By Matthew Willett

Medarex Inc. plans to raise $175 million through an offering of convertible notes due 2006, and it expanded its relationship with Danish partner Genmab A/S.

Medarex, which maintains a 33 percent stake in Genmab, of Copenhagen, will develop a fully human therapeutic antibody against inflammation with its European partner through the expansion of their relationship. The companies already have a partnership centered on Medarex¿s UltiMAb platform.

As is typical of other antibody development deals with Medarex, the companies will share equally in costs of development and profits from a commercialized product. Medarex will retain all rights and cost responsibilities for product development and commercialization in Asia.

Medarex CEO Don Drakeman said the financing will fund a variety of general corporate purposes. The notes offering, worth $175 million plus a 15 percent overallotment option, will fund ¿general corporate purposes, including things like building our manufacturing capacity, furthering product development, potential acquisitions of technologies and other corporate purposes,¿ he said.

Neither the interest rate nor the conversion price of the notes has been fixed, Drakeman added.

Drakeman said the current Genmab collaboration is a separate entity from the larger relationship the companies have to partner with European genomics and proteomics companies.

¿This particular product was chosen separately from that [larger] collaboration to develop together and take advantage of the strengths of both companies in antibodies,¿ Drakeman told BioWorld Today. ¿One of the key complementary things is that we have a terrific manufacturing capacity. We just had a ribbon cutting on our new development center, and we¿ve manufactured antibodies for the last seven or eight years. Genmab has put together an outstanding capacity for the clinical development of antibodies, especially in Europe, but on a worldwide basis as well.¿

Medarex, of Princeton, N.J., reported first-quarter revenues and interest income of $15.7 million and net income of $3.3 million, or 4 cents per share. It ended the first quarter with $339.3 million in cash, Drakeman said.

The company had about 72.7 million shares outstanding at the end of the first quarter, he said.

Medarex¿s technology platform includes the UltiMAb Human Antibody Development system, which uses genetically altered HuMAb mice to create fully human antibodies against a variety of targets. Its T-12 Development system is a program to move from a target to clinical testing in about a year, and its Trans-Phage Technology combines high-throughput screening with fully human antibody development.

Medarex¿s stock (NASDAQ:MEDX) fell $2.21 Tuesday to close at $24.99.

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