SOUTH SAN FRANCISCO, Calif.--(BUSINESS WIRE)--Oct. 27, 2008--Exelixis, Inc. (Nasdaq: EXEL) today reported financial results for the third quarter ended September 30, 2008.

Revenues for the quarter ended September 30, 2008 were $29.9 million, compared to $26.8 million for the comparable period in 2007. The increase from 2007 to 2008 was primarily due to an acceleration of revenue recognition as a result of the development term of our collaboration with GlaxoSmithKline, Inc. (GSK) concluding on October 27, 2008. This increase was partially offset by the exclusion of revenue as a result of the sale of 80.1% of our former subsidiary Artemis Pharmaceuticals GmbH in 2007.

Research and development expenses for the quarter ended September 30, 2008 were $65.7 million, compared to $58.6 million for the comparable period in 2007. The increase from 2007 to 2008 primarily reflected the increased development expenses associated with the maturation and advancement of our pipeline through phase 3 clinical trial start-up activities, the initiation of various non-clinical studies and phase 1 and phase 2 clinical trials, and expanded enrollment in our ongoing clinical trials.

General and administrative expenses for the quarter ended September 30, 2008 were $8.9 million, compared to $10.8 million for the comparable period in 2007. The decrease from 2007 to 2008 was primarily due to the allocation of general corporate costs (such as facilities costs) to research and development, which primarily reflected the growth of the research and development function compared to the general and administrative function.

Net loss for the quarter ended September 30, 2008 was $38.5 million, or $0.36 per share, compared to $13.7 million, or $0.14 per share, for the comparable period in 2007. The increase in net loss in 2008 compared to 2007 is primarily due to the inclusion in 2007 of the $18.8 million gain on the sale of assets recognized in conjunction with our transaction with Agrigenetics, Inc., a wholly-owned subsidiary of The Dow Chemical Company, which was accounted for as a sale of our plant trait business.

Cash and cash equivalents, short-term and long-term marketable securities, investments held by Symphony Evolution, Inc. (a consolidated clinical development financing vehicle), and restricted cash and investments totaled $135.2 million at September 30, 2008, compared to $299.5 million at December 31, 2007. These amounts do not include $150.0 million available for borrowing under our financing facility with Deerfield Management.

Q3 2008 Highlights & Recent Developments

-- Announced that GSK has decided not to exercise its option to license XL184, and that it has also decided not to license the other compounds in the collaboration, including XL281, XL228, XL820, and XL844. As a result, Exelixis retains the rights to develop, commercialize, and/or license all of these compounds.

-- Successfully concluded the six-year collaboration with GSK to discover, develop, and commercialize novel therapeutics in the area of oncology.

-- Submitted an investigational new drug (IND) application to the U.S. Food and Drug Administration for XL888, a novel anticancer compound. XL888 is an orally available small molecule inhibitor of HSP90.

-- Submitted a comprehensive data report for IND candidate XL413, a selective inhibitor of Cdc7, to Bristol-Myers Squibb Company. Bristol-Myers Squibb has 30 days to review the data package and determine if it will select the compound for clinical development and commercialization.

-- Presented 15 abstracts at the 20th EORTC-NCI-AACR Symposium "Molecular Targets and Cancer Therapeutics." These included reports on XL184, XL228, XL281, XL765, XL147, XL820, XL844, XL888, and XL413.

"We believe that our six-year collaboration with GSK has been beneficial for both companies," said George A. Scangos, PhD, President and Chief Executive Officer of Exelixis. "GSK has selected one excellent compound, the dual MET/VEGFR inhibitor XL880, and Exelixis has received approximately $235 million in upfront, milestone, and R&D support payments, and a loan facility. In addition, Exelixis now has the rights to XL184, XL281, XL228, XL844, and XL820. These compounds, together with the compounds already in Exelixis' proprietary clinical pipeline, XL147, XL765, XL019, and XL888, comprise a deep pipeline of promising oncology compounds."

"Retaining the rights to XL184 is a major positive event with significant strategic value for the company. This compound is our most advanced asset with a very promising mechanism of action. It has generated compelling data in patients with medullary thyroid cancer, and data emerging from the phase 2 trial being conducted in patients with glioblastoma are also encouraging. We believe this compound has substantial medical and commercial potential and being able to retain it has a major impact on the company. We have had a significant number of inquiries about our willingness to partner the program and we are exploring all options to advance the program and maximize its value to the company. Additionally, we believe data recently presented on XL281 and XL228, and additional data that will be presented for XL228 later this year, indicate that they also have substantial potential as anti-cancer agents."

"The power of our strategy and the productivity of our discovery group are reflected in the deep, high-quality pipeline that we now have in our hands. The clarity achieved through the end of the GSK collaboration will allow Exelixis to further define and implement its strategy to maximize the short- and long-term value of this remarkable portfolio of compounds."

Conference Call and Webcast

Exelixis' management will discuss the company's third quarter ended September 30, 2008 financial results as well as a general update on the company's financial position and business, including its development pipeline and corporate strategy, during a conference call beginning at 2:00 p.m. PT/ 5:00 p.m. ET today, Monday, October 27, 2008. To listen to a webcast of the discussion, visit the Event Calendar page under Investors at www.exelixis.com.

