OFFER TO PURCHASE FOR CASH ANY OR ALL OF THE $44,412,500 AGGREGATE FACE VALUE (SUBJECT TO A $22,206,250 MINIMUM) OF CONTINGENT PAYMENT RIGHTS OF MEDAREX, INC. BY BCC ACQUISITION I LLC

OFFER TO PURCHASE FOR CASH
ANY OR ALL OF THE $44,412,500 AGGREGATE FACE VALUE
(SUBJECT TO A $22,206,250 MINIMUM)
OF CONTINGENT PAYMENT RIGHTS OF
MEDAREX, INC.
BY BCC ACQUISITION I LLC

THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON
FRIDAY, JULY 17, 1998, UNLESS THE OFFER IS EXTENDED.

BCC Acquisition I LLC, a Delaware limited liability company (the
"Purchaser"), hereby offers to purchase for cash any or all of the $44,412,500
(subject to a $22,206,250 minimum) in aggregate face value of certain contingent
payment rights (the "Rights") of Medarex, Inc. (the "Company"), upon the terms
and subject to the conditions set forth in this Offer to Purchase and in the
related Letter of Assignment enclosed with this Offer to Purchase (which
together constitute the "Offer"). The full, undiscounted value of any of the
Rights is referred to herein as the "Face Value" of such Rights. The Rights are
held by the former holders (the "Holders") of preferred stock ("GenPharm
Preferred Stock") and common stock ("GenPharm Common Stock") of GenPharm
International, Inc. ("GenPharm"). The Rights, as such term is used in this
Offer, represent such Holders' rights to receive the remainder of the merger
consideration (the "Remaining Merger Consideration") payable to such Holders
under the Amended and Restated Agreement and Plan of Reorganization dated as of
May 5, 1997 by and among the Company, Medarex Acquisition Corp., a California
corporation wholly-owned by the Company ("Merger Sub"), and GenPharm (the
"Merger Agreement"), pursuant to which the Company acquired GenPharm (the
"Merger"). While the Remaining Merger Consideration is denominated in dollars,
the Merger Agreement provides that it is payable (in most cases) in shares of
the Company's common stock, par value $.01 per share (the "Common Stock"),
valued at the Fair Market Value thereof at the time of payment (as defined in
the Merger Agreement). At the date hereof, the Remaining Merger Consideration
is $44,412,500. This amount is not required to be paid until December 31, 1998
(and possibly, to some extent, in 1999) and is subject to reduction in certain
circumstances all as more fully described herein.

The Purchaser is offering to acquire any or all of the Rights, subject to
the terms and conditions of the Offer (which includes the condition that at
least 50% ($22,206,250) of the aggregate Face Value of the Rights be assigned),
at a price that represents a 20% discount from the amount of the Remaining
Merger Consideration such Holder would receive if the Remaining Merger
Consideration were not reduced and such Holder actually received such Holder's
maximum entitlement to such Remaining Merger Consideration. Since, pursuant to
the Merger Agreement, the amount of each Holder's

share of the Remaining Merger Consideration is dependent on whether such Holder
was a holder of GenPharm Preferred Stock and/or GenPharm Common Stock (and, if a
holder of GenPharm Preferred Stock, which series of GenPharm Preferred Stock
such Holder held), the price the Purchaser is offering to pay to each Holder
depends upon which class or series of GenPharm stock the Holder held.

The following table sets forth the cash payment the Purchaser is offering
to make to the Holders to acquire the Rights pursuant to the Offer. The first
line of the table sets forth the price to be paid by the Purchaser for the
Rights relating to each share of GenPharm Preferred Stock and GenPharm Common
Stock (on an as-converted fully diluted basis) formerly held by any such Holder.
This price reflects the 20% discount. The second line of the table sets forth,
on the same per-share basis, the amount of Remaining Merger Consideration that
would be received by such Holders pursuant to the Merger, assuming no further
reduction in the Remaining Merger Consideration.

GenPharm
Series of GenPharm Preferred Stock Common
---------------------------------- Stock
-----

A B C D E F G H I
- - - - - - - - -

Cash Payment to be $.17 $.17 $.67 $.78 $1.57 $4.02 $4.47 $3.14 $3.13 $1.65
Received Pursuant
to the Offer

Value of Additional $.21 $.21 $.84 $.98 $1.96 $5.03 $5.59 $3.93 $3.91 $2.06
Shares to be
Received Assuming
No Further
Reduction in
Remaining Merger
Consideration (the
Face Value of the
Rights)

In evaluating the Offer, Holders should note that, under the Merger
Agreement, the aggregate amount of the Remaining Merger Consideration payable to
the Holders is subject to reduction, on a dollar-for-dollar basis, to the extent
GenPharm fails to receive

certain license fees and promissory note payments from unrelated third parties
(the "Third Party Payments") of approximately $23 million. Although the Company
believes that the Third Party Payments will be received (and the Company has to
date received timely payment of sums due from the parties obligated to make the
Third Party Payments), there is a risk that unforeseen factors will result in
the Company's not receiving some or possibly all of the Third Party Payments. A
significant reduction in the receipt of such Third Party Payments could result
in a significant reduction in the amount of the Remaining Merger Consideration
to be received by the Holders of the Rights. The Company also has some
discretion as to when the Remaining Merger Consideration is paid and is not
required to pay such amount until December 31, 1998 (and possibly, to some
extent, until 1999). Even the form of payment is uncertain. While in most
cases the Company is obligated to pay the Remaining Merger Consideration in
shares of Common Stock, at any time during which the Fair Market Value (as
defined in the Merger Agreement) of the Company's Common Stock is less than
$5.00, it may pay such Remaining Merger Consideration in cash. Finally, if the
Company issues Common Stock to the Holders, depending on the then Fair Market
Value of such stock, a large number of shares may be issued. Any attempt by a
significant number of Holders to sell such a large number of shares of Common
Stock upon receipt could have an adverse effect on the market price of the
Company's Common Stock.

Holders who accept the Offer will receive, at the consummation of the
Offer, in consideration of their assignment of their Rights to Purchase, the
cash purchase price offered by the Purchaser. Holders who do not accept the
Offer will receive payment of the amount of the Remaining Merger Consideration
they are entitled to receive as and when provided under the terms of the Merger
Agreement.

The Purchaser and the Company have entered into a Rights Exchange Agreement
(the "Rights Exchange Agreement"), dated as of June 10, 1998. This Offer is
being made by the Purchaser pursuant to the Rights Exchange Agreement. The
Rights Exchange Agreement provides that, immediately upon the consummation of
the Offer, the Company will issue to the Purchaser in exchange for each $6.75 in
Face Value of the Rights acquired by the Purchaser (i) one share of the
Company's Common Stock (up to a maximum of 6,579,629 shares; such shares being
the "Shares") and (ii) a warrant or warrants (the "Warrants") to purchase 0.1222
shares of the Company's Common Stock at an exercise price of $10.00 per share
exercisable over a period of seven years (up to a maximum of 804,000 shares).
The Warrants will be issued upon the terms and conditions set forth in the
Warrant Agreement (the "Warrant Agreement") between the Company and the
Purchaser in a form attached as an exhibit to the Rights Exchange Agreement.
The Company and the Purchaser have agreed that the aggregate Face Value of the
Rights for purposes of the exchange for Shares shall be $44,412,500 (i.e., their
full, undiscounted value). If all of the Rights are assigned to the Purchaser
and exchanged for Shares under the Rights Exchange Agreement, the Purchaser will

beneficially own (after taking into account the Warrants) approximately 25% of
the Company's outstanding Common Stock.

The Rights Exchange Agreement also provides, among other things, that the
Company will register the Shares and the shares to be issued to the Purchaser
upon exercise of the Warrants as well as any resale thereof, and will pay to the
Purchaser a fee of $750,000 (plus expenses) under certain circumstances if the
Offer is not consummated and the Company completes a similar transaction with
another party. The Rights Exchange Agreement is more particularly described in
Section 5 of this Offer to Purchase. Under the Rights Exchange Agreement, the
Company will appoint a representative of the Purchaser to the Company's Board of
Directors immediately following the closing of the transactions contemplated by
the Rights Exchange Agreement. While no formal agreement exists, the Company
and the Purchaser have discussed adding another director mutually acceptable to
the Company and the Purchaser.

THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, AT LEAST $22,206,250
(50%) IN AGGREGATE FACE VALUE OF RIGHTS BEING PROPERLY ASSIGNED AND NOT
WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER. NEITHER THE COMPANY NOR ITS
BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO ANY HOLDER OF THE RIGHTS AS TO
WHETHER OR NOT TO ASSIGN THE RIGHTS. HOWEVER, IN ORDER TO FACILITATE THE OFFER,
THE COMPANY HAS AGREED TO GRANT ITS CONSENT TO THE TRANSFER OF THE RIGHTS TO THE
PURCHASER. THE RIGHTS MAY NOT BE ASSIGNED OR OTHERWISE TRANSFERRED EXCEPT
PURSUANT TO THE OFFER.

