Medarex receives consents to amend 2.25% convertibles

New York, Oct. 4 - Medarex, Inc. said it received the necessary consents to amend $150 million of outstanding 2.25% convertible senior notes due 2011.

The announcement follows a change to the solicitation made on Oct. 2, when Medarex eliminated the consent fee but added an offer of call protection for the convertibles.

Under the changes to the securities, Medarex will no longer have the right to redeem the notes before May 15, 2010. From May 15, 2010 to May 14, 2011, Medarex will be able to redeem the notes at a price of 100.3 if its stock trades above a 150% hurdle for 20 out of 30 consecutive trading days.

In the solicitation, the company was seeking consents to amend some reporting requirements and events of default in the note indenture.

On Aug. 18, Medarex announced that it was not able to file its 10-Q report for the quarter ended June 30. As a result, Medarex received a notice of default on Aug. 25 from Citadel Equity Fund Ltd., a holder of more than 25% of the principal amount of the notes.

At the time, the company said that its board of directors had appointed one of its outside directors to oversee an investigation of its historical stock option practices and related accounting treatment, and that it could not file its 10-Q until the ongoing investigation was complete.

According to the notice, if Medarex does not file its 10-Q report by Oct. 24, an event of default under the indenture will exist.

The company's amendments give it more time to file reports and waive any reporting requirements related to periods ended before Dec. 31, 2005.

Under the original terms announced Sept. 22, the company was offering a fee of $2.50 per $1,000 principal amount of notes. Medarex also said that all noteholders would receive an additional $10.00 per $1,000 principal amount if, by Oct. 24, it has not filed an amendment restating its 2005 10-K, an amendment to its 10-Q for the quarter ended March 31 and its second quarter 10-Q.

The consent deadline was 5 p.m. ET on Oct. 4.

Goldman, Sachs & Co. (800 828-3182 or collect 212 902-9077) is the solicitation agent. Global Bondholder Service Corp. is the information agent and depositary (866 873-6300 or collect 212 430-3774).

Medarex is a Princeton, N.J., biopharmaceutical company focused on cancer, inflammation, autoimmune disorders and infectious diseases.

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