Exelixis, Inc announced that Bristol-Myers Squibb Company has exercised its option to develop and commercialize Exelixis' investigational new drug (IND) candidate XL413, a selective inhibitor of Cdc7.

Under the terms of the collaboration agreement between the two companies, which became effective in January 2007, the selection of XL413 by Bristol-Myers Squibb entitles Exelixis to a milestone payment of $20 million. In addition, Exelixis has exercised its option under the collaboration agreement to co-develop and co-commercialize XL413 in the United States. Following the transfer of the XL413 development program, which is expected to occur promptly, Bristol-Myers Squibb will lead all global activities. The parties will co-develop and co-commercialize XL413 in the United States and share those profits 50/50. Exelixis will be entitled to receive double-digit royalties on product sales outside of the United States.

XL413 is the second compound selected by Bristol-Myers Squibb in this collaboration. Previously, in January 2008, Bristol-Myers Squibb exercised its option to select XL139, an inhibitor of the hedgehog signaling pathway, for further development and commercialization.

"To our knowledge, no other selective inhibitors of Cdc7 have advanced to this stage of preclinical development, giving XL413 the potential to become a first-in-class therapy," said Michael M Morrissey, president of Research and Development at Exelixis. "Our colleagues at Bristol-Myers Squibb have substantial expertise in developing and commercializing innovative cancer therapies, and we are excited to have another opportunity to work with them."

"Providing innovative medicines to patients with cancer is central to our company's mission," said Francis Cuss, senior vice president, Discovery and Exploratory Clinical Research. "Cdc7 inhibition represents a novel approach to cancer treatment and we are pleased to add XL413 to our growing pipeline of cancer compounds, and to further expand our productive collaborations with Exelixis."

XL413 is a small molecule inhibitor of the serine-threonine kinase Cdc7. The function of Cdc7 is required for DNA replication to proceed, and its activity is often upregulated in cancer cells. Studies suggest that Cdc7 plays a role in regulation of cell cycle checkpoint control and protects tumour cells from apoptotic cell death during replication stress.

Exelixis is a development-stage biotechnology company dedicated to the discovery and development of novel small molecule therapeutics for the treatment of cancer and other serious diseases.