MEDAREX INC, S-3/A, 1997-01-08

MEDAREX INC
S-3/A, 1997-01-08
BIOLOGICAL PRODUCTS, (NO DIAGNOSTIC SUBSTANCES)

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As filed with the Securities and Exchange Commission on January 8, 1997.

Registration No. 333-16373
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------

AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------

MEDAREX, INC.
(Exact name of registrant as specified in its charter)

---------------------------
<TABLE>
<S> <C> <C>
NEW JERSEY 8731 22-2822175
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)

1545 ROUTE 22 EAST
ANNANDALE, NEW JERSEY 08801
(908) 713-6001
</TABLE>
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)

----------------------------

DONALD L. DRAKEMAN
MEDAREX, INC.
1545 ROUTE 22 EAST
ANNANDALE, NEW JERSEY 08801
(908) 713-6001
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
-----------------------

Copies to:
DWIGHT A. KINSEY, ESQ.
SATTERLEE STEPHENS BURKE & BURKE LLP
230 PARK AVENUE
NEW YORK, NEW YORK 10169
(212) 818-9200
------------------------

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.

-----------------------

If the only securities being registered on this Form are to be offered pursuant
to dividend or interest reinvestment plans, please check the following box [ ].

If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box [X].

-----------------------------------------------

THE REGISTRANT HEREBY AMENDS THE REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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PROSPECTUS
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70,000 SHARES

MEDAREX, INC.

COMMON STOCK

All of the shares of common stock, $.01 par value (the "Common Stock") of
Medarex, Inc. (the "Company") being offered hereby (the "Securities") are being
sold for the account of the selling security holders set forth herein (the
"Selling Security Holders"). The Securities were issued by the Company to the
Selling Security Holders pursuant to a private placement completed on April 26,
1996.

The Selling Securityholders and any broker-dealers, agents or underwriters
that participate with the Selling Securityholders in the distribution of the
Securities, may be deemed "underwriters," as that term is defined in the
Securities Act of 1933, as amended (the "Securities Act"), and any commissions
received by them and any profit on the resale of the Securities purchased by
them may be deemed underwriting commissions or discounts under the Securities
Act. The Securities to be offered by the Selling Securityholders may be offered
in one or more transactions in the over-the-counter market or in negotiated
transactions or a combination of such methods of sale, at market prices
prevailing at the time of sale, the prices related to such prevailing market
prices or at negotiated prices. The Securities to be offered by the Selling
Securityholders may be sold either (a) to a broker or dealer as principal for
resale by such broker or dealer for its account pursuant to this Prospectus (for
example, in transactions with a "market maker") or (b) in brokerage
transactions, including transactions in which the broker solicits purchasers.

The Company has agreed to pay all of the expenses of this offering but will
not receive any of the proceeds from the sale of the Securities being offered
hereby. All brokerage commissions and other similar expenses incurred by the
Selling Securityholders will be borne by the Selling Securityholders. The
aggregate proceeds to the Selling Securityholders from the sale of the
Securities will be the purchase price of the Securities sold, less the aggregate
agents' commissions and underwriters' discounts, if any, and other expenses of
issuance and distribution not borne by the Company. See "Use of Proceeds" and
"Plan of Distribution."

The Common Stock is quoted on the Nasdaq National Market under the symbol
"MEDX." The closing price per share reported on the Nasdaq National Market on
January 6, 1997 was $7.13.

---------------------------------

THE SHARES OF COMMON STOCK OFFERED HEREBY INVOLVE A HIGH DEGREE OF
RISK. SEE "RISK FACTORS."
---------------------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

The date of this Prospectus is January 7, 1997.
<PAGE>

AVAILABLE INFORMATION

The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company may be inspected and
copied at the public reference facilities of the Commission located at 450 Fifth
Street, N.W., Washington, D.C., and at the Commission's regional offices located
at 7 World Trade Center, Suite 1300, New York, New York 10048, and at Citicorp
Center, Suite 1400, 500 West Madison, Chicago, Illinois 60661. Copies of such
material can also be obtained at prescribed rates from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549.

The Company has filed with the Commission, Washington, D.C. 20549, a
Registration Statement (which term shall include all amendments, exhibits and
schedules thereto) on Form S-3 under the Securities Act of 1933 (the "Securities
Act"), with respect to the Common Stock offered hereby. This Prospectus, which
constitutes a part of the Registration Statement, does not contain all of the
information set forth in the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the Commission, to which
Registration Statement reference is hereby made. Statements made in this
Prospectus as to the contents of any contract, agreement or other document
referred to are not necessarily complete. With respect to each such contract,
agreement or other document filed as an exhibit to the Registration Statement,
reference is made to the exhibit for a more complete description of the matter
involved and each such statement shall be deemed qualified in its entirety by
such reference. The Registration Statement may be inspected and copied at the
public reference facilities maintained by the Commission at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. Copies of such materials
may be obtained from the Public Reference Section of the Commission, Washington,
D.C. 20549, at prescribed rates.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The Company incorporates by reference in this Prospectus its Annual Report
on Form 10-K for the year ended December 31, 1995, its Quarterly Reports on Form
10-Q for the quarters ended March 31, June 30, and September 30, 1996, and its
Proxy Statement dated April 15, 1996 filed in connection with the Annual Meeting
of Stockholders of the Company held May 16, 1996, each as filed with the
Commission pursuant to the Exchange Act.

All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of this offering shall be deemed to be incorporated by reference in
this Prospectus and to be a part hereof from the date of filing of such
documents.

The Company will provide without charge to each person to whom a Prospectus
is delivered, upon the written or oral request of such person, a copy of any and
all of the information incorporated by reference in the Prospectus (not
including exhibits to the information incorporated by reference unless such
exhibits are specifically incorporated by reference into the information that
the Prospectus incorporates). Such a request should be directed to: Michael A.
Appelbaum, Medarex, Inc., 1545 Route 22 East, Annandale, New Jersey 08801.

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THE COMPANY

Medarex, Inc. ("Medarex" or the "Company") is an antibody-based
biopharmaceutical company developing therapeutic products for cancer, AIDS and
other life-threatening diseases based on proprietary technology in the field of
immunology. Medarex's products are designed either to enhance and direct a
specific immune response or to block or diminish an undesirable immunological
activity. The Company's broad technology platform has led to several products
now in clinical trials and to three strategic alliances and has the potential to
provide the foundation for new products and new strategic alliances in various
therapeutic areas. At present, the Company has six products in human clinical
trials for the treatment of breast cancer, head and neck cancer and a variety of
other solid tumor cancers, leukemia, AIDS and autoimmune disease. The Company
is developing three of its products through strategic alliances with Ciba-Geigy
Limited, of Basel, Switzerland ("Ciba"), Merck KGaA, of Darmstadt, Germany ("E.
Merck") and Centeon L.L.C. ("Centeon") a Delaware limited liability company
formed as a joint venture of Hoechst AG and Rhone-Poulenc Rorer, Inc.

The Company's principal products under development are bispecific; that is,
they are designed to attach to both disease targets and immune system killer
cells simultaneously. This dual binding ability is essentially a target-trigger
combination in which one portion of the Bispecific binds to a Trigger molecule
on killer cells and the other targets and binds to the tumor cell or infectious
agent (a "pathogen") to be eliminated. After joining the killer cell and the
tumor cell or pathogen, the Bispecific triggers the killer cell's destruction of
the target. Based on early clinical trial results, management believes that its
Bispecifics have the potential to cause the destruction of tumors and pathogens
that ordinarily might escape detection by the body's immune system.

The Trigger portion of the Company's Bispecific products may be linked to a
variety of different targeting mechanisms, such as recombinant proteins, single
chain antibodies and antibody fragments. For this reason, the Company believes
that its Bispecifics may be designed for the treatment of a wide range of
cancers, viruses, bacteria and parasites. The Company has patented the Trigger
molecule and has obtained licenses to a number of targeting mechanisms.

In May 1995, the Company entered into a strategic alliance with Ciba
pursuant to which Ciba obtained a worldwide exclusive license to MDX-210, the
Company's Bispecific therapeutic for tumors that overexpress an antigen known as
HER-2. These tumors include a significant number of breast, ovarian, prostate
and other tumors. MDX-210 is currently in Phase II clinical trials. In 1994,
the Company entered into a collaborative arrangement with E. Merck pursuant to
which the Company is developing MDX-447 for the treatment of cancers that
overexpress the epidermal growth factor receptor ("EGF-R"). Cancers in which
EGF-R is overexpressed include head and neck, breast, brain, non-small cell lung
and bladder tumors. MDX-447 is currently in Phase I/II clinical trials.
Medarex is currently in discussions with biotechnology and pharmaceutical
companies and academic institutions to establish collaborations for the creation
and development of additional Bispecific products.

In addition, in April 1996, the Company entered into a strategic alliance
with Centeon to develop and market MDX-33, the Company's product for the
treatment of ITP, an autoimmune condition in which a person's platelets are
destroyed by his own immune system. MDX-33 may diminish the triggering function
on various killer cells, potentially diminishing the autoimmune activity. MDX-
33 is currently in Phase I clinical trials. The Company believes that its
Bispecific products may also act as therapeutic vaccines. In addition to
destroying the target cells, they may stimulate the patient's own immune system
to generate a further active immune response leading to the production of
specific antibodies and killer cells that may cause on-going destruction of the
tumor or pathogen. Research programs are also underway to develop Bispecific
products as tumor vaccines.

