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12:00 AM
 | 
Jan 02, 2006
 |  BioCentury  |  Strategy

Stocking stuffers

Exelixis Inc. did two deals in December that are object lessons in how to monetize an acquisition. Through deals with Bristol-Myers Squibb Co. and Wyeth that include upfront payments totaling $27.5 million, EXEL has more than recouped the $23.8 million in cash and stock it spent to buy nuclear hormone receptor play X-Ceptor Therapeutics Inc. in 2004. If the milestones hit, the X-Ceptor takeout looks to become wildly profitable.

Under the deal with BMY (New York, N.Y.), the companies will identify and develop compounds that target the liver X receptor (LXR) to treat atherosclerosis. EXEL gets $17.5 million up front, and the pharma company will provide about $20 million in R&D funding over two years. EXEL also is eligible for $140 million in development and regulatory milestones per product for two products, plus sales milestones and royalties (see BioCentury, Dec. 12, 2005).

EXEL granted WYE (Madison, N.J.) a license to preclinical compounds targeting the farnesoid X receptor (FXR) for metabolic and liver disorders. EXEL will receive $10 million up front and is eligible for up to $147.5 million in milestones, plus royalties (see B5).

In total, EXEL could be eligible for up to $335 million in payments, excluding royalties(see "Monetizing X-Ceptor").

"The LXR and FXR targets are in the metabolic disease space, which typically requires long and expensive clinical trials," said Michael Morrissey, senior vice president of discovery at EXEL. "The targets therefore required early partnerships. In both cases, we took X-Ceptor assets that were at the lead optimization stage and used our discovery engine to crank on those and get them out the door."

EXEL plans to apply the upfront money from...

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