By Karen Pihl-Carey

On top of plans announced Monday to move its ovarian cancer drug candidate into a Phase III trial, Medarex Inc. also formed a strategic alliance with Eos Biotechnology Inc. to identify and develop fully human antibody products targeted to life-threatening cancers and other diseases.

The alliance means $25 million in cash to Eos, as well as a $75 million credit line that would otherwise be payable to Medarex in the form of milestones and royalties for use of the Medarex HuMAb-Mouse technology.

"We're very excited about it," said Gayle Mills, vice president of business development for South San Francisco-based Eos. "It certainly provides validation for Eos' approach and our expertise in our core competencies.

"It provides us very broad access to what we think is a very powerful technology for making human antibodies, as well as near- and long-term benefits," Mills told BioWorld Today. "In the near term, $25 million in cash, and in the longer term, the ability to use a $75 million credit that we would otherwise have owed to Medarex. We believe that will enable us to capture more of the revenues from the antibody products."

The $25 million cash payment consists of $5 million up front and an additional $20 million placed in an escrow account from which Eos may obtain funds by achieving clinical development milestones.

Eos will identify and validate novel antibody targets and will then use the HuMAb-Mouse technology to create products to those targets. The company also will develop the products through Phase IIa trials. Upon completion of the trials, Medarex and Eos will jointly own the products. The $75 million credit line can be applied to all Eos products derived from Medarex's technology, whether or not Medarex jointly owns the products.

The deal covers at least six and up to nine product candidates.

"As joint owners, we can decide either to outlicense, or to jointly fund, further development and marketing," Mills said. "So those decisions will be made on a product-by-product basis."

Medarex, of Princeton, N.J., has the option to obtain exclusive marketing rights in Europe for some of the products. The company also may be retained to perform manufacturing services.

While initially the companies will focus on cancer indications, the field could be expanded to add therapeutic indications of "comparable commercial size," Mills said.

"We expect to have our first therapeutic antibody in trials early next year," she said.

Aside from the alliance with Eos, Medarex announced its plan to move the MDX-210 bispecific antibody into a Phase III trial in ovarian cancer. The trial will be carried out by Immuno-Designed Molecules Inc. (IDM), of Marlborough, Mass., in 45 centers in Europe and North America. IDM is a subsidiary of Immuno-Designed Molecules SA, of Paris. Its Monocyte-derived Activated Killer (MAK) cell technology will be used in combination with MDX-210 in the trial. IDM and Medarex just received European regulatory approval for the start of the Phase III trial, based on positive Phase II results.

Novartis AG, of Basel, Switzerland, was partnered with Medarex on MDX-210 before dropping out of the alliance a year ago. (See BioWorld Today, March 1, 1999, p. 1.)

On Monday, Medarex entered into an agreement with IDM to expand their 1993 partnership, giving IDM worldwide commercial rights for the use of MDX-210 in connection with cell therapy. Under the agreement, IDM acquires rights to Medarex's bispecific and monoclonal antibody technologies to develop products for prostate, colorectal, bladder and breast cancers. It also gains certain economic interests in Medarex's products, MDX-RA and MDX-447, as well as worldwide rights to MDX-220, MDX-22 and certain research programs.

MDX-RA, a monoclonal antibody in a Phase III trial, is delivered directly into the eye after primary cataract surgery, where it binds to and destroys lens epithelial cells that can otherwise proliferate and lead to secondary cataracts. MDX-447 is in Phase II for cancer tumors that express the epidermal growth factor receptor, while MDX-220, an anticancer bispecific for tumors that express the protein TAG-72, is in a Phase I trial. MDX-22, which is used to purge leukemia cells from the bone marrow of acute myeloid leukemia patients undergoing a transplant of their own bone marrow, is in a Phase II trial.

In exchange for IDM's rights, Medarex will receive certain ownership rights in IDM or in a new jointly owned entity. The company currently owns 6 percent of IDM, but the partnership will increase its ownership rights to about 43 percent in either IDM or in the new entity.

Medarex also will pay IDM $2 million and may be required to provide up to $5 million more in cash or stock in exchange for additional ownership rights in IDM or the joint entity. Medarex waives its rights to acquire commercialization rights in North America to MAK technology in targeted immunotherapy, and IDM agrees to fund Medarex's research and development costs up to $1 million per year for two years.

Medarex did not return a phone call seeking comment. The company's stock (NASDAQ:MEDX) closed Monday at $78.187, down $3.687.