned joint venture, to develop
genetically modified strains of mice which can produce fully human monoclonal
antibodies, called XenoMouse technology, and to commercialize products
generated from XenoMouse technology. Upon our organization, Cell Genesys
assigned its rights in Xenotech to us.
We must obtain licenses from Xenotech to commercialize antibody
products generated by XenoMouse technology. We have the right to license the
use of XenoMouse technology from Xenotech to develop a certain number of
antigen targets each year. If we have used our yearly allotment of licenses
to develop antigen targets and desire to acquire a license to develop
additional antigen targets, we may have to negotiate with Akros or others to
acquire such rights. Disputes with Akros, or its parent company Japan
Tobacco, Inc., may result in the loss of the right to commercialize a product
candidate by either party. Limits on our ability to acquire additional
licenses to develop antigen targets, or disputes with Akros or Japan Tobacco,
will limit our ability to establish collaborations and fully realize the
commercial potential of XenoMouse technology.
WE FACE INTENSE COMPETITION AND RAPID TECHNOLOGICAL CHANGE
The biotechnology and pharmaceutical industries are highly
competitive and subject to significant and rapid technological change. We are
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 our
collaborative partners. Also, we compete 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 GenPharm International, Inc., a wholly-owned subsidiary of
Medarex, Inc., Cambridge Antibody Technology Group plc, Protein Design Labs,
Inc. and MorphoSys AG.
Some of our competitors have received regulatory approval or are
developing or testing product candidates that may compete directly with our
product candidates. Recently, Sangstat Medical Corp. received approval for an
organ transplant rejection product that may compete with ABX-CBL, which is in
clinical trials. We are also aware that several companies, including
Genentech, Inc., have potential product candidates that may compete with
ABX-IL8 which is in clinical trials. Furthermore, we are 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 trials. We
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may also compete 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 we do. In addition,
many of these competitors, either alone or together with their collaborative
partners, have significantly greater experience than we do in:
- developing products;
- undertaking preclinical testing and human clinical trials;
- obtaining FDA and other regulatory approvals of products; and
- manufacturing and marketing products.
Accordingly, our competitors may succeed in obtaining patent
protection, receiving FDA approval or commercializing products before us. If
we commence commercial product sales, we will be competing against companies
with greater marketing and manufacturing capabilities, areas in which we have
limited or no experience.
We also face, 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 we are seeking to develop therapeutic products. In addition, any
product candidate that we successfully develop 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 competitors may render our product candidates or
technologies obsolete or noncompetitive. We face 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 ours.
MARKET ACCEPTANCE OF OUR PRODUCTS IS UNCERTAIN
Our product candidates may not gain market acceptance among
physicians, patients, healthcare payors and the medical community. We may not
achieve market acceptance even if clinical trials demonstrate safety and
efficacy, and the necessary regulatory and reimbursement approvals are
obtained. The degree of market acceptance of any product candidates that we
develop will depend on a number of factors, including:
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- establishment and demonstration of clinical efficacy and safety;
- cost-effectiveness of our product candidates;
- their potential advantage over alternative treatment methods;
- reimbursement policies of government and third-party payors; and
- marketing and distribution support for our product candidates.
Physicians will not recommend therapies using our products until
such time as clinical data or other factors demonstrate the safety and
efficacy of such procedures as compared to conventional drug and other
treatments. Even if the clinical safety and efficacy of therapies using our
antibody products is established, physicians may elect not to recommend the
therapies for any number of other reasons, including whether the mode of
administration of our antibody products is effective for certain indications.
For example, antibody products are typically administered by infusion or
injection, which requires substantial cost and inconvenience to patients. Our
product candidates, if successfully developed, will compete with a number of
drugs and therapies manufactured and marketed by major pharmaceutical and
other biotechnology companies. Our products may also compete with new
products currently under development by others. Physicians, patients,
third-party payors and the medical community may not accept and utilize any
product candidates that Abgenix or our collaborative partners develop. If our
products do not achieve significant market acceptance, our business,
financial condition and results of operations will be materially adversely
affected.
OUR PATENT POSITION IS UNCERTAIN AND OUR SUCCESS DEPENDS ON OUR PROPRIETARY
RIGHTS
Our success depends in part on our ability to:
- obtain patents;
- protect trade secrets;
- operate without infringing upon the proprietary rights of others;
and
- prevent others from infringing on our proprietary rights.