The Company was incorporated in New Jersey on July 6, 1987. Its principal
executive offices are located at 1545 Route 22 East, Annandale, New Jersey
08801. Its telephone number is (908) 713-6001.

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RECENT DEVELOPMENTS

On December 18, 1996, the Company entered into an Agreement and Plan of
Merger with Houston Biotechnology Incorporated, a Delaware corporation ("HBI"),
and Medarex Acquisition Corp., a Delaware corporation and wholly-owned
subsidiary of the Company ("Merger Sub"), pursuant to which (i) Merger Sub will
be merged with and into HBI (the "Merger") and HBI will become a wholly-owned
subsidiary of the Company and (ii) each of the outstanding 5,638,707 shares of
common stock, par value $0.01 per share, of HBI ("HBI Common Stock") shall be
converted into the right to receive 0.182 shares of the Company's Common Stock
(the "Exchange Ratio").

In addition, pursuant to the terms of the Merger, all of the outstanding
options (the "HBI Options") and warrants (the "HBI Warrants") to acquire HBI
Common Stock will be assumed by the Company. Consequently, the HBI Options and
HBI Warrants will be exercisable into such number of shares of the Company's
Common Stock equal to the number of shares of HBI Common Stock subject to the
HBI Options or HBI Warrants immediately prior to the consummation of the Merger
multiplied by the Exchange Ratio and the exercise price shall be equal to the
exercise price of the HBI Options or the HBI Warrants immediately prior to the
consummation of the Merger divided by the Exchange Ratio. The exercise prices
of the HBI Options range from $.5625 to $10.00 and the exercise price of the HBI
Warrants is $9.38. Upon completion of the Merger, the HBI Options will be
converted into options to purchase 150,850 shares of the Company's Common Stock
at exercise prices ranging from $3.09 to $54.95 and the HBI Warrants will be
converted into warrants to purchase 822,924 shares of the Company's Common Stock
at an exercise price of $51.54 per share.

Pending consummation of the Merger, the Company has agreed to fund the
pending operations of HBI. In connection therewith, the Company has loaned HBI
$500,000 to be used exclusively for operating expenses in the ordinary course.
In addition, the Company has agreed to loan an additional $250,000 to HBI on
January 15, 1997. The loans are evidenced by Convertible Notes and, in certain
circumstances, are convertible into shares of common stock of HBI. As security
for payment of the loans by HBI, HBI has granted to the Company an exclusive,
transferable, perpetual license to use, further develop, manufacture, sell and
otherwise commercialize HBI's 4197X-RA immunotoxin product in North America.
The license shall be held in escrow and delivered to the Company only upon
certain events of default, as set forth in the Convertible Notes evidencing the
loans.

Consummation of the Merger is subject to the satisfaction of certain
conditions, including approval of HBI's stockholders, registration under the
Securities Act of the shares of the Company's Common Stock to be issued in the
Merger and listing of the shares of the Company's Common Stock on the Nasdaq
National Market. It is expected that the consummation of the Merger will occur
as soon as practicable after the satisfaction of all such conditions.

HBI is engaged primarily in the research and development of monoclonal
antibody and other biopharmaceutical products to prevent secondary cataract and
treat glaucoma, disorders that impair or destroy human vision. HBI's principal
expertise is its monoclonal antibody-based immunoconjugate technology, which
involves the linking of a monoclonal antibody to another substance such as a
drug or an anti-proliferative agent. HBI has no products approved for sale by
the United States Food and Drug Administration and its current product
candidates are not expected to generate significant revenues, if any, for a
number of years.

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RISK FACTORS

The shares of Common Stock offered hereby involve a high degree of risk.
Prospective investors should carefully consider, among other things, the
following factors before a decision is made to purchase any shares of Common
Stock.

EARLY STAGE OF PRODUCT DEVELOPMENT. The Company's therapeutic products are
under development and no revenues have been generated from the sale thereof. In
addition, the Company has generated only minimal revenues from the sales or
licensing of its research products. As of the date of this Prospectus, the
Company does not have any products in Phase III clinical trials and none of the
products under development by the Company has been approved by the United States
Food and Drug Administration ("FDA") for sale. If the Company's products in
preclinical studies advance to the clinical stage, there can be no assurance
that any positive therapeutic effects of these products will be demonstrated in
clinical trials or that toxic side effects will not occur. With respect to
those products which the Company currently has in various phases of clinical
studies, there can be no assurance that these products will prove to be
effective or that significant toxic side effects will not occur negating the
therapeutic utility, if any, of the product. Furthermore, any products which
are successfully developed will be subject to various FDA regulatory
requirements including, but not limited to, FDA approval prior to their
commercial distribution. Such approval may take two to four years or more
following submission of the requisite marketing application, if it is complete,
and may never be obtained. Generally, only a small percentage of new
therapeutic products developed in the laboratory is eventually approved by the
FDA for commercial sale. No assurance can be given that the Company will
succeed in the development and marketing of any therapeutic products.

HISTORY OF OPERATING LOSSES AND ACCUMULATED DEFICIT. The Company has
experienced operating losses in each year since its inception and, as of
September 30, 1996, had an accumulated deficit of $29,296,940. The Company
expects its operating losses to increase at an accelerating rate over the next
several years as the Company expands and accelerates its clinical trials and
product development efforts. In prior years, a significant portion of the
Company's revenues was generated from collaborative development agreements. The
Company currently has three such revenue-producing agreements, and its operating
results may be adversely affected if it does not meet certain milestones
required by such agreements. No assurance can be given that the Company will be
able to meet such milestones. The Company's ability to achieve a profitable
level of operations is dependent in large part on obtaining regulatory approvals
for its products, entering into agreements for product development and
commercialization and making the transition to a manufacturing and marketing
company. There can be no assurance that the Company will ever achieve product
approvals or a profitable level of operations.

ADDITIONAL FINANCING REQUIREMENTS AND ACCESS TO CAPITAL FUNDING. The
operation of the Company's business requires substantial capital resources. It
is anticipated that the Company's current sources of liquidity will be
sufficient to meet the capital requirements of the Company for a period of at
least 36 months from the date of this Prospectus. The acceleration of the
development of the Company's products will result in an increase in the rate at
which the Company uses capital and in the Company's rate of losses. During such
period and thereafter, the Company will continue to spend substantial funds to
complete research and development of its products. The Company is likely to
require additional funds for these purposes. If additional funds are raised
through the issuance of equity, further dilution to stockholders may result.
The Company has no established bank lines of credit or other arrangements
through which it can obtain financing. No assurance can be given that
additional funds will be available

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for the Company to finance its development on acceptable terms, if at all. If
adequate funds are not available from operations or additional sources of
financing, the Company's business will be materially adversely affected.

DEPENDENCE ON STRATEGIC ALLIANCES. The Company has entered into strategic
alliances relating to the research and development and sales, marketing and co-
promotion of several of the Company's potential products. Under these
arrangements, the Company has granted to its corporate partners license rights
in and to certain of the Company's potential products in exchange for the
payment of license fees and commitments for additional funding in the form of
additional equity purchases, research and development payments and milestone
fees. Most of these payments are subject to the Company's achieving certain
milestones or to the satisfaction of the Company's collaborators with testing
results of the related product. In particular, the Company has entered into
strategic alliances with Ciba and E. Merck to develop and market the Company's
MDX-210 and MDX-447 Bispecifics, respectively. The Company relies on the
payments made under these strategic alliances to further the development of
these products and its operating results may be adversely affected if it is
unable to meet certain milestones required by such agreements. Should these
arrangements be terminated, the Company may be required to seek additional
funding from other sources in order to develop and market these products. If
such funding is not available, its research and product development efforts
would be adversely affected. No assurance can be given that additional funds
will be available on acceptable terms, if at all. If adequate funds are not
available the Company's business will be materially adversely affected.

GOVERNMENT REGULATION. The research and development activities of the
Company as well as the investigation, manufacture, labeling, distribution,
marketing and sale of therapeutic products are subject to extensive and rigorous
regulation, including pre-market approval, by the FDA and other state and
foreign agencies. The process of obtaining FDA approval is costly and time-
consuming, and there can be no assurance that any product that the Company may
develop will be deemed to be safe and effective by the FDA and granted marketing
approval. Even if marketing approvals are obtained, a product and its
manufacturer are subject to continuing review, and later discovery of previously
unknown problems with a product or its manufacturer may result in the imposition
of restrictions on or sanctions against the product or its manufacturer,
including withdrawal of products from the market and other enforcement actions.
Delays in obtaining regulatory approvals may adversely affect the marketing of
any products developed by the Company and the ability of the Company to receive
product revenues and royalties. In light of the limited regulatory history of
bispecific therapeutics based on the Company's technology, there can be no
assurance that regulatory approvals for the Company's products will be obtained
without lengthy delays, if at all. In addition, the Company cannot predict the
extent to which changes to existing governmental regulations might have an
adverse effect on the Company. In 1990 and 1991, the Company received orphan
drug designations for MDX-22 and MDX-11, respectively, for the treatment of AML.
In October 1993, the Company received an orphan drug designation for MDX-210 for
the treatment of ovarian cancer. There can be no assurance that the Company
will ever receive FDA approval to market these products, or that the Company
will be the first sponsor to receive FDA approval to market these products and
thus receive orphan drug marketing exclusivity or that its rights to market MDX-
22, MDX-11, or MDX-210 will not be preempted by orphan exclusivity held by
another company.