IMPORTANT

THE OFFER IS BEING MADE BY THE PURCHASER PURSUANT TO THE RIGHTS EXCHANGE
AGREEMENT BETWEEN THE PURCHASER AND THE COMPANY. PURSUANT TO THAT AGREEMENT,
THE COMPANY AND THE PURCHASER HAVE PREPARED THIS OFFER TO PURCHASE. ALL
STATEMENTS MADE IN THIS OFFER TO PURCHASE (OTHER THAN THOSE RELATING TO THE
IDENTITY OF THE PURCHASER, THE SOURCE OF THE PURCHASER'S FUNDS, THE PURCHASER'S
PLANS AND INTENTIONS, OR THE TERMS OF THE OFFER) ARE BASED SOLELY ON INFORMATION

SUPPLIED BY THE COMPANY TO THE PURCHASER OR CONTAINED IN THE COMPANY'S PUBLIC
FILINGS UNDER THE SECURITIES ACT OF 1933 (THE "SECURITIES ACT") AND THE
SECURITIES EXCHANGE ACT OF 1934 (THE "EXCHANGE ACT"). THE COMPANY HAS REVIEWED
THIS OFFER TO PURCHASE AND BELIEVES THAT ALL INFORMATION (OTHER THAN THAT
PERTAINING TO THE IDENTITY OF THE PURCHASER, THE SOURCE OF THE PURCHASER'S FUNDS
OR THE PURCHASER'S PLANS AND INTENTIONS, AS TO WHICH THE COMPANY CAN EXPRESS NO
VIEW) SET FORTH HEREIN IS ACCURATE AND COMPLETE IN ALL MATERIAL RESPECTS. WHILE
THE PURCHASER BELIEVES ALL INFORMATION SUPPLIED BY THE COMPANY OR OBTAINED FROM
THE COMPANY'S FILINGS UNDER THE SECURITIES ACT AND THE EXCHANGE ACT TO BE
ACCURATE IN ALL MATERIAL RESPECTS, THE PURCHASER DOES NOT AND CANNOT WARRANT THE
ACCURACY OF SUCH INFORMATION.

ANY HOLDER OF RIGHTS DESIRING TO ASSIGN TO THE PURCHASER ALL OR ANY PORTION
OF ITS RIGHTS SHOULD COMPLETE AND SIGN THE LETTER OF ASSIGNMENT OR A FACSIMILE
THEREOF IN ACCORDANCE WITH THE INSTRUCTIONS IN THE LETTER OF ASSIGNMENT AND MAIL
OR DELIVER IT AND ANY OTHER REQUIRED DOCUMENTS TO CONTINENTAL STOCK TRANSFER &
TRUST COMPANY (THE "DEPOSITARY"). THE COMPANY WILL PAY ALL CHARGES AND EXPENSES
OF THE DEPOSITARY IN CONNECTION WITH THE OFFER.

QUESTIONS AND REQUESTS FOR ASSISTANCE MAY BE DIRECTED TO THE DEPOSITARY OR
SHAREHOLDER COMMUNICATIONS CORPORATION (THE "INFORMATION AGENT") AT THEIR
RESPECTIVE ADDRESSES AND TELEPHONE NUMBERS SPECIFIED ON THE BACK COVER OF THIS
OFFER TO PURCHASE. ADDITIONAL COPIES OF THIS OFFER TO PURCHASE AND THE LETTER
OF ASSIGNMENT MAY BE OBTAINED FROM THE DEPOSITARY.

CONTENTS

INTRODUCTION 1

SECTION 1 TERMS OF THE OFFER 4

SECTION 2 ACCEPTANCE FOR PAYMENT AND PAYMENT FOR RIGHTS 6

SECTION 3 PROCEDURE FOR ASSIGNING RIGHTS; EFFECTS OF ASSIGNING RIGHTS 7

SECTION 4 WITHDRAWAL RIGHTS 8

SECTION 5 THE RIGHTS EXCHANGE AGREEMENT 8

SECTION 6 CERTAIN FEDERAL INCOME TAX CONSEQUENCES 9

SECTION 7 PRICE RANGE OF THE COMPANY'S COMMON STOCK, DIVIDENDS 12

SECTION 8 CERTAIN INFORMATION CONCERNING THE COMPANY 13

SECTION 9 CERTAIN INFORMATION CONCERNING THE PURCHASER 17

SECTION 10 SOURCE AND AMOUNT OF FUNDS 17

SECTION 11 PURPOSE OF THE OFFER 17

SECTION 12 CERTAIN CONDITIONS OF THE OFFER 19

SECTION 13 CERTAIN LEGAL MATTERS 21

SECTION 14 FEES AND EXPENSES 22

SECTION 15 MISCELLANEOUS 23

INTRODUCTION

The Purchaser hereby offers to purchase for cash any or all of the Rights
upon the terms and subject to the conditions set forth in the Offer. The
"Rights" are each Holder's right to receive such Xxxxxx's share of the Remaining
Merger Consideration to be paid to the Holders under the Merger Agreement
pursuant to which the Company acquired GenPharm. THE OFFER IS CONDITIONED UPON,
AMONG OTHER THINGS, A MINIMUM OF $22,206,250 (50%) IN AGGREGATE FACE VALUE OF
RIGHTS BEING PROPERLY ASSIGNED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE
OFFER.

The Purchaser is offering to acquire any or all of the Rights, subject to
the terms and conditions of the Offer, at a price that represents a 20% discount
from the amount of Remaining Merger Consideration such Holder would receive if
the Remaining Merger Consideration were not reduced as described below and such
Holder actually received such Holder's maximum entitlement to such Remaining
Merger Consideration. Since, pursuant to the Merger Agreement, each Holder's
share of the Remaining Merger Consideration is dependent on whether such Holder
was a holder of GenPharm Preferred Stock and/or GenPharm Common Stock (and, if a
holder of GenPharm Preferred Stock, which series of GenPharm Preferred Stock
such Holder held), the price the Purchaser is offering to pay to each Holder
depends upon which class or series of GenPharm stock the Holder held.

GenPharm
Series of GenPharm Preferred Stock Common
---------------------------------- Stock
-----

A B C D E F G H I
- - - - - - - - -

Cash Payment to be $.17 $.17 $.67 $.78 $1.57 $4.02 $4.47 $3.14 $3.13 $1.65
Received Pursuant
to the Offer

Value of Additional $.21 $.21 $.84 $.98 $1.96 $5.03 $5.59 $3.93 $3.91 $2.06
Shares to be
Received Assuming
No Further

Reduction in
Remaining Merger
Consideration (the
Face Value of the
Rights)

The Company, Merger Sub and GenPharm entered into the Merger Agreement on
May 5, 1997. Pursuant to the Merger Agreement, on October 21, 1997 (the "Merger
Date"), Merger Sub merged with and into GenPharm with GenPharm being the
surviving corporation and all of the outstanding shares of GenPharm Common Stock
and GenPharm Preferred Stock were converted into the right to receive
$62,725,000 (the "GenPharm Purchase Price"), subject to adjustment. As a
result, GenPharm became a wholly-owned subsidiary of the Company. On the Merger
Date, the Company issued 3,250,000 shares of Common Stock (the "Initial Shares")
as payment of $17,793,750 of the GenPharm Purchase Price. As of the date
hereof, the GenPharm Purchase Price has been reduced by $518,750 as a result of
certain adjustments provided for in the Merger Agreement. As a result, the
Remaining Merger Consideration payable to the Holders is currently $44,412,500.
However, under the Merger Agreement, the aggregate amount of the Remaining
Merger Consideration payable to the Holders is subject to reduction, on a
dollar-for-dollar basis, to the extent GenPharm fails to receive certain license
fees and promissory note payments from unrelated third parties (the "Third Party
Payments") of approximately $23 million. Although the Company believes that the
Third Party Payments will be received (the $23 million in remaining Third Party
Payments already reflects the timely receipt of approximately $8 million of such
payments) there is a risk that unforeseen factors will result in non-receipt of
some or possibly all of the Third Party Payments. A significant reduction in
the receipt of such Third Party Payments could result in a significant reduction
in the amount of the Remaining Merger Consideration to be received by the
Holders of the Rights. (As noted above, the Remaining Merger Consideration
already reflects a reduction of $518,750).

The Remaining Merger Consideration is payable in additional shares of the
Company's Common Stock (the "Additional Shares") or, under certain
circumstances, cash. The Additional Shares are to be issued first to the
Holders of the Rights relating to GenPharm Preferred Stock to the extent of the
balance of their aggregate preference amount of $40,378,646 (the "Preference
Amount") and then pro rata to the Holders of the Rights relating to GenPharm
Common Stock and GenPharm Preferred Stock (on an as-converted fully diluted
basis).

