united states district court for the...

Case 3:09-cv-03824-FLW-DEA Document 1 Filed 07/31/2009 of 23

UNITED STATES DISTRICT COURT"FOR THE DISTRICT OF NEW JERSEY

, Individually and )s Similarly Situated, ) Civil Action No.

Plaintiff, )CLASS ACTION COMPLAINT

-vs. } FOR VIOLATION} OF SECURITIES LAWS

MEDAREX INC., HOWARD H. PIEN, MARC }RUBIN, M.D., RONALD J. SALDARINI, Ph.D., )CHARLES R. SCHALLER, ABHIJEET J. LELE, )JULIUS A. VIDA, Ph.D., PATRICIA M. DANZON,) JURY TRIAL DEMAND Ph.D., ROBERT C. DINERSTEIN, and )BRISTOL-MYERS SQUIBB COMPANY, )PUMA ACQUISITION CORPORATION, )

1Defendants. )

}

Plaintiff by his undersigned attorneys, alleges upon knowledge as to his

own acts and upon information and belief as to all other matters, based upon the investigation made

by and through his attorneys, which investigation included, inter alia, reviewing Securities and

Exchange Commission ("SEC') filings, press releases, analyst reports, news articles and/or other

materials as follows:


NATURE OF ACTION

1. This is a stockholder class action brought by plaintiff on behalf of himself and the

public shareholders of Medarex Inc. ("Medarex" or the "Company") against Medarex, and certain

of its officers and directors, and Bristol -Myers Squibb Company ("BMS") .arising out of an

agreement to sell Medarex to BMS via an unfair process, at an inadequate and unfair price, and with

inadequate disclosures to the Company's public shareholders (the "Proposed Acquisition"). In

pursuing the Proposed Acquisition, each of the defendants has violated applicable law by directly

breaching and/or aiding breaches of fi duciary duti es of loyalty, due care, candor, independence, good

faith, and fair dealing owed to plaintiff and the proposed class.

2. Under the terms of the Proposed Acquisition, BMS will commence an all cash tender

offer to acquire all of Medarex's outstanding shares of common stock for $16 per share, in a

transaction valued at approximately $2.4 billion. The Proposed Acquisition therefore caps at $lb

the interest in the Company of plaintiff and the other public shareholders of Medarex; meanwhile,

BMS will acquire a successful cancer-treating compound anticipated to be a source of massive

revenues, and senior Medarex executives will reap millions of dollars in severance and related

benefits. Furthermore, unidentified Company insiders are in discussions with BMS to secure

employment at BMS after the consummation of the Proposed Acquisition. According to the

Company's Schedule 14D-9 filed with the SEC on July 28, 2009 (the "July 28, 2009 1.4D-9")

"Medarex understands that BMS is also presently discussing entering into retention agreements with

certain other executives of Medarex." Therefore, Company insiders are set to benefit from the

Proposed Acquisition at the expense of plaintiff and the Company's other common shareholders.

In addition, the Company has failed to disclose to its shareholders material info -Liation concerning

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the Proposed Acquisition meaning plaintiff and the Company's other public shareholders have no

meaningful opportunity to decide whether to tender their shares or otherwise disapprove of or

support the Proposed Acquisition. No appraisal rights for the Company's shareholders are available

under governing New Jersey law.

3. The Proposed Acquisition is the product of a flawed process that was designed to

ensure the sale of Medarex to BMS on terms preferential to BMS and detrimental to plaintiff and

the other public stockholders of Medarex. Plaintiff seeks to enjoin the Proposed Acquisition, or

alternatively, in the event the Proposed Acquisition is consummated, plaintiff seeks to recover

damages caused by the breach of fiduciary duties owed to the Company's shareholders.

4. Finally, the material filed with the SEC and distributed to Medarex shareholders

contains misstatements and omissions, as detailed herein, in violation of Section 14(e) of the

Securities Exchange Act of 1934 (the "Exchange Act").

TURISDICTION AND VENUE

5. This action is brought to remedy violations of Section 14(c) of the Exchange Act, 15

U.S.C. § 78n, and Section 20 of the Exchange Act, 15 U.S.C. § 78t.