GOVERNMENTAL REFORMS. Health care reform is an area of increasing national
and international attention and a priority of many elected officials. Several
proposals to modify the current health care system in the United States to
improve access and control costs are currently being considered by both federal
and state governments. Any such reform measures could adversely affect the
amount of reimbursement available from governmental or private payors or could
affect the ability to set prices for

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newly approved therapeutic products. Similar proposals are being considered by
governmental officials in other significant pharmaceutical markets, including
Europe. It is uncertain what proposals will be adopted or what actions
governmental or private payors for health care goods and services may take in
response to proposed or actual legislation in the United States or other
important markets. The Company cannot predict the outcome of health care reform
proposals or the effect any such reforms may have on the Company's business.
Any such proposals, if adopted, could have a material adverse effect on the
Company.

NO ASSURANCE OF ADEQUATE REIMBURSEMENT. The success of the Company's
products in the United States and other significant markets will depend in part
upon the extent to which a consumer will be able to obtain reimbursement for the
cost of such products from government health administration authorities, private
health insurers and other organizations. Uncertainty exists as to the
reimbursement status of any newly approved therapeutic product. There also can
be no assurance that adequate third party reimbursement by private insurers will
be available for such products. Even if approved for marketing, there can be no
assurance that patients will have sufficient resources to pay for the therapy or
that governmental or private payors will provide reimbursement for such therapy.
There can be no assurance that the Company's products will be considered cost-
effective, that reimbursement will be available or, if available, that the
payor's reimbursement policies will not adversely affect the Company's ability
to sell its products on a profitable basis.

TECHNOLOGICAL CHANGE AND COMPETITION. The biotechnology industry is
subject to rapid and significant technological change. Competitors of the
Company engaged in all areas of biotechnology in the United States and abroad
are numerous and include, among others, major pharmaceutical and chemical
companies, specialized biotechnology firms, universities and other research
institutions. There can be no assurance that the Company's competitors will not
succeed in developing technologies and products that are more effective than any
which are being developed by the Company or which would render the Company's
technology and products obsolete or non-competitive. Many of these competitors
have substantially greater financial and technical resources and production and
marketing capabilities than the Company. In addition, many of the Company's
competitors have significantly greater experience than the Company in
undertaking preclinical testing and clinical trials of new or improved
therapeutic products and obtaining FDA and other regulatory approvals of
products for use in health care. Accordingly, the Company's competitors may
succeed in obtaining FDA approval for products more rapidly than the Company.

PATENTS AND PROPRIETARY RIGHTS. Certain of the processes by which the
Company is able to produce its products are proprietary; some of these
technologies are legally owned by the Company and some are legally owned by
others and licensed, either on an exclusive or a non-exclusive basis, to the
Company. The Company believes that patent protection of materials or processes
it develops and any products that may result from the Company's and licensors'
research and development efforts are important to the possible commercialization
of the Company's products. The patent position of biotechnology firms generally
is highly uncertain and involves complex legal and factual questions. To date,
no consistent policy has emerged regarding the breadth of claims allowed in
biotechnology patents. Accordingly, there can be no assurance that patent
applications relating to the Company's products or technology will result in
patents being issued or that, if issued, the patents will afford protection
against competitors with similar technology. It is possible that patents issued
to the Company will be successfully challenged. In addition, companies that
obtain patents claiming products or processes that are necessary for or useful
to the development of the Company's products or otherwise covering aspects of
the Company's technology can bring legal actions against the Company claiming
infringement. Litigations

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to establish the validity of patents, to defend against infringement claims or
to assert infringement claims against others, if required, can be lengthy and
expensive. There can be no assurance that the Company will have the financial
resources necessary to enforce any patent rights it may hold. The Company may
be required to obtain licenses from others to develop, manufacture or market its
products. There can be no assurance that the Company will be able to obtain such
licenses on commercially reasonable terms or that the patents underlying the
licenses will be valid and enforceable.

The Company also relies upon unpatented proprietary technology, and no
assurance can be given that others will not independently develop substantially
equivalent proprietary information or techniques or otherwise gain access to the
Company's proprietary technology or disclose such technology or that the Company
can meaningfully protect its rights in such unpatented proprietary technology.

The Company attempts and will continue to attempt to protect its
proprietary materials and processes by relying on trade secret laws and
nondisclosure and confidentiality agreements and exclusive licensing
arrangements with its employees and certain other persons who have access to
its proprietary materials or processes or who have licensing or research
arrangements exclusive to the Company, including the Company's Scientific
Founders (as defined herein). Despite these protections, no assurance can be
given that others will not independently develop or obtain access to such
materials or processes or that the Company's competitive position will not be
adversely affected thereby. The Company does not have confidentiality
agreements with the Company's Scientific Advisors (as defined herein). To the
extent members of the Company's Scientific Advisory Board have consulting
arrangements with or are employed by a competitor of the Company, the Company
could be materially adversely affected by the disclosure of the Company's
confidential information by such Scientific Advisors.

DILUTION. As of December 31, 1996, there were outstanding (a) 1,773,600
shares of Common Stock reserved for issuance pursuant to options and warrants
exercisable by 63 individuals who are present or former employees, officers,
directors and consultants of the Company, at a weighted average exercise price
of $3.54 per share; and (b) 100,000 shares of Common Stock issuable upon the
exercise of certain additional warrants at an exercise price of $4.50 per share.
Any exercise of such options and warrants will take place at a time when the
Company would be able, in all likelihood, to obtain funds from the sale of the
Company's Common Stock at prices higher than the exercise price thereof. As a
result, investors in the Securities offered hereby may incur substantial
dilution of their investment. See "Dilution."

In addition, upon consummation of the Merger (i) all of the outstanding
shares of HBI's Common Stock will be converted into 1,026,245 shares of the
Company's Common Stock, (ii) the HBI Options will be converted into options to
purchase 150,850 shares of the Company's Common Stock at exercise prices ranging
from $3.09 to $54.95 per share and (iii) the HBI Warrants will be converted into
warrants to purchase 822,924 shares of the Company's Common Stock at an exercise
price of $51.54 per share.

The exercise of all or a portion of the outstanding options and warrants
may result in a significant increase in the number of shares of Common Stock
that will be subject to trading on the Nasdaq National Market, and the issuance
and sale of the shares of Common Stock upon the exercise thereof may have an
adverse effect on the price of the Common Stock. See "-Possible Volatility of
Securities Prices," "Dilution" and "Description of Securities."

FUTURE SALES OF COMMON STOCK. Of the 17,592,992 shares of Common Stock
outstanding as of December 31, 1996, 3,130,263 are "restricted securities" as
that term is defined in Rule 144 under the

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Securities Act and under certain circumstances may be sold without registration
pursuant to such rule. The Company is unable to predict the effect that sales
made under Rule 144 or otherwise may have on the then prevailing market price of
the Common Stock. The issuance of a significant number of additional
securities, or even the possibility thereof, may depress the market price of
such securities. See "-Possible Volatility of Securities Prices," "Dilution"
and "Description of Securities--Shares Eligible for Future Sale."

The Company has also filed registration statements on Form S-3 under the
Securities Act relating to 1,140,888 shares of Common Stock being offered by
certain selling security holders. Such shares of Common Stock are freely
tradeable without restriction or further registration under the Securities Act,
except for shares, if any, held by "affiliates" of the Company which shares will
be subject to resale limitations of Rule 144.

The Company intends to file a registration statement on Form S-4 relating
to the 1,026,245 shares of the Company's Common Stock issuable upon conversion
of the outstanding shares of HBI's Common Stock pursuant to the Merger and the
822,924 shares of the Company's Common Stock issuable upon the exercise of the
HBI Warrants. Upon effectiveness of said registration statement and
consummation of the Merger, shares of the Company's Common Stock issued in
exchange for HBI Common Stock and upon exercise of the HBI Warrants other than
shares issued to affiliates of the Company, will be freely tradeable in the
public market.

In addition, the Company has filed registration statements on Form S-8
under the Securities Act to register the shares of Common Stock issuable under
its Amended and Restated 1987 Stock Option Plan (282,450 shares), Amended and
Restated EMP Plan (451,500), Amended and Restated 1991 Stock Option Plan
(250,000 shares), 1992 Stock Option Plan (250,000 shares), 1994 Stock Option
Plan (300,000 shares), 1995 Stock Option Plan (350,000 shares) and 1996 Stock
Option Plan (350,000 shares). Upon consummation of the Merger, the Company
intends to file a registration statement on Form S-8 to register the 150,850
shares of the Company's Common Stock issuable upon the exercise of the HBI
Options. Shares issued under such plans other than shares issued to affiliates
of the Company, will be freely tradeable in the public market.
POSSIBLE VOLATILITY OF SECURITIES PRICES. There has been significant
volatility in the market prices of securities of biotechnology companies,
including those of the Company. See "Price Range of Common Stock." Various
factors and events, including announcements by the Company or its competitors
concerning testing results, the achievement of or failure to achieve certain
milestones, patents, regulatory approvals, proprietary rights, arrangements with
collaborative partners, technological innovations or new commercial products, as
well as public concern about the safety of biotechnology in general, may have a
significant impact on the Company's business. The trading prices of the
Company's securities are subject to wide fluctuations in response to these
factors, as well as to the sale or attempted sale of a large amount of Common
Stock into the market.

