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As filed with the Securities and Exchange Commission on October 28, 1997.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
OCTOBER 28, 1997 (OCTOBER 21, 1997)
MEDAREX, INC.
(Exact name of registrant as specified in its charter)
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<S> <C> <C>
NEW JERSEY 0-19312 22-2822175
(State of other jurisdiction (Commission (IRS Employer
of incorporation) File Number Identification No.)
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1545 ROUTE 22 EAST, ANNANDALE, NEW JERSEY 08801-0953
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (908) 713-6001
NOT APPLICABLE
(Former name or former address, if changed since last report)
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MEDAREX, INC.
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TABLE OF CONTENTS
FOR
CURRENT REPORT ON FORM 8-K
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Item 5. Other Events................................ 3
Item 7. Financial Statements and Exhibits .......... 3
Signature................................................ 4
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2
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ITEM 5. OTHER EVENTS.
Effective October 21, 1997 (the "Effective Time"), Medarex Inc., a New
Jersey corporation ("Medarex"), acquired GenPharm International, Inc.
("GenPharm"), by means of the merger of Medarex Acquisition Corp., a California
corporation wholly-owned by Medarex ("Merger Sub"), into GenPharm with GenPharm
being the surviving corporation and resulting in GenPharm becoming a wholly-
owned subsidiary of Medarex (the "Merger"), all in accordance with the terms set
forth in the Amended and Restated Agreement and Plan of Reorganization dated as
of May 5, 1997 (the "Merger Agreement"), among Medarex, Merger Sub and GenPharm.
In connection with the Merger, Medarex will issue shares of its Common Stock
having a market value up to $62,725,000, subject to adjustment as described
herein (the "Purchase Price"), in exchange for all of the outstanding shares of
GenPharm Common Stock and GenPharm Preferred Stock.
At the Effective Time of the Merger, the outstanding shares of
GenPharm Common Stock and GenPharm Preferred Stock were converted into the right
to receive shares of Medarex Common Stock, issuable as described below. During
1997, Medarex will issue up to 3,250,000 shares of Medarex Common Stock to
holders of GenPharm Preferred Stock. Additional shares (the "Additional
Shares") will be issued on or before December 31, 1998 (and possibly 1999)
representing the balance of the Purchase Price, but only if, and to the extent,
that GenPharm has received certain patent license fees and related payments from
third parties (the "Third Party Payments"). The Additional Shares will be
issued first to the holders of GenPharm Preferred Stock to the extent of the
balance of their aggregate preference amount of $40,378,646 (the "Preference
Amount") remaining after the issuance of the Initial Shares, and then to holders
of GenPharm Common Stock and GenPharm Preferred Stock (on an as-converted
basis). The number of shares of Medarex Common Stock deliverable in respect of
shares of GenPharm Common Stock and GenPharm Preferred Stock will be determined
based on certain exchange ratios calculated using average trading prices of
Medarex Common Stock over specified periods. In addition, outstanding stock
options for the purchase of GenPharm Common Stock will be assumed by Medarex and
will become options to purchase Medarex Common Stock.
The Purchase Price of $62,725,000 may be reduced on a dollar-for-
dollar basis to the extent that certain amounts specified in the Merger
Agreement, including primarily the amount of the Third Party Payments received
by GenPharm after the Effective Time (net of income tax liability attributable
to receipt of the Third Party Payments), total less than $33,000,000. In
addition, even if all of the Third Party Payments are received, the Purchase
Price will still be reduced if the gross proceeds per share from the sale of
Initial Shares (as defined below) by GenPharm shareholders in the Initial
Placement (as defined below) are below $5.71, and will be increased if such
gross proceeds per share are higher than $8.57, with the adjustment in each case
being pursuant to a formula set forth in the Merger Agreement.
At the Effective Time, Medarex issued 2,000,000 shares of Medarex
Common Stock (the "Initial Payment Shares") to the holders of GenPharm Preferred
Stock. On the Initial Placement Date (as defined below), Medarex will issue
1,250,000 additional shares of Medarex Common Stock (the "Placement Date
Shares") to the holders of GenPharm Preferred Stock. The Initial Payment Shares
and the Placement Date Shares are together referred to as the "Initial Shares."
The holders of the Initial Shares are entitled to participate in a sale of their
Initial Shares (the "Initial Placement") managed by a placement agent or agents
(the "Placement Agents") chosen by Medarex. The date of the closing of the
Initial Placement (the "Initial Placement Date") will occur, if at all, during
1997. In the event the Initial Placement does not occur on or prior to December
31, 1997, the Initial Placement Date will be deemed to be December 31, 1997, and
the Placement Date Shares will be issued on that date.