6. The subject matter jurisdiction of this Court is based upon, inter alia, Section 27 of

the Exchange Act, 15 U.S.C. § 78aa, 28 U.S.C. § 1331, and 28 U.S.C. § 1367.

7. Venue is properly laid in this District because many of the acts, transactions, and

conduct constituting violations of law complained of occurred herein. Medarex, a corporation

incorporated under the laws of the State of New Jersey, is headquartered in this District.

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8. In connection with the acts, conduct, and other wrongs complained of herein,

defendants, directly and indirectly, used the means and instrumentalities of interstate commerce,

including the mails, telephone communications, and the facilities of national securities markets.

PARTIES

9. Plaintiff., at all times relevant hereto, has been the owner of Medarex common stock

as set forth in the annexed certification.

10. Defendant Medarex is a New Jersey corporation, headquartered at 707 State Road,

Princeton, New Jersey, 08450. Medarex is and at all times relevant hereto was listed and traded on

the NASDAQ under the symbol "MEDX". The Company specializes in the development of medical

bio-pharmaceutical products. One of the Company's key products is the compound 1pilimumab.

Ipilimumab, a cancer treating agent, has demonstrated significant success in clinical tests leading to

high hopes among the Company and its investors that a major source of revenues has been

developed. On June 19, 2009, the renowned Mayo Clinic reported that prostate cancer patients

thought to have inoperable tumors had responded so well to Ipilimumab treaLinent that operations

were possible. One of the Mayo Clinic surgeons, Dr. Kwon, described the Ipilimumab tests as "one

of the holy grails of prostate cancer research" and went on to state, "We've been looking for this for

years".

11. Defendant Marc Rubin, M.D. ("Rubin") has been a director of the Company since

November 2007. Rubin is a biopharmaceutical consultant and the former President and Chief

Executive Officer of Titan Pharmaceuticals, Inc.. Rubin also serves on the Company's Nominating

and Corporate Governance Committee and Compensation & Organization Committee.

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12. Defendant Ronald J. Saldarini, Ph.D. ("Saldarini") has been a director of the

Company since May 2001. Saldarini is the Company's designated `Lead Independent Director'.

Saldarim serves on the Company's Audit Committee, Nominating and Corporate Governance

Committee, and Compensation & Organization Committee,

13. Defendant Charles R. Schaller ("Schaller") has been a director of the Company since

July 1987. Schaller served as the Company's Chairman of the Board from the Company's inception

until May 18, 1997. Schaller also serves on the Company's Audit Committee,

14, Defendant Abhijeet J. Lele ("Lele") has been a director of the Company since

September 2006. Lele serves on the Company's Audit Committee.

15. Defendant Julius A. Vida ("Vida") has been a director of the Company since February

1994. From 1975 until his retirement in 1993, Vida held various positions at BMS and its

predecessors. Vida serves on the Company's Nominating and Corporate Governance Committee.

16. Defendant PatriciaM. Danzon, Ph.D. ("Damon") has been a director of the Company

since May 2005. Danzon serves on the Company's Nominating and Corporate Governance

Committee and Compensation & Organization Committee.

17. Defendant Robert C. Dinerstein ("Dinerstein") has been a director of the Company

since September 2006, Dinerstein serves on the Company's Nominating and Corporate Governance

Committee and Compensation & Organization Committee.

18. Defendant Howard H. Pien ("Pien") has been a director of the Company since June

2007. Pien is the Chairman of the Company's Board and serves as the Company's President and

Chief Executive Officer. Upon a change of control of the Company, such as proposed by the

Proposed Acquisition, Pien will receive a lump sum severance payment equal to two years of base

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salary, two years of annual cash award, a prorated annual cdsh award for the year of termination, two

years of company-paid premiums for continued health insurance coverage and the accelerated

vesting of all unvested equity awards. In addition, Pien has agreed with the Company that, in the

event of such a change in control, if certain stock options held by hire (specifically his initial grant

of 500,000 stock options and any subsequent annual stock option awards) are not assumed or

substituted in connection with the change of control., such options will be canceled in exchange for

a cash payment based on the difference between the per share consideration to be paid in the

transaction and the exercise price per share of such cancelled options. It is anticipated that Pien will

receive approximately $ 17.3 million pursuant to accelerated benefits resulting from the Proposed

Acquisition. According to the July 28, 2009 14D-9, Pien was the Company representative most

responsible for negotiating the Proposed Acquisition between the Company and BMS.