We will be able to protect our proprietary rights from unauthorized
use by third parties only to the extent that our proprietary rights are
covered by valid and enforceable patents or are effectively maintained as
trade secrets. While we have pending patent applications in the United States
relating to XenoMouse technology, no patents have been issued. We try to
protect our proprietary position by filing United States and foreign patent
applications related to our proprietary technology, inventions and
improvements that are important to the development of our 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 we own or license from third parties may
not provide any protection against competitors. Our pending patent
applications, those we may file in the future, or those we may license from
third parties, may not result in patents being issued. Also, patent rights
may not provide us with proprietary protection or competitive advantages
against competitors with similar technology. Furthermore, others may
independently develop similar technologies or
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duplicate any technology that we have developed. The laws of certain foreign
countries do not protect our intellectual property rights to the same extent
as do the laws of the United States.
In addition to patents, we rely on trade secrets and proprietary
know-how. We seek protection, in part, through confidentiality and
proprietary information agreements. These agreements may not provide
meaningful protection or adequate remedies for our technology in the event of
unauthorized use or disclosure of confidential and proprietary information.
The parties may breach such agreements. Furthermore, our trade secrets may
otherwise become known to, or be independently developed by, our competitors.
WE MAY FACE CHALLENGES FROM THIRD PARTIES REGARDING THE VALIDITY OF OUR
PATENTS AND PROPRIETARY RIGHTS
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. Our commercial success depends significantly on our ability to
operate without infringing the patents and other proprietary rights of third
parties. Our technologies may infringe the patents or violate other
proprietary rights of third parties. In the event of infringement or
violation, Abgenix and our collaborative partners may be prevented from
pursuing product development or commercialization. Such a result will
materially adversely affect our business, financial condition and results of
operations.
In March 1997, we entered into a cross-license and settlement
agreement with GenPharm to avoid protracted litigation. Under the
cross-license, we 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 that are integral to our products and business. Our
business, financial condition and results of operations will be materially
adversely affected if any of the parties breaches the cross-license
agreement. We have 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.
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 our issued and licensed patents;
- protect trade secrets or know-how that we own or license; or
- determine the enforceability, scope and validity of the proprietary
rights of others.
If we become involved in any litigation, interference or other
administrative proceedings, we will incur substantial expense and the efforts
of our technical and management personnel will be significantly diverted. An
adverse determination may subject us to significant liabilities or require us
to seek licenses that may not be available from third parties. We may be
restricted or prevented from manufacturing and selling
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our products, if any, in the event of an adverse determination in a judicial
or administrative proceeding or if we fail to obtain necessary licenses.
Costs associated with these arrangements may be substantial and may include
ongoing royalties. Furthermore, we may not be able to obtain the necessary
licenses on satisfactory terms, if at all. These outcomes will materially
adversely affect our business, financial condition and results of operations.
WE ARE SUBJECT TO EXTENSIVE GOVERNMENT REGULATIONS AND WE MAY NOT BE ABLE TO
OBTAIN REGULATORY APPROVALS
Our 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 our products are marketed
abroad, they also are subject to extensive regulation by foreign governments.
None of our product candidates has been approved for sale in the United
States or any foreign market. The regulatory review and approval process,
which includes preclinical studies and clinical trials of each product
candidate, is lengthy, expensive and uncertain. Securing FDA approval
requires the submission of extensive preclinical and clinical data and
supporting information to the FDA for each indication to establish the
product candidates safety and efficacy. For example, we have not received FDA
approval to commence registration clinical trials for ABX-CBL. The approval
process takes many years, requires the expenditure of substantial resources,
involves post-marketing surveillance, and may involve ongoing requirements
for post-marketing studies. Delays in obtaining regulatory approvals may:
- adversely affect the successful commercialization of any drugs that
Abgenix or our collaborative partners develop;
- impose costly procedures on Abgenix or our collaborative partners;
- diminish any competitive advantages that Abgenix or our
collaborative partners may attain; and
- adversely affect our receipt of revenues or royalties.
Certain material changes to an approved product such as
manufacturing changes or additional labeling claims are subject to further
FDA review and approval. Any required approvals, once obtained, may be
withdrawn. Compliance with other regulatory requirements may not be
maintained. Further, if we fail to comply with applicable FDA and other
regulatory requirements at any stage during the regulatory process, Abgenix
or our contract manufacturers may be subject to sanctions, including:
- delays;
- warning letters;
- fines;
- product recalls or seizures;
- injunctions;
- refusal of the FDA to review pending market approval applications or
supplements to approval applications;
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<PAGE>
- total or partial suspension of production;
- civil penalties;
- withdrawals of previously approved marketing applications; and
- criminal prosecutions.
