Medarex to restate financials, faces possible Nasdaq delisting

By Elaine Rigoli

Tampa, Fla., Aug. 18 - Medarex, Inc. said it will restate annual and interim financial statements from 2000 through 2005 as well as the first-quarter report for the three months ended March 31 after an internal investigation found discrepancies in its stock-option grants.

The board of directors of Medarex started an investigation in May into its historical stock option grant practices and appointed one of its outside directors to oversee the investigation. The outside director is being assisted by outside legal counsel that had not previously been involved with Medarex's stock option plans and forensic accountants.

The initial investigation has focused on processes used to establish the option exercise price and obtain required approvals of stock option grants and the related measurement dates used for financial reporting purposes.

During the course of the investigation, however, the outside director reached the preliminary conclusion that the correct measurement dates for certain stock option grants made by the company during the period 1997 to 2001 differ from the measurement dates previously used to account for such option grants.

Medarex also announced that it will request a hearing before the Nasdaq listing qualification panel in response to the receipt of a Nasdaq staff determination letter on Aug. 14 notifying Medarex that it was not in compliance with Nasdaq rules because Medarex had not timely filed its quarterly report on form 10-Q for the period ended June 30.

Medarex is a biopharmaceutical company based in Princeton, N.J.

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