19. The Defendants named above in 11-18 are sometimes collectively referred to

herein as the "Individual Defendants."

20. Defendant BMS is a Delaware Corporation specializing in the development and sale

of phai u iaceutical products, and is headquartered at 345 Park Avenue, New York, New York, 10154.

Defendant BMS entered into a collaboration agreement with Medarex to produce and market

Ipilimumab, providing BMS with insider knowledge as to Ipilimumab's development, clinical trial

results and likelihood of meeting regulatory approval.

21. Defendant Puma Acquisition Corporation is a Delaware corporation. It is an

wholly-owned subsidiary of BMS Holding Ltd, foi wed for the purpose of making the Tender Offer.

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CLASS ACTION ALLEGATIONS

22. Plaintiff brings this action on his own behalf and as a class action, on behalf of all

stockholders of Medarex, except defendants herein and any person, frill, trust, corporation, or other

entity related to or affiliated with the defendants, who are threatened with injury arising from

defendants' actions as is described more fully below (the "Class").i

23. This action is properly maintainable as a class action.

24. The Class is so numerous that joinder of all members is impracticable. According

to Medarex's SEC filings, as of July 24, 2009, there were over 128 million shares of Medarex

common stock outstanding. The disposition of their claims in a class action will be of benefit to the

parties and to the Court.

25. A class action is superior to other methods for the fair and efficient adjudication of

the claims herein asserted, and no unusual difficulties are likely to be encountered in the

management ofthis action as a class action. The likelihood of individual class members prosecuting

separate claims is remote.

26. There is a well-defined community of interest in the questions of law and fact

involved affecting the members of the Class. Among the questions of law and fact which are

common to the Class, which predominate over questions affecting any individual class member are,

inter alia, the following:

(a) Whether the Tender Offer documents contain materially false and misleading

statements, in violation of Section 14(e) of the Exchange Act;

(b) Whether the Tender Offer price is adequate;

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(c) whether defendants have breached their fiduciary duties of undivided loyalty,

independence or due care with respect to plaintiff and the other members of the Class in

connection with the Proposed Acquisition;

(d) whether the Individual Defendants have breached their fiduciary duties to

secure and obtain the best price reasonable under the circumstances for sale of Medarex to

the benefit of plaintiff and the other members of the Class in connection with the Proposed

Acquisition;

(e) whether the defendants have erected provisions designed to deter interested

bidders, other than BMS;

(f) Whether BMS owes fiduciary obligations to Medarex's stockholders;

(g) whether defendants have breached any of their other fiduciary duties to

plaintiff and the other members of the Class in connection with the Proposed Acquisition,

including the duties of good faith, diligence, candor, and fair dealing;

(h) whether the Proposed Acquisition compensation payable to plaintiff and the

Class is unfair and inadequate; and

(i) whether plaintiff and the other members of the Class will be irreparably

hairmed were the transactions complained of herein consummated.

27. Plaintiff is a member of the Class and is committed to prosecuting this action.

Plaintiff has retained competent counsel experienced in litigation of this nature. The claims of the

plaintiff are typical of the claims of the other members of the Class, and plaintiff has the same

interests as the other members of the Class. Plaintiff does not have interests antagonistic to or in

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conflict with those they seeks to represent. Plaintiff is therefore an adequate representative of the

Class.

28. The likelihood of individual Class members prosecuting separate individual actions

is remote due to the relatively small loss suffered by each class member as compared to the burden

and expense of prosecuting litigation of this nature andmagnitude, Absent a class action, defendants

are likely to avoid liability for their wrongdoing, and class members are unlikely to obtain redress

for their wrongs alleged herein. There are no difficulties likely to be encountered in the management

of the Class claims. This Court is an appropriate forum for this dispute.