MANUFACTURING AND MARKETING. The Company has not yet commercially
introduced any products, except for sales of research products to scientists.
To be successful, the Company's therapeutic products must be manufactured in
commercial quantities in compliance with regulatory requirements and at
acceptable costs. While the Company believes its current facilities are
adequate for the production of its proposed products for clinical trials, such
facilities are not yet adequate for the production of any products for
commercial sale. In order to manufacture its products for such purposes, the
Company will have to enhance its existing facilities and obtain requisite
consents or acquire new facilities, which will

9
<PAGE>

require additional funds and approval by the FDA and other regulatory agencies.
The Company has no experience in large-scale manufacturing, and no assurance can
be given that the Company will be able to make the transition to commercial
production successfully or achieve profitability. Although the Company intends
to market certain of its products through a direct sales force, if and when
regulatory approval is obtained, it currently has no marketing or sales staff.
To the extent that the Company determines not to, or is unable to, arrange third
party distribution for its products, significant additional expenditures,
management resources and time will be required to develop a sales force. There
can be no assurance that the Company will be able to establish such a sales
force or be successful in gaining market acceptance for its products.

PRODUCT LIABILITY. The clinical investigation, marketing and sale of human
health care products entail an inherent risk of allegations of product
liability, and there can be no assurance that product liability claims will not
be asserted against the Company. The Company currently has product liability
insurance coverage in the amount of $5,000,000 for use of its investigational
products during human clinical studies. The Company expects to seek to obtain
product liability insurance if and when its products are commercialized;
however, there can be no assurance that adequate insurance coverage will be
available at acceptable costs, if at all, or that a product liability claim
would not materially adversely affect the business or financial condition of the
Company. Some medical centers will not participate in FDA-approved clinical
studies unless a company has adequate product liability insurance.

DEPENDENCE ON KEY PERSONNEL AND ATTRACTION OF KEY EMPLOYEES AND
CONSULTANTS. The Company's success is dependent on certain key management and
scientific personnel. Competition for qualified employees among biotechnology
companies is intense, and the loss of key personnel, or the inability to attract
and retain the additional highly skilled employees required for the expansion of
the Company's activities, could adversely affect its business. In the near
future, the Company will also need to hire additional personnel skilled in the
clinical testing and regulatory process as it develops products with commercial
potential. There can be no assurance that the Company will be able to attract
or retain such personnel. The Company has obtained insurance on the lives of
each of Donald L. Drakeman, President and Chief Executive Officer, and Michael
A. Appelbaum, Senior Vice President - Finance and Administration, Secretary,
Treasurer and Chief Financial Officer, of which the Company is the sole
beneficiary, in the amount of $2,000,000 for Dr. Drakeman and $1,000,000 for Mr.
Appelbaum. Dr. Drakeman and Mr. Appelbaum are subject to certain restrictions
set forth in their respective employment agreements. The Company has
experienced and expects to continue to experience a period of significant growth
in the number of new employees necessary to support the Company's business
operations. The Company's need to manage growth effectively will also require
it to continue to implement and improve its operational, financial and
management information systems and to train, motivate and manage its employees.
The Company's failure to manage growth effectively would have a material adverse
effect on the Company's results of operations and its ability to execute its
business strategy.

The Company has obtained a substantial amount of its technology from the
Trustees of Dartmouth College ("Dartmouth"), and Dartmouth currently maintains
an equity interest in the Company. Drs. Michael W. Fanger and Paul M. Guyre,
two of the Company's principal founders (who, together with Dr. Edward D. Ball,
formerly of Dartmouth Medical School and now a faculty member at the University
of Pittsburgh Medical School, are the Company's "Scientific Founders"), are
members of the faculty of Dartmouth Medical School.

CONFLICTS OF INTEREST. The Company relies on members of its Scientific
Advisory Board (the "Scientific Advisors"), which includes distinguished
scientists with a wide range of experience in the

10
<PAGE>

research and development of biopharmaceutical products, to assist the Company
in formulating its research and development strategy. All of the members of the
Scientific Advisory Board are employed other than by the Company and may have
commitments to or consulting or advisory contracts with other entities that may
limit their availability to the Company.

DIVIDENDS. The Company has not paid any cash dividends, and it is unlikely
that the Company will pay any dividends in the foreseeable future. Earnings, if
any, will be retained in the business for further development and expansion.
There can be no assurance that the Company will ever be in the position to pay
cash dividends. See "Dividend Policy."

USE OF PROCEEDS

The Selling Security Holders will receive all of the net proceeds from the
sale of the Securities owned by it and offered hereby. The Company will not
receive any of the proceeds from the sale of the Securities offered hereby.

CAPITALIZATION

The following table sets forth the capitalization of the Company as of
September 30, 1996.
<TABLE>
<CAPTION>

SEPTEMBER 30, 1996
----------------------
(in thousands)
(unaudited)

<S> <C>
Long-term debt and other long-term
obligations............................. $ 116

Stockholders' equity:

Preferred stock, $1.00 par value,
2,000,000 shares authorized, none
issued and outstanding.............. --

Common stock, $0.01 par value,
40,000,000 shares authorized,
17,588,242 shares issued and
outstanding(1)...................... 176

Capital in excess of par value...... 65,805

Unrealized gain on securities....... 189

Accumulated deficit................. (29,297)

Total stockholders' equity..... $36,872

Total capitalization......... $36,988

</TABLE>
- ----------
(1) Does not include shares of Common Stock issuable upon the exercise of
outstanding options and warrants.

11
<PAGE>

DIVIDEND POLICY

The Company has not paid any cash dividends on its Common Stock and does not
anticipate paying cash dividends in the foreseeable future. The Company intends
to retain any earnings to finance the growth of the Company. The Board of
Directors will review its dividend policy from time to time to determine the
feasibility and desirability of paying dividends, after giving consideration to
the Company's earnings, financial condition, capital requirements and such other
factors as the Board of Directors deems relevant.

PRICE RANGE OF COMMON STOCK

The Common Stock is traded on the Nasdaq National Market under the symbol
"MEDX." The following table sets forth for the periods indicated the high and
low sale prices for the Common Stock as reported by Nasdaq.
<TABLE>
<CAPTION>
1994 HIGH LOW
- ---- ------ -----
<S> <C> <C>

First Quarter...................... $ 8.13 $5.75

Second Quarter..................... $ 7.25 $3.88

Third Quarter...................... $ 6.25 $3.75

Fourth Quarter..................... $ 4.25 $2.50

1995
- ----

First Quarter...................... $ 4.13 $2.38

Second Quarter..................... $ 6.50 $2.75

Third Quarter...................... $ 7.50 $4.38

Fourth Quarter..................... $ 7.13 $6.50

1996
- ----

First Quarter...................... $ 7.13 $6.50

Second Quarter..................... $12.25 $6.25

Third Quarter...................... $ 9.00 $5.38

Fourth Quarter..................... $ 9.00 $6.25

1997
- ----

First Quarter (through January 6).. $ 7.25 $6.63
</TABLE>

On January 6, 1997 the last reported closing price for the Common Stock was
$7.13, and there were approximately 360 holders of record of the Common Stock.

12
<PAGE>

DILUTION

As of December 31, 1996, there were outstanding (a) 1,773,600 shares of Common
Stock reserved for issuance pursuant to options and warrants exercisable by 63
individuals who are present or former employees, officers, directors and
consultants of the Company, at a weighted average exercise price of $3.54 per
share; and (b) 100,000 shares of Common Stock issuable upon the exercise of
certain additional warrants at an exercise price of $4.50 per share.

The following table sets forth the number of shares of Common Stock
outstanding as of December 31, 1996 as well as the number of shares of Common
Stock that would be outstanding in the event that all of the options warrants
are exercised. Any exercise of options or warrants will take place at a time
when the Company would be able, in all likelihood, to obtain funds from the sale
of the Company's Common Stock at prices higher than the exercise prices or
conversion prices thereof. As a result, investors in the Common Stock offered
hereby may incur substantial dilution of their investment, as the issuance of
such a significant number of additional securities, or even the possibility
thereof, may depress the price of the Common Stock being offered hereby.
<TABLE>
<CAPTION>
COMMON STOCK
MARKET, EXERCISE, OUTSTANDING OR
CONVERSION OR RESERVED FOR
SECURITY OPTION PRICE ISSUANCE
- ---------------------------------- ----------------- --------------
<S> <C> <C>
Outstanding Common Stock $7.00/1/ 17,592,992
Stock Options
1987 Plan $0.38/3/ 276,150
EMP Plan/2/ $0.10 403,000
1991 Plan $4.34/3/ 183,500
1992 Plan $4.25/3/ 191,250
1994 Plan $4.70/3/ 296,250
1995 Plan $6.95/3/ 350,000
1996 Plan $9.46/3/ 73,450
Other warrants $4.50 100,000
----------
Fully Diluted Shares Outstanding 19,466,592
==========
</TABLE>
- ----------------------------

(1) The last reported closing price of the Company's Common Stock on the
Nasdaq National Market on December 31, 1996.
(2) Upon the merger of Essex Medical Products, Inc. ("EMP") and the Company
in June 1990, the Company assumed EMP's obligations pursuant to the
options granted under this plan.
(3) Represents the weighted average exercise price.

