Medarex Inc. and Ciba-Geigy Ltd. entered into a collaboration thatcould be worth $39 million to Medarex for development andmarketing of its lead product, MDX-210, a Bispecific antibody beingstudied for a variety of tumors.
Ciba-Geigy will make an initial $4 million equity investment inMedarex and make a second stock purchase of $4 million after PhaseII trials, both at a premium to market price. Medarex, of Annandale,N.J., also will receive up to $31 million in research and developmentfunding and milestone payments.
Ciba-Geigy, of Basel, Switzerland, will assume all costs of Phase IIIdevelopment, regulatory approvals and product launch. Medarex willget royalties on sales and might get manufacturing rights.
MDX-210 consists of fragments of two monoclonal antibodies linkedtogether. It is designed to induce tumor killing by simultaneouslybinding to the protein HER-2 on the surface of cancer cells and to areceptor on immune system killer cells, such as monocytes and otherwhite blood cells. The company said HER-2 is overexpressed inmany cancers.
Medarex has the Bispecific antibody in the clinic in several trials: apilot, multiple-dose Phase II study in breast and ovarian cancers; aPhase I/II in refractory prostate cancer patients; a Phase I/II study inGermany combining MDX-210 and granulocyte colony stimulatingfactor (G-CSF) in refractory breast cancer patients; and the NationalCancer Institute is sponsoring a Phase I/II study of cancer patientswho are positive for HER-2 (which is being announced today).
"Within the next few months we expect to initiate several otherstudies," said Lisa Drakeman, vice president, administration, forMedarex. They may include multiple doses of MDX-210 and G-CSF,and MDX-210 and granulocyte-macrophage colony stimulatingfactor, she said.
"We have a strategy of evaluating a number of different patientpopulations and a number of combination regimens and dosages,"Drakeman said. "We're trying to avoid some of the pitfalls otherbiotech companies have inadvertently encountered because they didnot have enough information before they started their pivotalstudies."
Neither Ciba-Geigy nor Medarex would break out specific details ofthe $31 million in research funding and milestones. Nor would theydisclose the formula to be used when determining the premium atwhich the stock would be purchased.
But Charles Keene, Ciba-Geigy's international media liaison, toldBioWorld the "decision on the second [$4 million] stock purchasewill be made at the end of the Phase II clinical studies. It will dependon the outcome of those studies."
A decision on manufacturing rights will be made in the next 18months, Keene said. And, he said, Ciba-Geigy's initial $4 millionequity investment is expected to result in an ownership in Medarex ofabout 8 percent.
Drakeman said the formula being used to price the shares could resultin Ciba-Geigy owning 8 to 10 percent of the company. She addedthat the financing being provided to Medarex is "certainly expectedto take care of the product development costs through Phase II."
Medarex's stock price (NASDAQ:MEDX) increased 26 percent, or88 cents, on Wednesday, closing at $4.25 per share.
For the quarter that ended March 31, Medarex reported having $8.8million in cash and equivalents. It also reported about 8.7 millionshares outstanding. Neither figure takes into account the Ciba-Geigydeal.
Separately, Medarex has an ongoing collaboration with E. Merck, ofDarmstadt, Germany, that was signed last spring and is worth up to$29 million to Medarex. The companies are developing a Bispecificantibody for the treatment of tumors overexpressing the epidermalgrowth factor receptor (EGF-R).
Drakeman said trials are expected to begin this summer in the EGF-Rprogram. E. Merck already had a EGF-R antibody, and it wantedMedarex to make it into a Bispecific product, she said.
"There are no limitations on the use of our technology," Drakemansaid. "We are in no way limited from producing other cancerproducts or applications of our technology. We think this [deal withCiba-Geigy] highlights the potential of our technology, and we hopeto develop more Bispecifics for other disease targets." n
-- Jim Shrine
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