SUBSTANTIVE ALLEGATIONS

29. The long teem prospects for Medarex's products and finances are good. The

Company has promising new products and in April 2009 announced it had sold two licenses to

Merck &Company for $225 million, In addition, on June 20, 2009, the Mayo Clinic announced that

Medarex's drug Ipilimumab had shown success in treating prostate cancer.

30. Ipilimumab is a human antibody that plays a critical role in regulating the body's

natural immune responses and is designed to sustain an active immune response in its attack on

cancer cells. Ipilimumab is being developed through a jointpa, Wership between BMS and Medarex.

The two companies pursued a broad clinical development program with Ipilimumab evaluating its

potential use in advanced metastatic melanoma, as well as prostate, lung, pancreatic, bladder, breast,

lymphoma, and leukemia cancers. By 2008, more than 2,000 patients had been treated with

Ipilimumab as a monotherapy or in combination with other agents in clinical trials.

31. Mcdarex's joint venture with BM generated significant revenue for the Company.

According to documents filed by the Company with the SEC, the collaboration and related securities

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purchase agreement in which the Company and BMS each granted the other certain intellectual

property licenses and product rights, resulted in Medarex receiving up to $205 million from BMS,

plus up to an additional $275 million in sales-related milestones. As part of the collaboration, BMS

made a cash payment to the Company on January 21, 2005 of $25 million and also purchased

2,879,223 shares of the Company's common stock at a purchase price equal to $8.6829 per share fori

an aggregate purchase price of $25.0 million.

32. Industry analysts are bullish about Medarex's financial prospects. On May 4, 2009,

Business Week reported on Medarex as a promising biotech company. Relevant portions of the article

stated as follows:

The company is close to becoming a major biotech player, says analyst Mark Monaneof investment bank Needham, given its late-stage development drugs aimed at majordiseases, including metastatic melanoma, prostate and lung cancers, psoriasis,rheumatoid arthritis, and clostridium-a deadly form of diarrhea....

Medarex's state of drug production is the envy of other biotechs. "Medarex has oneof the most robust pipelines in the industry, with 40 compounds in development,either internally or through partnerships, including three that are in phase in clinicaltrials," says analyst Jeffrey Loo of Standard & Poor's, who rates the stock a buy....

Medarex has been busy_ teaming up with some of the biggest pharmaceuticalcompanies. Loo notes that as of Dec. 31, 2008, Medarex had more than 50pay nerships with pharmaceutical and biotech companies to jointly develop andcommercialize products, including Pfizer (PFE), Amgen (AMGlN), Bristol-MyersSquibb (BMY), J&J, Eli Lilly (LLY), Abbott Laboratories (ABT), Human GenomeSciences (HGSI), and Novartis (NVS)....

33. Defendant Pien was equally upbeat about the Company's financial prospects. On

April 30, 2009, the Company issued a press release in which Pien stated:

Our first quarter accomplishments and steadyprogress of key dove] opm ent programstowards proof-of-concept have given us a strong start to an exciting year. In additionto furthering our pipeline, we are also capitalizing on value-creating opportunities,including our agreement with Merck and the progress and recent approvals for

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products developed by licensee partners. Our future prospects will remain strong aswe continue to advance the pipeline, leverage multiple opportunities and execute asolid business strategy.

34. Just as shareholders were looking forward to reaping the profits of the Company's

strategies, defendants announced on July 22, 2009, that they had entered into an Agreement and Plan

of Merger (the "Merger Agreement") with BMS, pursuant to which a wholly-owned subsidiary of

BMS will commence a tender offer to purchase all of the outstanding shares of Medarex common

stock for $16.00 per share in cash (the "Tender Offer"). The announcement extolled the benefits

of the Proposed Acquisition to BMS. On July 22 2009, defendants issued a press release that read,

in relevant part:

Medarex's technology platform, people and pipeline provide a strong complementto our company's biologics strategy, specifically in immuno-oncology," said JamesM. Cornelius, chairman and chief executive officer, Bristol-Myers Squibb. "Withits productive and proven antibody discovery capabilities, ability to generateinteresting therapeutic programs and unique set of pre-clinical and clinical assets indevelopment, Mcdarex represents what we're looking for in terms of our String ofPearls strategy. This acquisition is another important step in our BioPharmatransfoijuation.."

