Exelixis Will Receive $20 Million Milestone Payment and Will Share U.S. Profits 50/50

SOUTH SAN FRANCISCO, Calif., Nov 24, 2008 (BUSINESS WIRE) -- Exelixis, Inc. (Nasdaq:EXEL) today announced that Bristol-Myers Squibb Company (NYSE:BMY) has exercised its option to develop and commercialize Exelixis' investigational new drug (IND) candidate XL413, a selective inhibitor of Cdc7. Under the terms of the collaboration agreement between the two companies, which became effective in January 2007, the selection of XL413 by Bristol-Myers Squibb entitles Exelixis to a milestone payment of $20 million. In addition, Exelixis has exercised its option under the collaboration agreement to co-develop and co-commercialize XL413 in the United States. Following the transfer of the XL413 development program, which is expected to occur promptly, Bristol-Myers Squibb will lead all global activities. The parties will co-develop and co-commercialize XL413 in the United States and share those profits 50/50. Exelixis will be entitled to receive double-digit royalties on product sales outside of the United States.

XL413 is the second compound selected by Bristol-Myers Squibb in this collaboration. Previously, in January 2008, Bristol-Myers Squibb exercised its option to select XL139, an inhibitor of the hedgehog signaling pathway, for further development and commercialization.

"To our knowledge, no other selective inhibitors of Cdc7 have advanced to this stage of preclinical development, giving XL413 the potential to become a first-in-class therapy," said Michael M. Morrissey, PhD, President of Research and Development at Exelixis. "Our colleagues at Bristol-Myers Squibb have substantial expertise in developing and commercializing innovative cancer therapies, and we are excited to have another opportunity to work with them."

"Providing innovative medicines to patients with cancer is central to our company's mission," said Francis Cuss, Senior Vice President, Discovery and Exploratory Clinical Research. "Cdc7 inhibition represents a novel approach to cancer treatment and we are pleased to add XL413 to our growing pipeline of cancer compounds, and to further expand our productive collaborations with Exelixis."

About XL413

XL413 is a small molecule inhibitor of the serine-threonine kinase Cdc7. The function of Cdc7 is required for DNA replication to proceed, and its activity is often upregulated in cancer cells. Studies suggest that Cdc7 plays a role in regulation of cell cycle checkpoint control and protects tumor cells from apoptotic cell death during replication stress. Therefore, inhibition of Cdc7 may have utility in the treatment of a wide variety of cancers, either as a single agent or in combination with DNA damaging agents.

Background on the Collaboration Agreement

Under the terms of the agreement, Exelixis is fully responsible for the identification and preclinical development of small molecule drug candidates directed against mutually selected targets. In addition to an upfront payment of $60 million in January 2007, the agreement provides for Exelixis to receive $20 million for each of up to three different IND-stage drug candidates selected by Bristol-Myers Squibb. For each candidate selected by Bristol-Myers Squibb, Exelixis has the right to opt in to the co-development or co-promotion in the United States. If Exelixis does not opt in to co-promote the selected IND candidates, Exelixis would be entitled to receive milestones and royalties in lieu of profits from sales in the United States. Outside of the United States, Bristol-Myers Squibb will have primary responsibility for development activities and Exelixis will be entitled to receive royalties on product sales.

In January 2008, Bristol-Myers Squibb selected XL139, a small molecule inhibitor of the hedgehog signaling pathway, for further development and commercialization. In connection with this selection, Exelixis received a $20 million milestone payment and also exercised its option under the collaboration agreement to co-develop and co-commercialize XL139 in the United States. Following the transfer of the XL139 development program in mid-2008, Bristol-Myers Squibb has been leading all global activities for that program.

About Exelixis

Exelixis, Inc. is a development-stage biotechnology company dedicated to the discovery and development of novel small molecule therapeutics for the treatment of cancer and other serious diseases. The company is leveraging its fully integrated drug discovery platform to fuel the growth of its development pipeline, which is primarily focused on cancer. Currently, Exelixis' broad product pipeline includes investigational compounds in phase 3, phase 2, and phase 1 clinical development. Exelixis has established strategic corporate alliances with major pharmaceutical and biotechnology companies, including GlaxoSmithKline, Bristol-Myers Squibb, Genentech, Wyeth Pharmaceuticals, and Daiichi-Sankyo. For more information, please visit the company's website at http://www.exelixis.com.

Forward-Looking Statements

This press release contains forward-looking statements, including, without limitation, statements related to Exelixis' potential receipt of royalties under the collaboration with Bristol-Myers Squibb, statements related to the co-development and co-commercialization of XL413, Exelixis' related costs and payments under the collaboration with Bristol-Myers Squibb, expected timing for the transfer of the XL413 development program to Bristol-Myers Squibb, and the potential for XL413 to become a first-in-class therapy. Words such as "will," "expected," "potential," and similar expressions are intended to identify forward-looking statements. These forward-looking statements are based upon Exelixis' current plans, assumptions, beliefs, and expectations. Forward-looking statements involve risks and uncertainties. Exelixis' actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties, which include, without limitation, risks related to the potential failure of XL413 to demonstrate safety and efficacy in clinical testing, the therapeutic and commercial value of XL413 and risks related to Exelixis' relationship with Bristol-Myers Squibb. These and other risk factors are discussed under "Risk Factors" and elsewhere in Exelixis' quarterly report on Form 10-Q for the quarter ended September 26, 2008, and Exelixis' other filings with the Securities and Exchange Commission. Exelixis expressly disclaims any duty, obligation, or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Exelixis' expectations with regard thereto or any change in events, conditions, or circumstances on which any such statements are based.

Exelixis and the Exelixis logo are registered U.S. trademarks.

SOURCE: Exelixis, Inc.

Exelixis, Inc.
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