West Coast Editor

A month after pulling down $35 million from a briskly advancing cancer deal with GlaxoSmithKline plc, Exelixis Inc. has signed a collaboration with Genentech Inc. to target proteins and genes involved in cell proliferation and differentiation.

Genentech has agreed to pay $16 million over the deal's three-year span, including an up-front fee.

The pact is centered on "part of the founding intellectual property of the company that we've been able to monetize," said Charles Butler, associate director of corporate communications for South San Francisco-based Exelixis, which has garnered other partnerships by way of its gene-to-drug platform. "It's what got the company going."

Specifically, the deal involves Exelixis' IP portfolio regarding the Notch pathway. Yale University developmental geneticist Spyros Artavanis-Tsakonas, co-founder of Exelixis, completed most of the research identifying the Notch signal transduction pathways using fruit flies. (See BioWorld Today, Feb. 21, 1997.)

A Notch pathway has five core genes involved in delivering an extracellular signal to the nucleus of a cell, and there are four Notch pathways, each responsible for formation of different tissues of the body.

Genentech, also of South San Francisco, is providing Exelixis milestone and royalty payments for compounds against cancer that come out of the arrangement, giving Exelixis an option to share costs and profits related to products in the fields of tissue growth and repair or inflammation.

In the first stage of the deal, the firms will work jointly to develop assays and reagents that will be used to determine the potential of drug candidates, with Genentech holding responsibility for manufacturing and clinical development.

"We're going to work jointly with Genentech to develop the toolkit, if you will, to explore these areas," Butler said. "Given their expertise in antibodies, particularly in oncology, they're going to take the lead [in that indication]. In any of those areas, should things merit advancement, they will pick it up when we get into clinic."

Exelixis' genomics-based drug discovery efforts have yielded a well-stocked pipeline, including XL119 (becatecarin), in Phase III trial for bile-duct tumors and XL784, which started out as a cancer therapy, has completed a Phase I study and is being developed for renal disease.

The Phase III trial with XL119 started last year and is expected to last three years. "It's doing well and on track," Butler said.

Others in the lineup are anticancer compounds XL647, XL999 and XL880, all kinase inhibitors in Phase I trials. The firm also has XL820 and XL844, cancer drugs for which investigational new drug applications have been filed, and multiple compounds at the preclinical stage.

Last month, Exelixis gained $35 million through its deal with London-based GSK, thanks to entry into the clinic of cancer compounds sooner than expected. The pair signed that agreement in October 2002 to develop an undisclosed number of therapeutics in indications such as cancer and renal disease, using Exelixis compounds. Terms included $134 million in guaranteed funding with the potential for more to Exelixis. (See BioWorld Today, Oct. 30, 2002.)

Lately, Exelixis has been tightening its focus, dropping an agricultural joint venture to develop insecticides. The company granted its interest in the project, GenOptera LLC, to collaborator Bayer CropScience, a unit of Leverkusen, Germany-based Bayer AG. The companies formed the joint venture five years ago. (See BioWorld Today, April 4, 2005.)

"We've been remarkably productive with our pipeline and we've been putting things in its place to move it forward," Butler said, adding that the project "has been going well so far. We're comfortable with our cash position well into next year, and business development discussions of various types are ongoing."

Exelixis' stock (NASDAQ:EXEL) closed Friday up 4 cents at $7.15. Genentech's shares (NYSE:DNA) ended the day at $81.39, down $1.46.

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