35. The July 22, 2009 press release also revealed thatthe Proposed Acquisition had been

unanimously approved by the boards of directors of both the Company and BMS and that the Merger

Agreement provided far BMS to commence a cash tender offer on or about July 27, 2009 to purchase

all of the outstanding shares of Medarex common stock.

36. The terms of the Merger Agreement are designed to ensure the sale of Medarex to one

buyer, BMS, on terms preferential to BMS, and to subvert the interests of plaintiff and the other

public stockholders of Medarex. In particular, according to documents filed by the Company with

the SEC, the Merger Agreement prohibits the Company from soliciting bidders other than BMS, and

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restricts the Company from accepting unsolicited third-1 arty bids. The Merger Agreement also

provides for BMS to be paid $70.8 million in the event the Proposed Acquisition is terminated in

favor of another bidder.

37. On July 28, 2009, Medarex filed with the SEC the July 28, 2009 1413-9, purporting

to infoiin the Company's shareholders about the tender offer and the terms of the Merger Agreement

and recommending that the shareholders tender their shares pursuant to BMS's fender offer.

However, the July 28, 2009 14D-9 is woefully lacking in detail and meaningful disclosures.

Therefore, the July 28, 2009 14D-9 fails to provide the Company's shareholders any meaningful

opportunity to assess the Proposed Acquisition and deter mine whether to tender their Company

shares. The lack of disclosure includes, but is not limited to:

a. inadequate disclosures relating to Ipilimumab, the relatedcollaboration between Medarex and BMS and other products in the Company'spipeline. The discussion of the Ipilimumab in the July 28, 2009 14D-9 is limited andprovides no meaningful infoinnation relating to the success of clinical trialsassociated with the compound, or likely success in meeting regulatory approval.Cryptic references to `milestones' are revealed but without necessary detailconcerning the anticipated success of the compound, both clinically and in generatingrevenue. Said omissions mean the Company's shareholders are unable to make aninformed decision as to the Company's anticipated revenues and whether to tendercompany shares pursuant to the Proposed Acquisition;

b. inadequate disclosures elating to the financial projections utilized bythe Company's financial advisors, Goldman Sachs & Co. ("Goldman Sachs") whenopining as to the fairness of the $16 offer price. For example, the July 28, 200914D-9 reveals that Goldman Sachs performed a discounted cash flow analysis usingprojected figures, supplied by the Company, out to the year 2021. However, thesame projections are not disclosed to the Company's shareholders and there areinsufficient financial disclosures to allow Medarex's shareholders to perform theirown cash flow analysis or verify the reliability of the Goldman Sachs' opinion. Othermaterial disclosures omitted from the July 28, 2009 14D-9 include why certaindiscount ranges were utilized by Goldman Sachs and the methodology fordetennining said discount rates. Without fall disclosure of said methodology

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Medarex shareholders will be unable to fully evaluate the fairness of the ProposedAcquisition;

C. inadequate disclosures relating to the issuance of new equityconsidered by Goldman Sachs in its discounted cash flow analysis. No informationis provided as to the dilutive effect of said new equity on Medarex's currentshareholders;

d. inadequate disclosures relating to the timing of net operating lossesand their impact on cash flow;

e. inadequate disclosures relating to Medarex achieving "milestones" forits pipeline products and related impact on any discounted cash flow analysis;

f. inadequate disclosure relating to cash flows for individual parts of theCompany;

g. inadequate disclosure relating to multiples used for Goldman Sachs'Sensitivity Analysis and Transactional Analysis;

h. inadequate disclosure as to the conflict of interests between theIndividual Defendants and BMS and whether the Proposed Acquisition wasnegotiated in the best interests of the Company's shareholders. Further informationis required relating to why defendant Pien was the primary Medarex representativenegotiating with BMS when he more than anyone else stood to profit from theProposed Acquisition in accelerated benefits and change in control payments. Inaddition, more infoj Ovation is required concerning Medarex employees negotiatingbenefits fromtheProposed Acquisitionnot available to the Company's shareholders,including post-transaction employment. Further disclosure is also necessaryconcerning the relationship between Goldman Sachs and Medarex and BMS. TheJuly 28, 2009 14D-9 reveals that Goldman Sachs has performed significant work for

