By Mary Welch

Staff Writer

Medarex Inc. registered to sell 1.75 million shares of its common stock that upon filing last week was expected to raise about $113.7 million.

However, at the stock's (NASDAQ:MEDX) closing price of $49.75 Monday, down $8.25, the offering would gross about $87 million. The stock had dropped $7.187 Friday when the offering was disclosed.

The Princeton, N.J.-based company intends to use the proceeds to fund the in-licensing of potential therapeutic targets and the development of fully human antibody-based products using these targets. In addition, it intends to fund the expansion of its human antibody partnering business.

Following the offering, the company will have about 34.2 million shares of common stock outstanding. As of Jan. 14, it had about 32.4 million shares outstanding.

In addition, Medarex is offering the underwriters an option to purchase another 262,500 shares. The offering is being underwritten by Morgan Stanley Dean Witter, of New York; Chase H&Q, of New York; Dain Rauscher Wessels, of Minneapolis; and Warburg Dillon Read LLC, of New York.

Medarex has yet to report year-end figures but it ended the first nine months of 1999 with revenues of $8.34 million and a net operating loss of $10.4 million. In 1998, the company posted year-end revenues of $6.79 million and a net operating loss of $22.5 million. As of Sept. 30, Medarex had $20.2 million in cash.

A few weeks ago, Medarex signed a $12 million alliance with Kirin Brewery Co. Ltd., of Tokyo, for the global commercialization of technology enabling the creation of fully human monoclonal antibodies. (See BioWorld Today, Jan. 11, 2000, p. 3.)

The company's core technology includes the HuMAb Mouse, which was developed by GenPharm International Inc., of Palo Alto, Calif. Medarex acquired GenPharm in May 1997 for $65 million. The HuMAb Mouse generates, within three to six months, human (and therefore non-immunogenic) monoclonal antibodies with strong binding ability to a wide variety of disease targets. These human antibodies can be readily reproduced as monoclonal antibodies and manufactured in large scale for therapeutic or diagnostic use.

However, the company suffered its share of setbacks last year. Last March, partner Novartis AG, of Basel, Switzerland, dropped out of its collaboration for the development of MDX-210, an anti-HER cancer product. MDX-210 consists of fragments of two monoclonal antibodies linked together. It is designed to induce tumor death by simultaneously binding to the protein HER-2 on the surface of cancer cells and to a receptor on immune system killer cells, such as monocytes and other white blood cells. HER-2 is overexpressed in many cancers. (See BioWorld Today, March 1, 1999, p. 1.)

In December, Medarex suspended a Phase III trial of its cataract product, MDX-RA, because of adverse effects. MDX-RA is a monoclonal antibody linked to ricin, a plant-derived toxin. It was acquired from Houston Biotechnology Inc., of The Woodlands, Texas.

Medarex has since licensed both MDX-RA and MDX-210 in Europe and the Near East to a German company, Scil Biomedicals GmbH, in a deal worth up to $29 million in committed funds to develop the products. (See BioWorld Today, Jan. 5, 2000, p. 1.)

Medarex has two bispecific anticancer products in Phase II trials: MDX-210 and MDX-447. MDX-220, another anticancer bispecific, is in Phase I/II trials. Bispecific antibodies enhance and direct the body's immune system to fight diseases. Also in Phase II trials are MDX-22, which is used to purge leukemia cells from the bone marrow of acute myeloid leukemia patients who are undergoing a transplant of their own bone marrow, and MDX-33 for the treatment of autoimmune diseases. The company's first fully human antibody product, MDX-CD4, started Phase I clinical trials last year for the treatment of rheumatoid arthritis.

MDX-RA will continue its Phase III trial to prevent secondary cataracts as the adverse effects did not seem to be caused by the drug. The problem, the company said, was in the formulation.