By Karen Pihl-Carey
Exelixis Inc. intends to raise $100 million in an initial public offering, which the South San Francisco-based company intends to use for research and development activities and working capital.
The model system genetics and comparative genomics company, founded in 1994, did not disclose in a prospectus filed with the SEC either the number of shares it intends to offer or their price.
Goldman, Sachs & Co., of New York, is leading the offering, while Credit Suisse First Boston Corp. and SG Cowen Securities Corp., both of New York, are co-managing it. The underwriters will be granted an overallotment option to purchase additional shares of common stock.
The company posted revenues of $12.5 million in 1999 and a net loss of $16.7 million. It had $6.9 million in cash, cash equivalents and short-term investments as of Dec. 31.
Exelixis intends to use any proceeds from the offering for the research and development programs, as well as general corporate purposes. The company is conducting research in more than 12 different programs for the pharmaceutical, agrochemical, agricultural, diagnostic and biotechnology industries.
It has established three collaborations for use of its PathFinder and other technologies: one with Bayer AG, of Leverkusen, Germany, focused on the discovery and development of novel insecticides and nematicides for crop protection; one with Pharmacia & Upjohn, of Bridgewater, N.J., in the fields of Alzheimer's disease, Type II diabetes and associated complications of metabolic syndrome; and one with Bristol-Myers Squibb Co., of New York, to identify the mechanism of action of compounds delivered to Exelixis by Bristol-Myers.
The Bayer collaboration signed in May 1998 was expanded in January for another eight years (see BioWorld Today, May 22, 1998, p. 1; and Jan. 12, 2000, p. 4). The five-year collaboration with Pharmacia & Upjohn was signed in February 1999 and was expanded in October, while the three-year collaboration with Bristol-Myers began in September (see BioWorld Today, March 3, 1999, p. 1; and Nov. 4, 1999, p. 2). Exelixis has delivered targets to each of its collaborators. Committed funding from the collaborations totals more than $180 million.
The company's technology involves using model system genetics, a process that takes advantage of the short life cycles, biology and ease of genetic manipulation in species such as fruit fly, D. melanogaster and the nematode worm. The company scans the entire genome of the organisms for genes capable of leading to a desired outcome. It can, for example, identify each gene capable of blocking the unregulated cell growth characteristic of cancer cells when targeted by a pharmaceutical, or each gene that will lead to the death of insect pests when targeted by an agrochemical.
Exelixis said it has built an infrastructure of tools, reagents, libraries of organisms, databases and software, allowing experiments that take a year or more in complex systems to be carried out in one to two weeks in its simple model system.
The company, which changed its name to Exelixis Inc. from Exelixis Pharmaceuticals Inc., filed with Nasdaq to list its stock under the symbol EXEL.