In addition, upon consummation of the Merger, (i) all of the outstanding
shares of HBI's Common Stock will be converted into 1,026,245 shares of the
Company's Common Stock, (ii) the HBI Options will be converted into options to
purchase 150,850 shares of the Company's Common Stock at exercise prices ranging
from $3.09 to $54.95 per share and (iii) the HBI Warrants will be converted into
warrants to purchase 822,924 shares of the Company's Common Stock at an exercise
price of $51.54 per share.

13
<PAGE>

SELECTED FINANCIAL DATA

The following selected financial data for the five years ended December 31,
1991, 1992, 1993, 1994 and 1995 are derived from audited financial statements of
the Company. The financial data for the nine months ended September 30, 1995
and 1996 are derived from unaudited financial statements. Such unaudited
financial statements include all adjustments (consisting only of normal
recurring accruals) which the Company considers necessary for a fair
presentation of its financial condition and results of operations for such
periods. Operating results for the nine months ended September 30, 1996 are not
necessarily indicative of the results that may be expected for the entire year
ending December 31, 1996. This selected financial data should be read in
conjunction with the financial statements and the related notes thereto.
<TABLE>
<CAPTION>
NINE MONTHS
YEARS ENDED DECEMBER 31, ENDED SEPTEMBER 30,
--------------------------------------------------- ---------------------
1991 1992 1993 1994 1995 1995 1996
-------- -------- --------- --------- --------- ---------- ---------
STATEMENT OF (In thousands, except per share data) (Unaudited)
OPERATIONS DATA:
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues:
Sales.................... $ 366 $ 365 $ 406 $ 378 $ 312 $ 253 $ 210
Contract and license
revenues................ 1,309 -- -- 200 1,467 981 1,551
------- ------- -------- -------- -------- ------- -------
Total revenues........... 1,675 365 406 578 1,778 1,234 1,762
Cost and Expenses:
Cost of sales............ 57 66 82 91 123 94 100
Research and
development............. 1,431 2,531 3,798 5,905 6,442 4,805 5,560

General and
administrative.......... 873 2,165 2,361 2,154 2,275 1,691 1,863
------- ------- -------- -------- -------- ------- -------
Total costs and
expenses................ 2,362 4,761 6,240 8,150 8,840 6,591 7,522

Operating loss........... (687) (4,396) (5,834) (7,572) (7,062) (5,356) (5,761)
Interest and dividend
income.................. 318 399 421 348 561 380 1,091

Interest expense......... (217) -- (2) (11) (8) (6) (4)
------- ------- -------- -------- -------- ------- -------
Net loss................. $ (585) $(3,997) $ (5,415) $ (7,236) $ (6,509) $(4,983) $(4,674)
======= ======= ======== ======== ======== ======= =======
Net loss per share/(1)/.. ($0.15) ($0.79) ($0.86) ($1.00) ($0.69) ($0.55) ($0.32)
Weighted average
common shares
outstanding/(1)/........ 3,838 5,049 6,304 7,269 9,457 9,024 14,515
<CAPTION>

As of September 30,
1991 1992 1993 1994 1995 1996
------- ------- -------- -------- -------- -------------------
BALANCE SHEET DATA: (In thousands) (Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Cash, cash equivalents
and marketable
securities.............. $11,349 $15,938 $ 9,687 $ 9,434 $ 15,729 $33,733

Working capital.......... 11,228 15,918 8,330 8,017 14,549 33,480
Total assets............. 11,942 16,943 12,640 13,017 19,240 38,212
Long-term obligations.... --- --- 78 60 40 116
Accumulated deficit...... (1,465) (5,462) (10,877) (18,113) (24,623) (29,297)
Total stockholders'
equity.................. 11,634 16,603 10,943 11,097 17,375 36,872

</TABLE>
- ----------------------

(1) Computed on the basis described for net loss per share in Note 2 to the
Financial Statements.

14
<PAGE>

SELLING SECURITY HOLDERS

The following table sets forth certain information with respect to the
Selling Security Holders for whom the Company is registering the Securities for
resale to the public. The Company will not receive any of the proceeds from the
sale of such Securities. An aggregate of up to 70,000 shares of Common Stock
may be offered by the Selling Security Holders.

On April 26, 1996, the Company entered into an Nonexclusive Sublicense
Agreement (the "Sublicense") with Polaroid Corporation and Boston Biomedical
Research Institute, Incorporated (the "Selling Security Holders") pursuant to
which the Company obtained certain license rights relating to products and
processes covered by certain patents and patent applications. The Securities
are being registered pursuant to certain demand registration rights granted to
the Selling Security Holders as part of the Sublicense.
<TABLE>
<CAPTION>

Maximum
Shares of Common Number of
Stock Beneficially Shares to Shares Beneficially
Owned Prior to be Sold Owned After
the Offering in Offering the Offering
------------------- ----------- --------------------

NUMBER PERCENT NUMBER PERCENT
-------- --------- -------- ----------
<S> <C> <C> <C> <C> <C>
Polaroid Corporation........ 40,000 * 40,000 0 0%
549 Technology Square
Cambridge, MA 02139

Boston Biomedical Research.. 30,000 * 30,000 0 0%
Institute, Incorporated
20 Stanford Street
Boston, MA 02114
</TABLE>

- ---------------------
* Less than 1%

15
<PAGE>

PLAN OF DISTRIBUTION

The sale of the Securities by the Selling Security Holders may be effected
from time to time in transactions (which may include block transactions by or
for the account of the Selling Security Holders) in the over-the-counter market
or in negotiated transactions, through the writing of options on the Securities,
a combination of such methods of sale or otherwise. Sales may be made at fixed
prices which may be changed, at market prices prevailing at the time of sale, or
at negotiated prices.

The Selling Security Holders may effect such transactions by selling their
Securities directly to purchasers, through broker-dealers acting as agents for
the Selling Security Holders or to broker-dealers who may purchase shares as
principals and thereafter sell the Securities from time to time in the over-the-
counter market, in negotiated transactions or otherwise. Such broker-dealers,
if any, may receive compensation in the form of discounts, concessions or
commissions from the Selling Security Holders and/or the purchasers for whom
such broker-dealers may act as agents or to whom they may sell as principals or
both (which compensation as to a particular broker-dealer may be in excess of
customary commissions). The Company also understands that some or all of the
Securities offered hereby may from time to time alternatively be sold pursuant
to Rules 144, 144A or 904 under the Securities Act provided the requirements of
such rules, including, without limitation, the holding period and the manner of
sale requirements, are met.

The Selling Security Holders and broker-dealers, if any, acting in connection
with such sale might be deemed to be "underwriters" within the meaning of
Section 2(11) of the Securities Act and any commission received by them and any
profit on the resale of the Securities might be deemed to be underwriting
discounts and commissions under the Securities Act.

DESCRIPTION OF SECURITIES

COMMON STOCK

The Company is authorized to issue 40,000,000 shares of Common Stock, par
value $0.01 per share. As of January 7, 1997, there were 17,592,992 shares of
Common Stock outstanding and the Company had approximately 360 holders of
record.

Each share of Common Stock entitles the holder thereof to one vote on all
matters submitted to a vote of the stockholders. Since the holders of Common
Stock do not have cumulative voting rights, holders of more than 50% of the
outstanding shares can elect all of the Directors of the Company and holders of
the remaining shares by themselves cannot elect any Directors. The holders of
Common Stock do not have preemptive rights or rights to convert their Common
Stock into other securities. Holders of Common Stock are entitled to receive
ratably such dividends as may be declared by the Board of Directors out of funds
legally available therefor. In the event of a liquidation, dissolution or
winding up of the Company, holders of Common Stock have the right to a ratable
portion of the assets remaining after payment of liabilities. All shares of
Common Stock outstanding (including the shares of Common Stock offered hereby)
are fully paid and non-assessable.

16
<PAGE>

PREFERRED STOCK

The Company's authorized Preferred Stock consists of 2,000,000 shares, par
value $1.00 per share. The Company's Restated Certificate of Incorporation, as
amended, grants the Board of Directors the authority to issue by resolution
shares of Preferred Stock in one or more series and to fix the number of shares
constituting any such series, the voting powers, if any, designations,
preferences and relative, participating, optional or other special rights, and
qualifications, limitations or restrictions thereof, including the rate or rates
at which, and the other terms and conditions on which, dividends shall be
payable; whether and on what terms the shares constituting any series shall be
redeemable, subject to sinking fund provisions, or convertible or exchangeable
into securities of the Company; and the liquidation preferences, if any, of such
series, without any further vote or action by the stockholders. For example,
the Board of Directors is authorized to issue a series of Preferred Stock that
would have the right to vote, separately or with any other series of Preferred
Stock, on any proposed amendment to the Company's Restated Certificate of
Incorporation, as amended, or any other proposed corporate action, including
business combinations and other transactions. The Board of Directors currently
does not contemplate the issuance of any Preferred Stock and is not aware of any
pending or proposed transactions that would be affected by such issuance.

