Editor

Industry leaders like to use phrases such as "going forward" and "as the company evolves," even though a troubling number of firms in biotechnology (and other industries) tend instead to stall, slide or die.

An exception is Medarex Inc., the transgenic mouse company. Founded in 1987, the company has pulled down more than 50 deals based on its UltiMAb system for creating antibodies with all-human protein sequences. Such might be considered achievement enough, but the company has bigger plans, including a handsome pipeline of its own.

Then came last week's bombshell: a $530 million collaboration with Bristol-Myers Squibb Co. to develop and sell Medarex's MDX-010, the antibody targeting the CTLA-4 receptor for metastatic melanoma.

It's the deal that puts Medarex at last on the path toward becoming a commercial firm. Such a goal was but a dream - and a dream met with some skepticism, when the company was "reinvented and transformed" in 1997 with the $65 million buyout of GenPharm International Inc., which gave Medarex the patented HuMab-Mouse strain, containing functional human antibody genes.

"This is what we set out to do," said Donald Drakeman, president and CEO.

Medarex and BMS together will try the product in other tumor types as well, such as kidney and prostate for which Phase II trials are under way. In June, the FDA granted MDX-010 orphan status for high-risk Stage II, III and IV melanoma. The drug's use against HIV is being explored, too.

News of the BMS deal came less than two months after Medarex's first eye-opener - an agreement worth up to $510 million with another New York-based firm: none other than the pharmaceutical giant Pfizer Inc., for the discovery and development of up to 50 antibody products over 10 years.

Medarex gets $110 million in up-front cash and equity payments, plus more than $400 million in research funding, license fees and milestone payments if all 50 products achieve regulatory approval. Royalties, too. The milestone payments range from $7 million to $10 million per product, and the royalties between 3 percent and 5 percent, typical of the "cash and carry" deals that have been Medarex's bread and butter, Drakeman said.

The company has dealt with major players before, including the likes of Eli Lilly and Co. and Abbott Laboratories, and has formed biotechnology alliances with such firms as the Celltech Group plc, Human Genome Sciences Inc. and MedImmune Inc., but the BMS agreement is a turning of the corner.

"The Pfizer deal relates primarily to our technology rather than our products, and it's a quintessential example of our technology licensing business, much as the BMS deal stands as an example of the drug development business," Drakeman said.

Partners have been moving along the drugs they've developed with Medarex antibodies, with about 20 compounds in the works.

Medarex and its affiliates own five of the products: MDX-010, MDX-060 in Phase II trials for lymphoma, MDX-070 in Phase II for prostate cancer, MDX-214 in Phase I/II for cancers that are epidermal growth factor-positive, and MDX-1307 in Phase I for colorectal, pancreatic, bladder and breast cancers.

One antibody in Phase I for Clostridium difficile-associated diarrhea, MDX-066, is being jointly developed with the Massachusetts Biologic Laboratories. Another, MDX-018 in Phase I/II for autoimmune disease, is being jointly developed with licensing partner Genmab A/S. Four more are moving forward with Genmab alone: HuMax-CD4 in Phase II for cutaneous T-cell lymphoma, HuMax-IL15/AMG 714 in Phase II for rheumatoid arthritis, HuMax-EGFr in Phase I/II for head and neck cancer, and HuMax-D20 in Phase I/II for lymphomas.

Other licensing partners, including Novartis Pharma AG, Lilly and Centocor Inc., among others, are developing a total of eight antibody products, for inflammatory and/or autoimmune diseases and cancer that are in early clinical trials. HGS said Phase I experiments have begun with an anticancer antibody product developed pursuant to a licensing agreement with Medarex partner Kirin Brewery Co. Ltd.

"The Medarex story is that you can be a highly successful product development and highly successful platform company," Drakeman said. "I can't point to anybody who has built the pipeline we have and at the same time has so many products in the clinic based on the technology."

HGS, Millennium Pharmaceuticals Inc., CuraGen Corp. and other target-generation platform companies "have done a fine job with their businesses," he added, but do not have as large a clinical pipeline of proprietary products and drugs related to technology licensing. In that regard, Medarex beats by "a considerable margin" other firms often cited, such as Abgenix Inc., Cambridge Antibody Technology Group plc and Dyax Corp., he said.

"We've played the field, as it were," Drakeman said. "From the beginning we believed that the best return for our shareholders would be to build our own pipeline. But we knew that, no matter how much money we raised, we still weren't going to be able to do everything that could be done."

The so-called "cash and carry" deals let Medarex participate in many more opportunities, he said, crediting the firm's success to "the user-friendly aspect of our technology and the breadth of its applications," along with "our business strategy of providing broad, nonexclusive access."

At the same time, "we very aggressively set out to in-license disease targets and form 50-50 partnerships with companies," Drakeman said.

"Those targets, there are fewer of them around than you would expect," he added. "Genomics has given us many target ideas, but not so many well-validated targets."

But the antibody approach has been well proved by Medarex, its partners and plenty of others, Drakeman said.

"There is no question that monoclonal antibodies will be the foundation of biopharmaceutical products over the next 15 years, the mainstay of novel product development on the biologics side," he said. "Look at what's in the clinic. It just takes some time before all the wrinkles are ironed out."