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.)

Exelexis suspends XL999 P2 trials

EXEL suspended enrollment of patients in the Phase II cancer program for XL999 after a preliminary review showed four out of 14 patients enrolled during October experienced serious adverse cardiovascular events. EXEL said 12 out of 117 patients had experienced serious cardiovascular events through the end of September. Because all but one of the events occurred on first administration, EXEL is continuing to treat the patients already enrolled in the trial. To date, 115 of the 131 patients enrolled have received repeated doses with no cardiac toxicities. Dosing has been every week or every other week, ranging from two doses (two weeks) to 53 doses (about two years). EXEL expects enrollment to be suspended for two weeks to three months while it reviews data. XL999 is a spectrum selective inhibitor of VEGF, FGF and platelet derived growth factor (PDGF) receptors and FMS-like tyrosine kinase 3 (FLT3). On Thursday, EXEL fell $1.13 (12%) to $8.21.