Exelixis Retains Rights to Develop and Commercialize XL184

Exelixis Also Retains Rights to XL281, XL228, XL820, and XL844
SOUTH SAN FRANCISCO, Calif.--(Business Wire)--
Exelixis, Inc. (Nasdaq:EXEL) today announced that GlaxoSmithKline
(GSK) (LSE: GSK; NYSE: GSK) has decided not to exercise its option to
license XL184. GSK also informed Exelixis that it had decided not to
license the earlier compounds in the collaboration, including XL281,
XL228, XL820, and XL844. As a result, Exelixis retains the rights to
develop, commercialize, and/or license all of the compounds, subject
to payment to GSK of a 3% royalty on net sales of any product
incorporating XL184. With GSK's decision not to exercise an option to
any of the compounds, the six-year collaboration between Exelixis and
GSK to discover and develop oncology compounds comes to an end. GSK
will continue development and commercialization of XL880, a compound
developed under the collaboration and previously in-licensed by GSK,
with potential additional milestone payments of up to $90 million and
double-digit royalty payments to Exelixis on XL880's successful
development and commercialization. Encouraging data on several of the
compounds, including XL184 (MET, RET, VEGFR2), XL281 (RAF), and XL228
(BCR-ABL, IGF1R, SRC), were presented at the EORTC-NCI-AACR meeting
this week, and there will be additional data presented on XL228 at the
American Society of Hematology (ASH) meeting in December.

"We are pleased to retain the rights to develop and commercialize
XL184," said George A. Scangos, PhD, President and Chief Executive
Officer of Exelixis. "This compound is our most advanced asset with a
promising mechanism of action. It has generated compelling data in
patients with medullary thyroid cancer, and data emerging from the
phase 2 trial being conducted in patients with glioblastoma also are
encouraging. We recently initiated a phase 3 registration trial for
XL184 in MTC, and we look forward to the successful progress of this
and other trials for the compound. We have had a significant number of
inquiries about our willingness to partner the program and we are
exploring all options to advance the program and maximize its value to
the company. Additionally, we believe data recently presented on XL281
and XL228, and additional data that will be presented for XL228 later
this year, indicate that they also have substantial potential as
anti-cancer agents."

"Exelixis now has the rights to XL184, XL281, XL228, as well as
two earlier compounds, XL844 and XL820," Dr. Scangos continued. "These
compounds, together with the compounds already in Exelixis'
proprietary clinical pipeline, XL147, XL765, XL019, and XL888,
comprise a deep pipeline of promising oncology compounds. The clarity
achieved through the expiration of the collaboration will allow
Exelixis to further define its clinical, commercial, and financial
strategies, which will become apparent over the next few months."

Paolo Paoletti, MD, Senior Vice President of GSK Oncology R&D,
commented, "GSK and Exelixis have successfully concluded this
long-term collaboration which has resulted in the discovery and
development of a number of promising compounds with potential benefit
to cancer patients."

Additional clinical studies with XL184 are ongoing to complement
the pivotal trial in patients with MTC. This is part of Exelixis'
strategy to rapidly advance compounds into areas of high unmet medical
need, while potentially expanding into broader commercial markets by
demonstrating activity in major tumor types. A phase 1b/2 trial of
XL184 as a single agent and in combination with erlotinib was recently
initiated in patients with non-small cell lung cancer. In addition, a
phase 2 study of XL184 in patients with glioblastoma multiforme is
ongoing.

Background on Exelixis-GSK Collaboration

In October 2002, Exelixis and GSK established a broad alliance to
discover, develop, and commercialize novel therapeutics in the areas
of vascular biology, inflammatory disease, and oncology. Under the
terms of the collaboration, Exelixis was required to deliver to GSK a
number of small molecule compounds that met agreed-upon
proof-of-concept criteria, and GSK had the right to select up to two
of the compounds for further development and commercialization. GSK
previously selected XL880, and it has now decided not to select any of
the compounds remaining in the collaboration: XL184, XL281, XL228,
XL820, and XL844. Exelixis and GSK will bring their six-year
collaboration to a successful conclusion on October 27, 2008, as
scheduled. Exelixis will have full rights to compounds not selected by
GSK and may, either alone or in collaboration with partners, advance
the development and commercialization, in some cases with a small
royalty to GSK on sales of collaboration compounds not selected by
GSK. As a result of the conclusion of the collaboration, Exelixis'
exclusivity obligations will be limited to the compounds selected by
GSK. Exelixis will have the right to perform additional discovery,
development, and commercialization efforts against any collaboration
target or compound that does not infringe upon the intellectual
property associated with compounds selected by GSK for further
development and commercialization.