We expect to rely on our collaborative partners to file
investigational new drug applications and generally direct the regulatory
approval process for many of our products. Our collaborative partners may not
be able to conduct clinical testing or obtain necessary approvals from the
FDA or other regulatory authorities for any product candidates. If we fail to
obtain required governmental approvals, our collaborative partners will
experience delays in or be precluded from marketing products developed
through our research. In addition, the commercial use of our products will be
limited. Delays and limitations may materially adversely affect our business,
financial condition and results of operations.
Abgenix and our contract manufacturers also are required to comply
with the applicable FDA current good manufacturing practice regulations. Good
manufacturing practice 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. Such facilities must be approved before we can use them in
commercial manufacturing of our products. Abgenix or our contract
manufacturers may not be able to comply with the applicable good
manufacturing practice requirements and other FDA regulatory requirements. If
Abgenix or our contract manufacturers fails to comply, our business,
financial condition and results of operations will be materially adversely
affected.
WE RELY ON A SOLE SOURCE THIRD-PARTY MANUFACTURER AND DO NOT HAVE COMMERCIAL
SCALE MANUFACTURING EXPERIENCE
We lack the resources and capability to manufacture our products on
a commercial scale. We currently manufacture only limited quantities of
antibody products for preclinical testing. While we maintain a limited
inventory of antibody products, we depend on a sole source contract
manufacturer to produce ABX-CBL, ABX-IL8 and ABX-EGF under good manufacturing
practice regulations for use in our clinical trials. Our contract
manufacturer has a limited number of facilities in which our product
candidates can be produced. Our 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 our product candidates can be produced under good
manufacturing practice regulations for use in pharmaceutical drugs. It can
also take a substantial period of time for a contract facility to begin
producing antibodies under good manufacturing practice regulations.
Accordingly, we depend on our contract manufacturer to produce our product
candidates under good manufacturing practice regulations which meet
acceptable standards for our 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. Our contract
manufacturer may not perform as agreed or may not remain in the contract
manufacturing business for the time required by us to successfully produce
and market our product candidates. If our contract manufacturer fails to
deliver the required quantities of our product candidates for clinical use on
a timely
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basis and at commercially reasonable prices, and we fail to find a
replacement manufacturer or develop our own manufacturing capabilities, our
business, financial condition and results of operations will be materially
adversely affected.
In addition, Abgenix and our 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 our third-party
manufacturer fails to maintain compliance with the good manufacturing
practice requirements, our business, financial condition and results of
operations will be materially adversely affected.
WE DO NOT HAVE MARKETING AND SALES EXPERIENCE
We do not have a marketing, sales or distribution capability. For
certain products, we may establish an internal marketing and sales force. We
intend to enter into arrangements with third parties to market and sell most
of our products. We may not be able to enter into marketing and sales
arrangements with others on acceptable terms, if at all. To the extent that
we enter into marketing and sales arrangements with other companies, our
revenues, if any, will depend on the efforts of others. These efforts may not
be successful. If we are unable to enter into third-party arrangements, then
we must develop a marketing and sales force, which may need to be substantial
in size, in order to achieve commercial success for any product candidate
approved by the FDA. We may not successfully develop marketing and sales
experience or have sufficient resources to do so. If we do develop such
capabilities, we will compete with other companies that have experienced and
well-funded marketing and sales operations. If we fail to establish
successful marketing and sales capabilities or fail to enter into successful
marketing arrangements with third parties, our business, financial condition
and results of operations will be materially adversely affected.
WE DEPEND ON KEY PERSONNEL AND MUST CONTINUE TO ATTRACT AND RETAIN KEY
EMPLOYEES AND CONSULTANTS
We are highly dependent on the principal members of our scientific
and management staff. If we lose any of these persons, our business,
financial condition and results of operations may be materially adversely
affected. For us to pursue product development, marketing and
commercialization plans, we will need to hire additional qualified scientific
personnel to perform research and development. We will also need to hire
personnel with expertise in clinical testing, government regulation,
manufacturing, marketing and finance. Attracting and retaining qualified
personnel will be critical to our success. We may not be able to attract and
retain personnel on acceptable terms given the competition for such personnel
among biotechnology, pharmaceutical and healthcare companies, universities
and non-profit research institutions.
