Genentech Kicks Off New Year With Exelixis Deal For MEK Inhibitor

Genentech joins Pfizer and AstraZeneca in developing the new class of oncology compounds.

Genentech and its South San Francisco neighbor Exelixis have signed a co-development agreement to market what could potentially become one of the first treatments in a new class of oncology drugs targeting a critical intracellular signaling pathway. The companies announced a co-development agreement for XL518, a small-molecule inhibitor of MEK, Jan. 3.

Genentech is a "great partner for our promising inhibitor of the MEK pathway, and we're looking forward to seeing what we can achieve together in terms of making MEK inhibition a new approach to cancer therapy," Exelixis CEO George Scangos stated during a same-day conference call announcing the deal.

MEK, also known as mitogen activated protein kinase, is a key component of the RAS/RAF/MFK/ERK pathway, which is frequently activated in human tumors, according to Exelixis.

"Inappropriate activation of the MEK/ERK pathway can promote cell growth in the absence of exogenous growth factors," the company explained. Activation of the pathway occurs as a result of mutations in RAS in approximately 30 percent of all human tumors, and in B-RAF in 60 percent of melanomas.

Exelixis submitted an IND application for XL518 to FDA on Dec. 20.

While there are currently no MEK inhibitors on the market, both Pfizer and AstraZeneca have later-stage candidates in development in Phase II. Pfizer is studying PD-0325901 in patients with advanced non-small cell lung cancer, while AstraZeneca initiated a Phase II study of AZD6244, in development with Array BioPharma, in June in malignant melanoma.

Scangos said, however, that XL518 compares "favorably" to the other two compounds.

"Obviously, we've looked very carefully at those compounds," he said. "From the data that is publicly available, we have a pretty good view of both their strengths and their limitations and the issues they've had with toxicity. I can tell you that so far, 518 does not so far have those tox issues and is an extremely potent compound."

Under the terms of the deal, Genentech will pay Exelixis $40 million in upfront and milestone payments. The smaller biotech will be responsible for developing the compound through the end of Phase I, at which point Genentech will have an option to further develop XL518. If Genentech exercises the option, the company will pay Exelixis an additional payment and be responsible for further development costs.

Exelixis, meanwhile, will maintain an option to co-develop the drug in the U.S. and will share in marketing and commercialization costs. The firm will have an equal share in U.S. profits for the compound initially, but that share will decrease as sales reach a pre-specified threshold. The company will receive royalties on sales outside of the U.S.

In December, Exelixis announced a new collaboration with Bristol-Myers Squibb for three small-molecule drug candidates, marking its first deal in which the company maintained co-development and co-promotion rights in the U.S. At the time, Scangos said the ability to maintain co-promotion rights marked a fundamental shift in the firm's partnering strategy (¹ (Also see "Bristol-Myers Squibb Builds On Exelixis Collaboration" - Pink Sheet, 18 Dec, 2006.)).

During the Jan. 3 call, he noted, "As much as we believe in using partnering and collaborations as a way to generate revenue and speed development of a large number of compounds, our ultimate goal as a company is to develop and commercialize our own products."

The two firms signed a development deal in 2005 to develop antibodies to proteins provided by Exelixis for therapeutics targeting cancer, inflammatory diseases and tissue growth and repair. Exelixis, with a pipeline largely focused on oncology, also has development alliances with companies including GlaxoSmithKline, Wyeth and Sankyo.

- Jessica Merrill ([email protected])

[Editor's Note: An interview with Exelixis CEO George Scangos is featured in F-D-C Reports' new Decision-Makers Guide, Brokering Biotech. For more information, visit ² http://www.fdcreports.com/guides/brokering.html.]