both Medarex and BMS but the information relating to the fees derived for saidemployment is omitted; and

i. inadequate disclosures relating to the background of the ProposedAcquisition, including disclosures relating to how the Company valued itself priorto and during negotiations with BMS. Currently, disclosures relating to thebackground of the Proposed Acquisition amount to fewer than two pages, and theIndividual Defendants have made no meaningful attempt to provide Medarexshareholders with material information as to the efforts of the Individual Defendantsto solicit third party interest in the Company, attract other investors or make anyother such attempt to maximize shareholder value. The July 28, 2009 14D-9 doesreference a `strategic plan' envisioned by the Company's Board of Directors should

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the Proposed Acquisition be rejected by the Individual Defendants, but no disclosureis then forthcoming as to the details of that strategic plan, or the envisioned revenuesderived therefrom.

38. As a result of the defendants' actions, plaintiff and the Class will suffer irreparable

injury in that, as a result of an unfair process, they will not receive their fair portion of the value of

Medarex's assets and businesses and will be prevented from obtaining a fair price for their common

stock. The Proposed Acquisition has been timed to coincide with a temporary decrease in the trading

price of Medarex common stock, and to take advantage of key Company products, such as

Ipilimumab, before the true value of said products is reflected in the trading price of the Company's

shares.

39. As a result of the defendants' actions, plaintiff and the Class will suffer irreparable

injury in that, as a result of an unfair process, they are being asked to tender their shares pursuant to

the Proposed Acquisition without full disclosure as to the Company's projected revenue and

earnings. Projections or future revenue and earnings are the key element in valuation in many, if not

most, transactions. Among other things, they drive discounted cash flow models. Projections are

supplied by management, by investment bankers or are arrived at by some combination of the two.

Analysts make estimates of corporate growth rates of earnings and revenues. Customarily, these

estimates often originate with management and are reviewed by management. Here, the Company's

shareholders do not know the proj ected earnings and other operational data prepared by management,

which were relied upon by the parties in negotiating the Merger Agreement and by Goldman Sachs

in preparing its opinion. This information is material in order for Medarex's public shareholders to

assess the reliability of Goldman Sachs' analyses, the fairness opinion issuedby Goldman Sachs and,

ultimately, the recommendation by the Individual Defendants that shareholders tender their shares.

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40. As a result of the defendants' actions, plaiftiff and the Class will suffer irreparable

injury in that, as a result of an unfair process, they are being asked to tender their shares pursuant to

the Proposed Acquisition without full disclosure as to material conflicts of interests between

Company executives and BMS. The Individual Defendants have premised, in part, their

recommendation to Medarex shareholders to tender Company shares on the fairness opinion issuedI

by Goldman Sachs, therefore, information relating to conflicts of interest is crucial to any

shareholder's evaluation of the independence of both the Individual Directors and Goldman Sachs,

or lack thereof, as well as the basis for Goldman Sachs' conclusion that the Merger Agreement is

fair from a financial point of view to Medarex shareholders.

41. Unless enjoined by this Court, the defendants will continue to breach and/or aid the

breaches of fiduciary duties owed to plaintiff and the Class, and may consummate the Proposed

Acquisition which will exclude the Class from its fair share of Medarex's valuable assets and

businesses, all to the irreparable harm of the Class.

42, Plaintiff and the other members of the Class have no adequate remedy at law.

