Exelixis entered into an agreement with Genentech for the worldwide co-development its preclinical cancer product candidate. XL518 is a small-molecule inhibitor of MEK, a key component of the RAS/RAF/MEK/ERK pathway, which is frequently activated in human tumors.
Exelixis will receive upfront and milestone payments totaling $40 million upon signing of the agreement and with the submission of the IND, which the company expects to do in December. Exelixis is responsible for developing XL518 through the end of Phase I. If Genentech exercises its option to further develop XL518, Exelixis will receive an additional payment. Genentech will then be responsible for all further development costs.
Exelixis has the option to co-promote in the U.S. and a substantial share in the marketing and commercialization costs, as well as an initial equal share in profits in the U.S., which will decrease as sales increase. Exelixis will receive royalties on any sales of the product, which may be commercialized outside the U.S.