CERTAIN SPECIAL CHARTER AND BY-LAW PROVISIONS

The Restated Certificate of Incorporation, as amended, and the Amended and
Restated By-laws of the Company as in effect on the date hereof contain certain
provisions that may delay, defer or prevent a change in control of the Company.
Specifically, the Board of Directors is classified. Directors are elected for
three year terms with only one class of board members elected each year. In
addition, the Amended and Restated By-laws provide that special meetings of
shareholders may be called only by the President, the Chairman of the Board of
Directors, the Board of Directors or by the holders of not less than 33% of the
Company's shares entitled to vote at such meetings.

Furthermore, the Company's Restated Certificate of Incorporation, as amended,
incorporates all of the provisions of the New Jersey Shareholders Protection Act
(the "New Jersey Act"), which provides that a resident New Jersey corporation
such as the Company may not engage in certain Business Combinations with any
Interested Stockholder (as such terms are defined therein) for a period of five
years following the date (the "Acquisition Date") that such Interested
Stockholder became the owner, directly or indirectly, of 10% or more of the
voting power of the Company, unless (i) such transaction is approved by the
Company's Board of Directors prior to the Acquisition Date, or (ii) the holders
of two-thirds (66 2/3%) of the voting stock of the Company, excluding the shares
of the Interested Stockholder, approve such transaction. The New Jersey Act
also precludes the purchase by the Company (except as hereinafter noted) at a
premium over market of any of its voting stock from an Interested Stockholder
who has owned such securities for less than five years. Notwithstanding the
foregoing, such a purchase would be permitted if the same offer were made to all
other holders of the same kind of securities, or the transaction were approved
by the holders of 66 2/3% of the outstanding voting stock of the Company
excluding the shares of any Interested Stockholder, or the Board of Directors of
the Company approved the transaction prior to such Interested Stockholder's
Acquisition Date. The Company's Restated Certificate of Incorporation, as
amended, does not provide for any additional anti-takeover protection other than
those set forth in the New Jersey Act.

17
<PAGE>

SHARES ELIGIBLE FOR FUTURE SALE

As of January 7, 1997, the Company had 17,592,992 shares of Common Stock
outstanding, without taking into account shares of Common Stock issuable upon
exercise of outstanding options and warrants. The 70,000 shares of Common Stock
offered pursuant to this Prospectus will be freely tradeable without restriction
or further registration under the Securities Act, except for any shares held by
"affiliates" of the Company within the meaning of the Securities Act, which
shares will be subject to the resale limitations of Rule 144 promulgated under
the Securities Act.

Of such 17,592,992 shares of Common Stock outstanding, 3,130,263 shares (the
"Restricted Shares") were issued and sold by the Company in private transactions
in reliance upon one or more exemptions contained in the Securities Act or upon
the exercise of stock options. The Restricted Shares are deemed to be
"restricted securities" within the meaning of Rule 144 and may be publicly sold
only if registered under the Securities Act or sold pursuant to Rule 144. All
of the Restricted Shares have been held for more than two years and are eligible
for public sale in accordance with the requirements of Rule 144, as described
below.

In general, under Rule 144 as currently in effect, any person (or persons
whose shares are aggregated), including persons deemed to be affiliates of the
Company, whose restricted securities have been fully paid for and held for at
least two years from the later of the date of issuance by the Company or
acquisition from an affiliate, may sell such securities in brokers' transactions
or directly to market makers, provided that the number of shares sold in any
three month period may not exceed the greater of 1% of the then outstanding
shares of Common Stock or the average weekly trading volume of the Common Stock
in the over-the-counter market during the four calendar weeks preceding the
sale. Sales under Rule 144 are also subject to certain notice requirements and
the availability of current public information about the Company. After three
years have elapsed from the later of the issuance of restricted securities by
the Company and their acquisition from an affiliate, such securities may be sold
without limitation by persons who are not affiliates under the rule.

The Company intends to file a registration statement on Form S-4 relating to
the 1,026,245 shares of the Company's Common Stock issuable upon conversion of
the outstanding shares of HBI Common Stock pursuant to the Merger and 822,924
shares of the Company's Common Stock issuable upon the exercise of the HBI
Warrants. Upon effectiveness of said registration statement and consummation of
the Merger, shares of the Company's Common Stock issued upon exercise of the HBI
Warrants other than shares issued to affiliates of the Company, will be freely
tradeable in the public market.

18
<PAGE>

the 150,850 shares of the Company's Common Stock issuable upon the exercise of
the HBI Options. Shares issued under such plans other than shares issued to
affiliates of the Company, will be freely tradeable in the public market.

No predictions can be made as to the effect, if any, that sales of shares or
the availability of shares for sale will have on the market prices prevailing
from time to time. Moreover, the Company cannot predict the number of shares of
Common Stock that may be sold in the future pursuant to Rule 144 because such
sales will depend upon, among other factors, the market prices of the Common
Stock and the individual circumstances of the holders thereof. Nevertheless,
sales of substantial amounts of the Common Stock in the public market following
the offering made hereby could have a significant adverse effect on prevailing
market prices and could impair the Company's future ability to raise capital
through the sale of its equity securities. See "Risk Factors--Possible
Volatility of Securities Prices."

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the Common Stock is Continental Stock
Transfer & Trust Company, Two Broadway, New York, New York 10004.

LEGAL MATTERS

The validity of the Common Stock offered hereby has been passed upon for the
Company by Satterlee Stephens Burke & Burke LLP, New York, New York.

EXPERTS

The financial statements of Medarex, Inc., appearing in Medarex, Inc.'s
Annual Report (Form 10-K) for each of the three years in the period ended
December 31, 1995 and for the period from July 15, 1987 (inception) to December
31, 1995, have been audited by Ernst & Young LLP, independent auditors, as set
forth in their report thereon included therein and incorporated herein by
reference in reliance upon such report given upon the authority of such firm as
experts in accounting and auditing.

19
<PAGE>

<TABLE>
<S> <C>
============================================ ========================================

NO DEALER, SALESPERSON OR OTHER PERSON HAS
BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO
MAKE ANY REPRESENTATION NOT CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY OR ANY UNDERWRITER. THE MEDAREX, INC.
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL
OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO
ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE
SUCH OFFER IN SUCH JURISDICTION. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE 70,000 SHARES OF COMMON STOCK,
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, $.01 PAR VALUE
CREATE ANY IMPLICATION THAT THE INFORMATION
HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
THE DATE HEREOF OR THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
SUCH DATE.

---------------

TABLE OF CONTENTS

AVAILABLE INFORMATION.................... 2
INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE................................ 2
THE COMPANY.............................. 3
RECENT DEVELOPMENTS...................... 4 ----------------
RISK FACTORS............................. 5
USE OF PROCEEDS.......................... 11 PROSPECTUS
CAPITALIZATION........................... 11
DIVIDEND POLICY.......................... 12 ----------------
PRICE RANGE OF COMMON STOCK.............. 12
DILUTION................................. 13
SELECTED FINANCIAL DATA.................. 14
SELLING SECURITY HOLDERS................. 15
PLAN OF DISTRIBUTION..................... 16
DESCRIPTION OF SECURITIES................ 16
LEGAL MATTERS............................ 19
EXPERTS.................................. 19

---------------

January 7, 1997
============================================ ========================================
</TABLE>
<PAGE>

PART II
Information Not Required in Prospectus

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

Expenses in connection with the issuance and distribution of the securities
being registered are set forth in the following table. All amounts except the
registration fee are estimated.
<TABLE>
<CAPTION>
EXPENSES
--------
<S> <C>
Registration Fee - Securities and Exchange Commission.. $ 145
Transfer Agent Fees and Expenses....................... 2,000
Accounting Fees and Expenses........................... 7,500
Legal Fees and Expenses................................ 7,500
Blue Sky Fees and Expenses............................. 1,000
Printing and Engraving................................. 1,000
Miscellaneous.......................................... 855
-------

TOTAL................................................. $20,000
=======
</TABLE>

The Company will bear all of the expenses of the registration of the
securities being offered.

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Restated Certificate of Incorporation, as amended, and Article XIII of
the Registrant's Amended and Restated By-laws provide for the indemnification of
its Officers and Directors under certain circumstances and are incorporated
herein by reference.

Section 14A:3-5 of The New Jersey Business Corporation Act (the "NJBCA")
empowers a New Jersey corporation to indemnify any person who is or was a
director, officer, employee or agent of the indemnifying corporation or of any
constituent corporation absorbed by the indemnifying corporation in a
consolidation or merger and any person who is or was a director, officer,
trustee, employee or agent of any other enterprise, serving as such at the
request of the indemnifying corporation, or of any such constituent corporation,
or legal representative of any such director, officer, trustee, employee or
agent (a "corporate agent"), against his expenses and liabilities incurred in
connection with any proceeding involving the corporate agent, other than a
proceeding by or in the right of the corporation, if (a) such corporate agent
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation and (b) with respect to any
criminal proceeding, such corporate agent had no reason to believe that his
conduct was unlawful. In addition, a corporation may indemnify such corporate
agent against his expenses in connection with any preceding by or in the right
of the corporation to procure a judgment in its favor which involves such
corporate agent by reason of his having been such corporate agent, if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation. However, in such proceeding no
indemnification shall be provided in respect of any claim, issue or matter as to
which such corporate agent shall have been adjudged to be liable to the
corporation, unless and only to the extent that the Superior Court of the State
of New Jersey or the court in which such proceeding was brought shall determine
upon application that despite the adjudication of liability, but in view of all
circumstances of

II-1
<PAGE>

the case, such corporate agent is fairly and reasonably entitled to indemnity
for such expenses as the Superior Court or such other court shall deem proper.

