By Kim Coghill
Exelixis Inc. filed a shelf registration to sell up to $150 million in common stock to help pay for development and manufacturing of its recently acquired anticancer drug, rebeccamycin.
George Scangos, Exelixis¿ CEO, said some of the money also will be used for general corporate purposes. ¿This is really a matter of wanting to be prepared; you don¿t know how the market is going to change,¿ he told BioWorld Today.
As of the end of March, Exelixis, a South San Francisco-based drug discovery company that provides comparative genomics and model systems genetics services, had about $108 million in cash. The company¿s burn rate is expected to be between $35 million and $40 million this year, and it has 48 million shares outstanding.
Exelixis¿ stock (NASDAQ:EXEL) closed Monday at $17, down $1.60.
In a $200 million agreement with Bristol-Myers Squibb Co. announced last month, Exelixis will gain an exclusive worldwide license to develop and commercialize rebeccamycin, a compound in Phase I/II trials by the National Cancer Institute. (See BioWorld Today, July 19, 2001.)
Under terms of the deal, Bristol-Myers Squibb Co., of Princeton, N.J., will pay Exelixis $5 million up front, purchase 600,600 shares of Exelixis stock at $33.30 per share, and pay $3 million per year for at least three years with multiple near-term milestones. In return, Exelixis will identify and validate molecular targets that trigger cell death in cancer cells. BMS will then further validate these targets in human models. Each company will have the option to obtain exclusive worldwide rights to equal numbers of validated targets arising from the collaboration. Bristol-Myers Squibb may also use Exelixis¿ expertise in assay development, high-throughput screening, medicinal chemistry and preclinical pharmacology for several of the selected targets.
In other company news, just last week Exelixis said it will expand its pharmaceutical development and research divisions by adding metabolic diseases to its cancer and angiogenesis franchise areas. The new program focuses on therapies for cardiovascular disease, obesity and diabetes. (See BioWorld Today, July 30, 2001.)
This expansion is being sparked by the February 2002 conclusion of a research collaboration with Peapack, N.J.-based Pharmacia Corp. The collaboration, formed in 1999, was aimed at identifying targets for small-molecule therapies for Alzheimer¿s, Type II diabetes and associated complications of metabolic syndrome like obesity and certain categories of cardiovascular disease. During the life of the deal, Exelixis has delivered more than a dozen novel drug targets to Pharmacia.
The end of the collaboration means Exelixis will have rights to pursue all other targets it identified in the alliance.
Exelixis also recently signed an agreement with Protein Design Labs Inc., of Fremont, Calif., to develop antibodies for cancer diagnosis and treatment. (See BioWorld Today, May 24, 2001.)