Exelixis and GlaxoSmithKline amend collaboration
The collaboration between Exelixis and GlaxoSmithKline was established in October 2002 to discover and develop novel therapeutics in the areas of vascular biology, inflammatory disease and oncology. Under the terms of the original agreement, a four-month option period began in October 2004 for GSK to elect whether or not to expand the collaboration. The amended collaboration does not strictly adhere to either one of the options originally envisioned. The amended collaboration provides accelerated milestone payments to Exelixis and allows third-party development and funding of certain programs, so that all compounds discovered under the collaboration can be moved forward aggressively. "The new near-term milestones, together with the flexibility to advance programs using alternative financing vehicles, will allow Exelixis to quickly progress multiple compounds through clinical development," said Dr George Scangos, president and CEO of Exelixis. Under the amended agreement, Exelixis will continue to work on 12 programs (XL784, XL647, XL999, XL880, XL184, XL820, XL844 and 5 earlier stage programs) and GSK retains exclusivity rights to 32 specified targets. Under GSK's election of the modified program, GSK has the right to select from these programs up to two compounds at proof-of-concept (completion of phase IIa clinical development) or three compounds if GSK extends the collaboration. Depending on the timing of GSK's compound selection, GSK will pay proof-of- concept milestones up to approximately $275 million for three compounds. Exelixis will receive additional development-related milestones and royalties on product sales and has certain co-promotion rights to products in North America. In addition, Exelixis retains rights to all collaboration compounds not encompassed by the 12 programs selected by GSK and may work on any collaboration targets with the exception of the 32 targets subject to GSK's exclusivity. GSK will provide a new $30 million milestone to Exelixis upon the filing of three additional investigational new drug applications (INDs) from the compounds XL880, XL184, XL820 and XL844, by the end of 2005, or upon successful completion in 2005 of a phase I trial for one of these four compounds. GSK will pay an additional new $5 million milestone to Exelixis upon achieving specified progress with certain other candidates. Under the amended agreement, GSK will provide research funding of $47.5 million over the remaining term of the collaboration.