John De Garmo, Section 002, 4/8/14, ID: 931-426-635
The XenoMouse: The Case of Where the Business Should Go
1) What are the pros and cons of Abgenix collaborating with a partner on ABX-EGF in comparison to going solo?
A partner to the business brings an advantage of providing additional capital, resources, and other material to develop the ABX-EGF drug program, all the while limiting the amount of risk that Abgenix takes on. For example, the drug may not develop correctly and fail in trail(s), or possibly the turns out to be unsuccessful, this after Abgenix provides a large amount of their limited resources. It’s also a benefit that the partner will have complementary knowledge, assets, ...view middle of the document...
Granted, with the positives the company has in bringing in a partner, it also faces a few potential cons. Any returns and/or gains from the company’s product will be split with the partner company, the amount to be determined by an agreed upon contract/negotiations, thus Abgenix will not see the same amount of revenue as it would if it was solo. Also, the company can potentially lose some control over its development processes, direction of business, or funding goals/objectives. This has been noted in a four-year study of inter-organizational collaboration by Fischer and colleagues at the University of Oxford, founding that successful collaboration can be rapidly derailed through external policy steering, particularly where it undermines relations built on trust. The partner can become a potential competitor when the technology and processes of Abgenix are exposed, making Abgenix having to give some control to a partner in their processes, and the product(s) like the ABX-EGF drug as well.
2) If Abgenix chooses to collaborate, would it be better off licensing ABX-EGF to the pharmaceutical company or forming a joint venture with the biotech company?
The key factors effecting Abgenix are the monetary factors, in the form of short term on hand cash, and the speed/time that the company has to get ABX-EGF through testing and cleared for market. Both licensing and forming a joint venture will provide the funding, but licensing is more beneficial due to Abgenix not having to bear the additional various costs for current or future processes, testing, manufacturing, regulation fees, marketing, and other costs associated with the product(s) development and sale. With a joint venture, Abgenix is still involved in the shared costs and risks. However, the costs and risks are offset by the additional resources, financing, and other monetary benefits that the partner (joint venture) brings. In the area of speed to market, two competitors are also developing drugs that target the same EGF pathway. The displacement between the time to market and/or phase of testing...