Medarex Announces 2008 Second Quarter Financial Results

PRINCETON, N.J., Aug. 5 /PRNewswire-FirstCall/ -- Medarex, Inc.
(Nasdaq: MEDX) announced today its financial results for the quarter ended
June 30, 2008.
Medarex's net loss for the quarter ended June 30, 2008 was $53.1 million,
or ($0.42) per share as compared to a net loss of $41.0 million, or ($0.32)
per share for the second quarter of 2007. Included in the 2008 results was a
non-cash charge of $6.0 million, or ($0.05) per share for stock based
compensation recorded in accordance with FAS 123(R) and a non-cash equity in
net loss of affiliate charge of $3.5 million or ($0.03) per share related to
our share of the net loss of AVANT Immunotherapeutics, Inc. ("AVANT").
Excluding the impact of these items, Medarex's net loss on a non-GAAP basis
for the quarter ended June 30, 2008 was $43.6 million, or ($0.34) per share.
Total revenues for the quarter ended June 30, 2008 were $10.0 million, as
compared to $11.8 million for the second quarter of 2007. Research and
development (R&D) expenses for the quarter ended June 30, 2008 increased by
$7.3 million, from $45.3 million in the second quarter of 2007 to $52.6
million in the second quarter of 2008. General and administrative expenses
increased by $1.8 million for the quarter ended June 30, 2008, from $10.6
million in the second quarter of 2007 to $12.4 million in the second quarter
of 2008.
Medarex ended the second quarter of 2008 with approximately $426.7 million
in cash, cash equivalents and marketable securities. In addition, as of June
30, 2008, the fair market value of Medarex's equity interests in Genmab A/S
and AVANT were approximately $87.1 million and approximately $72.2 million,
respectively.
Non-GAAP Financial Measurements
This press release and the accompanying tables include non-GAAP financial
measures. Please see the section of the accompanying tables titled
"Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Loss" for a
description of these non-GAAP financial measures, including reasons for
Medarex management's decision to use each measure, and reconciliations of
these non-GAAP financial measures to the most directly comparable financial
measures prepared in accordance with Generally Accepted Accounting Principles.
"Our clinical development achievements this quarter speak to our steadfast
commitment to execute on our business strategy, which is focused on providing
long-term value through the development and advancement of medically
meaningful products in our portfolio," said Howard H. Pien, President and CEO
of Medarex. "We are also pleased with the recent regulatory progress announced
by our licensing partner, Centocor, Inc., regarding the development of
ustekinumab and golimumab for multiple inflammatory diseases. These two
antibodies represent some of the first UltiMAbs generated from Medarex's
technology that have the potential to become significant royalty-generating
assets for Medarex."
Medarex's 2008 Second Quarter Highlights:
-- At the 2008 American Society of Clinical Oncology (ASCO) annual meeting
in May/June 2008, preliminary results indicating long-term survival and anti-
tumor activity of ipilimumab in advanced melanoma were presented in multiple
presentations studying ipilimumab treatment as a monotherapy and in
combination with chemotherapy. Ipilimumab is an investigational oncology
immunotherapy designed to sustain an active immune response in its attack on
cancer cells. Interim data from a Phase 1/2 trial which demonstrated safety
and preliminary efficacy of ipilimumab in combination with radiotherapy for
metastatic castration resistant prostate cancer were also presented at ASCO.
-- Positive preliminary anti-tumor activity data from an ongoing oncology
Phase 1 trial of MDX-1106 were also presented at the 2008 ASCO annual meeting.
MDX-1106 is a fully human antibody that targets the PD-1 signaling pathway, an
important path in activating T-cell responses and promoting an immune response
to fight cancer and infectious disease.
-- Two separate Phase 2 trials of MDX-1100 were initiated for the
treatment of ulcerative colitis and rheumatoid arthritis. MDX-1100 is a fully
human antibody that targets IP-10, a chemokine expressed and associated with
multiple inflammatory disease conditions.
-- Positive Phase 1 safety and preliminary efficacy data for MDX-1100 in
ulcerative colitis were presented at the 2008 Digestive Disease Week meeting
in May 2008.
-- At the 2008 Annual Meeting of the American Association for Cancer
Research in April 2008, several investigational programs using Medarex's
antibody-drug conjugate technology presented encouraging preclinical data.
About Medarex
Medarex is a biopharmaceutical company focused on the discovery,
development and potential commercialization of fully human antibody-based
therapeutics to treat life-threatening and debilitating diseases, including
cancer, inflammation, autoimmune disorders and infectious diseases. Medarex
applies its UltiMAb(R) technology and product development and clinical
manufacturing experience to generate, support and potentially commercialize a
broad range of fully human antibody product candidates for itself and its
partners. Over forty of these therapeutic product candidates derived from
Medarex technology are in human clinical testing or have had INDs submitted
for such trials, with seven of the most advanced product candidates currently
in Phase 3 clinical trials or the subject of regulatory applications for
marketing authorization. Medarex is committed to building value by developing
a diverse pipeline of antibody products to address the world's unmet
healthcare needs. For more information about Medarex, visit its website at
www.medarex.com.
Statement on Cautionary Factors
Except for the historical information presented herein, the statements
relating to Medarex's investments and advances related to its products in this
press release may constitute forward-looking statements, as defined in the
Private Securities Litigation Reform Act of 1995, that are subject to certain
risks and uncertainties that could cause actual results to differ materially
from any future results, performance or achievements expressed or implied by
such statements. Statements that are not historical facts, including
statements preceded by, followed by, or that include the words "potential";
"preliminary"; or similar statements are forward-looking statements. Medarex
disclaims any intent or obligation to update these forward-looking statements.
Risks and uncertainties include risks associated with product discovery and
development, uncertainties related to the outcome of clinical trials, slower
than expected rates of patient recruitment, unforeseen safety issues resulting
from the administration of antibody products in patients, uncertainties
related to product manufacturing, the need for additional capital, compliance
with regulatory requirements, risks associated with the use of hazardous
substances and risks associated with the enforceability of our patents, as
well as risks detailed from time to time in Medarex's public disclosure
filings with the U.S. Securities and Exchange Commission (SEC), including its
Annual Report on Form 10-K for the fiscal year ended December 31, 2007 and its
quarterly reports on Form 10-Q. There can be no assurance that such
development efforts will succeed or that developed products will receive
required regulatory clearance or that, even if such regulatory clearance were
received, such products would ultimately achieve commercial success. Copies of
Medarex's public disclosure filings are available from its investor relations
department.
Medarex(R), the Medarex logo and UltiMAb(R) are registered trademarks of
Medarex, Inc. All rights are reserved.