Under the NJBCA a corporation shall indemnify a corporate agent against
expenses to the extent that such corporate agent has been successful on the
merits or otherwise in any proceeding referred to above or in defense of any
claim, issue or matter therein.

The indemnification and advancement of expenses provided by or granted
pursuant to the NJBCA shall not exclude any other rights, including the right to
be indemnified against liabilities and expenses incurred in proceedings by or in
the right of the corporation, to which a corporate agent may be entitled under a
certificate of incorporation, by-law, agreement, vote of shareholders, or
otherwise; provided that no indemnification shall be made to or on behalf of a
corporate agent if a judgment or other final adjudication adverse to the
corporate agent establishes that his acts or omissions (a) were in breach of his
duty of loyalty to the corporation or its shareholders, (b) were not in good
faith or involved a knowing violation of law or (c) resulted in receipt by the
corporate agent of an improper personal benefit.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended (the "Act") may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in that Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.

The Registrant maintains a standard form of officers' and directors'
liability insurance policy which provides coverage to the officers and directors
of the Registrant for certain liabilities, including certain liabilities which
may arise out of this Registration Statement.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(A) EXHIBITS

The following exhibits are filed as part of this Registration Statement:
<TABLE>
<C> <S>
/1/2.1 Certificate of Merger, dated June 15, 1989, including Plan of Merger.

/16/3.1 Restated Certificate of Incorporation, as amended, of the Registrant.

/1/3.2 Amended and Restated By-laws of the Registrant.

/1/4.1 Form of Specimen of Common Stock Certificate.

/1/4.2 Warrant Agreement between the Registrant and Continental Stock Transfer and
Trust Company, dated as of June 20, 1991.
</TABLE>

II-2
<PAGE>

<TABLE>
<C> <S>
/1/4.4 Form of Specimen of Warrant Certificate.

/9/4.4 Amendment No. 1 to Warrant Agreement between the Registrant and Continental
Stock Transfer and Trust Company, dated as of December 14, 1992.

/9/4.5 Amendment No. 2 to Warrant Agreement between the Registrant and Continental
Stock Transfer and Trust Company, dated as of December 18, 1992.
/*/5.1 Opinion of Satterlee Stephens Burke & Burke LLP re: legality of securities being
registered.
/4/10.1 Lease of the Registrant's executive offices dated August 1, 1992.
/1/10.2 Lease of the Registrant's laboratory facilities.
/1/10.3 1991 Employee Stock Option Plan.
/1/10.4 Letter of Intent dated April 25, 1991 between Lower Pyne Associates, L.P. and
Medarex, Inc.
/1/10.5 Joint Venture Agreement by and among Trustees of Dartmouth College, Essex
Medical Products, Inc. and the Registrant, dated as of July 15, 1987.
/1/10.6 Exclusive License Agreement by and between Trustees of Dartmouth College and
the Registrant, dated July 15, 1987.
/1/10.7 Non-Exclusive License Agreement by and between Trustees of Dartmouth College
and the Registrant, dated July 15, 1987.
/1/10.8 Assignment Agreement by and between the Registrant and Michael W. Fanger,
dated July 15, 1987.
/1/10.9 Consulting Agreement between the Registrant and Michael W. Fanger, dated as of
July 15, 1987.
/1/10.10 Assignment Agreement by and between the Registrant and Paul M. Guyre, dated
July 15, 1987.
/1/10.11 Consulting Agreement between the Registrant and Paul M. Guyre, dated as of July
15, 1987.
/1/10.12 Assignment Agreement by and between the Registrant and Edward Ball, dated July
15, 1987.
/1/10.13 Consulting Agreement between the Registrant and Edward Ball, dated as of July
15, 1987.
/1/10.14 Stock Purchase Agreement among Essex Vencap, Inc. and Medarex Founders and
the Registrant, dated as of June 15, 1989.
/1/10.15 Amended and Restated Research and Development and Umbrella Agreement
between Fondation Nationale de Transfusion Sanguine and the Registrant, dated
March 7, 1991.
/1/10.16 AML/SCCL License Agreement between Fondation Nationale de Transfusion
Sanguine and the Registrant, dated February 13, 1990.
</TABLE>

II-3
<PAGE>

<TABLE>
<C> <S>
/1/10.17 HIV License Agreement between Fondation Nationale de Transfusion Sanguine
and the Registrant, dated February 13, 1990.
/1/10.18 HIV Targeting Antibody License Agreement between Fondation Nationale de
Transfusion Sanguine and the Registrant, dated February 13, 1990.
/1/10.18A Amendment to AML/SCCL License Agreement, the HIV License Agreement and
the HIV Targeting Antibody License Agreement dated March 7, 1991.
/1/10.19 Medarex Targeted Immunostimulation License Agreement between the Registrant
and Fondation Nationale de Transfusion Sanguine, dated March 7, 1991.
/1/10.20 FNTS Targeted Immunostimulation License Agreement between Fondation
Nationale de Transfusion Sanguine and the Registrant, dated March 7, 1991.
/1/10.21 Agreement of SmithKline Beecham Pharmaceuticals and the Registrant with respect
to Research Collaboration, dated February 1, 1990.
/1/10.21A Amendment to Agreement of SmithKline Beecham Pharmaceuticals and the
Registrant with respect to Research Collaboration dated July 5, 1990.
/1/10.22 Research Agreement between the Registrant and The Upjohn Company, dated
October 18, 1990.
/1/10.23 Agreement dated as of May 16, 1991 by and among Trustees of Dartmouth
College and the Registrant relating to the assignment of certain patents and the
modification of the Joint Venture Agreement.
/1/10.24 Assignment of certain patent rights by Trustees of Dartmouth College to the
Registrant dated May 16, 1991.
/1/10.25 Loan Agreement by and between Dr. Edward Ball, Dr. Paul Guyre, Dr. Donald
Drakeman, Dr. Michael Fanger, and First New Hampshire Bank of Lebanon,
dated October 25, 1990.
/1/10.26 Security Agreement between the Registrant and First New Hampshire Bank of
Lebanon, dated October 25, 1990.
/1/10.27 Distribution Agreement between the Registrant and Funakoshi Pharmaceutical Co.,
Ltd., dated as of June 1, 1989, expiring May 31, 1990.
/1/10.28 Employment Agreement by and between the Registrant and Dr. Donald Drakeman,
dated as of April 1, 1991, as amended.
/1/10.29 Employment Agreement by and between the Registrant and Dr. Nathan B. Dinces,
dated as of April 1, 1991, as amended.
/1/10.30 Form of Financial Advisory and Investment Banking Agreement between the
Registrant and Josephthal Lyon & Ross Incorporated.
/1/10.31 License Agreement between the Registrant and Cetus Corporation dated as of
February 19, 1991.
/1/10.32 Form of invention and confidential information agreement between registrant and
its employees.
</TABLE>

II-4
<PAGE>

<TABLE>
<C> <S>
/1/10.33 Stock Purchase Plan.
/1/10.34 Settlement Agreement by and between the Registrant and Fondation Nationale de
Transfusion Sanguine, dated December 9, 1991.
/1/10.35 Amended and Restated HIV Targeting Antibody License Agreement by and
between the Registrant and Fondation Nationale de Transfusion Sanguine, dated
December 9, 1991.
/2/10.36 HBV Cell Line License Agreement by and between the Registrant and Fondation
Nationale de Transfusion Sanguine, dated December 9, 1991.
/3/10.37 Employment Agreement by and between the Registrant and Michael A.
Appelbaum, dated as of July 29, 1991.
/4/10.38 Agreement dated November 28, 1991 between Scotgen Limited and the Company
pertaining to the genetic engineering of one of the Company's antibodies.
/5/10.39 Amended and Restated 1987 Stock Option Plan.
/6/10.40 Letter of Intent between Registrant and The Bayson Company dated March 16,
1992.
/6/10.41 Form of Consulting Agreement between the Registrant and Paul M. Guyre, dated
as of March 17, 1992.
/6/10.42 Form of Consulting Agreement between the Registrant and Edward Ball, dated as
of March 17, 1992.
/6/10.43 Form of Consulting Agreement between the Registrant and Michael W. Fanger,
dated as of March 17, 1992.
/6/10.44 Agreement In Principle dated as of July 10, 1992 between the Registrant and Dr.
Daniel Beck of Centre Hospitalier Universiter Vaudrois.
/6/10.45 Agreement In Principle dated as of July 23, 1992 by and among Institut Curie,
Immuno-Designed Molecules, SARL and the Registrant.
/7/10.46 Underwriting Agreement by and between the Registrant and Rosenkrantz Lyon &
Ross Incorporated as Representative of the Several Underwriters, dated June 20,
1991.
/9/10.47 Placement Agent Agreement between the Registrant and Josephthal Lyon & Ross
Incorporated, dated as of November 13, 1992.
/9/10.48 Placement Agent Warrant Agreement between the Registrant and Josephthal Lyon
& Ross Incorporated, dated as of December 14, 1992.
/9/10.49 Placement Agent Agreement between the Registrant and Josephthal Lyon & Ross
Incorporated, dated as of December 17, 1992.
/9/10.50 Placement Agent Warrant Agreement between the Registrant and Josephthal Lyon
& Ross Incorporated, dated as of December 18, 1992.
/8/10.51 1992 Employee Stock Option Plan.
</TABLE>

