SmallCaps Online LLC Initiates Coverage of Medarex, Inc. with a BUY Recommendation

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New York, NY, May 18, 1999 - SmallCaps Online LLC announced today that it has initiated coverage of Medarex, Inc. (Nasdaq: MEDX) with a BUY recommendation. The full text of this report can be accessed at SmallCaps Online’s web site, at www.SmallCapsOnline.com.

Jeffrey B. Davis, President of SmallCaps Online stated, "We believe Medarex represents a unique, risk-reduced biotechnology investment opportunity at this time. The company has a proprietary human antibody services business based on its HuMAb-Mouse system, seven antibody-based products currently in clinical trials, a long list of major corporate partners (with the potential for many additional collaborations), and a strong financial position."

Excerpts from the report follow:

Broad Technology Base — Short-Term Licensing Revenue/Long-Term Product Royalty Stream

• HuMAb-Mouse Services Business: MEDX has 11 ongoing partnerships including Bristol-Myers Squibb, Novartis, Schering AG, Centocor and Immunex. We expect MEDX to expand these relationships (as recently announced with Schering AG) and add new partners. Each partnership should yield roughly $500,000 in upfront license fees, and an additional $1-2 million in milestone payments per antibody developed, upon commencement of Phase I trials.
• Seven Products in Human Clinical Trials: MEDX currently has four products in Phase II trials, two for cancer, one for AML and one for ITP–we expect one cancer product, MDX 210 to enter Phase III by the end of 1999; two products are now in Phase I trials, one for rheumatoid arthritis and autoimmune diseases and one for cancer; one product in Phase III to treat secondary cataracts is currently stalled, pending analysis of adverse events.

Strong Corporate Partnerships — Additional Collaborations Expected in Near Future

• Throughout 1999, we expect a steady flow of announcements from MEDX surrounding the partnering of its HuMAb-Mouse technology.
• MEDX is currently in discussions to partner MDX 210, expected to enter Phase III trials this year. We believe that MEDX will be able to partner this product and others in early-stage and preclinical development in the near future.

Compelling Valuation at Current Levels — BUY Recommendation

• With more than $30 million in cash and equivalents, a relatively low cash burn rate and an expected flow of positive news events related to clinical trials and additional partnerships, we believe MEDX stock to be undervalued and recommend purchase for those investors tolerant of the risks associated with small-cap equity investments.

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