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to the customer, the product that Ablexis intends to deliver to its Big Pharma customers is an actual mouse. These mice, in all the vast complexity of their live immune systems, will be able to offer a better guide to antibody discovery teams as they try to pick candidates that are likely to pass all the clinical trials required by the FDA before a drug can be sold in the U.S.
Once Ablexis finishes its work on its platform, called the AlivaMab, it will deliver the mouse to all five members of its consortium at the same time, and collect the equal eight-figure license fees, Green says. Each company will have unencumbered rights to use the Ablexis technology. That means they won’t owe the little company future milestone payments or royalties, and they will be free to develop antibodies against any target, or against any disease of their choosing.
Green and the Ablexis chairman, Scott Greer, chose to structure the deal this way partly based on their experience in the past at Fremont, CA-based Abgenix. While deals from the past may have given exclusive access to a single company, or divvied up the technology licenses for narrow uses against specific targets or diseases, Ablexis felt that would be counterproductive.
“We’ve found that putting encumbrances on platforms doesn’t necessarily add any business upside for the company, but it provides limitations for the company and end user,” Green says.
While this original consortium is made up of five of the world’s top 15 pharmaceutical companies, Ablexis has retained the right to structure other deals with other companies, Green says. So the company hasn’t put a limit on the maximum amount of money it can make from the AlivaMab mouse technology, he says.
Ablexis certainly isn’t the only company with what it hopes will be a platform technology for discovering antibodies, that will useful to big drugmakers. Lebanon, NH-based Adimab has struck a series of partnerships around its ability to pump out antibody candidates with a yeast-based technology that’s designed to be faster and cheaper than existing methods.
Without having hard numbers to crunch, it’s impossible to say how rich of a value Big Pharma companies are really placing on the Ablexis technology. But when asked about the deal structure, Green talked about how it provides a return to his investors without having to wait around for an IPO that may never materialize, or a big ticket acquisition by a single buyer. The upfront cash provides more operating capital to help build the company, without diluting the value of the stakes of earlier investors. Cary Pfeffer, a partner with Third Rock, noted in a statement that today’s deal provides a “resounding endorsement” of the Ablexis technology, and also creates a “near-term liquidity event,” in which his firm and others will be able to cash out.
“This consortium provides the return on investment that our investors are looking for,” Green says. “Typically, companies have provided a return on investment through an IPO or an acquisition. But there’s always uncertainty, especially in today’s environment.”