In addition, we rely on members of our Scientific and Medical
Advisory Boards and other consultants to assist us in formulating our
research and development strategy. All of our consultants and the members of
our Scientific and Medical Advisory Boards are employed by other entities.
They may have commitments to, or advisory or consulting agreements with,
other entities that may limit their availability to us. If we lose the
services of these personnel, the achievement of our development objectives
may be impeded. Such impediments may materially adversely affect our
business, financial condition and results of operations.
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DIRECTORS, EXECUTIVE OFFICERS, PRINCIPAL STOCKHOLDERS AND AFFILIATED ENTITIES
OWN A SIGNIFICANT PERCENTAGE OF OUR CAPITAL STOCK
As of June 30, 1999, our directors, executive officers, principal
stockholders and affiliated entities beneficially own, in the aggregate,
approximately 28.5% of our outstanding common stock. These stockholders, if
acting together, will be able to significantly influence all matters
requiring approval by our stockholders. Such matters include the election of
directors and the approval of mergers or other business combination
transactions. We may be adversely impacted by the control that such
stockholders will have with respect to matters affecting us.
WE MAY REQUIRE ADDITIONAL FINANCING
We will continue to expend substantial resources for the expansion
of research and development, including costs associated with conducting
preclinical testing and clinical trials. We will be required to expend
substantial funds in the course of completing required additional
development, preclinical testing and clinical trials of and regulatory
approval for product candidates. Our future liquidity and capital
requirements will depend on many factors, including:
- the scope and results of preclinical testing and clinical trials;
- the retention of existing and establishment of further collaborative
arrangements, if any;
- continued scientific progress in our research and development
programs;
- the size and complexity of these programs;
- the time and expense involved in obtaining regulatory approvals, if
any;
- competing technological and market developments;
- the time and expense of filing and prosecuting patent applications
and enforcing patent claims;
- the cost of establishing manufacturing capabilities, conducting
commercialization activities and arrangements and product
in-licensing; and
- other factors not within our control.
We believe that our current cash balances, cash equivalents,
short-term investments and cash generated from our collaborative arrangements
will be sufficient to meet our operating and capital requirements for at
least the next two years. However, we may need additional financing within
this timeframe. We may need to raise additional funds through public or
private financing, collaborative arrangements or other arrangements.
Additional funding may not be available to us on favorable terms, if at all.
Furthermore, any additional equity financing may be dilutive to stockholders,
and debt financing, if available, may involve restrictive covenants.
Collaborative arrangements may require us to relinquish our rights to certain
of our technologies, product candidates or marketing territories. If we fail
to raise additional funds when needed, our business, financial condition and
results of operations will be materially adversely affected.
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<PAGE>
CELL GENESYS EXERCISES SIGNIFICANT INFLUENCE OVER US
As of June 30, 1999, Cell Genesys beneficially owns approximately
22.5% of our outstanding capital stock. As a result, Cell Genesys will have
significant influence over all matters requiring the approval of our
stockholders. Such matters include the election of our Board of Directors and
changes in control of Abgenix. We have entered into a governance agreement
with Cell Genesys which provides that so long as Cell Genesys or a group to
which it belongs owns a specific percentage of our outstanding voting stock,
Cell Genesys or the group shall have the right to nominate a fixed number of
directors to serve on our Board. The details of this arrangement are set
forth in the table below:
<TABLE>
<CAPTION>
PERCENTAGE OWNERSHIP NUMBER OF DIRECTORS
-------------------- -------------------
<S> <C>
50% or more 4 out of 7
Less than 50% but greater than 25% 3 out of 7
Less than 25% but greater than 15% 1 out of 7
</TABLE>
The governance agreement also provides that Cell Genesys and each of
our officers and directors who owns voting stock shall agree to vote for the
persons nominated as set forth above. We may be adversely impacted by the
significant influence which Cell Genesys will have with respect to matters
affecting us.
WE FACE UNCERTAINTY OVER REIMBURSEMENT AND HEALTHCARE REFORM
In both domestic and foreign markets, sales of our product
candidates will depend in part upon the availability of reimbursement from
third-party payors. Such 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. We may need to
conduct post-marketing studies in order to demonstrate the cost-effectiveness
of our products. Such studies may require us to provide a significant amount
of resources. Our product candidates may not be considered cost-effective.
