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Cambridge Antibody Tech to Spin Out Protein Array Company: Seeks Independent Financing

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Cambridge Antibody Technology, a Cambridge, UK-based company creating therapeutic antibodies and microarray content, is promising profitability by 2008 but its microarray segment may not be in the same offices to see it.

Last month, CEO Peter Chambre announced that the company is seeking independent financing for its antibody array business.

“For some time, [Cambridge Antibody (CAT)] has been developing the application of industrialized microarray technology for use in personalized medicine,” he said. “We see this as a very exciting opportunity. As a result of our focus on therapeutic antibodies, CAT will be seeking independent financing for this business.”

Kevin Johnson, the firm’s chief technology officer and a director, will lead the effort.

With outside funding, the CAT microarray business would be poised to make a solo entry into a nascent marketplace for antibody arrays, with no clear leader, to compete against other potential players like Luminex of Austin, Texas; Molecular Staging of New Haven, Conn.; and the collaboration between Large Scale Biology of Vacaville, Calif., and Biosite diagnostics.

Johnson told BioArray News he volunteered for the position.

“I’ve been working on this for a while,” he said. “Basically, I set this up a couple of years ago when we started off the technology division.”

Johnson was a founding employee of the 12-year old company, and has served as head of the technology department.

In March, Johnson spoke at the International Conference on Protein Microarrays in San Diego and said: “I see antibody arrays as eminently possible. The problem I see is how you can make any money out of them.”

He has changed his tune. So has the company, which signed on Chambre, former COO of Celera Genomics, as CEO last April.

“What is really holding it back is the availability of content,” Johnson said. “We have been positioning what we do to make that not so, and we feel pretty well placed to do so. The unique capability of this entity is the antibody content, what you put on the chip or the bead.”

Johnson would not say where the firm is looking for funding. He said that it is in the middle of its financing efforts and expects to close “within a year.”

“It’s not done until it’s done,” Johnson said, sounding like a British version of Yogi Berra, the glib Yankee baseball legend.

CAT, a publicly owned company listed on the London and Nasdaq exchanges, has nearly 300 employees and six monoclonal antibody drugs in clinical trials and a seventh submitted for regulatory review by Abbott. A pioneer in phage display technology, it also has partnerships with AstraZeneca, Genzyme, Pfizer, Human Genome Sciences, Xerion Pharmaceuticals, and Immunex. CAT had revenues of $14.7 million for its 2002 financial year, compared to $11 million for 2001 while operating at a pre-tax loss of $50 million in 2002 and $18 million in 2001. Within five years, Chambre has told analysts he aims to turn the red numbers on the ledgers into black, by concentrating solely on manufacturing therapeutic antibodies.

In other words, Johnson said, CAT does not have the necessary funds to get to profitability while supporting a separate business.

“It’s a related field, but it’s quite different,” he said. “We needed to focus on making this business work, rather than trying to run two different businesses.”

The hope, he said, is for a complete spinout.

“We have most of what we need to make the antibody arrays work, it’s a question of applying that in a slightly different way,” he said.

Winning, according to Johnson, requires the ability to manufacture high-quality content, robotics, and informatics.

“To win in microarrays, you need to win in all of those,” he said.

But antibody arrays are a different business than DNA.

“There is a premium on the guys who can supply or make these assays work,” he said. “There are only a handful of organizations around the world who can deliver antibody content — not only the quality of the output but the overall capacity. There is no point spending six months fashioning three fantastic antibodies, you have to have 300 assays in that time. You have to deliver the scale that the market wants. If there is anybody who can make that content, it is us.”

While Johnson would not divulge potential partners, his travel itinerary might. He said he was going to spend the week after Thanksgiving near San Diego.

— MOK

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