The Merger Agreement provides that payment of the Remaining Merger
Consideration is to be made on or before December 31, 1998, provided GenPharm
has received the Third Party Payments by that time. In the event any of the
Third Party Payments are received after December 15, 1998, final payment of the
Remaining Merger Consideration will occur not later than the earlier of (i) 30
days following the receipt of the last Third Party Payment, and (ii) December
31, 1999. The Remaining Merger

Consideration will be paid first to the Holders of the Rights relating to
GenPharm Preferred Stock to the extent of the Preference Amount remaining after
the issuance of the Initial Shares ($22,584,896), and then to Holders of the
Rights relating to GenPharm Common Stock and GenPharm Preferred Stock (on an
as-converted basis). Since the number of Additional Shares to be issued as
payment of the Remaining Merger Consideration will be determined at future dates
based on the then Fair Market Value of the Company's Common Stock and the amount
of the Remaining Merger Consideration as adjusted, the maximum number of
Additional Shares to be issued in connection with the Merger cannot be
determined at this time. A significant decrease in the Fair Market Value of the
Company's Common Stock would result in a significant increase in the number of
Additional Shares issuable in connection with the Merger or, possibly, the
payment of the Remaining Merger Consideration in cash. Similarly, a significant
increase in the Fair Market Value of the Company's Common Stock and/or a
significant reduction in the Remaining Merger Consideration would result in a
significant decrease in the number of Additional Shares issuable in connection
with the Merger. The uncertainties surrounding payment of the Remaining Merger
Consideration are of particular concern to former Holders of GenPharm Common
Stock, since, at least to the extent of the remaining Preference Amount, the
Remaining Merger Consideration is first paid to former Holders of GenPharm
Preferred Stock and, therefore, any significant reduction in the Remaining
Merger Consideration would have a disproportionately greater negative impact on
the value received in the Merger per share of GenPharm Common Stock.

Holders of Rights who accept the Offer and assign their Rights eliminate
the risk associated with a reduction of the Remaining Merger Consideration in
the event all or a portion of the Third Party Payments are not received. In
addition, under the terms of the Merger Agreement, the Company is not required
to issue Additional Shares of its Common Stock in satisfaction of the Rights
until December 31, 1998 (and possibly, to some extent, until December 31, 1999).
Thus, Holders who accept the Offer will, if the Offer is completed, receive cash
payments for their Rights in advance of the time they would receive any
Additional Shares (or cash) from the Company as payment of the Remaining Merger
Consideration. Furthermore, there can be no assurance that Holders who do not
accept the Offer will be able to sell the Additional Shares they receive in
payment of the balance of the Remaining Merger Consideration at one time or over
a relatively short time frame without adversely affecting the market price of
the Company's Common Stock. Finally, if the Company issues Common Stock to the
Holders, depending on the then Fair Market Value of such stock, a large number
of shares may be issued. Any attempt by a significant number of Holders to sell
such a large number of shares of Common Stock upon receipt could have an adverse
effect on the price of the Company's Common Stock.

While acceptance of the Offer would reduce or eliminate the above described
risks, assuming the Third Party Payments are received and there are no further
reductions in the Remaining Merger Consideration, because of the discount,
Holders of the Rights who accept the Offer will receive less in value than they
would if they did not accept the Offer and continued to hold their Rights until
the Company delivered the Additional Shares as payment of the Remaining Merger
Consideration.

Holders who accept the Offer will receive at the consummation of the Offer,
in consideration of their assignment of their Rights to Purchase, the cash
purchase price offered by Purchaser. Holders who do not accept the Offer will
receive payment of the amount of the Remaining Merger Consideration they are
entitled to receive as and when provided under the terms of the Merger
Agreement.

The Purchaser and the Company have entered into the Rights Exchange
Agreement and this Offer is being made by the Purchaser pursuant thereto. The
Rights Exchange Agreement provides that, immediately upon the consummation of
the Offer, the Company will issue to the Purchaser in exchange for each $6.75 in
Face Value of the Rights acquired by the Purchaser (i) one Share of the
Company's Common Stock (up to a maximum of 6,579,629 Shares), and (ii) a Warrant
or Warrants to purchase .1222 shares of the Company's Common Stock at an
exercise price of $10.00 per share exercisable over a period of seven years (up
to a maximum of 804,000 shares). The Warrants will be issued upon the terms and
conditions set forth in the Warrant Agreement between the Company and the
Purchaser in the form attached to the Rights Exchange Agreement.

In order to facilitate the Offer, pursuant to the Rights Exchange
Agreement, the Company has granted its consent to the transfer of the Rights to
the Purchaser. The Rights may not be assigned or otherwise transferred except
pursuant to the Offer. The Rights Exchange Agreement is more particularly
described in Section 5 of this Offer to Purchase.

The purpose of the Offer is for the Purchaser to purchase for cash any or
all of the $44,412,500 aggregate Face Value of Rights so that the Purchaser
will, upon acquisition of the Shares under the Rights Exchange Agreement, have a
substantial equity interest in the Company, and be entitled to purchase
additional Common Stock of the Company by exercising the Warrants. The
Purchaser will also obtain representation on the Company's board of directors
(see Section 11 below). In connection with the Rights Exchange Agreement, the
Company and Purchaser have agreed that the aggregate value of the Rights for
purposes of the exchange for Shares shall be $44,412,500; in other words, the
Purchaser will receive Shares based on the full, undiscounted value of the
Rights. Holders should note that the Company and the

Purchaser have no agreement preventing the sale of the Shares by the Purchaser,
and the Company has agreed in the Rights Exchange Agreement to register the
Shares for resale.

According to the Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended March 31, 1998 (the "March 10-Q"), as filed with the Securities
and Exchange Commission (the "Commission") on May 14, 1998, there were
22,197,486 shares of Common Stock outstanding (the "Outstanding Shares") as of
May 7, 1998. In the event the minimum amount of Rights are assigned and
accepted for purchase by the Purchaser, the number of shares of Common Stock to
be issued by the Company to the Purchaser under the Rights Exchange Agreement in
exchange for the Rights acquired in the Offer will constitute approximately 14%
(or approximately 25% if all the Rights are assigned and accepted for payment)
of the number of shares of the Company's Common Stock that will be outstanding
following the completion of the Offer, in each case including the shares of the
Company's Common Stock that the Purchaser would receive upon exercise of the
Warrants.

1. TERMS OF THE OFFER. Upon the terms and subject to the conditions of the
Offer, the Purchaser will accept for payment and will pay for any or all of the
$44,412,500 in Face Value of the Rights which are properly assigned on or prior
to the Expiration Date (as hereinafter defined) and not withdrawn in accordance
with Section 4 of this Offer to Purchase. The Purchaser is offering to acquire
the Rights at a price that represents a 20% discount from the amount of
Remaining Merger Consideration each Holder would receive if the amount of
Remaining Merger Consideration were not reduced below $44,412,500.

As used in the Offer, the term "Expiration Date" means 12:00 Midnight, New
York City time, on Friday, July 17, 1998, provided, however, that if the
Purchaser, in its sole discretion, has extended the period of time for which the
Offer is open, the term "Expiration Date" means the latest time and date to
which the Offer is extended, subject to the terms and conditions of the Rights
Exchange Agreement, including, but not limited to, the provisions contained
therein that the Offer may not be extended beyond August 14, 1998 (the
"Termination Date").

Any Holder of Rights desiring to assign to the Purchaser all or any portion
of its Rights should complete and sign the Letter of Assignment or a facsimile
thereof in accordance with the instructions in the Letter of Assignment and mail
or deliver it and any other required documents to the Depositary. (See Section
3 below).

If Letters of Assignment convey fewer than $22,206,250 (50%) in aggregate
Face Value of the Rights are properly delivered to the Depositary by the
Expiration Date and

not withdrawn, the Purchaser may (i) terminate the Offer and return all assigned
Rights to assigning Holders, (ii) extend the Offer and retain all such Rights
until the expiration of the Offer as extended, or (iii) waive the condition that
at least $22,206,250 (50%) in aggregate Face Value of the Rights be properly
assigned and purchase all properly assigned Rights.

Due to the difficulty of determining the precise amount of Rights properly
assigned and not withdrawn, the Purchaser does not expect to announce the final
results of the Offer or pay for any Rights until at least seven NASDAQ trading
days after the Expiration Date. Holders of Rights will be notified as promptly
as practicable as to the results of the Offer.

The Purchaser reserves the right, at any time or from time to time, to
extend the period of time during which the Offer is open by announcing such
extension in a press release followed as promptly giving written notice of such
extension to the Holders of the Rights. If the Purchaser decides to increase
the consideration offered in the Offer to Holders of the Rights, make a material
modification to the Offer or waive a material condition to the Offer and, at the
time that notice of such action is first sent or given to Holders of the Rights
in the manner specified below, the Offer is scheduled to expire at any time
earlier than the expiration of a period ending on the tenth business day from,
and including, the date that such notice is first so sent or given, the Offer
will be extended until the expiration of such period of ten business days,
provided that such date is not beyond the Termination Date.

The Purchaser also expressly reserves the right (i) to delay payment for
any Rights regardless of whether such Rights were theretofore accepted for
payment or to terminate the Offer and not accept for payment or pay for any
Rights not theretofore accepted for payment or paid for upon the occurrence of
any of the conditions specified in Section 12 by giving as provided in the next
sentence notice of such delay in payment or termination to the Holders of the
Rights and (ii) at any time or from time to time, subject only to the Rights
Exchange Agreement, to amend the Offer in any respect. Any extension, delay in
payment, termination or amendment will be announced by means of press release
followed as promptly as practicable by delivery of written notice thereof to the
Holders of the Rights.

