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news.Exelixis has said that Genentech has exercised its option to further develop and commercialize company's compound XL518, which is currently in a Phase I clinical trial.
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As a part of agreement, Exelixis will continue to be responsible for the Phase I clinical trial until the point that a maximum tolerated dose (MTD) is determined. After MTD is achieved, Genentech will be responsible for completing the Phase I clinical trial and subsequent clinical development.
Under the terms of the collaboration agreement between Exelixis and Genentech, Exelixis has received upfront and milestone payments totaling $40 million at the time the agreement was signed in January 2007. Selection of the compound and opt-in by Genentech trigger a payment of $3 million. Another $7 million is due when a Phase II program is initiated by Genentech.
Exelixis has the option to co-promote in the US and is entitled to receive an initial equal share in profits in the US, which will decrease as sales increase. Exelixis will receive royalties on any sales of the product that may be commercialized outside the US.