THE FIDUCIARY DU'T'IES OF THE INDIVIDUAL, DEFENDANTS

43. In any situation where the directors of a publicly traded corporation undertake a

-transaction that will result in either (i) a change in corporate control or (ii) a break-up of the

corporation's assets, the directors have an affirmative fiduciary obligation to obtainthe highest value

reasonably available for the corporation's shareholders, and if such transaction will result in a change

of corporate control, the shareholders are entitled to receive a significant premium. To diligently

comply with these duties, the directors may not take any action that:

(a) adversely affects the value provided to the corporation's shareholders;

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(b) will discourage or inhibit alternativb offers to purchase control of thecorporation or its assets;

(c) contractually prohibits them from complying with their fiduciaryduties;

(d) will otherwise adversely affect their duty to search and secure the bestvalue reasonably available under the circumstances for the corporation'sshareholders. and/or

i(e) will provide the directors with preferential treatment at the expense

of, or separate from, the public shareholders.

44. In light of the foregoing, the Individual Defendants must, as their fiduciary

obligations require:

(a) act independently so that the interests of Medarex's publicshareholders will be protected;

(b) rescind any unlawful terms in the agreement pursuant to the ProposedAcquisition, including, without limitation, the termination fee and no solicitationterms; and

(c) adequately ensure that no conflicts of interest exist between theinterests of the Individual Defendants and their fiduciary obligations to maximizestockholder value or, if such conflicts exist, to ensure that all conflicts be resolvedin the best interests of Medarex's public shareholders.

45. As described herein, the Individual Defendants have breached their fiduciary duties

as they have agreed to sell Medarex without attempting to maximize shareholder value and without

disclosing material information to the Company's shareholders sufficient for there to evaluate the

Proposed Acquisition. Moreover, the Individual Defendants have improperly favored BMS over all

other potential bidders. According to documents filed by the Company with the SEC, the Merger

Agreement prohibits the Company from soliciting bidders other than BMS, and restricts the

Company from accepting unsolicited third-party bids. In addition, the Merger Agreement provides

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for BMS to be paid $70.80 million in the event the Proposed Acquisition is terminated in favor of

another bidder.

46. Because the Individual Defendants have breached their duties of due care, loyalty and

good faith in connection with the Proposed Acquisition, the burden of proving the inherent or entire

fairness of the Proposed Acquisition, including all aspects of its negotiation, structure, price and

terms, is placed upon the Individual Defendants as a matter of law.

CLAIM IVIOLATION OF SECTION 14(e) OF THE EXCHANGE ACT

47. Plaintiff repeats and realleges each and every allegation contained in each of the

foregoing paragraphs as if set forth fully herein.

48. This claim, pursuant to Section 14(e) of the Exchange Act promulgated by the SEC

thereunder, is brought directly against each defendant.

49. Defendants caused to be issued the Tender Offer which was materially false and

misleading in that it contained false and misleading statements, and failed to disclose material

information, as set forth above.

50. Defendant BMS seeks to secure complete control of Medarex by means of the

materially false and misleading information.

51. Had the individual defendants disclosed in the Proxy Statement the omissions

described herein, Medarex would not tender their shares unless the tender consideration was

increased materially.

52. As a result of the foregoing, the defendants have violated Section 14(e) of the

Exchange Act promulgated by the SEC thereunder.

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53. Plaintiff and the Class have sustained damages by reason of defendant's

misrepresentations as described herein equal to the difference between the tender consideration of

16.00 per share and the higher amount which the shares were worth.

CLAIM IIVIOLATION OF SECTION 20(a) OF THE EXCHANGE ACT



55. Defendant BMS, by virtue of their positions, stock ownership, and/or specific acts

described above, were, at the time of the wrongs alleged herein, controlling persons within the

meaning of Section 20(a) of the Exchange Act.

56, Defendant BMS had the power and influence and exercised the same to issue the

tender at an inadequate price having inside information as to Medarex's true value.

CLAIM IIIVIOLATION OF FIDUCIARY OBLIGATIONS

UNDER SUPPLEMENTAL JURISDICTION



58, The Individual Defendants have violated their fiduei-u y duties of care, loyalty, candor,

good faith, and independence owed to the public shareholders of Mcdarex and have acted to put their

personal interests ahead of the interests of Medarex's shareholders.

59. By the acts, transactions and courses of conduct alleged herein, the Individual

Defendants, individually and acting as a part of a common plan, are attempting to unfairly deprive

plaintiff and other members of the Class of the true value of their investment in Medarex.