This Offer to Purchase and the related Letter of Assignment is being mailed
to the record Holders of the Rights and will be furnished to brokers, banks and
similar persons whose names, or the names of whose nominees, appear on the
Company's list of Rights Holders.

2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR RIGHTS. Upon the terms and subject
to the conditions of the Offer, the Purchaser will purchase, by accepting for
payment, and will pay for, Rights properly assigned and not withdrawn by the
Expiration Date as soon as practical after the latest of (i) the expiration or
termination of the waiting period applicable to the issuance of the Shares by
the Company to the Purchaser in exchange for the Rights acquired by the
Purchaser in the Offer pursuant to the Rights Exchange Agreement under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976 (the "H-S-R Act"), and (ii)
Expiration Date. In all cases, payment for Rights purchased pursuant to the
Offer will be made only after timely receipt by the Depositary of a properly
completed and duly executed Letter of Assignment (or facsimile thereof) and any
other documents required by the Letter of Assignment. Since the Rights are not
transferable (except pursuant to the Offer), the Rights may only be assigned as
provided in the Letter of Assignment.

The Company and the Purchaser intend to file a Notification and Report Form
with respect to the issuance of the Shares by the Company to the Purchaser in
exchange for the Rights acquired by the Purchaser pursuant to the Offer under
the H-S-R Act on or before June 17, 1997 and, accordingly, the waiting period
under the H-S-R Act applicable thereto will expire at 11:59 p.m., New York City
time, on the date which is 30 days from the date of such filing. However, prior
to such time, the Federal Trade Commission (the "FTC") or the Antitrust Division
of the Department of Justice (the "Antitrust Division") may extend the waiting
period by requesting additional information or documentary material from the
Purchaser. If such a request is made, the waiting period would expire on the
tenth day after substantial compliance by the Purchaser with such request. For
additional information regarding the H-S-R Act, see Section 12.

For purposes of the Offer, the Purchaser shall be deemed to have accepted
for payment (and thereby purchased) assigned Rights as, if and when the
Purchaser gives oral or written notice to the Depositary of the Purchaser's
acceptance of such Rights for payment. Payment for Rights purchased pursuant to
the Offer will be made by deposit of the purchase price with the Depositary,
which will act as agent for Holders choosing to assign their Rights for the
purpose of receiving payment from the Purchaser and transmitting payments to
such Holders. Under no circumstances will interest be paid on the purchase
price by the Purchaser by reason of any delay in making such payment. IF ANY
ASSIGNED RIGHTS ARE NOT PURCHASED FOR ANY REASON, THE ASSIGNMENT OF SUCH RIGHTS
WILL NOT BE EFFECTIVE.

If, prior to the Expiration Date, the Purchaser increases the consideration
offered to Holders of the Rights pursuant to the Offer, such increased
consideration shall be paid to all Holders whose assignments of Rights have
previously been accepted for payment pursuant to the Offer.

The Purchaser reserves the right to transfer or assign to one or more
direct or indirect affiliates of the Purchaser the right to purchase Rights
assigned pursuant to the Offer, but any such transfer or assignment shall not
relieve the Purchaser of its obligations under the Offer or prejudice the rights
of Holders assigning their Rights to receive payment for Rights properly
assigned and accepted for payment.

3. PROCEDURE FOR ASSIGNING RIGHTS; EFFECTS OF ASSIGNING RIGHTS. For Rights to
be properly assigned pursuant to the Offer, a properly completed and duly
executed Letter of Assignment or facsimile thereof with any other documents
required by the Letter of Assignment must be received by the Depositary at one
of its addresses indicated on the back cover of this Offer to Purchase on or
before the Expiration Date.

THE METHOD OF DELIVERY OF ALL DOCUMENTS IS AT THE ELECTION AND RISK OF THE
ASSIGNING HOLDER.

Under the backup withholding rules, unless an exception applies under the
applicable law and regulations, the Depositary will be required to withhold, and
will withhold, 20 percent of the gross proceeds paid to a Holder pursuant to the
Offer unless the Holder provides his tax identification number (employer
identification number or social security number) and certifies that such number
is correct. Therefore, unless such an exception exists and is proved in a
manner satisfactory to the Purchaser and the Depositary, each Holder wishing to
assign Rights should complete and sign the main signature form, and, if
applicable, should complete and sign the Substitute Form W-9 (or a Form W-8 for
foreign Holders) included as part of the Letter of Assignment, so as to provide
the information and certification necessary to avoid backup withholding.

Payment for Rights assigned and purchased pursuant to the Offer will be
made only after timely receipt by the Depositary of a properly completed and
duly executed Letter of Assignment or facsimile thereof and any other documents
required by the Letter of Assignment.

The assignment of Rights pursuant to the procedures described above will
constitute a binding agreement between the Holder and the Purchaser upon the
terms and subject to the conditions of the Offer. In addition, by delivering
the Letter of Assignment a Holder thereof assigns (conditioned upon payment) to
the Purchaser any claim such Holder may have against the Company to receive any
portion of the Remaining Merger Consideration represented by such Rights, as
well as any non-contractual claims against the Company. Further, if for any
reason the assignment is not effective, the Holder agrees to release any claim
that the Holder may have against the Company for payment of the Remaining Merger
Consideration in consideration of the payment by the Purchaser of the purchase
price for the Rights pursuant to the Offer.

All questions as to the validity, form, eligibility (including time of
receipt) and acceptance for payment of any assignment of Rights will be
determined in the sole discretion of the Purchaser, whose determination shall be
final and binding. The Purchaser reserves the absolute right to reject any or
all assignments not in proper form or if the acceptance of or payment for such
Rights may, in the opinion of the Purchaser's counsel, be unlawful. The
Purchaser also reserves the absolute right to waive any of the conditions of the
Offer or any defect or irregularity in any assignment with respect to any
particular Rights of any particular Holder. None of the Purchaser, the
Depositary, or the Company will be under any duty to give notification of any
defects or irregularities in assignment or incur any liability for failure to
give any such notification.

4. WITHDRAWAL RIGHTS. Except as otherwise provided in this Section,
assignments of Rights made pursuant to the Offer are irrevocable. Holders
assigning Rights to the Purchaser pursuant to the Offer may withdraw their
Rights (in other words, they may revoke their assignment) at any time prior to
12:00 Midnight on the Expiration Date, and, unless theretofore accepted for
payment as provided in this Offer to Purchase, such assignments may also be
revoked after the date that is 60 days after the commencement of the Offer. For
the purposes of the Offer, a "business day" means any day other than a Saturday,
Sunday or federal holiday, and consists of the time period from 12:01 a.m.
through 12:00 Midnight, New York City time. If the Purchaser extends the Offer,
is delayed in its purchase of or payment for Rights or is unable to purchase or
pay for Rights for any reason, then, without prejudice to the Purchaser's rights
under Sections 1 and 12, assigned Rights may be retained by the Depositary on
behalf of the Purchaser and may not be revoked except to the extent that Holders
are entitled to revoke such assignments as set forth in this Section.

For a revocation to be effective, a written, telegraphic, telex or
facsimile transmission notice of revocation must be timely received by the
Depositary at its address indicated on the back cover of this Offer to Purchase.
Any such notice of revocation must specify the name of the Holder who assigned
the Rights and the aggregate Face Value of Rights to be revoked. Such notice of
revocation must be signed by such revoking Holder prior to becoming effective.
All questions as to the form and validity (including time of receipt) of notices
of revocation will be determined by the Purchaser, in its discretion, whose
determination shall be final and binding.

Any assignments of Rights revoked will be deemed not properly assigned for
purposes of the Offer. However, Rights may be reassigned by following any of
the procedures described in Section 3 at any subsequent time prior to or at the
Expiration Date.

5. THE RIGHTS EXCHANGE AGREEMENT. The Purchaser and the Company have
entered into the Rights Exchange Agreement. What follows is a summary of the
Rights Exchange Agreement. This summary is qualified in its entirety by the
text of the Rights Exchange Agreement itself, which has been filed by the
Company with the Commission as an exhibit to a Current Report on Form 8-K
(see Section 8 for information or how to obtain documents from the
Commission).

The Rights Exchange Agreement provides that, immediately upon the
consummation of the Offer, each $6.75 in Face Value of the Rights purchased
by the Purchaser in the Offer will be exchanged for (i) one Share of the
Company's Common Stock (up to a maximum of 6,579,629 Shares) plus (ii) a
Warrant or Warrants to purchase 0.1222 shares of the Company's Common Stock
(up to a maximum of 804,000 shares) for $10.00 per share exercisable over a
period of seven years, upon the terms and conditions set forth in the Warrant
Agreement. The Company and the Purchaser have agreed that, for purposes of
the Rights Exchange Agreement, the aggregate Face Value of the Rights shall
be $44,412,500.

The closing conditions to the Rights Exchange Agreement include, among
other things: (i) the consummation of the Offer, (ii) that a director
specified by the Purchaser be appointed to the board of directors of the
Company, (iii) that the Company has not paid any of the Remaining Merger
Consideration to any of the Holders, and (iv) certain other customary closing
conditions.