Adequate third-party reimbursement may not be available to enable us to
maintain price levels sufficient to realize an appropriate return on our
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 our 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 our product candidates, the
market acceptance of our products may be adversely affected. If our products
do not receive market acceptance, our business, financial condition and
results of operations will be materially adversely affected.
WE FACE PRODUCT LIABILITY RISKS AND MAY NOT BE ABLE TO OBTAIN ADEQUATE
INSURANCE
The use of any of our product candidates in clinical trials, and the
sale of any approved products, may expose us to liability claims resulting
from such use or sale of our products. These claims might be made directly by
consumers, healthcare providers or by pharmaceutical companies or others
selling such products. We may experience financial losses in the future due
to product liability claims. We have obtained limited product liability
insurance coverage for our clinical trials. Our insurance coverage limits are
$5.0 million per occurrence and $5.0 million in the aggregate. We intend to
expand our insurance coverage to include the sale of commercial products if
marketing approval is obtained for product candidates in development.
However, insurance coverage is becoming increasingly expensive. We may not be
able to
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maintain insurance coverage at a reasonable cost or in sufficient amounts to
protect us against losses. If a successful product liability claim or series
of claims is brought against us for uninsured liabilities or in excess of
insured liabilities, our business, financial condition and results of
operations may be materially adversely affected.
OUR OPERATIONS INVOLVE HAZARDOUS MATERIALS
Our research and manufacturing activities involve the controlled use
of hazardous materials. We cannot eliminate the risk of accidental
contamination or injury from these materials. In the event of an accident or
environmental discharge, we may be held liable for any resulting damages,
which may exceed our financial resources and may materially adversely affect
our business, financial condition and results of operations.
OUR STOCK PRICE IS HIGHLY VOLATILE
The market price of our common stock has been highly volatile and is
likely to continue to be volatile. Factors affecting our stock price include:
- fluctuations in our operating results;
- announcements of technological innovations or new commercial
therapeutic products by us or our competitors;
- published reports by securities analysts;
- progress with clinical trials;
- governmental regulation;
- changes in reimbursement policies;
- developments in patent or other proprietary rights;
- developments in our relationship with collaborative partners;
- public concern as to the safety and efficacy of our products; and
- general market conditions.
WE ARE SUBJECT TO ANTI-TAKEOVER PROVISIONS AND WE HAVE IMPLEMENTED A
STOCKHOLDERS RIGHTS PLAN
In June 1999, our Board of Directors adopted a Stockholder Rights
Plan. The Stockholder Rights Plan provides for a dividend distribution of one
Preferred Shares Purchase Right on each outstanding share of our common
stock. Each Right entitles stockholders to buy 1/1000th of a share of our
Series A participating preferred stock at an exercise price of $120.00. Each
Right will become exercisable following the tenth day after a person or group
announces acquisition of 15 percent or more of our common stock, or announces
commencement of a tender offer, the consummation of which would result in
ownership by the person or group of 15 percent or more of our common stock.
In the case of Cell Genesys, which beneficially owns approximately 22.5% of
our outstanding capital stock as of June 30, 1999, each right will become
exercisable
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<PAGE>
following the tenth day after it announces the acquisition of 25 percent or
more of our common stock, or announces commencement of a tender offer, the
consummation of which would result in ownership by Cell Genesys of 25 percent
or more of our common stock. We will be entitled to redeem the Rights at
$0.01 per Right at any time on or before the tenth day following acquisition
by a person or group of 15 percent or more (or in the case of Cell Genesys,
25 percent or more) of our common stock.
The Stockholder Rights Plan and certain provisions of our Amended
and Restated Certificate of Incorporation and Amended and Restated Bylaws may
have the effect of making it more difficult for a third party to acquire, or
of discouraging a third party from attempting to acquire control of Abgenix.
