Exelixis and Bristol-Myers Squibb to Co-Develop XL139, an Inhibitor of the Hedgehog...

Exelixis and Bristol-Myers Squibb to Co-Develop XL139, an Inhibitor of the
Hedgehog Pathway
- Exelixis will receive $20 million milestone payment and will share U.S.
profits 50/50 -

SOUTH SAN FRANCISCO, Calif., Jan. 22 /PRNewswire-FirstCall/ -- Exelixis,
Inc. (Nasdaq: EXEL) today announced that Bristol-Myers Squibb Company
(NYSE: BMY) has exercised its option to develop and commercialize Exelixis'
compound XL139. Under the terms of the collaboration agreement between the two
companies, which became effective in January 2007, the selection of XL139 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 XL139 in the United States.
Following the transfer of the XL139 development program, which is expected to
occur promptly, Bristol-Myers Squibb will lead all global activities. The
parties will co-develop and co-commercialize XL139 in the U.S. and share those
profits 50/50. Exelixis will be entitled to receive double-digit royalties on
product sales outside of the U.S.
XL139 is a small molecule inhibitor of the hedgehog pathway. Hedgehog
signaling is deregulated in a variety of cancers and the pathway is a
promising target for novel cancer therapies.
"I am pleased that Bristol-Myers Squibb shares our enthusiasm for the
potential of hedgehog pathway modulators and of XL139 in particular. This is
an exciting pathway with therapeutic potential for a number of solid tumor
types," said George A. Scangos, Ph.D., president and chief executive officer
of Exelixis. "Bristol-Myers Squibb has substantial expertise in
commercializing innovative cancer therapies, and we are excited to have
another opportunity to work with and learn from our Bristol-Myers Squibb
colleagues. We expect that Bristol-Myers Squibb's resources will help speed
the development of this novel compound designed to inhibit an important
cancer-related pathway. This will enable us to deploy our internal resources
on our proprietary assets."
Dr. Scangos added, "We are executing a partnership strategy that is
designed to provide near- and long-term opportunities for value creation. The
selection of XL139 exemplifies what we intend to achieve with this strategy:
Bristol-Myers Squibb's expertise and capabilities will enhance the development
of the compound. The $20 milestone payment adds to our financial resources to
support our key proprietary programs. And, the 50/50 profit share in the U.S.
on XL139 provides the potential for substantial long-term revenues. We have
worked with Bristol-Myers Squibb for a number of years, and the selection of
this compound is another indication of the success of this collaboration."
Under the terms of the companies' collaboration agreement, Exelixis
deploys its drug discovery platform and is fully responsible for the
identification and preclinical development of small molecule drug candidates
directed against mutually selected targets. Bristol-Myers Squibb has the right
to select up to three IND candidates against three different targets.
Following selection by Bristol-Myers Squibb, Bristol-Myers Squibb will lead
all global activities, although the parties will co-develop and co-
commercialize the programs in the United States. Bristol-Myers Squibb made an
upfront payment of $60 million in cash to Exelixis in January 2007, when the
collaboration became effective. The terms of the agreement provide for
Exelixis to receive $20 million for each of up to three different drug
candidates selected by Bristol-Myers Squibb at IND. For each candidate
selected by Bristol-Myers Squibb, the parties plan to share equally
development costs, commercial profits and co-promotion responsibilities in the
United States, and Exelixis will receive royalties on product sales outside of
the United States. 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, Exelixis will receive milestones
and royalties in lieu of a U.S. profit share.
About XL139
XL139 is a small molecule inhibitor of the hedgehog signaling pathway.
Hedgehog plays a critical role in regulating cell growth, proliferation and
differentiation in normal development. The pathway is deregulated in basal
cell carcinoma, medulloblastoma, glioblastoma, multiple myeloma and pancreatic
and a variety of other cancers. Inappropriate activation of hedgehog can
result from activating mutations, loss of repressors or overexpression of
factors that stimulate the pathway. Signaling through hedgehog also has been
shown to stimulate production of angiogenic and survival factors, both in
tumor cells and in the surrounding stromal tissue. In addition, recent data
suggest that hedgehog signaling may play a key role in cancer stem cell (CSC)
proliferation and the resistance of CSCs to chemotherapeutics and
radiotherapy.
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 2 and phase 1
clinical development for cancer and renal disease. Exelixis has established
strategic corporate alliances with major pharmaceutical and biotechnology
companies, including GlaxoSmithKline, Bristol-Myers Squibb Company, Genentech,
Wyeth Pharmaceuticals and Daiichi-Sankyo. For more information, please visit
the company's web site at http://www.exelixis.com.
Forward-Looking Statements
This press release contains forward-looking statements, including, without
limitation, statements related to the future development and potential
efficacy of XL139, Exelixis' potential receipt of milestone payments and
royalties under its collaboration with Bristol-Myers Squibb, related costs and
payments under the collaboration, potential long-term revenues and the
transfer of the XL139 development program. Words such as "expect," "will,"
"potential," "intend," "plan" and similar expressions are intended to identify
forward-looking statements. These forward-looking statements are based upon
Exelixis' current 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 XL139 to demonstrate safety and
efficacy in clinical testing 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 30, 2007 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.
SOURCE Exelixis, Inc.

Soleil Maxwell Harrison, Senior Manager, Corporate Communications of Exelixis,
Inc., +1-650-837-7012, sharriso@exelixis.com; Investor Contact: Charles
Butler, Senior Director, Corporate Communications of Exelixis, Inc.,
+1-650-837-7277, cbutler@exelixis.com