As soon as practicable (but not later than 30 days) after the
consummation of the Offer, the Company has agreed to prepare and file with
the Securities and Exchange Commission (the "Commission") a shelf
registration statement (and thereafter shall use its reasonable best efforts
to cause such shelf registration statement to be declared effective) for the
Shares and the Common Stock issuable upon the complete exercise of the
Warrants (the "Warrant Shares") as well as any resale thereof. An effective
shelf registration statement would permit the Purchaser to sell or otherwise
transfer the Shares or the Warrant Shares without violating the Securities
Act or relying on a transfer that is exempt from the Securities Act.

If (i) during the term of the Rights Exchange Agreement, the Company
receives an unsolicited third-party offer where the third-party offers to
merge with, acquire assets or stock of, or engage in a similar transaction
with, the Company, and (ii) within six months of the termination of the
Rights Exchange Agreement, the Company commits to accept such third-party
offer, then the Company is obligated to pay the Purchaser $750,000 plus up
to $150,000 in expenses as a break-up fee. The terms of the Rights Exchange
Agreement provide that the Company cannot itself solicit third-party offers
and can only accept such an offer if advised that such offer is more
favorable than

the Offer, and if advised by outside legal counsel that failure to accept the
third-party offer would be reasonably likely to violate the fiduciary duties
of its board of directors.

6. CERTAIN FEDERAL INCOME TAX CONSEQUENCES. The following discussion
summarizes the material federal income tax consequences of the Offer that are
generally applicable to Holders of Rights. This discussion is based on
currently existing provisions of the Internal Revenue Code of 1986, as
amended (the "Code"), existing and proposed Treasury Regulations thereunder
and current administrative rulings and court decisions, all of which are
subject to change. Any such change, which may or may not be retroactive,
could alter the tax consequences to Holders of Rights.

Holders should be aware that this discussion does not deal with all
federal income tax considerations that may be relevant to particular Holders
in light of their particular circumstances, such as Holders who are dealers
in securities, who are subject to the alternative minimum tax provisions of
the Code, who are foreign persons, or who do not hold their Rights as capital
assets. In addition, the following discussion does not address the tax
consequences of the Offer under foreign, state or local tax laws, the tax
consequences of transactions effectuated prior or subsequent to, or
concurrently with, the Offer (whether or not any such transactions are
undertaken in connection with the Offer).

RIGHTS HOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS AS TO THE
SPECIFIC TAX CONSEQUENCES TO THEM OF THE OFFER, INCLUDING THE APPLICABLE
FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES.

ASSIGNMENT OF RIGHTS

Assignment of Rights pursuant to the Offer will be taxable transactions
for federal income tax purposes. A Holder who assigns Rights in the Offer
will recognize capital gain or loss (assuming the Rights are held as a
capital asset) and imputed interest income. The amount of capital gain or
loss will be determined by subtracting the adjusted basis of the Rights from
the present value of the cash consideration received (using a discount rate
equal to the appropriate applicable federal rate ("AFR") of interest) as
discounted from the date of assignment to the Merger Date. The remainder of
the cash consideration will be treated as interest for federal income tax
purposes. To the extent that a Holder recognizes capital gain or loss, such
capital gain or loss will be long-term if, as of the date of assignment, the
holding period of the Rights is more than 18 months, mid-term if the holding
period is more than one year but not more than 18 months, or short-term if,
as of such date, the holding period is one year or less.

RETENTION OF RIGHTS

Holders of Rights who do NOT accept the Offer will continue to be
entitled to payment of the Remaining Merger Consideration in accordance with
the terms of the Merger Agreement. As a general matter, the federal income
tax consequences of a Holder who does not accept the Offer should not be
affected by the Offer or the acceptance of the Offer by other Holders.

The Merger was intended to constitute a tax-free reorganization under
Section 368(a) of the Code (a "Reorganization"). However, the parties to the
Merger did not request a ruling from the Internal Revenue Service ("IRS") in
connection with the Merger. Assuming the Merger qualified as a
Reorganization, subject to the limitations and qualifications referred to
herein, the receipt of the Remaining Merger Consideration pursuant to the
Merger Agreement should result in the following federal income tax
consequences:

(a) No gain or loss will be recognized by holders of GenPharm Common
Stock and GenPharm Preferred Stock solely upon their receipt of the Company's
Common Stock in exchange for GenPharm Common Stock and GenPharm Preferred
Stock in the Merger (except as described below with respect to a portion of
the Additional Shares being characterized as interest under the Code and gain
or loss being recognized on cash received in lieu of a fractional share of
the Company's Common Stock).

(b) The aggregate tax basis of the Company's Common Stock received by
GenPharm shareholders in the Merger (other than Common Stock characterized as
interest under the Code), as reduced by any tax basis attributable to
fractional shares deemed to be disposed of, will be the same

as the aggregate tax basis of the GenPharm Common Stock and GenPharm
Preferred Stock surrendered in exchange therefor.

(c) The holding period of the Company's Common Stock received by each
GenPharm shareholder in the Merger, other than Common Stock characterized as
interest under the Code, will include the period for which the GenPharm
Common Stock and GenPharm Preferred Stock so surrendered is held as a capital
asset at the time of the Merger.

(d) Cash payments received by holders of GenPharm Common Stock and
GenPharm Preferred Stock in lieu of a fractional share will be treated as if
such fractional share of the Company's Common Stock had been issued in the
Merger and then redeemed by the Company. A GenPharm shareholder receiving
such cash will recognize gain or loss, upon such payment, measured by the
difference (if any) between the amount of cash received and the basis in such
fractional share.

IMPUTED INTEREST

Notwithstanding the intended qualification of the Merger as a
reorganization, a portion of any Additional Shares received by a holder more
than six months after the Merger Date will be characterized as interest for
federal income tax purposes under the imputed interest rules of the Code and
in certain circumstances, the original issue discount rules of the Code.
Generally, under these rules, a portion of the Additional Shares received
more than six months after the Merger Date equal to the present value of the
Additional Shares (using a discount rate equal to the appropriate AFR) as
discounted from the date of payment of the Additional Shares to the Merger
Date will be treated as merger consideration (and therefore subject to the
rules discussed above). The remainder of each such payment of Additional
Shares will be treated as interest for federal income tax purposes. The
interest portion of the payment will be includable in the gross income of the
holder in the year in which the amount of the payment is made. Also, in the
event the right of payment of Additional Shares becomes fixed more than six
months before the payment is due, the holder of the right to Additional
Shares will recognize original issue discount.

The federal income tax discussion set forth is included for general
information only. For a more detailed description of the federal income tax
consequences of the Merger please see the discussion relating thereto
contained the Section entitled "THE MERGER-Certain Federal Income Tax
Considerations" in the Prospectus/Consent Solicitation Statement dated
September 25, 1997 delivered to the Holders in connection with the Merger.
Each Holder is urged to consult his tax advisor with respect to the tax

consequences to him of the Offer, including the effects of state, local and
other tax consequences.

A Holder who sells Rights in the Offer and who fails to complete and
sign the Substitute Form W-9 that is included in the Offer (or, in the case
of a Foreign Holder, a Form W-8) may be subject to a required United States
backup withholding tax of 31% of the gross proceeds payable to such Holder.
In addition, that portion of the purchase price paid to a Foreign Holder
which is attributable to imputed interest will be subject to a withholding
tax at a 30% rate or at such lesser rate as may be provided by treaty. To
claim a lower treaty withholding tax rate, a Foreign Holder must submit a
properly completed Form 1001 to the Purchaser.

7. PRICE RANGE OF THE COMPANY'S COMMON STOCK, DIVIDENDS. The Rights are
not transferable (other than pursuant to this Offer by virtue of the
Company's waiver of the transfer restrictions under the Merger Agreement).
Accordingly, there is no public or private market for the Rights. However,
Holders not accepting the Offer are likely to be paid their share of the
Remaining Merger Consideration in shares of Common Stock, since that is
required by the Merger Agreement so long as the Fair Market Value (as defined
in the Merger Agreement) of the Company's Common Stock is $5.00 or more.
Further, the Purchaser will receive up to 6,579,629 Shares under the Rights
Exchange Agreement at a valuation equal to $6.75 per Share and Warrants to
acquire up to 804,000 shares of Common Stock for $10.00 per share exercisable
over a period of seven years.

The Company's 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.

High Low
1995 ---- ---
----

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

Second Quarter . . . . . . . . . . . . . . . . . . . . . $6.50 $2.75
Third Quarter. . . . . . . . . . . . . . . . . . . . . . $7.63 $5.13
Fourth Quarter . . . . . . . . . . . . . . . . . . . . . $7.50 $5.38
1996
----

First Quarter. . . . . . . . . . . . . . . . . . . . . . $8.00 $5.75

Second Quarter . . . . . . . . . . . . . . . . . . . . . $12.25 $6.25
Third Quarter. . . . . . . . . . . . . . . . . . . . . . $9.00 $5.38
Fourth Quarter . . . . . . . . . . . . . . . . . . . . . $9.00 $6.25
1997
----

First Quarter. . . . . . . . . . . . . . . . . . . . . . $10.00 $6.50

Second Quarter . . . . . . . . . . . . . . . . . . . . . $8.75 $5.88
Third Quarter. . . . . . . . . . . . . . . . . . . . . . $6.75 $4.13
Fourth Quarter . . . . . . . . . . . . . . . . . . . . . $7.06 $4.75
1998
----
First Quarter. . . . . . . . . . . . . . . . . . . . . . $6.25 $4.38
Second Quarter (through June 10) . . . . . . . . . . . . $8.25 $4.75

The Company has not paid any dividends on its Common Stock and does not
anticipate paying dividends in the foreseeable future. The Company intends
to retain any earnings to finance its growth.

