Exelixis strikes $251M portfolio pact with Merck

Exelixis ($EXEL) is banking a $12 million upfront from Merck ($MRK) under a licensing deal covering its PI3K-delta research work. With the biotech focused squarely on its controversial late-stage development program for cabozantinib, Merck is gaining the full development and commercialization rights to a group of programs, including the preclinical XL499, in a deal that includes $239 million in development and regulatory milestones.

"PI3K-delta is an interesting target with potential utility in a number of therapeutic areas, including inflammation and oncology," said Michael M. Morrissey, Ph.D., president and chief executive officer of Exelixis. "Our PI3K-delta program builds on our prior interest in the PI3K family, which led to the advancement of pan-PI3K inhibitors into clinical development for cancer. Merck's global presence and significant resources make it the ideal organization to carry the PI3K-delta program forward. At the same time, this agreement provides Exelixis with resources for the continued development and potential commercialization of our lead compound, cabozantinib, which is in late-stage development for medullary thyroid and prostate cancers."

Exelixis could use the added financial support right now. Its shares plunged after the biotech announced that it would forge ahead into Phase III for "cabo" without a special protocol assessment from the FDA, a stamp of approval on trial design and endpoints that can significantly reduce the steep risks inherent in any study. Under Morrissey, who took the helm at Exelixis following George Scangos' departure to Biogen Idec ($BIIB), the company has been downsized and the pipeline slimmed as investigators concentrated on cabozantinib's fate.

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