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60. The Individual Defendants have violated Their fiduciary duties by agreeing to the

Proposed Acquisition and the Merger Agreement to the detriment of plaintiff and the Company's

public shareholders. By agreeing to the Merger Agreement, including the non-solicitation provisions

and excessive termination fee as alleged herein, the Individual Defendants have deprived plaintiff

and members of the proposed Class the true value of their ownership in Medarex.

61. As demonstrated by the allegations above, the Individual Defendants have failed to

exercise the care required, andbreached their duties of loyalty, good faith, candor, and independence

owed to the shareholders of Medarex because, among other reasons:

(a) they have failed to properly value the Company;

(b) they have failed to take steps to maximize the value of Medarex to its

public shareholders and theyhave taken steps to avoid a competitive bidding process;

and

(c) they have failed to disclose the true value of Medarex to its

shareholders.

62. Medarex shareholders will, if the Proposed Acquisition is consummated, be deprived

of the opportunity for substantial gains that the Company may realize.

63. Unless enjoined by this Court, the Individual Defendants will continue to bran ch their

fiduciary duties owed to plaintiff and the other members of the Class, and may consummate the

Proposed Acquisition which will exclude the Class from its fair proportionate share of Medarex's

valuable assets and businesses, all to the irreparable harm of the Class.

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64. Plaintiff and the Class have no adequate rdmedy at law. Only through the exercise

of this Court's equitable powers can plaintiff and the Class be fully protected from the immediate

and irreparable injury which the Individual Defendants' actions threaten to inflict.

CLAIM IVAGAINST MEDAREX AND BMS

FOR AIDING AND ABE'T'TING BREACHES OF FIDUCIARY DUTIES

65. Plaintiff repeats and re-alleges each allegation set forth herein.

66. Defendants Medarex and BMS, by reason of their status as parties to the Proposed

Acquisition and their possession of non-public information, have aided and abetted the Director

Defendants in the aforesaid breach of their fiduciary duties.

67. Such breaches of fiduciary duties could not and would not have occurred but for the

conduct of defendants Medarex and BMS who, therefore, aided and abetted such breaches by

agreeing to an imminent sale of Medarex to BMS.

68. As a result of the unlawful actions of defendants Medarex and BMS, plaintiff and the

other members of the Class will be irreparably haimed in that they will not receive fair value for

Mcdarex's assets and business and will be prevented from obtaining the real value of their equity

ownership in the Company. Unless the actions of defendants Medarex and BMS are enjoined by the

Court, they will continue to aid and abet the Individual Defendants' breaches oftheir fiduciary duties

owed to plaintiff and the members of the Class.

69. Plaintiff demands trial by jury.

WHEREFORE, plaintiff, on behalf of himself and the Class, prays for judgment and relief

as follows:

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A. declaring this action to be a proper Blass action and certifying plaintiff as the

representative of the Class under Rule 23 of the Federal Rules of Civil Procedure;

B. declaring that defendants have violated Section 14(e);

C. declaring that defendants Medarex and BMS and have violated Section 20(a);

D. Declaring and decreeing that the Merger Agreement was entered into in breach

of the fiduciary duties of the Individual Defendants and is therefore unlawful and unenforceable;

E. Enjoining defendants, their agents, counsel, employees, and all persons acting

in concert with them from consummating the Proposed Acquisition, unless and until the Company

adopts and implements a procedure or process to obtain the highest possible price for shareholders,

and to fully disclose to them material information concerning the Company and the process by which

the Company is to be sold;

F. Directing the Individual Defendants to exercise their fiduciary duties to obtain

a transaction that is in the best interests of Medarex's shareholders and to refrain from entering into

any transaction until the process for the sale or auction of the Company is completed and the highest

possible price is obtained;

G. Rescinding, to the extent already implemented, the Proposed Acquisition or

any of the terms thereof;

H. Imposing a constructive trust ; in favor of plaintiff, upon any benefits

improperly received by defendants as a result of their wrongful conduct;

I. Awarding plaintiff the costs and disbursements of this action, including

reasonable attorneys' and experts' fees; and

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J. Granting such other and further equitable relief as this Court may deem just

and proper.

Dated: July 31, 2009

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