UPDATE 1-Deerfield provides Exelixis withs $150 mln funding

(Adds CEO comment, paragraphs 4-5; funding details)

LOS ANGELES, June 5 (Reuters) - Exelixis Inc (EXEL.O) said on Thursday that health-care hedge fund Deerfield Management will provide a flexible $150 million line of credit, allowing Exelixis to advance its drug pipeline and explore partnership deals.

Shares of the development-stage biotechnology company rose more than 6 percent.

Deerfield holds a significant stake in Exelixis, which is conducting clinical trials of several compounds, but has no commercial products.

George Scangos, the company's chief executive, described the Deerfield facility as "an insurance policy" that gives Exelixis time to see its way through a period of major pipeline and business milestones.

"We have a lot of balls up in the air," he said, referring to talks with existing and potential drug development partners.

The biotech company said last month that it would delay a pivotal-stage trial of a lung cancer drug known as XL647 in order to carry out additional studies and altered the dosage for a another drug trial, also delaying that program.

Excluding the new credit line, Exelixis has said it expects to have $200 million in cash on hand by the end of the year -- down from $250 million at the end of March.

The company, based in South San Francisco, California, said the Deerfield funds could be drawn at any time over the next 18 months and the facility could be terminated without penalty.

Under the funding agreement, Exelixis will pay a 2.5 percent transaction fee, as well as a 2.25 percent annual commitment fee on a quarterly basis. Funds can be drawn in $15 million increments at an annual interest rate of 6.75 percent.

Any outstanding principal and interest will be due in June of 2013 and can be paid in stock or cash at any point.

Deerfield will also receive warrants to acquire 1 million shares of Exelixis stock at an exercise price of $7.40 per share, which is a 20 percent premium to the stock's recent price.

Additional warrants would be issued if Exelixis draws on the credit line, with the overall number capped at 11 million.

Exelixis shares were up 38 cents, or 6.1 percent, at $6.54 on the Nasdaq. (Reporting by Deena Beasley; Editing by Andre Grenon, Leslie Gevirtz)