By Karen Pihl-Carey

Abgenix Inc. and CuraGen Corp. formed a five-year alliance to use genomics technologies to identify up to 120 fully human antibody drug candidates to fight cancer and autoimmune disorders, among other illnesses.

Under terms of the agreement, Abgenix, of Fremont, Calif., will purchase $15 million of CuraGen common stock, while CuraGen, of New Haven, Conn., provides research support payments of $7.5 million total, or $1.5 million per year. Both companies will receive reciprocating milestone and royalty payments for products that come out of the alliance.

"It's good news for CuraGen," said company spokesman Mark Vincent. "Primarily, it really positions CuraGen to be a genomics-based drug company, and monoclonal antibodies, fully human, have really come into their own. The combination between genomics and antibodies at this scale, because this is the first time a deal has been done at this scope, is really going to prove to be powerful."

In response to the news, CuraGen's stock (NASDAQ:CRGN) rose 14 percent Thursday to close at $45, up $5.625. Abgenix's stock (NASDAQ:ABGX) dropped 10 percent, after rising 10.8 percent the day before on news the company is moving ABX-CBL into a Phase III trial, to close at $79.375, down $9.125.

Through the alliance, the companies will use Abgenix's XenoMouse technology to generate antibodies to cancer antigens in CuraGen's database. The companies will mine the genome to discover drug targets for which XenoMouse can develop drugs.

"The goal is to develop drugs that are more efficacious a lot faster," Vincent told BioWorld Today. "This has the potential to speed up the process in the preclinical stages, and the primary reason being our antibodies are readily accepted by your immune system because they already exist there."

Which company receives milestone and royalty payments from the other will depend on which company's chosen drug candidate achieves certain development accomplishments and reaches the market.

"They get a choice, and we get a choice," Vincent said, "and based on that choice, the ones that actually make it through the clinic, the royalties will be paid on."

CuraGen has two gene discovery technologies, SeqCalling, a sequence database product, and GeneCalling, which produces fully annotated databases that are integrated with PathCalling, a pathway and target discovery technology. GeneCalling gives a quick expression analysis of almost all genes associated with diseases and drug responses based on proprietary gene tagging, quantification and database look-up processes. PathCalling characterizes the roles of genes and their related proteins in biological pathways.

CuraGen recently exercised options to borrow $26 million through its collaborations with Genentech Inc., of South San Francisco, and Biogen Inc., of Cambridge, Mass., in order to rev up its internal drug development effort. (See BioWorld Today, Oct. 20, 1999, p. 1.)

It also raised $15 million in September through a private placement of stock to expand its functional genomics technologies and databases and its drug discovery program. (See BioWorld Today, Sept. 9, 1999, p. 1.)

Earlier this week, Abgenix said its plans to move its steroid-resistant graft-vs.-host disease product, ABX-CBL, into a Phase III trial. (See BioWorld Today, Dec. 9, 1999, p. 1.)

And last week the company signed its largest XenoMouse collaboration, with Human Genome Sciences Inc., of Rockville, Md. (See BioWorld Today, Dec. 2, 1999, p. 1.)

The XenoMouse Technology uses a strain of genetically engineered mice that, once immunized with an antigen, make entirely human antibodies. The technology allows researchers to isolate the gene that makes the antibody, and speed up the manufacturing process, allowing therapies to move rapidly into the clinic.