On May 5, 1997, the last trading day prior to the announcement by the
Company and GenPharm that they had reached an agreement concerning the
Merger, the closing sale price of the Company's Common Stock as reported on
The Nasdaq National Market was $8.50 per share. On June 10, 1998, the last
trading date prior to the commencement of the Offer, the closing sale price
of a share of the Company's Common Stock as reported on The Nasdaq National
Market was $6.31.

8. CERTAIN INFORMATION CONCERNING THE COMPANY. The Company is incorporated
under the laws of the State of New Jersey and its principal executive offices
are located at 0000 Xxxxx 00 Xxxx, Xxxxxxxxx, Xxx Xxxxxx 00000 (telephone
(000) 000-0000).

The following description of the Company is derived from the Company's
Annual Report on Form 10-K for the year ended December 31, 1997 and filed
with the Commission on March 31, 1998 (the "1997 10-K").

The Company is engaged in the discovery and development of novel
therapeutics to treat cancer, autoimmune diseases and other life threatening
diseases based on its expertise in monoclonal antibodies and immunology.
Virtually all of the

Company's products are designed either to enhance and direct a specific
immune response or to block or diminish an undesired immunological activity.
The Company's broad technology platform has led to five products in clinical
trials and eight strategic alliances and includes: (i) bispecific antibodies
that are designed to attach to both disease targets and immune system killer
cells simultaneously; (ii) with the acquisition of Houston Biotechnology,
Incorporated, immunoconjugates, a monoclonal antibody linked to a toxin;
(iii) monoclonal antibodies; and (iv) with the acquisition of GenPharm, the
ability to create fully human monoclonal antibodies for itself and for
potential partners.

The Company files periodic reports, proxy statements and other
information with the Commission under the Exchange Act, relating to its
business, financial statements and other matters. The Company is required to
disclose in such proxy statements certain information, as of particular
dates, concerning its directors and officers, their remuneration, stock
options granted to them, the principal holders of the Company's securities,
and any material interests of such persons in transactions with the Company.
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 Room 0000, Xxxxxxxxx Xxxxx, 000 Xxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X.,
and at the Commission's regional offices located at 0 Xxxxx Xxxxx Xxxxxx,
Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000, Xxxxxxxx Xxxxxx, Xxxxx 0000, 000 Xxxx
Xxxxxxx, Xxxxxxx, Xxxxxxxx 00000, and at 0000 Xxxxxxxx Xxxxxxxxx, 00xx Xxxxx,
Xxx Xxxxxxx, Xxxxxxxxxx 00000-3648. Copies of such material can also be
obtained at prescribed rates from the Public Reference Section of the
Commission at 000 Xxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000. Copies may
also be obtained from the Commission's web page at: http:\\xxx.xxx.xxx.

Set forth below is certain summary consolidated financial information
with respect to the five years ended December 31, 1993, 1994, 1995, 1996 and
1997 of the Company and its consolidated subsidiaries, which is excerpted or
derived from the 1997 10-K, and certain unaudited consolidated summary
financial information with respect to the quarter ended March 31, 1998 which
is excerpted or derived from the March 10-Q. More comprehensive financial
and other information is included in such reports and other documents filed
by the Company with the Commission, and the following summary is qualified in
its entirety by reference to such reports and other documents and all of the
financial information and notes contained therein.

Year Ended December 31,
----------------------------

1993 1994 1995 1996 1997
---- ---- ---- ---- ----

(in thousands, except per share data)

Statement of Operations Data:

Revenues:

Sales $ 406 $ 378 $ 312 $ 255 $ 221

Grants, contract and license revenues -- 200 1,467 1,626 3,011
------- ------- ------- ------- -------

Total revenues 406 578 1,778 1,881 3,232

Costs and expenses:

Cost of sales 82 91 123 132 150

Research and development 3,797 5,905 6,442 7,596 14,100

General and administrative 2,361 2,154 2,275 2,558 3,644

Stock bonus to GenPharm
International, Inc. Employees -- -- -- -- 2,275

Acquisition of in-process technology -- -- -- -- 40,316
------- ------- ------- ------- -------

Total costs and expenses 6,240 8,150 8,840 10,286 60,486

Operating loss (5,834) (7,573) (7,062) (8,405) (57,254)

Interest and dividend income 419 337 553 1,537 1,876
------- ------- ------- ------- --------

Net loss $(5,415) $(7,236) $(6,509) $(6,868) $(55,377)
------- ------- ------- ------- --------
------- ------- ------- ------- --------

Basic and diluted net loss per share(1) $ (0.86) $ (1.00) $ (0.69) $ (0.45) $ (2.93)

Weighted average common shares

outstanding(1) 6,304 7,269 9,457 15,289 18,871

December 31,
----------------------------------------

1993 1994 1995 1996 1997
---- ---- ---- ---- ----

(in thousands)

Balance Sheet Data:

Cash, cash equivalents and marketable
securities

$ 9,687 $ 9,434 $ 15,729 $ 31,463 $ 28,444

Working capital 8,330 8,017 14,549 31,259 1,647

Total assets 12,640 13,017 19,240 36,044 48,695

Long-term obligations 78 60 40 110 107

Cash dividends declared per common share -- -- -- -- --

Accumulated deficit (10,877) (18,113) (24,623) (31,491) (86,869)

Total stockholders' equity 10,943 11,097 17,375 34,648 5,681

----------

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

Three Months Ended

March 31,
-------------------

(Unaudited)

1998 1997
------ ------

Statement of Operations Data:

Revenues:

Sales 59,213 50,163

Grants, contract and license revenues 1,254,345 400,177
--------- -------

Total revenues 1,313,558 450,340

Costs and expenses:

Cost of sales 131,351 38,485

Research and development 5,287,577 2,530,380

General and administrative 1,059,254 810,323

Acquisition of in-process technology -- 10,662,952
----------- ----------

Operating loss (5,164,624) (13,591,800)

Interest and dividend income 695,071 390,817

Interest expense 600,218 5,651
-------

Net loss (5,069,771) (13,206,634)
----------- ------------
----------- ------------

Basic and diluted net loss per share(1) $ (0.23) $ (0.74)

Weighted average shares outstanding 22,163,875 17,963,137

March 31, 1998
-----------------------

Actual As
-------- Adjusted(2)
--------

Balance Sheet Data:
(Unaudited)

Current assets, principally cash, cash
equivalents, notes receivable and
marketable securities

$36,911,455 $44,411,455

Property, plant and equipment, net 3,118,373 3,118,373

Investments in, and advances to affiliate 414,777 414,777

Other assets 1,217,245 1,217,245
----------- -----------

$41,661,850 $49,161,850
----------- -----------
----------- -----------

Current liabilities $39,852,244 $ 5,487,051

Other liabilities 87,018 87,018

Stockholders' equity 1,722,588 43,587,781
----------- -----------

$41,661,850 $49,161,850
----------- -----------
----------- -----------

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

(2) As adjusted to give effect to the issuance of the Shares in exchange for
the Rights pursuant to the Rights Exchange Agreement and the receipt of the
remaining Third Party Payments.

The information concerning the Company contained herein has been taken from
or is based upon documents and records on file with the Commission or otherwise
publicly available. Although the Purchaser has no knowledge that would indicate
that

any statements contained herein are untrue, the Purchaser cannot take
responsibility for the accuracy of the information or for any failure by the
Company to disclose events unknown to the Purchaser that may have occurred and
may affect the significance or accuracy of any such information.

9. CERTAIN INFORMATION CONCERNING THE PURCHASER.

The Purchaser, BCC Acquisition I LLC, is a manager-managed Delaware limited
liability company which has two members. One member, The Bay City Capital Fund
I, L.P. ("BCC"), is a Delaware limited partnership. BCC has committed to
provide $15,000,000 to the Purchaser. BCC is the manager of the Purchaser and
is an investment fund that solely invests in companies in the life sciences
industry. BCC has made $24,310,054 in investments within the past twelve months
and has undrawn committed funds of $75,689,946. The second member of the
Purchaser is Bay Investment Group, L.L.C., a Delaware limited liability company
("BIG"). XXX has committed to contribute all funds in excess of $15,000,000
needed to consummate the Offer. BIG has assets in excess of $23 million and has
undrawn committed funds of $63.9 million. BIG is ultimately owned by trusts for
the benefit of various members of the Pritzker family.

Other than the Rights Exchange Agreement or as elsewhere disclosed herein,
neither the Purchaser nor, to the best knowledge of the Purchaser, any of its
officers, directors or affiliates has any contract, arrangement, understanding
or relationship with any other person with respect to any securities of the
Company, including, but not limited to, the transfer or voting of such
securities, joint ventures, loan or option arrangements, puts or calls,
guaranties of loans, guaranties against loss or the giving or withholding of
proxies.