3
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits. The following material is filed as an
exhibit to this Current Report on Form 8-K:
Exhibit
Number Description of Exhibit
- ------- ----------------------
99.1 Press Release dated October 23, 1997.
4
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MEDAREX, INC.
Registrant
Date: October 27, 1997 By:/s/Donald L. Drakeman
--------------------------------------
Donald L. Drakeman
President, Chief Executive Officer
and Director
5
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EXHIBIT INDEX
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Exhibit Page
Number Description Number
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99.1 Press Release dated October 23, 1997.
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EXHIBIT 99.1
FOR IMMEDIATE RELEASE Contact: Donald L.Drakeman
- --------------------- Chief Executive Officer
Medarex, Inc.
908-713-6001
MEDAREX LAUNCHES HUMAN ANTIBODY BUSINESS
ANNANDALE, NJ, OCTOBER 23, 1997, Medarex, Inc. (NASDAQ: MEDX) announced today
that it has completed the acquisition of GenPharm International, Inc. and the
HuMAb-Mouse technology and is now in the business of creating and developing
human antibodies for itself and others. In addition to developing new products
to use with its core Bispecific technology, the Company expects to offer a full
range of antibody development capabilities, including the patented HuMAb-Mouse,
which produces high affinity fully human antibodies to a target antigen in about
three to six months. In addition, Medarex has an experienced clinical
development and operations team that manufactures and oversees the five Medarex
antibody products that are currently in the clinic. Medarex also operates a
Phase III GMP antibody production facility in Annandale, New Jersey.
Medarex will offer a number of business advantages to its potential partners:
Medarex's partners will have the option to use the HuMAb-Mouse technology at
their facilities, under their own control.
Medarex's partners can have access to its expertise in the creation, scale-up
and production of monoclonal antibodies.
Medarex's partners can have access to its proprietary Bispecific and antibody
engineering technology.
Medarex is fully committed to the HuMAb-Mouse technology and is expanding its
existing transgenic capability to provide further improvements to the
technology.
"Antibody therapeutics represent the largest category of biotechnology products
in clinical trials, and the HuMAb-Mouse technology is an excellent tool to
develop new higher affinity human antibodies. Affinities as high as10/12 /have
been obtained using this technology,/"/ said Donald L. Drakeman, President and
CEO of Medarex. " Not only will Medarex utilize the HuMAb-Mouse to create its
own proprietary products, but we have a new business opportunity as other
companies begin to target the thousands of new
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antigens that have been discovered through advances in genomics and molecular
biology."
"Adding GenPharm's discovery technology to Medarex's Bispecific platform and
clinical and manufacturing capabilities creates strong synergies," said Jonathan
MacQuitty, CEO of GenPharm. "Medarex will be able to offer a unique array of
services."
Medarex will acquire GenPharm for up to $65 million in shares of Medarex common
stock. In payment for the acquisition, Medarex will issue approximately 3.5
million shares of common stock to GenPharm's shareholders in 1997 to satisfy a
portion of the purchase price. These shares will be subject to certain "lock-
up" restrictions until the end of 1998. However, these shares can be sold
through an offering managed by a placement agent of Medarex's choice prior to
that date. At the end of 1998, Medarex will issue additional shares to cover
any remaining balance of the purchase price. The additional shares will only be
due to the extent that GenPharm has received certain patent license fees and
related payments due from third parties.
As part of the acquisition, Medarex expects to receive cash of $33 Million by
the end of 1998 through a combination of GenPharm's cash on hand and the certain
patent license fees and related payments from third parties mentioned above.
Medarex will also obtain three new corporate partnerships with Eisai Company
Ltd., Centocor, Inc. and LeukoSite, Inc.
Medarex is a biopharmaceutical company developing antibody-based therapeutics.
The Company employs several core technologies including Bispecific antibodies
which enhance and direct the body's own immune system to fight disease, the
HuMAb-Mouse antibody development system for the creation of high affinity human
antibodies, and immunotoxin technology. Medarex has five products in clinical
development including the anti-cancer Bispecifics MDX-210 and MDX-447, MDX-33
for autoimmune disease, MDX-RA for the prevention of secondary cataracts, and
MDX-22 for acute myeloid leukemia.
Certain statements in this press release consist of forward looking statements
that involve risks and uncertainties including, but not limited to,
uncertainties regarding the risks of new business opportunities and
uncertainties regarding the receipt of the patent license fees and third party
payments.
