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Bristol-Myers Takes Stake in Exelixis as Part of Deal to Develop Cancer Drugs

NEW YORK, July 18 - Bristol-Myers Squibb and Exelixis said Wednesday that they had signed a collaboration and licensing deal targeted at developing new cancer drugs.

Under the terms of the deal, Bristol-Myers Squibb of Princeton, NJ, will make an equity investment in Exelixis, which will use its knock-out technology to identify and validate targets that can trigger cell death in cancerous cells while leaving healthy cells unharmed. Bristol-Myers will then further analyze the targets in humans. 

In addition to making an equity investment in Exelixis of South San Francisco, Calif., the pharmaceutical company will also provide an up-front licensing fee of an undisclosed amount and research support to the genomics company. 

"This collaboration, which we believe is valued at $200 million, provides us not only with working capital, but significant upside in the form of milestones and royalties and a clinical stage product that will enable us to build our clinical development infrastructure," George Scangos, CEO of Exelixis, said in a statement.

The New York Times reported that Bristol-Myers would buy slightly more than 1 percent of Exelixis, paying $20 million for $10 million worth of stock.

The companies could not immediately be reached for comment.

Exelixis and Bristol-Myers Squibb will each have the option to exclusive rights to equal numbers of targets that come out of the collaboration, allowing both Exelixis and Bristol-Myers Squibb to develop treatments.

As part of the deal, Exelixis, which is in the process of building an internal oncology division, will also receive an exclusive a license to develop and commercialize a selected version of Bristol-Myers Squibb anticancer compound, rebeccamycin. Bristol-Myers Squibb has agreed to provide access to its internal clinical development process to help Exelixis to develop the drug, which is currently being evaluated in early stage clinical trials. 

Each company has certain rights of first negotiation for cancer treatments that result from the targets validated in the collaboration as well as those that the companies decide to license out.

Earlier this month, Exelixis announced that Protein Design Labs had agreed to pursue several cancer antibody targets provided by the company. In May, Protein Design Labs signed a deal to have Exelixis identify novel antibody targets to create antibodies for the diagnosis, prevention, and treatment of cancer.

Exelixis also has partnerships with other large pharmaceutical companies, namely in the area of agricultural genomics. Exelixis subsidiary Exelixis Plant Sciences and Aventis CropScience each own 50 percent of Agrinomics, a company that studies arabidopsis. 

In addition Exelixis operates a joint venture with Bayer called Genoptera, which is focused on developing technologies that can be used to develop insecticides.  

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