Sample Case study on Abgenix and the XenoMouse

Abgenix and the XenoMouse

For a long time, biotechnology has been relied upon for its medicinal value. Animals have been vital in both research and development of antibodies to fight antigens in the human body. The antibodies play a significant role in the treatment of human disorders, for instance, cancer. Many pharmaceuticals and biotechnology companies are therefore conducting thorough research in an effort to identify and match human disorders to their respective antibody therapy. This essay will find out how best Abgenix can exploit XenoMouse, and what the company needs to do. It will further explain on who else could capture the value from XenoMouse.

XenoMouse can be very beneficial to Abgenix if well and fully exploited. To do this, the company needs to develop, through research, as many drugs as possible from the humanized Xenomouse. For example, presently, Abgenix has four drugs at different stages of testing for approval by Food and Drugs Administration (FDA). These drugs include ABX-CBL, ABX-IL8, ABX-EGF, and ABX-RB2. In addition, Abgenix being a company aiming at making profits should adopt a strategy that will enable it to minimize its expenses and maximize profits. The decision that the company will make should also aim at not only generating money instantly but also in future.

Financially, Abgenix can benefit from XenoMouse in various ways. Firstly, it can benefit immensely by licensing the XenoMouse technology to other collaborators. When a company identifies a disease target, it approaches Abgenix and gets licensed through buying of access rights to develop the antibodies through the XenoMouse technology. In addition, the company will be required to pay an upfront fee and loyalties on sales. By doing this, Abgenix is assured of life-long returns from the technology.  In addition, Abgenix can also earn from XenoMouse by conducting the early stages of drug development, and selling the right to develop and market the drug to other companies. Abgenix will therefore not undergo the marketing cost but through loyalties, it will benefit from the development and sale of drugs. In effect, the cost will be minimized and profits maximized.

Abgenix needs a collaborator. With many options available, the best collaborator would be the one who can offer life-long returns. For example, with ABX-EGF, the best option is between Pharmacol and Biopart. Abgenix has a tough decision to make since each one of them has its advantages and disadvantages. In choosing Pharmacol, for instance, Abgenix would incur very little expenses after signing the deal; the deal would be ‘hands-off’. Conversely, the Biopart deal is ‘hands-in’. In the Biopart deal, Abgenix needs to enter a partnership deal where the two companies share most of the costs. If losses are incurred at various stages of the drug development and marketing, Abgenix will have to bear part of the loss. Comparably, in ABC-EGF, Abgenix needs to collaborate with Pharmacol; the deal is profitable since it will offer long term returns, and being ‘hands-off’, it is also less risky. Losses incurred later in the process will not directly affect Abgenix. In any other deal entered by Abgenix on the XenoMouse technology drugs, consideration on the marketing ability of the collaborator needs to be key.

Abgenix alone cannot attain the value from the XenoMouse. Collaborators will also greatly benefit from the sale of the drugs. In addition, Abgenix competitors are most likely to benefit. Imclone, for instance, was giving an antibody therapy with a combination of C225 and radiations. If granted the rights to the XenoMouse based technology, the company will benefit. Other beneficiaries will include the employees of the company, and the patients whom the drugs will be administered.

Concisely, XenoMouse is a breakthrough to Abgenix. It is the “three billion dollar mouse”. Through formation of the right partnerships, the company will generate revenues at reduced costs. The company needs to channel enough resources to research on various antigens in the human body that the antibodies from the XenoMouse can fight. The research will increase the revenue base for the company in future, and will benefit patients.

 

 

 

 

 

 

 

 

 

 

 

 

 

References

Harvard Business School (2001).Abgenix and the XenoMouse. file:///C:/Users/user/AppData/Local/Temp/72251037_Abgenix_and_the_XenoMouse_1.pdf