10. SOURCE AND AMOUNT OF FUNDS. The total amount of funds required by the
Purchaser to purchase the Rights pursuant to the Offer (not including related
fees and expenses) is estimated to be approximately $35,530,000 (the "Funds"),
assuming all $44,412,500 in aggregate Face Value of the Rights are assigned and
accepted for payment pursuant to the Offer.

The Purchaser has received a binding commitment to contribute $15,000,000
from BCC. BIG has made a binding commitment to contribute the balance of the
funds needed to consummate the Offer. The commitments are unconditional. The
Offer is not conditioned on financing.

11. PURPOSE OF THE OFFER. The primary purpose of the Offer is to acquire for
cash all of the Rights so that, upon exchange of the Rights for shares of
Company Common Stock under the Rights Exchange Agreement, the Purchaser will
have a significant

equity interest in the Company. Immediately upon the consummation of the Offer,
the Purchaser will exchange each $6.75 in Face Value of the Rights it acquires
in the Offer for (i) one Share of the Company's Common Stock (up to a maximum of
6,579,629 shares) plus a Warrant or Warrants to purchase .1222 shares of Common
Stock of the Company (up to a maximum of 804,000 shares) at an exercise price of
$10.00 per share exercisable over a period of seven years. In the event the
minimum amount of Rights are accepted for purchase by the Purchaser and assigned
to the Purchaser, the number of shares of Common Stock to be issued by the
Company to the Purchaser in exchange for the Rights will constitute
approximately 14% (or approximately 25% if all the Rights are assigned and
accepted for payment) of the number of shares of the Company's Common Stock that
will be outstanding following the completion of the Offer, in each case
including the shares that the Purchaser would hold upon exercise of the
Warrants.

Upon consummation of the Offer, Purchaser shall obtain representation on
the board of directors of the Company. Under the terms of the Rights Exchange
Agreement, the Company and the Purchaser have agreed that the Company will add
to its board of directors, on or before the Closing of the transactions
contemplated by the Rights Exchange Agreement, a person with substantial
experience and reputation in the biotechnology or pharmaceutical industries who
is nominated by the Purchaser and acceptable to the board of directors of the
Company. In addition, so long as the Purchaser owns at least 5% of the
Company's outstanding Common Stock or at least 75% of the number of shares of
Common Stock it received from the Company pursuant to the Rights Exchange
Agreement, the Company will use its reasonable best efforts to ensure that the
Purchaser's representative is included in the Company's proxy materials as a
nominee of the board of directors for election to the board and is elected to
serve on the Company's board of directors.

In addition, while no formal agreement currently exists as to any future
changes in the board of directors of the Company, discussions have taken place
between the Company and the Purchaser to the effect that it may be appropriate
for the addition of another new director who has substantial experience and
reputation in the biotechnology or pharmaceutical industry and who is deemed
mutually acceptable by the board of directors of the Company and the Purchaser.

The Purchaser does not presently have any plans to acquire control of the
Company, nor does it have any current plans relating to or which would result in
(i) an extraordinary corporate transaction relating to Company, (ii) the sale or
transfer of a material amount of the Company's assets, (iii) a change (beyond
that described above) in the Company's board of directors or management, (iv)
beyond that contemplated by the Offer and the Rights Exchange Agreement, any
material change in the Company's capitalization or dividend policy, (v) any
other material change to the Company's corporate structure and business, or (vi)
any distribution of the Company Common

Stock or termination of the registration of the Company's Common Stock under
Section 12 of the Exchange Act.

While the Purchaser presently intends to hold the shares of Common Stock it
acquires under the Rights Exchange Agreement, it reserves the right to either
acquire more such shares or sell, in any lawful manner, any or all of such
shares at any time. In this regard, the Purchaser notes that, pursuant to the
Rights Exchange Agreement, the Company has agreed within 30 days of the closing
of the Offer, to file a shelf registration statement covering the Shares of
Common Stock and the shares of Common Stock resulting from the complete exercise
of the Warrants to be acquired by the Purchaser as well as any resales thereof.

Upon consummation of the transactions contemplated by this Offer and by the
Rights Exchange Agreement, the Purchaser will be the beneficial owner of more
than 10% of the Company's Common Stock and as such will be an "interested
stockholder" as defined in the New Jersey Shareholders Protection Act ("NJSPA").
The NJSPA may prohibit certain future business combinations between the
Purchaser and the Company including a merger or consolidation, a sale, lease,
exchange, transfer or other disposition of 10% or more of the assets of the
Company.

12. CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other provisions of
the Offer, the Purchaser will not be required to accept for payment or pay for
any Rights assigned, or may terminate or amend the Offer, or may postpone the
acceptance for payment or payment for any Rights assigned, if fewer than
$22,206,250 (50%) in aggregate Face Value of the Rights are properly assigned
and the assignments are not revoked prior to the Expiration Date, or if at any
time before payment for any Rights assigned (whether or not any other Rights
have theretofore been accepted for payment or paid for pursuant to the Offer),
any of the following shall occur:

(a) any change (or any condition, event or development involving a
prospective change) shall have occurred or been threatened or shall have
become known to the Purchaser in the business, properties, assets,
liabilities, financial condition, operations, prospects or results of
operations of the Company or any of its subsidiaries or affiliates which
has or may have material adverse significance with respect to the Company
and its subsidiaries and affiliates, taken as a whole, or the value of the
Company's Common Stock.

(b) any (i) general suspension of, or limitation on prices for, trading in
securities on The Nasdaq National Market, (ii) declaration of a banking
moratorium or any suspension of payments in respect of federal or state
banks in the United States of any limitation on, or any other condition,
event or development which may affect, the extension of credit by lending
institutions in

the United States, or in any other country, (iii) commencement of a war,
armed hostilities or other international or national calamity directly or
indirectly involving the United States, (iv) material change in United
States or any other currency exchange rates or a suspension of, or
limitation on the market therefor or (v) in the case of any of the
foregoing existing at the time of commencement of the Offer, a material
acceleration or worsening thereof;

(c) the Company or any subsidiary or affiliate of the Company shall, on or
after June 10, 1998, have (i) issued or sold, or authorized or proposed the
issuance or sale of, any shares of capital stock of any class, or any
securities convertible into any such shares, or any rights, warrants or
options to acquire any such shares or convertible securities, except (a)
the issuance of shares upon the exercise, in accordance with the terms
thereof in effect on June 10, 1998, of employee stock options outstanding
on June 10, 1998, and (b) pursuant to the terms of any agreement with the
Company's strategic corporate partners as disclosed in the 1997 10-K and
the March 10-Q, (ii) issued, sold, authorized or proposed the issuance or
sale of any other securities in respect of, in lieu or in substitution for
shares of its Common Stock outstanding on June 10, 1998, (iii) declared or
paid any dividend or distribution on any shares of its capital stock, or
(iv) authorized, proposed, recommended or entered into or granted any
option or other right with respect to, or announced any intention to
authorize, propose, recommend or enter into or grant any option or right
with respect to any merger, consolidation, business combination,
acquisition of assets or securities, disposition of assets, disposition of
shares of a subsidiary or affiliate, or any material change in its
capitalization, any relinquishment of any material contractual rights, or
any comparable event not in the ordinary course of business or taken any
action to implement any such transaction previously authorized, recommended
or proposed, other than recommendations concerning the Offer;

(d) any action or proceeding shall be taken, instituted, proposed or
threatened, or any statute, rule, regulation or order shall be proposed,
introduced, enacted, promulgated, entered, enforced or deemed applicable to
the Offer by or before any domestic or foreign government, court, agency,
authority or instrumentality or any official or representative of any of
the foregoing (each being referred to herein as a "Governmental Agency") or
by any other person, domestic or foreign, which may (i) challenge the
making or completion of the Offer or closing of the transactions
contemplated by the Rights Exchange Agreement or otherwise directly or
indirectly relate to the making or completion of the Offer, or the
execution, delivery or performance by any party of the Rights Exchange
Agreement (ii) result in a delay in or restrict the ability of the
Purchaser to accept for payment or to pay for some or all of the Rights
pursuant to the Offer, or make the consummation of the Offer unduly
burdensome to the Purchaser, (iii) render the Purchaser unable to accept
for payment or to pay for

some or all of the Rights pursuant to the Offer, (iv) make the acceptance
for payment or payment for some or all of the Rights illegal or otherwise
restrict or prohibit consummation of the Offer (whether under any federal
or state law or otherwise), (v) seek to prohibit ownership or require the
divestiture by the Purchaser or any of the Purchaser's subsidiaries or
affiliates of any Rights or impose any limitation on the ability of any of
them to acquire or own Rights, (vi) impose any limitation on the ability of
the Purchaser or any of the Purchaser's subsidiaries or affiliates to
exercise effectively all rights of ownership with respect to the Rights or
the Shares, (vii) impose any limitation upon the ability of the Purchaser
or any of the Purchaser's subsidiaries or affiliates effectively to enforce
or enjoy the benefit of Purchaser's rights under the Rights Exchange
Agreement, (viii) prohibit or impose any limitation upon Purchaser's
ownership of the Rights, the Shares, or the Warrants or compel the
Purchaser or the Company to divest or hold separate all or any portion of
the business or assets of the Purchaser or the Company (including the
businesses or assets of any of their respective subsidiaries and
affiliates) or impose any limitation on any of them in the conduct of their
businesses, or (ix) otherwise adversely affect the Purchaser or the Company
or any of their respective subsidiaries or affiliates;

