As part of the termination agreement, BMS will shell out $17 million, a figure that would have covered its financial contribution to the drug’s development over the next three months. The South San Francisco-based biotech said in a conference call this morning that despite the loss of about $20 million in expected revenues this year from the collaboration, it will still end the year with a higher cash balance than in 2009.
However, that healthier balance sheet has more to do with cost-cutting than milestone payments from partners. In March, the company underwent a major restructuring in order to help support the development of the drug candidate, cutting 40% of staff, or 270 jobs. The move was meant to save the company $90 million through 2011, and help fund the development of XL 184, arguably the most critical compound in the Exelixis pipeline.
XL184 blocks three protein kinases, MET, VEGFR2, and RET, and is being studied to treat thyroid cancer, glioblastoma, and a variety of other cancers. If an ongoing Phase III trial in thyroid cancer yields positive results, Exelixis expects to ask FDA for approval in 2011. The biotech also plans a Phase III in glioblastoma towards the end of this year.
“We could not agree with BMS on the prioritization of XL184, the speed, the scope of the program,” George Scangos said this morning.
So what’s next for Exelixis and XL 184? The biotech firm is clearly on the lookout for partner number three. Scangos told analysts he expected even more suitors at the company’s doorstep, as the data for the compound is more robust than when it was negotiating with BMS in 2008.
XL 184 was being watched as one of several drugs in development that block MET, a protein implicated in cancer metastasis. ArQule is developing ARQ197, which recently offered up solid Phase II data in lung cancer. Pfizer’s Crizotinib, which blocks MET and ALK, is also in Phase III trials in lung cancer. GlaxoSmithKline, Exelixis’ previous partner for XL 184, continues to develop XL880, which blocks MET and VEGFR2.