II-5
<PAGE>

<TABLE>
<C> <S>
/10/10.52 Lease of Registrant's Laboratory Facility (Clinton, New Jersey).
/11/10.53 Amendment to Lease of Registrant's Laboratory Facility (Clinton, New Jersey).
/11/10.54 Employment Agreement by and between the Registrant and Yashwant M. Deo,
dated as of July 8, 1993.
/12/10.55 Financing Agreement dated as of December 1, 1993 by and among the Registrant,
G. Musuri and FAM S.A.
/12/10.56 Consulting Agreement dated February 10, 1994 by and among the Registrant and
Dr. Julius A. Vida.
/13/10.57 Letter of Intent dated March 30, 1994 between the Registrant and E. Merck.
(Confidential Portions omitted and filed separately with the Securities and
Exchange Commission)
/14/10.58 Sublease of Registrant's Laboratory Facility (West Lebanon, New Hampshire).
/14/10.59 Sublease of Registrant's Executive Offices (Annandale, New Jersey).
/15/10.60 Sublease of Registrant's New Hampshire Facility, dated May 25, 1994.
/9/10.61 1995 Stock Option Plan
/9/10.62 Stock Purchase Agreement dated May 16, 1995 between the Registrant and CIBA-
GEIGY Limited.
/9/10.63 Development and Commercialization Agreement dated May 16, 1995 between the
Registrant and CIBA-GEIGY Limited. (Confidential Portions omitted and filed
separately with the Securities and Exchange Commission)
/9/10.64 Registration Rights Agreement dated May 16, 1995 between the Registrant and
CIBA-GEIGY.
/13/10.65 Letter of Josephthal Lyon & Ross Incorporated dated April 12, 1996.
/17/10.66 Agreement and Plan of Merger among Medarex, Inc., Medarex Acquisition Corp.
and Houston Biotechnology Incorporated dated December 18, 1996, together with
the exhibits thereto.
/18/10.67 Convertible Note dated December 18, 1996 executed by Houston Biotechnology
Incorporated in favor of Medarex, Inc.
/19/10.68 License Agreement effective December 18, 1996 between Houston Biotechnology
Incorporated and Medarex, Inc.
/20/10.69 Escrow Agreement dated as of December 18, 1996 among Houston Biotechnology
Incorporated, Medarex, Inc. and Satterlee Stephens Burke & Burke LLP, as
escrow agent.
/4/11 Statement re: computation of per share earnings.
21 Subsidiaries of the Registrant.
23.1 Consent of Ernst & Young LLP.
</TABLE>

II-6
<PAGE>

<TABLE>
<C> <S>
/*/23.2 Consent of Satterlee Stephens Burke & Burke LLP (included in their opinion filed
as Exhibit 5.1.)

/*/24.1 Power of Attorney.
</TABLE>
- ---------------
/1/ Incorporated by reference to the identically numbered exhibit to the
Registrant's Registration Statement on Form S-1 (File No. 33-39956)
filed on April 12, 1991.
/2/ Incorporated by reference to the identically numbered exhibit to the
Registrant's Current Report on Form 8-K dated December 20, 1991.
/3/ Incorporated by reference to exhibit number 10.33 to the
Registrant's Current Report on Form 8-K dated August 9, 1991.
/4/ Incorporated by reference to the identically numbered exhibit to the
Registrant's Annual Report on Form 10-K filed on March 14, 1996.
/5/ Incorporated by reference to exhibit number 4 to the Registrant's
Registration Statement on Form S-8 (File No. 33-44276) filed on
November 29, 1991.
/6/ Incorporated by reference to the identically numbered exhibit to the
Registrant's Registration Statement on Form S-1 (File No. 33-46509)
filed on March 18, 1992.
/7/ Incorporated by reference to the exhibit number 1.1 to the
Registrant's Registration Statement on Form S-1 (File No. 33-39956)
filed on April 12, 1991.
/8/ Incorporated by reference to the identically numbered exhibit to the
Registrant's Annual Report on Form 10-K filed on March 15, 1993.
/9/ Incorporated by reference to the identically numbered exhibit to the
Registrant's Post Effective Amendment No. 5 to Registration Statement
on Form S-1 (File No. 33-57366) filed on September 15, 1995.
/10/ Incorporated by reference to the identically numbered exhibit to
the Registrant's Quarterly Report on Form 10-Q filed on May 14, 1993.
/11/ Incorporated by reference to the identically numbered exhibit to the
Registrant's Quarterly Report on Form 10-Q filed on August 16, 1993.
/12/ Incorporated by reference to the identically numbered exhibit to the
Registrant's Annual Report on Form 10-K filed on February 15, 1994.
/13/ Incorporated by reference to the identically numbered exhibit to the
Registrant's Registration Statement on Form S-1 (File No. 33-57324)
filed on February 15, 1994.
/14/ Incorporated by reference to the identically numbered exhibit to
the Registrant's Quarterly Report on Form 10-K filed on May 13, 1994.
/15/ Incorporated by reference to the identically numbered exhibit to the
Registrant's Quarterly Report on Form 10-Q filed on August 12, 1994.
/16/ Incorporated by reference to the identically numbered exhibit to the
Registrant's Registration Statement on Form S-1 (File No. 33-98244).

/17/ Incorporated by reference to exhibit number 99.1 to the
Registrant's Current Report on Form 8-K filed on January 2, 1997.
/18/ Incorporated by reference to exhibit number 99.2 to the
Registrant's Current Report on Form 8-K filed on January 2, 1997.
/19/ Incorporated by reference to exhibit number 99.3 to the
Registrant's Current Report on Form 8-K filed on January 2, 1997.
/20/ Incorporated by reference to exhibit number 99.4 to the
Registrant's Current Report on Form 8-K filed on January 2, 1997.
/*/ Previously filed.

II-7
<PAGE>

(b) Financial Statement Schedules

All schedules are omitted because of the absence of the conditions under
which they are required, or because the information called for is included in
the financial statements or notes thereto.

ITEM 17. UNDERTAKINGS

The undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement to include any material
information with respect to the plan of distribution not previously disclosed in
the Registration Statement or any material change to such information in the
Registration Statement.

(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.

The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities and Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

See Item 14, "Indemnification of Directors and Officers."

II-8
<PAGE>

SIGNATURES
----------

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, MEDAREX, INC.
HAS DULY CAUSED THIS AMENDMENT TO REGISTRATION STATEMENT TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF ANNANDALE,
NEW JERSEY, ON THE 7TH DAY OF JANUARY, 1997.

MEDAREX, INC.

By:/s/Charles R. Schaller
--------------------------------------------
Charles R. Schaller - Chairman of the Board

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED,
THIS AMENDMENT TO REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING
PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>

Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/Charles R. Schaller * Chairman of the Board January 7, 1997
- -----------------------------------------
Charles R. Schaller

/s/Donald L. Drakeman President, Chief Executive Officer and January 7, 1997
- -----------------------------------------
Donald L. Drakeman Director (Principal Executive Officer)

/s/Michael A. Appelbaum * Senior Vice President - Finance and January 7, 1997
- -----------------------------------------
Michael A. Appelbaum Administration, Secretary, Treasurer,
Chief Financial Officer and Director
(Principal Financial and Accounting
Officer)

/s/Michael W. Fanger * Director January 7, 1997
- -----------------------------------------
Michael W. Fanger

/s/Julius A. Vida * Director January 7, 1997
- -----------------------------------------
Julius A. Vida

/s/Irwin Lerner * Director January 7, 1997
- -----------------------------------------
Irwin Lerner

/s/W. Leigh Thompson, Jr. * Director January 7, 1997
- -----------------------------------------
W. Leigh Thompson, Jr.

/s/Robert Iggulden * Director January 7, 1997
- -----------------------------------------
Robert Iggulden

- ----------

*By:/s/Donald L. Drakeman
- --------------------------------------------
Donald L. Drakeman, as attorney-in-fact, pursuant to Power of Attorney previously filed.
</TABLE>
<PAGE>

INDEX TO EXHIBITS
<TABLE>
<CAPTION>

Location of
Exhibit in
Sequential
Exhibit No. Description of Document Numbering System
- ------------- ---------------------------- ----------------
<S> <C> <C>
21 Subsidiaries of Registrant

23.1 Consent of Ernst & Young LLP
</TABLE>

<PAGE>

Exhibit 21

Subsidiaries of Medarex, Inc.
-----------------------------

1. Medarex - Europe B.V.

2. Medarex Acquisition Corp.

<PAGE>

Exhibit 23.1

Consent of Independent Auditors
-------------------------------

We consent to the reference to our firm under the caption "Experts" in Amendment
No. 1 to the Registration Statement (Form S-3 No. 333-16373) and related
Prospectus of Medarex, Inc. for the registration of 70,000 shares of its common
stock and to the incorporation by reference therein of our report dated February
2, 1996, with respect to the financial statements of Medarex, Inc. included in
its Annual Report (Form 10-K) for the year ended December 31, 1995, filed with
the Securities and Exchange Commission.

ERNST & YOUNG LLP

Princeton, New Jersey
January 3, 1997