MEDAREX, INC.
Condensed Consolidated Statements of Operations

(In thousands, except per share data)

Three Months Ended Six Months Ended
June 30, June 30,
2008 2007 2008 2007
(unaudited) (unaudited)
Contract and license
revenues $5,891 $6,800 $13,875 $13,798
Reimbursement of
development costs 4,069 4,995 8,088 9,536
Total revenues 9,960 11,795 21,963 23,334

Costs and expenses:
Research and
development 52,574 45,273 101,866 92,295
General and
administrative 12,435 10,569 24,844 21,871
Operating loss (55,049) (44,047) (104,747) (90,832)

Equity in net loss of
affiliate (3,546) - (5,331) -
Interest income, net 5,496 3,945 160,314 159,346
Impairment loss on
investments in partners - (2,141) - (2,141)
Minority interest
- Celldex - 1,289 - 2,940

Income (loss) before
provision for income
taxes (53,099) (40,954) 50,236 69,313
Provision for income
taxes - - 23 2
Net income (loss) $(53,099) $(40,954) $50,213 $69,311

Basic net income (loss)
per share $(0.42) $(0.32) $0.39 $0.55
Diluted net income
(loss) per share $(0.42) $(0.32) $0.38 $0.52

Weighted average number
of common shares
outstanding during
the year - basic 127,724 126,430 127,927 125,730
- diluted 127,724 126,430 138,864 139,684

Condensed Consolidated Balance Sheets
(In thousands)

June 30, December 31,
2008 2007
(unaudited) (1)

Cash, cash equivalents and marketable
securities - Medarex $426,669 $334,772
Cash and cash equivalents - Celldex - 14,000
Marketable securities - Genmab - 152,000
Other current assets 18,554 29,013
Property, buildings and equipment, net 74,178 79,925
Marketable securities - Genmab non-current 87,054 139,165
Investment in AVANT Immunotherapeutics 7,809 -
Other assets 9,369 10,985
$623,633 $759,860

Current liabilities $71,427 $81,645
Other liabilities 83,545 89,454
Convertible notes 144,468 143,505
Shareholders' equity 324,193 445,256
$623,633 $759,860

(1) Derived from the December 31, 2007 audited financial statements. For
further information, refer to the consolidated financial statements
and footnotes thereto included in Medarex's Annual Report on Form 10-K
for the year ended December 31, 2007.