About Exelixis

Exelixis, Inc. 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. The company is leveraging its fully integrated drug discovery platform to fuel the growth of its development pipeline, which is primarily focused on cancer. Currently, Exelixis' broad product pipeline includes investigational compounds in phase 3, phase 2, and phase 1 clinical development. Exelixis has established strategic corporate alliances with major pharmaceutical and biotechnology companies, including GlaxoSmithKline, Bristol-Myers Squibb, Genentech, Wyeth Pharmaceuticals, and Daiichi-Sankyo. For more information, please visit the company's web site at www.exelixis.com.

Forward-Looking Statements

This press release contains forward-looking statements, including, without limitation, statements related to the timing of a potential compound selection by Bristol-Myers Squibb; Exelixis' belief as to the quality of its pipeline of oncology compounds; Exelixis' belief about the potential of XL184's mechanism of action; Exelixis' belief that XL184 has substantial medical and commercial potential; Exelixis' efforts to advance the XL184 program and maximize its value for the company; future data presentations on XL228; the potential for XL281 and XL228 as anti-cancer agents; and the further definition and implementation of Exelixis' strategy to maximize the value of its pipeline. Words such as "believe," "potential," "will," "promising," and similar expressions are intended to identify forward-looking statements. These forward-looking statements are based upon Exelixis' current plans, assumptions, beliefs, and expectations. Forward-looking statements involve risks and uncertainties. Exelixis' actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties, which include, without limitation: the timing of a potential compound selection by Bristol-Myers Squibb; the potential failure of Exelixis' compounds to demonstrate safety and efficacy in clinical testing; the therapeutic and commercial value of Exelixis' compounds; the ability to conduct clinical trials for Exelixis' compounds sufficient to achieve a positive completion; the timing and level of expenses associated with the growth of Exelixis' proprietary programs; Exelixis' ability to enter into new collaborations; Exelixis' ability to execute upon its strategies; Exelixis' need for additional capital; timely receipt of potential milestones and royalties under Exelixis' collaborative agreements; and changes in economic and business conditions. These and other risk factors are discussed under "Risk Factors" and elsewhere in Exelixis' quarterly report on Form 10-Q for the quarter ended September 26, 2008, and other filings with the Securities and Exchange Commission. Exelixis expressly disclaims any duty, obligation, or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Exelixis' expectations with regard thereto or any change in events, conditions, or circumstances on which any such statements are based.

Exelixis and the Exelixis logo are registered U.S. trademarks.

                            EXELIXIS, INC.
              CONSOLIDATED STATEMENT OF OPERATIONS DATA
                (in thousands, except per share data)
                             (unaudited)

                            Three Months Ended    Nine Months Ended
                               September 30,        September 30,
                            ------------------- ----------------------
                              2008      2007       2008        2007
                            --------- --------- ----------- ----------
Revenues:
   Contract                 $ 16,665  $ 17,496  $   52,047  $  49,040
   License                    13,267     9,329      36,240     35,180
                            --------- --------- ----------- ----------
      Total revenues          29,932    26,825      88,287     84,220
                            --------- --------- ----------- ----------

Operating expenses:
   Research and development   65,670    58,643     200,512    165,159
   General and
    administrative             8,867    10,757      27,786     33,151
   Amortization of
    intangible assets              -        51           -        195
                            --------- --------- ----------- ----------
      Total operating
       expenses               74,537    69,451     228,298    198,505
                            --------- --------- ----------- ----------

Loss from operations         (44,605)  (42,626)   (140,011)  (114,285)

Other income (expense):
   Interest income and
    other, net                 1,090     2,908       5,072      9,786
   Interest expense           (2,171)     (970)     (4,386)    (3,001)
   Gain on the sale of
    business                   4,500    18,808       4,500     18,808
                            --------- --------- ----------- ----------
       Total other income      3,419    20,746       5,186     25,593
                            --------- --------- ----------- ----------

Loss before noncontrolling
 interest in Symphony
 Evolution, Inc.             (41,186)  (21,880)   (134,825)   (88,692)

Loss attributed to
 noncontrolling interest in
 Symphony Evolution, Inc.      2,680     8,184       9,920     22,233
                            --------- --------- ----------- ----------

Net loss                    $(38,506) $(13,696) $ (124,905) $ (66,459)
                            ========= ========= =========== ==========

Net loss per share, basic
 and diluted                $  (0.36) $  (0.14) $    (1.19) $   (0.68)
                            ========= ========= =========== ==========

Shares used in computing
 basic and diluted net loss
 per share                   105,548    98,551     105,294     97,313
                            ========= ========= =========== ==========

                             EXELIXIS, INC.
                     CONSOLIDATED BALANCE SHEET DATA
                             (in thousands)

                                            September 30, December 31,
                                                 2008       2007 (1)
                                            ------------- ------------
                                             (unaudited)
   Cash and cash equivalents and short-term
    and long-term marketable securities (2)     $135,151      $299,530
   Working capital                              $ (1,440)     $150,898
   Total assets                                 $254,763      $412,120
   Stockholders' equity                         $(26,958)     $ 72,081

(1)  Derived from the audited consolidated financial statements.

(2)  These amounts include investments held by Symphony Evolution,
      Inc. of $18.5 million and $30.9 million and restricted cash and
      investments of $4.9 million and $7.2 million as of September 30,
      2008 and December 31, 2007, respectively.

CONTACT: Exelixis, Inc.
Frank Karbe, 650-837-7565
Chief Financial Officer
fkarbe@exelixis.com
or
Charles Butler, 650-837-7277
Senior Director
Corporate Communications & Investor Relations
cbutler@exelixis.com

SOURCE: Exelixis, Inc.