In an effort to strengthen its pipeline, Medarex Inc. agreed to buy a Canadian firm with intellectual property related to a protein they had jointly targeted through a year-old partnership.

The Princeton, N.J.-based company entered an agreement to acquire privately held Ability Biomedical Corp. for about $4.7 million through a combination of cash and stock. The purchase brings on board intellectual property related to IP-10 (interferon-inducible protein-10), a protein also known as CXCL10 that is believed to be associated with immune disorders such as multiple sclerosis, rheumatoid arthritis, inflammatory bowel disease, chronic obstructive pulmonary disease and Type I diabetes. An investigational antibody in preclinical development at Medarex, MDX-1100, targets IP-10.

"In our 50/50 partnership, both partners were obliged to pay their share of the costs," Medarex President and CEO Donald Drakeman told BioWorld Today. "But Ability, as a small company, would need to find that money . . . So this gives us a chance to develop the product without potentially needing to wait for Ability to complete additional financing rounds."

Medarex expects to file an investigational new drug application with the FDA for MDX-1100 in the first half of next year. Should development of the anti-IP-10 antibody program progress to the point of certain milestones before Sept. 4, 2007, Medarex would be required to pay about an additional $3.6 million in cash and/or stock. In lieu of that, Medarex also has the option to revert to its original joint collaboration agreement with Vancouver, British Columbia-based Ability Biomedical.

Drakeman noted that both companies were pleased with the progress since beginning their relationship in January 2003, and added that the business combination also made sense to both companies. Focused on chemokine-based therapeutics, Ability Biomedical was founded in February 2002 to leverage discoveries made at the University of California at Irvine by Thomas Lane and Hans Keirstead. The company raised $2 million since its inception.

"We had previously been interested in IP-10, and they had been formed to focus on IP-10," Drakeman said. "So it was a natural combination - we had product development technology and skills, and they had a great deal of knowledge about the target and intellectual property surrounding it."

Both Lane and Keirstead will maintain a role in the program's development as consultants to Medarex, Drakeman added, though he declined to comment on the future of Ability Biomedical's other employees or its sites in Vancouver and Irvine. The acquisition is expected to be completed in August.

With such plans on the horizon, Drakeman spoke enthusiastically about the future of the IP-10 program.

"It's been a high-priority program for us up to now," he said, "and will continue to be so going forward."

Medarex's product pipeline is based on therapeutic antibody products developed through the use of its UltiMAb technology.

The company's most advanced product, MDX-010, soon will enter pivotal trials for metastatic melanoma following agreement with the FDA on a special protocol assessment. Phase II programs at Medarex include MDX-060, for which positive results in Hodgkin's disease were recently reported, and MDX-070, which just got under way for prostate cancer.

"Altogether, there are 17 products in clinical trials that are based on our UltiMAb technology, including products at various stages of development from Johnson & Johnson, Novartis, Genmab, Amgen and other partners," Drakeman said, "more will be entering the clinic over the course of the year, and we think we have a tremendous number of shots on goal as we pursue our effort to generate a whole generation of antibody therapeutics."

On Friday, Medarex's shares (NASDAQ:MEDX) gained 15 cents to close at $7.30.