Exelixis, Inc. (Nasdaq: EXEL) has entered into an agreement with Elan Pharmaceuticals, Inc., a subsidiary of Elan Corporation, plc (NYSE: ELN) to produce a custom high-throughput screening compound library for use by both parties.

Under the terms of the three-year agreement, Exelixis will use its proprietary combinatorial chemistry platform to generate a large, high-quality, small molecule library for high-throughput screening. Elan Pharmaceuticals will pay Exelixis an initial upfront fee as well as ongoing compensation as compounds are delivered. Both parties have the ability to use the compounds resulting from this collaboration for internal drug discovery and collaborative efforts.

"This is our first chemistry-focused collaboration and it validates the quality of the discovery organization, while offsetting some of the cost of building our large high throughput screening compound library for drug discovery at Exelixis," said George A. Scangos, Ph.D., President and Chief Executive Officer of Exelixis, Inc. "As a result of our high quality discovery capabilities, we are aggressively moving our internal oncology targets through screening and into lead optimization, and expect to identify our first development compound by the end of the year."

Exelixis generates novel, genetically and biologically validated targets through its expertise in model system genetics. By combining these novel targets with the efficient high-throughput screening (HTS) platform, large compound library, parallel downstream assays and integrated chemistry capabilities, Exelixis believes it will have maximum opportunity for success to develop a portfolio of potentially innovative drugs against a variety of novel targets, initially in the area of cancer.

Exelixis, Inc. is a leading genomics-based drug discovery company focused on product development through its expertise in comparative genomics and model system genetics. These technologies provide a rapid, efficient and cost effective way to move from DNA sequence data to knowledge about the function of genes and the proteins they encode. The company's technology is broadly applicable to all life sciences industries including pharmaceutical, diagnostic, agricultural biotechnology and animal health. Exelixis has partnerships with Aventis, Bayer, Bristol-Myers Squibb, Protein Design Labs and Dow AgroSciences and is building its internal development program in the area of oncology. For more information, please visit the company's web site at www.exelixis.com.