Medarex

(MEDX)

shares jumped early Monday after the biotech company announced a drug development agreement with

Bristol-Myers Squibb

(BMY) - Get Report

.

The companies will collaborate to develop and commercialize MDX-010, an antibody currently in phase III clinical development for the treatment of metastatic melanoma. The collaboration also includes MDX-1379, a vaccine. Under terms of the deal, Medarex will receive an initial cash payment of $50 million -- half will be a purchase of Medarex's common stock by Bristol-Myers.

The Princeton, N.J.-based company also reported a net loss of $55, or 68 cents a share, in the third quarter, compared with a loss of $33.3 million, or 43 cents a share, a year go. Revenue increased by $1.4 million to $3.7 million.

Medarex is focused on the discovery and development of fully human antibody-based therapeutics to treat diseases such as cancer.

Shares rose $1.11, or 13.2%, to $9.50 in premarket trading. Bristol-Myers Squibb shares ended at $23.90 Friday.