Exelixis and GSK end research collaboration

Under the terms of the collaboration, GlaxoSmithKline (GSK) has the right to select up to two of the compounds in the collaboration for further development and commercialization. GSK previously selected XL880 and will be able to choose one additional compound from among XL184, XL281, XL228, XL820, and XL844. Exelixis will have the right to develop and commercialize compounds not selected by GSK, either alone or in collaboration with partners.

As a result of the conclusion of the collaboration, Exelixis’s exclusivity obligations will be limited to the compounds selected by GSK. Exelixis will have the right to perform additional discovery, development, and commercialization efforts against any collaboration target or compound that does not infringe upon the intellectual property associated with compounds selected by GSK for further development and commercialization.

To date, Exelixis has received approximately $235 million from GSK, which includes $150 million in upfront, milestone, and R&D support payments, and $85 million through a loan facility. Additionally, if GSK selects a second compound for further development, Exelixis will be entitled to receive an additional milestone payment of either $55 million or $27.5 million. The milestone will be due after the selected compound achieves proof-of-concept and will be creditable by GSK against amounts outstanding under the loan facility.

Exelixis is eligible for development milestones and royalties on compounds selected for development and commercialization by GSK, which include XL880 and potentially one additional compound if GSK exercises its second development election. Exelixis will pay GSK a low, single-digit royalty on certain ‘refused candidates’ that GSK elected not to choose with its development election which Exelixis thereafter successfully commercializes.

George Scangos, president and CEO of Exelixis, said: “With the successful completion of the collaboration, we will have clarity regarding the exclusivity obligations under the GSK collaboration and ownership of the compounds in our pipeline.”