By Donna Balancia,

SAN DIEGO — Avanir Pharmaceuticals is taking on the biotech big boys in launching a subsidiary that will sell a technology to generate human antibodies for use in drug discovery.

Xenerex Biosciences, the new unit of San Diego-based Avanir Pharmaceuticals, (AMEX: AVN) will compete with Annandale, N.J.-based Medarex Inc. (Nasdaq: MEDX) and Abgenix Inc. (Nasdaq: ABGX) of Fremont, Calif., two firms that have a combined market share of almost $8 billion, in the lucrative antibody field.

“Our technology is different,” Avanir Pharmaceuticals chief executive officer and president Gerald Yakatan told “We’ve found a way to put human cells into a mouse with no immune system, and watch as the mouse then produces human antibodies. It’s remarkable.”

Avanir Pharmaceuticals recently received full U.S. Food and Drug Administration approval on it’s topical fever blister ointment, Docosanol, and expects that its corporate partner, SmithKline Beecham Corp., (NYSE: SBH) will have the product on retail shelves by the end of the year.

“It’s been quite a story for Avanir,” said analyst James McCamant, editor of Medical Technology Stock Letter of Oakland. “The company’s back on its feet and it’s using the money it received from the agreement with its partner on the Docosanol product to fund other ventures. But they may be a little late getting into this new marketplace.”

The FDA has fast-tracked approval on drugs relating to the use of antibodies and the market is potentially quite large, given the range of diseases resulting from immune-related diseases, including cancer and AIDS.