This could limit the price that certain investors might be willing to pay in
the future for our shares of common stock. Certain provisions of our Amended
and Restated Certificate of Incorporation and Amended and Restated Bylaws
allow Abgenix to issue preferred stock without any vote or further action by
the stockholders, eliminate the right of stockholders to act by written
consent without a meeting, specify procedures for director nominations by
stockholders and submission of other proposals for consideration at
stockholder meetings, and eliminate cumulative voting in the election of
directors. We are subject to certain provisions of Delaware law which could
also delay or make more difficult a merger, tender offer or proxy contest
involving Abgenix. In particular, Section 203 of the Delaware General
Corporation Law prohibits a Delaware corporation from engaging in any
business combination with any interested stockholder for a period of three
years unless certain conditions are met. The Stockholder Rights Plan, the
possible issuance of preferred stock, the procedures required for director
nominations and stockholder proposals and Delaware law could have the effect
of delaying, deferring or preventing a change in control of Abgenix,
including without limitation, discouraging a proxy contest or making more
difficult the acquisition of a substantial block of our common stock. The
provisions could also limit the price that investors might be willing to pay
in the future for shares of our common stock.
WE DO NOT INTEND TO PAY DIVIDENDS
We intend to retain any future earnings to finance the growth and
development of our business and we do not plan to pay cash dividends in the
foreseeable future.
WE FACE UNCERTAINTY WITH YEAR 2000 COMPLIANCE
The Year 2000 Issue is the result of computer programs being written
using two digits rather than four to define the applicable year. Any of our
computer programs or hardware that have date-sensitive software or embedded
chips may recognize a date using "00" as the year 1900 rather than the year
2000. This may result in a system failure or miscalculations causing
disruptions of operations, including, among other things, a temporary
inability to receive supplies from our venders, or operate our accounting and
other internal systems. If our software vendors are unable to address the
Year 2000 compliance of their products, or should our suppliers' operations
be disrupted by the Year 2000 Issue, then our ability to serve collaborative
partners and develop products may be materially adversely affected.
USE OF PROCEEDS
We will not receive any proceeds from the sales of common stock by
the selling stockholders pursuant to this prospectus.
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PLAN OF DISTRIBUTION
In November 1998, Cell Genesys sold the 1,146,300 shares of common
stock offered by this prospectus to the selling stockholders. Pursuant to
that sale, we agreed to register the shares under the Securities Act for
resale to the public. We originally registered the shares for resale to the
public on a Form S-1 registration statement (File No. 333-70631), and by way
of a post-effective amendment to that Form S-1 registration statement, we
have replaced it with a Form S-3 registration statement, of which this
prospectus is part. Under the registration rights agreement between Abgenix
and the selling stockholders, we must use reasonable efforts to cause this
registration statement to be declared effective by the Securities and
Exchange Commission as soon as practicable and to keep this registration
statement, or a replacement, continuously effective under the Securities Act
until the earlier of (1) November 18, 2000 or (2) such time as the selling
stockholders have sold all shares offered by this prospectus, or a
replacement prospectus.
The sale of all of a portion of the shares of common stock offered
hereby by the selling stockholders may be effected from time to time at
prevailing market prices at the time of such sales, at prices related to such
prevailing prices, at fixed prices that may be changed or at negotiated
prices. The selling stockholders may effect such transactions by selling
directly to purchasers in negotiated transactions, to dealers acting as
principals or through one or more brokers, or any combination of these
methods of sale. In addition, shares may be transferred in connection with
the settlement of call options, short sales or similar transactions that may
be effected by the selling stockholders. Dealers or brokers may receive
compensation in the form of discounts, concessions or commissions from the
selling stockholders. The selling stockholders and any brokers or dealers
that participate in the distribution may under certain circumstances be
deemed to be "underwriters" within the meaning of the Securities Act, and any
commissions received by such brokers or dealers and any profits realized on
the resale of shares by them may be deemed to be underwriting discounts and
commissions under the Securities Act. Abgenix and the selling stockholders
may agree to indemnify such brokers or dealers against certain liabilities,
including liabilities under the Securities Act.
To the extent required under the Securities Act or the rules of the
Securities and Exchange Commission, a supplemental prospectus will be filed,
disclosing (1) the name of any such brokers or dealers, (2) the number of
shares involved, (3) the price at which such shares are to be sold, (4) the
commissions paid or discounts or concessions allowed to such brokers or
dealers, where applicable, (5) that such brokers or dealers did not conduct
any investigation to verify the information set out in this prospectus, as
supplemented, and (6) other facts material to the transaction.
There is no assurance that any of the selling stockholders will sell
any or all of the shares of common stock offered hereby.
We have agreed to pay the expenses incurred in connection with the
registration of the shares of common stock offered hereby. The selling
stockholders will be responsible for all selling commissions, transfer taxes
and related charges in connection with the offer and sale of such shares.
