Exelixis Announces Third Quarter 2009 Financial Results

http://www.businesswire.com/news/home/20091029006447/en

SOUTH SAN FRANCISCO, Calif.--(Business Wire)--
Exelixis, Inc. (Nasdaq:EXEL) today reported financial results for the third
quarter ended September 30, 2009.

Revenues for the quarter ended September 30, 2009 were $55.0 million, compared
to $29.9 million for the comparable period in 2008. The increase from 2008 to
2009 primarily reflects the increase in revenue relating to our new
collaborations with sanofi-aventis for XL147 and XL765, Bristol-Myers Squibb
Company for XL184 and XL281 and Boehringer Ingelheim for the S1P1 agonist
program partially offset by the conclusion of the research term of various
collaboration agreements with GlaxoSmithKline, Bristol-Myers Squibb Company and
Genentech.

Research and development expenses for the quarter ended September 30, 2009 were
$60.2 million, compared to $65.7 million for the comparable period in 2008. The
decrease from 2008 to 2009 primarily reflects decreased personnel costs due to
our November 2008 restructuring, the impact from other cost containment measures
initiated in 2008, and the wind down of development expenses for discontinued
programs, which were partially offset by increased development activities
related mainly to XL184.

General and administrative expenses for the quarter ended September 30, 2009
were $8.6 million, compared to $8.9 million for the comparable period in 2008.
The decrease from 2008 to 2009 was primarily due to decreased personnel costs
due to our November 2008 restructuring, partially offset by an increase in
facilities costs.

Collaboration cost-sharing for the quarter ended September 30, 2009 was $3.0
million and reflects the net impact of the amount due under our 2008
collaboration agreement with Bristol-Myers Squibb Company for expenses incurred
by Bristol-Myers Squibb Company on XL184 offset by our spend on XL281.

Provision for income taxes for the quarter ended September 30, 2009 reflected
the net impact of $7.0 million of withholding taxes to the French authorities
associated with our license and collaboration agreement with sanofi-aventis,
partially offset by a $0.1 million refundable income tax credit generated in
2009 by the Housing and Economic Recovery Act of 2008.

Net loss attributable to Exelixis, Inc. for the quarter ended September 30, 2009
was $25.4 million, or $0.24 per share, compared to $38.5 million, or $0.36 per
share, for the comparable period in 2008. The decrease in net loss attributable
to Exelixis, Inc. from 2008 to 2009 was primarily due to increased revenues from
our various collaborations as described above.

Cash and cash equivalents, short-term and long-term marketable securities, and
restricted cash and investments totaled $301.0 million at September 30, 2009,
compared to $284.2 million at December 31, 2008, which also included investments
held by Symphony Evolution, Inc. (a consolidated clinical development financing
vehicle).

2009 Q3 Business Highlights

* Received $140 million (less applicable tax withholding) from sanofi-aventis
upon successful closing of the licensing and collaboration agreements announced
in June 2009. The global license agreement covers XL147 and XL765. The broad
collaboration agreement covers the discovery of inhibitors of phosphoinositide-3
kinase (PI3K) for the treatment of cancer.
* Advanced broad development efforts with Bristol-Myers Squibb Company and
sanofi-aventis for the XL184 and PI3K (XL147 and XL765) programs, respectively.
* Thirteen abstracts were submitted and accepted for presentation at the
European Organisation for Research and Treatment of Cancer (EORTC) meeting in
November 2009 which includes XL147, XL765, XL139 and multiple preclinical
compounds.

"During the third quarter we got off to a great start with sanofi-aventis and
made substantial progress in our PI3K programs. We also moved XL184 aggressively
forward with BMS, and have implemented a development and commercial strategy
that we believe provides a clear regulatory path to approval and the potential
for substantial revenue downstream. The majority of our clinical programs are
progressing rapidly, and we look forward to presenting data on our compounds at
the EORTC meeting in November and at ASCO next summer," said George A. Scangos,
Ph.D., president and chief executive officer of Exelixis. "Our ability to
execute our partnering strategy has led to large, aggressive programs, with
hundreds of millions of dollars being committed by our partners across our three
lead compounds. At the same time we have brought in substantial cash from the
upfront payments, and we are optimistic about additional cash inflows from
milestones and additional partnerships in the future."

Update to Financial Outlook

We are updating our financial guidance for the full year 2009 by reducing the
expected range of our operating expenses to $270 million - $290 million from our
previous guidance of $290 million - $320 million. The change in operating
expense guidance primarily reflects continued cost savings throughout 2009 as
well as more clarity into the development programs for XL184 and our PI3K assets
as a result of the evolving discussions under our collaborations with
Bristol-Myers Squibb Company and sanofi-aventis. We continue to expect revenues
in the range of $140 million to $170 million for the full year 2009 and our
cash, cash equivalents, short-term and long-term marketable securities and
restricted cash balance at the end of 2009 to exceed $200 million.

