BMS re-ups with Exelixis in $565M development deal

Last summer, Exelixis was forced to endure some harsh criticism after Bristol-Myers Squibb opted out of its closely-watched pact for the cancer drug XL184. And with CEO George Scangos leaving days later to take the reins at Biogen Idec, it's no wonder the company's share price slid.

But this morning South San Francisco-based Exelixis and BMS completely revamped their relationship, with the biopharma company signing up to license two Exelixis drug development programs for $60 million upfront and $505 million in combined milestones. BMS gained the licensing rights to a new drug aimed at diabetes as well as anti-inflammatory therapies.

The pact covers Exelixis's small-molecule TGR5 agonist program and a preclinical collaboration on ROR antagonist programs. Exelixis also bowed out of its co-development role for XL139, gaining an accelerated milestone payment in return. The TGFR5 program is aimed at stimulating GLP-1 secretion in order to treat diabetes while the ROR programs can "inhibit production of pro-inflammatory cytokines and have broad potential as novel anti-inflammatory compounds."

"These transactions leverage our discovery expertise with the development expertise of Bristol-Myers Squibb in inflammation and metabolic diseases, and provide important additional resources for us to continue our focus on our clinical stage development pipeline," Exelixis CEO Michael M. Morrissey said.

- here's the Exelixis release