(e) the Company or any of its subsidiaries or affiliates shall have
proposed or adopted any amendment to any of their articles of incorporation
or bylaws or similar organizational documents, or the Purchaser shall have
learned that the Company or any of its subsidiaries or affiliates shall
have adopted any such amendment which shall not have been publicly
disclosed prior to June 10, 1998;

(f) any condition set forth in the Rights Exchange Agreement has not been
satisfied immediately prior to the Expiration Date or any impediment to
closing the transactions contemplated by the Rights Exchange Agreement
exists; or

(g) the failure of the Company to inform the Purchaser in writing
immediately prior to the Expiration Date that all conditions to Company's
obligations under the Rights Exchange Agreement have been satisfied or
waived and that Company will exchange all Rights purchased by Purchaser for
Shares and Warrants under the Rights Exchange Agreement;

which, in the sole judgment of the Purchaser with respect to each and every
matter referred to above and regardless of the circumstances, including any
action or omission by the Purchaser giving rise to any such condition, makes it
inadvisable to proceed with the Offer and/or with such acceptance for payment of
or payment for the Rights. Any determination by the Purchaser concerning the
events described in this Section 12 shall be final and binding upon all parties.
The foregoing conditions are for the sole benefit of the Purchaser and may be
waived by the Purchaser in whole or in part at any time and from time to time.

13. CERTAIN LEGAL MATTERS. GENERAL. Except as otherwise disclosed below,
neither the Company nor the Purchaser is aware of any license or regulatory
permit which appears to be material to the business of the Company and likely to
be adversely affected by the consummation of the transactions contemplated by
the Rights Exchange Agreement. Except as disclosed below, neither the Company
nor the Purchaser is aware of any approval or other action by any state, federal
or foreign governmental or administrative agency that would be required for the
acquisition of Rights by the Purchaser as contemplated herein. Should any such
license, permit, approval or other action be required, it is presently
contemplated that the same would be sought. There can be no assurance that any
license, permit, approval or other action, if needed, would be obtained without
substantial conditions or that adverse consequences might not have to be
disposed of in the event that such license, permit, or approval was not obtained
or any such other action was not taken. The Purchaser's obligation under the
Offer to accept for payment and pay for Rights is subject to certain conditions,
including conditions relating to the legal matters discussed in this Section.

ANTITRUST. The issuance of the Shares by the Company in exchange for the
Rights acquired by the Purchaser pursuant to the Offer (the "Rights Exchange")
is subject to the provisions of the H-S-R Act, which provides that certain
acquisition transactions may not be consummated until certain information has
been furnished to the Antitrust Division and the FTC and certain waiting period
requirements have been satisfied. Pursuant to the H-S-R Act, the Purchaser and
the Company intend to file a Notification and Report Form and certain
supplemental material with respect to the Rights Exchange with the Antitrust
Division and the FTC on or before June 17, 1998. Under the provisions of the
H-S-R Act applicable to the Rights Exchange, the issuance of the Shares by the
Company in exchange for the Rights acquired by the Purchaser pursuant to the
Offer may not be consummated until the expiration of a 30-calendar day waiting
period following the Purchaser's filing. Accordingly, the waiting period under
the H-S-R Act will expire at 11:59 p.m., New York City time, on the date which
is 30 days from the date of such filing, unless the Purchaser or the Company
receives a request for additional information or documentary material prior
thereto. If either the FTC or the Antitrust Division were to request additional
information or documentary material form the Purchaser or the Company, the
waiting period would expire at 11:59 p.m., New York City time, on the tenth
calendar day after the date of substantial compliance by the Purchaser or the
Company with such request. Thereafter, the waiting period could be extended
only by court order. If the Rights Exchange, and therefore, the acquisition of
the Rights pursuant to the Offer, is delayed by a request from the FTC or the
Antitrust Division for additional information or documentary material pursuant
to the H-S-R Act, the Offer may, but need not, be extended and, in any event,
the purchase of and payment for Rights pursuant to the Offer will be deferred
until 10 days after the request is substantially complied with, unless the
10-day extended period expires on or before the date when the initial 30-day
period would otherwise have expired or unless the waiting period is sooner
terminated by the FTC or the Antitrust Division. Any extension of the waiting
period will not give rise to any withdrawal rights not

otherwise provided for by applicable law (see Section 4). Although the Company
is required to file certain information and documentary material with the
Antitrust Division and the FTC in connection with the Rights Exchange, neither
the Company's failure to make such filings nor a request form the Antitrust
Division or the FTC for additional information or documentary material made to
the Company will extend the waiting period.

At any time before or after the Rights Exchange and the Purchaser's
acquisition of the Rights pursuant to the Offer, either the Antitrust Division
or the FTC, or both, could take such action under the antitrust laws as either
deems necessary or desirable in the public interest, or any other person could
take action under the antitrust laws, including seeking to enjoin the Rights
Exchange or seeking divestiture of the Shares acquired thereunder or the
divestiture of substantial assets of the Company or the Purchaser. Neither the
Purchaser nor the Company believe that the Purchaser's acquisition of the Offer
would violate the antitrust laws. However, there can be no assurance that a
challenge to the Rights Exchange on antitrust grounds will not be made or that,
if such a challenge is made, the Purchaser will prevail.

14. FEES AND EXPENSES. The Purchaser will not pay any fees or commissions to
any broker or dealer or any other person for soliciting assignments of Rights
pursuant to the Offer. Brokers, dealers, commercial banks and trust companies
will be reimbursed by the Company for customary mailing and handling expenses
incurred by them in forwarding offering materials to their customers.

The Company has retained Continental Stock Transfer & Trust Company as
Depositary in connection with the Offer. The Depositary will receive reasonable
and customary compensation for its services. The Company will also reimburse
the Depositary for out-of-pocket expenses, including reasonable attorneys' fees,
and has agreed to indemnify the Depositary against certain liabilities in
connection with the Offer, including certain liabilities in connection with the
Offer.

The Purchaser has retained Shareholder Communications Corporation as
Information Agent in connection with the Offer. The Information Agent will
receive reasonable and customary compensation for its services. The Purchaser
will also reimburse the Information Agent for out-of-pocket expenses, including
reasonable attorneys' fees, and has agreed to indemnify the Information Agent
against certain liabilities in connection with the Offer, including certain
liabilities in connection with the Offer.

Neither the Depositary nor the Information Agent has been retained to make
solicitations or recommendations with respect to the Offer.

15. MISCELLANEOUS. The Offer is not being made to, nor will assignments be
accepted front or on behalf of, Holders of Rights in any jurisdiction in which
the making or acceptance thereof would not be in compliance with the laws of
such jurisdiction.

No person has been authorized to give any information or make any
representation on behalf of the Purchaser other than as contained in this Offer
to Purchase or in the related Letter of Assignment and, if given or made, such
information or representation must not be relied upon as having been authorized.

BCC ACQUISITION I LLC

June 11, 1998

Facsimile copies of the Letter of Assignment will be accepted. The Letter
of Assignment and any other required documents should be sent or delivered to
the Depositary at one of its addresses set forth below:

THE DEPOSITARY:

CONTINENTAL STOCK TRANSFER & TRUST COMPANY
BY MAIL: BY FACSIMILE: BY HAND:
Continental Stock Transfer (000) 000-0000 Continental Stock Transfer
& Trust Company & Trust Company
0 Xxxxxxxx Confirm by Telephone: 0 Xxxxxxxx - 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx (000) 000-0000 Ext. 535 New York, New York
10004 10004

Continental Stock Transfer & (000) 000-0000 Continental Stock
Trust Company Transfer & Trust Company
0 Xxxxxxxx Confirm by Telephone 0 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000 (212) 509-4000, Ext. 535 New York, New York

Any questions or requests for assistance or for additional copies of
this Offer to Purchase or the Letter of Assignment may be directed
to the Information Agent at the telephone numbers and
addresses below. To confirm delivery for your Letter of
Assignment you are directed to contact the Depositary.

THE INFORMATION AGENT:

SHAREHOLDER COMMUNICATIONS CORPORATION
BY TELEPHONE:
(000) 000-0000

Confirm by Telephone:
(000) 000-0000 Ext. 535
(000) 000-0000, Ext. 493
(or call direct at)
(000) 000-0000

Document Metadata

Table of Contents

OFFER TO PURCHASE FOR CASH ANY OR ALL OF THE $44,412,500 AGGREGATE FACE VALUE (SUBJECT TO A $22,206,250 MINIMUM) OF CONTINGENT PAYMENT RIGHTS OF MEDAREX, INC. BY BCC ACQUISITION I LLC

Document Metadata