About XL184

XL184 inhibits MET, RET, and VEGFR2, which are key drivers of
tumor growth, metastasis, survival, and angiogenesis. In
pharmacodynamic studies in mice, oral administration of XL184 resulted
in balanced and durable inhibition of these targets. The compound has
also shown activity against common mutant forms of RET and MET. XL184
has exhibited dose-dependent tumor growth inhibition and tumor
regression in a variety of preclinical tumor models, including breast
cancer, colon cancer, MTC, non-small cell lung cancer, and
glioblastoma. In July 2008, on the basis of the encouraging phase 1
trial data, Exelixis initiated a phase 3 registration trial of XL184
for the potential treatment of MTC. Exelixis and the U.S. Food and
Drug Administration had previously reached agreement on this phase 3
registration trial via the Special Protocol Assessment process.

About Medullary Thyroid Cancer

The American Cancer Society estimates that MTC accounts for 5% of
all thyroid cancers. MTC occurs in sporadic and inherited forms
(approximately 80% and 20% of MTC, respectively). Patients with the
inherited form of MTC invariably have an activating mutation in RET in
their germline DNA. Activating mutations in RET are also present in
the tumor DNA of up to 50% of sporadic MTC patients with no familial
history of thyroid cancer. MTC may metastasize to lymph nodes or other
organs before it is ever diagnosed. Additionally, MTC does not take up
radioactive iodine, which is commonly used to treat other types of
thyroid cancers and to diagnose metastases. As a result, MTC is more
difficult to treat than other thyroid cancers. There are no approved
therapies for MTC; however, common treatments for MTC include surgery
to remove malignant tissue, radiation therapy, and chemotherapy, all
of which are associated with potential side effects, some of which may
be long-term.

About XL228

XL228 is a protein kinase inhibitor with potent activity against
wild-type and the T315I mutant forms of BCR-ABL, with additional
activity against IGF1R, SRC, and Aurora A. These targets play crucial
roles in cancer cell proliferation, survival, and metastasis. XL228
blocks downstream signaling from BCR-ABL T315I in cell lines and
modulates phosphorylated CrkL levels in mouse xenografts consistent
with inhibitory activity against BCR-ABL in vivo. XL228 has exhibited
activity in a variety of solid tumor xenograft models.

About XL281

XL281 is a novel small molecule designed to selectively inhibit
RAF kinases, which lie immediately downstream of RAS and are key
components of the RAS/RAF/MEK/ERK kinase signaling pathway. Genetic
lesions that activate this pathway are common in human tumors, with
activating mutations in KRAS occurring in 30 percent of tumors and
activating mutations in BRAF occurring in approximately 60 percent of
melanomas. The RAS/RAF/MEK/ERK pathway also plays a key role in the
transmission of growth-promoting signals downstream of receptor
tyrosine kinases. This suggests that deregulation of this pathway
plays a pivotal role in the progression of many human tumors, and that
inhibition of the pathway may be useful in the treatment of cancer.
XL281 potently inhibits BRAF, mutationally activated BRAF, and CRAF in
vitro, and does not interact with kinases outside of the RAF family.
XL281 displays high oral bioavailability in multiple preclinical
species, and strongly inhibits RAS/RAF/MEK/ERK signaling in human
xenograft tumor models. This translates into substantial inhibition of
tumor growth in preclinical models of human tumors that overexpress
receptor tyrosine kinases or harbor activating mutations in RAS or
RAF.

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 the continued development of
XL880; potential milestone and royalty payments from GSK upon XL880's
successful development and commercialization; future data
presentations on XL228; potential for XL281 and XL228 as anti-cancer
agents; progress and outcome of the phase 3 registration trial for
XL184 in MTC and other trials for the compound; Exelixis' efforts to
advance the XL184 program and maximize its value for the company;
Exelixis' belief as to the quality of its pipeline of oncology
compounds; the further definition and future visibility of Exelixis'
clinical, commercial and financial strategies; Exelixis' strategy to
rapidly advance compounds into areas of high unmet medical need and
expand into broader commercial markets; and the potential inhibition
by XL281 of BRAF, mutationally activated BRAF, and CRAF. Words such as
"continue," "look," "believe," "potential," "will," "promising," 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: timely
receipt of potential milestones and royalties from GSK; availability
of data at the referenced times; the potential failure of XL880,
XL184, XL228, XL281, XL844 and XL820 to demonstrate safety and
efficacy in clinical testing; the therapeutic and commercial value of
XL184, XL228, XL281, XL844, XL820 and Exelixis' other compounds; the
ability to conduct clinical trials for XL184, XL228, XL281, XL844,
XL820 and Exelixis' other compounds sufficient to achieve a positive
completion; the timing and level of expenses associated with the
growth of Exelixis' proprietary programs; Exelixis' ability to enter
into new collaborations; and Exelixis' ability to execute upon its
strategies. These and other risk factors are discussed under "Risk
Factors" and elsewhere in Exelixis' quarterly report on Form 10-Q for
the quarter ended June 27, 2008, and 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.

Exelixis, Inc.
Charles Butler, 650-837-7277
Senior Director
Corporate Communications & Investor Relations
cbutler@exelixis.com
Soleil Harrison, 650-837-7012
Senior Manager
Corporate Communications
sharrison@exelixis.com

Copyright Business Wire 2008