R. Scott Greer, the President and Chief Executive Officer of Abgenix, was faced with a very touch decision in determining the route to take in bringing to market a drug based on Xenomouse technology. The three options he had to consider included completely handing off the product for phased payments, becoming a partner in a joint venture and sharing both costs and income, or continuing to work on the drug independently in the hopes of achieving FDA approval and entering the pharmaceuticals marketplace with the result.
A compelling argument to choose Pharmacol to hand off ABX-EGF is their robust balance sheet, pharmaceuticals offerings in a number of areas, and a large and talented sales team. The management of Abgenix estimated a potential of $700 million in sales per year after the drug was on the market for ten years. Those are very compelling figures and represent a very large return on investment for the initial development of Xenomouse technology.
Biopart, by contrast, did not represent a future of such high profits with such low risk. Instead, with the opportunity to enter into a joint venture, Biopart was attractive because of the opportunity for Abgenix to remain deeply and integrally a part of research on the drug going forward. Additionally, Biopart had expertise in pharmaceuticals related to cancer and could perhaps focus more of its specialised sales and marketing force in support of ABX-EGF.