This press release dated August 5, 2008, contains non-GAAP financial
measures. The following table reconciles the non-GAAP financial measures
contained in the press release to the most directly comparable financial
measures prepared in accordance with GAAP. These non-GAAP financial measures
include non-GAAP net loss and non-GAAP net loss per share. Non-GAAP financial
measures should be considered in addition to, and not as a substitute for, or
superior to, financial measures prepared in accordance with GAAP.
The following reconciliation of GAAP net income (loss) to non-GAAP net
loss and GAAP net income (loss) per share to non-GAAP net loss per share is
provided as a complement to results presented in accordance with GAAP because
Medarex's management believes these non-GAAP financial measures provide better
insight into Medarex's performance by focusing on results generated by its
ongoing operations and are important in comparing current results with prior
period results. Non-GAAP net loss and non-GAAP net loss per share are intended
to illustrate Medarex's results of operations for the periods presented
excluding the items discuss below. Medarex's management believes investors'
understanding of Medarex's financial performance is enhanced as a result of
our disclosing these non-GAAP financial measures. Non-GAAP net loss and non-
GAAP net loss per share should not be viewed in isolation or as a substitute
for GAAP net income (loss) or GAAP net income (loss) per share.

MEDAREX, INC.
Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Loss
(In thousands, except per share data)
(unaudited)

Three Months Ended Six Months Ended
June 30, June 30,
(unaudited) (unaudited)
2008 2007 2008 2007
GAAP Net income (loss) $(53,099) $(40,954) $50,213 $69,311
Celldex net loss (1) - 3,221 2,924 7,349
Minority interest -
Celldex (1) - (1,289) - (2,940)
Stock-Based compensation
expense (2) 5,968 4,322 11,259 7,821
Impairment loss on
investments in partners - 2,141 - 2,141
Equity in net loss
of affiliate 3,546 - 5,331 -
Gain on sale of
Genmab stock - - (151,834) (152,143)
Non-GAAP Net loss $(43,585) $(32,559) $(82,107) $(68,461)

GAAP Net income (loss)
per share,
basic $(0.42) $(0.32) $0.39 $0.55
diluted $(0.42) $(0.32) $0.38 $0.52

Non-GAAP Net loss
per share, basic
and diluted $(0.34) $(0.26) $(0.64) $(0.54)

Shares used in computing
basic and diluted GAAP
net income (loss) per
share and Non-GAAP net
loss per share 127,724 126,430 127,927 125,730

(1) In management's view, the operations of Celldex prior to its merger
with AVANT Immunotherapeutics, Inc. (effective March 7, 2008) are not
necessarily indicative of, or directly attributable to, Medarex's
continuing operations. Celldex's operations relate primarily to the
research, development and commercialization of therapeutic vaccines,
which is outside the scope of Medarex's core business operations.

(2) For the three and six months ended June 30, 2008, Medarex incurred
$6.0 million and $11.3 million in non-cash stock compensation expense,
of which $2.8 million and $4.8 million are included in research and
development expenses and $3.2 million and $6.5 million, respectively,
are included in general and administrative expenses. Stock
compensation expense includes costs associated with stock awards,
including stock options which were recorded in accordance with the
provisions of FAS 123(R). FAS 123(R) requires companies to record
stock-based payments in the financial statements using a fair value
method.

In addition to excluding the items described in footnotes 1 and 2 above,
items have been excluded based upon management's evaluation (on an individual
basis) of both quantitative and qualitative aspects of the item, including,
(i) size and nature, (ii) whether it relates to our ongoing business
operations, and (iii) whether management expects it to occur as part of our
normal business on a regular basis. Those additional items excluded for
purposes of determining non-GAAP net loss and non-GAAP net loss per share are
gain on sales of Genmab stock, equity in net loss of affiliate and impairment
loss on investments in partners.
SOURCE Medarex, Inc.

Christian S. Schade, Senior VP and CFO, +1-609-430-2880, Laura S. Choi,
Investor Relations, +1-609-430-2880, ext. 2216, or Nichol Harber, Corporate
Communications (media), +1-609-430-2880, ext. 2214, all of Medarex, Inc.