Exelixis Deepens Profitable Ties to BMS

Includes: BMY, EXEL
by: The Burrill Report

By Michael Fitzhugh

Bristol-Myers Squibb (NYSE:BMY) will pay Exelixis (NASDAQ:EXEL) $60 million as part of two new agreements the partners established to address diabetes and inflammatory diseases. With milestones, Bristol could pay Exelixis $505 million more, plus royalties and other sales-related payments related to the two agonists, drugs that bind to cell receptors and trigger a response in the cell.

Exelixis president and CEO Michael Morrissey says the agreements leverage his company’s discovery expertise with BMS’ development expertise while providing Exelixis “important additional resources for us to continue our focus on our clinical stage development pipeline.”

Exelixis also says it is dropping a separate BMS collaboration involving the experimental cancer drug XL139, and will receive an accelerated milestone payment as BMS acquires an exclusive worldwide license to develop and commercialize the compound.

The companies began collaborating in 2005 with an agreement to jointly develop drugs targeting liver X receptors. They have since amended that agreement as well as a separate agreement on XL281, an experimental cancer drug out-licensed to BMS.

The latest agreements will give BMS an exclusive worldwide license to develop and commercialize small molecule TGR5 agonists for diabetes and ROR antagonists for inflammatory disease.

BMS will take the lead on the TGR5 program, holding responsibility for research, development, manufacturing, and commercialization of the molecule.

The ROR antagonist program involves a BMS-Exelixis collaboration, effective until a pre-clinical transition point when BMS will take sole responsibility for further research, development, manufacturing, and commercialization.

In exchange for rights to the ROR program, Exelixis is freed from its obligation to deliver a third investigational new drug candidate to BMS, a responsibility it picked up as part of a 2006 oncology collaboration agreement between the companies.