Conference Call and Webcast

Exelixis` management will discuss the company`s third quarter ended September
30, 2009 financial results and the company`s full year 2009 financial outlook,
and will provide a general business update, during a conference call beginning
at 2:00 p.m. PDT/5:00 p.m. EDT today, Thursday, October 29, 2009. To listen to a
webcast of the discussion, visit the Event Calendar page under Investors at
www.exelixis.com.

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
Bristol-Myers Squibb, sanofi-aventis, GlaxoSmithKline, Genentech, Boehringer
Ingelheim, Wyeth Pharmaceuticals, and Daiichi-Sankyo. For more information,
please visit the company`s web site at www.exelixis.com.

Basis of Presentation

Exelixis has adopted a 52- or 53-week fiscal year that ends on the Friday
closest to December 31st. For convenience, references in this press release as
of and for the fiscal year ended January 2, 2009 are indicated on a calendar
year basis, ended December 31, 2008 and as of and for the fiscal quarters ended
September 26, 2008 and October 2, 2009 are indicated as ended September 30, 2008
and 2009, respectively.

Forward-Looking Statements

This press release contains forward-looking statements, including, without
limitation, statements related to Exelixis` belief that the development and
commercial strategy developed with Bristol-Myers Squibb Company for XL184
provides a good regulatory path to approval and the potential for substantial
downstream revenue; the anticipated presentation of data at EORTC in November
and at ASCO next summer; Exelixis` optimistic view about additional cash inflows
from milestones and additional partnerships in the future; and Exelixis`
forecast of 2009 year-end operating expenses, revenue and cash, cash
equivalents, short-term and long-term marketable securities and restricted cash
balance. Words such as "believe," "potential," "look forward," "optimistic,"
"expect," "continue," 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
Exelixis` compounds to demonstrate safety and efficacy in clinical testing; the
therapeutic and commercial value of Exelixis` compounds; the ability to conduct
clinical trials for Exelixis` compounds sufficient to achieve a positive
completion; Exelixis` ability to enter into new partnerships and collaborations;
Exelixis` ability to execute upon its development and commercial strategies; the
timely receipt of license payments, research funding, milestones and royalties
under Exelixis` collaborative agreements; Exelixis` dependence on its
relationships with its partners; and changes in economic and business
conditions. These and other risk factors are discussed under "Risk Factors" and
elsewhere in Exelixis` quarterly report on Form 10-Q for the quarter ended
October 2, 2009, 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.
CONSOLIDATED STATEMENT OF OPERATIONS DATA
(in thousands, except per share data)
(unaudited)

Three Months Ended Nine Months Ended

Sept 30,
Sept 30,
2009 2008 2009 2008
Revenues:
Contract $ 24,608 $ 16,665 $ 37,615 $ 52,047
License 30,368 13,267 70,066 36,240
Total revenues 54,976 29,932 107,681 88,287

Operating expenses:
Research and development 60,186 65,670 170,567 200,512
General and administrative 8,643 8,867 25,910 27,786
Collaboration cost sharing 2,965 - 2,807 -
Total operating expenses 71,794 74,537 199,284 228,298

Loss from operations (16,818 ) (44,605 ) (91,603 ) (140,011 )

Other income (expense):
Interest income and other, net 355 1,090 1,276 5,072
Interest expense (2,122 ) (2,171 ) (6,356 ) (4,386 )
Gain on sale of business - 4,500 1,800 4,500
Loss on deconsolidation of Symphony Evolution, Inc. - - (9,826 ) -
Total other income (1,767 ) 3,419 (13,106 ) 5,186

Consolidated loss before taxes (18,585 ) (41,186 ) (104,709 ) (134,825 )
Provision for Income Taxes (6,860 ) - (6,014 ) -

Consolidated net loss (25,445 ) (41,186 ) (110,723 ) (134,825 )

Loss attributed to noncontrolling interest - 2,680 4,337 9,920

Net loss attributable to Exelixis, Inc. $ (25,445 ) $ (38,506 ) $ (106,386 ) $ (124,905 )
Net loss per share, basic and diluted attributable to Exelixis, Inc. $ (0.24 ) $ (0.36 ) $ (1.00 ) $ (1.19 )

Shares used in computing basic and diluted net loss per share 107,336 105,548 106,853 105,294

EXELIXIS, INC.
CONSOLIDATED BALANCE SHEET DATA
(in thousands)

September 30, December 31,
2009 2008 (1)
(unaudited)

Cash and cash equivalents and short-term and long-term marketable securities (2) $ 301,027 $ 284,185

Working capital $ 91,527 $ 82,028

Total assets $ 421,102 $ 401,622

Stockholders' deficit $ (142,770 ) $ (56, 261 )

(1) Derived from the audited consolidated financial statements.
(2) These amounts include investments held by Symphony Evolution, Inc. of zero and $14.7 million and restricted cash and investments of $4.7 million and $4.0 million as of September 30, 2009 and December 31, 2008, respectively.

Exelixis, Inc.
Frank Karbe, 650-837-7565
Chief Financial Officer
fkarbe@exelixis.com
Charles Butler, 650-837-7277
Vice President
Corporate Communications
& Investor Relations
cbutler@exelixis.com

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