The following table sets forth certain information known to us with
respect to beneficial ownership of our common stock as of June 30, 1999, by
each selling stockholder. The following table assumes that the selling
stockholders sell all of the shares of common stock. We are unable to
determine the exact number of shares that actually will be sold by the
selling stockholders.
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<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED PRIOR TO OFFERING NUMBER OF OWNED AFTER OFFERING
----------------------- SHARES --------------------------
NUMBER PERCENT(1) OFFERED NUMBER PERCENT(1)
---------- ------------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
SELLING STOCKHOLDERS
Alan Mandell, Trustee of the 1982 Elizabeth Heller
Mandell Trust................................... 8,000 * 8,000 -- --
Barrie Ramsay Zesiger.............................. 12,000 * 12,000 -- --
City of Milford Pension & Retirement Fund.......... 90,000 * 90,000 -- --
City of Stamford Firemen's Pension Fund............ 46,000 * 46,000 -- --
Domenic J. Mizio................................... 17,000 * 17,000 -- --
Fred & Lucy Giampino JTWROS........................ 3,000 * 3,000 -- --
Harold & Grace Willens JTWROS...................... 5,000 * 5,000 -- --
HBL Charitable Unitrust............................ 8,000 * 8,000 -- --
Helen Hunt......................................... 8,000 * 8,000 -- --
Lazar Foundation................................... 8,000 * 8,000 -- --
Mary Ann S. Hamilton Trust for Self................ 10,000 * 10,000 -- --
Morgan Trust Co. of the Bahamas Ltd. as Trustee U/A/D
11/30/93........................................ 16,000 * 16,000 -- --
Murray Capital, L.L.C.............................. 8,000 * 8,000 -- --
NFIB Employee Pension Trust........................ 22,000 * 22,000 -- --
Norwalk Employees' Pension Plan.................... 48,000 * 48,000 -- --
Planned Parenthood of NY........................... 6,000 * 6,000 -- --
Public Employee Retirement System of Idaho......... 181,000 1.2 181,000 -- --
Roanoke College.................................... 19,000 * 19,000 -- --
State of Oregon PERS/ZCG........................... 546,300 3.7 546,300 -- --
The Ferris Hamilton Family Trust................... 8,000 * 8,000 -- --
The Jenifer Altman Foundation...................... 16,000 * 16,000 -- --
The Meehan Investment Partnership I, L.P........... 8,000 * 8,000 -- --
Van Loben Sels Foundation.......................... 19,000 * 19,000 -- --
Wells Family L.L.C................................. 24,000 * 24,000 -- --
Wolfson Investment Partners L.P.................... 10,000 * 10,000 -- --
</TABLE>
* Represents beneficial ownership of less than one percent of the common
stock.
(1) Beneficial ownership is determined in accordance with the rules of
Securities and Exchange Commission and generally includes voting or
investment power with respect to securities. Subject to community property
laws where applicable, the stockholders named in the table above have sole
voting and investment power with respect to all shares of common stock
shown as beneficially owned by them. Percentage of beneficial ownership is
based on 14,959,828 shares of common stock outstanding as of June 30, 1999.
LEGAL MATTERS
The validity of the common stock offered hereby will be passed upon
for Abgenix by Wilson Sonsini Goodrich & Rosati, Professional Corporation,
Palo Alto, California. As of June 30, 1999, a certain investment partnership
and members of Wilson Sonsini Goodrich & Rosati, Professional Corporation,
beneficially owned an aggregate of approximately 16,250 shares of common
stock of Abgenix.
EXPERTS
The financial statements of Abgenix, Inc. appearing in this
prospectus and registration statement (Amendment No. 4 to the Form S-1 on
Form S-3) at December 31, 1997 and 1998, and for each of the three years in
the period ended December 31, 1998, have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report thereon
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included herein. Such financial statements are incorporated by reference in
reliance upon such report given on the authority of such firm as experts in
accounting and auditing.
The financial statements of Xenotech, L.P. appearing in this
prospectus and registration statement (Amendment No. 4 to the Form S-1 on
Form S-3) at December 31, 1997 and 1998, and for each of the three years in
the period ended December 31, 1998 and for the period from inception (June
12, 1991) to December 31, 1998, have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report thereon included herein.
Such financial statements are incorporated by reference in reliance upon such
report given upon the authority of such firm as experts in accounting and
auditing.
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