Washington Editor

Medarex Inc. could receive up to $530 million through a deal to partner a Phase III metastatic melanoma product with Bristol-Myers Squibb Co.

The worldwide collaboration is focused on the development and commercialization of MDX-010, a fully human antibody targeting the CTLA-4 receptor. That T-cell molecule, which is believed to be responsible for suppressing immune response, also has been explored by BMS through its parallel development of an immunosuppressive product that is not part of the collaboration.

"This shows that we've both been committed to this really important pathway for a long time," Medarex President and CEO Donald Drakeman told BioWorld Today. "We've both developed very important intellectual property, and to be able to collaborate on this CTLA-4 antibody program is a win-win for both companies."

MDX-010 is being developed for its potential to enable cancer patients' immune systems to fight tumors. BMS and Medarex also agreed to jointly investigate the product in additional tumor types; MDX-010 is in multiple Phase II trials for kidney and prostate cancer, as well as other oncology indications. In June, the FDA named it an orphan drug for high-risk Stage II, III and IV melanoma, and its potential use in HIV also is being explored.

"We are mutually committing to a nearly $200 million program for multiple tumors to be proceeding in a way that would be beyond the capacity for Medarex to do it alone," Drakeman said. "We're going to be able to tap into their cash and their enormous expertise and human resources in the area of cancer treatments."

Princeton, N.J.-based Medarex is receiving an initial cash payment of $50 million, with half that amount coming from an equity purchase by BMS at a premium to the market price. Medarex could receive up to another $205 million if all regulatory milestones are met, and up to an additional $275 million in sales-related milestones.

The collaboration also includes MDX-1379, an investigational gp100 peptide vaccine, which will be developed for use in combination with MDX-010 in melanoma. The FDA has granted fast-track status to MDX-010 in combination with MDX-1379 for treatment of patients with late-stage, unresectable metastatic melanoma who have failed or are intolerant to first-line therapy.

That combination is the subject of a Phase III trial that began in September. About 750 patients with previously treated Stage III or Stage IV metastatic melanoma are expected to be enrolled and randomized to one of three regimens: MDX-010 in combination with MDX-1379, MDX-010 alone or MDX-1379 alone. The trial, designed through a special protocol assessment with the FDA, is expected to finish in the first half of 2006. (See BioWorld Today, Aug. 24, 2004.)

Medarex and New York-based BMS will share costs of developing MDX-010 and MDX-1379 in the U.S. and Europe. Based on a pre-agreed percentage allocation, the partners will split costs evenly for trials solely used for U.S. approval. For trials that support U.S. and European development, Medarex will contribute 35 percent of costs and BMS will pay the remaining 65 percent. BMS will be responsible for all development outside those territories.

Down the road, Medarex can opt to co-promote in the U.S., which would allow it to share in 45 percent of U.S. profits. BMS will have an exclusive license outside the U.S. and pay royalties of an undisclosed rate to Medarex.

The deal follows closely on the heels of a potential $510 million agreement signed between Medarex and Pfizer Inc. for the discovery and development of up to 50 antibody products over 10 years. Terms of the relationship call for Medarex to use its UltiMAb human antibody technology to create products for disease-associated targets belonging to Pfizer, also of New York.

"We've had two half-billion dollar deals within a couple of months," Drakeman said. "This [latest] deal allows us to turn the corner to becoming a commercial-stage biotech company, with marketing and sales capabilities where we'll be able to launch the product in collaboration with the world's oncology leader with our own sales force trained by the world's oncology leader."

On Monday, Medarex's stock (NASDAQ:MEDX) gained 74 cents to close at $9.13.