Exelixis is like butter.....

because they're on a ROLL!

In addition to last month's BMS deal ($60M upfront + $20M each for 3 INDs selected by BMS.) EXEL has just optioned to Genentech XL518 - a MEK inhibitor just filed as an IND last month.

From the press releases, this looks like a great deal for both sides. It appears that EXEL is on the hook for all phase I expenses, and DNA can then decide whether to execute a pre-negotiated license prior to phase II. Assuming conversations have been going on for a while, DNA waited until IND-ready, and still is only obligated to spend the upfront payment on the program - depending on terms, DNA might be thinking it's worth the upfront fee just to control the rights to see the Phase I data on a compound targeting a 'new' kinase.

From EXEL's side, their financial risk is the phase I trials expenses, which I'm sure that they can handle financially (if it's not less than the DNA upfront), while booking a partner early on for a pioneering program. (It seems a law of biotech that I'll have to put some more thought into before writing too much that you should partner early on novel leads to novel targets, and partner later for novel leads to established targets.)

DNA is offering $40M in upfront and milestone payments. I'd REALLY like to know the split on that - $20M signing (based on BMS precedent last month) + $10M @ exercise + $10M for P2 milestone?)

(It could be as high as $40M upfront and after nominal milestones, as the press releases speak of additional payments should DNA exercise (after phase I).)

Kudos to EXEL for retaining US sales rights. They've drawn a top-notch partner to XL518, without tieing themselves so tightly to the partner that they become a single-buyer M&A candidate (like ImClone or Onyx.)

(EXEL seems to have done a great job to date in spreading around their connections (and future M & A interest) via partnerships with BMS, DNA, and GSK, to name a few.)