Exelixis has decided to reduce its workforce by approximately 40%, or 270 employees, so that it can focus on its three most advanced anticancer agents. The company expects to record a restructuring charge of approximately $15 million in the first quarter of 2010, which may increase later in the year, depending on potential facility-related charges and other write downs that have not yet been finalized.
Exelixis estimates that as a result of the restructuring cumulative cash expenditures through 2011 will be reduced by approximately $90 million after payment of restructuring costs. The savings are primarily related to reductions in compensation and benefits, laboratory supplies, and clinical trial expenses.
The company says that XL184, XL147, and XL765 are on the top of its priority list in terms of continued development. XL184 is in a Phase III trial as a treatment for metastatic medullary thyroid cancer, Phase II for recurrent glioblastoma as well as non-small-cell lung cancer (NSCLC), and Phase I for advanced malignancies. The compound is partnered with Bristol-Myers Squibb (BMS).
XL147 is being developed with sanofi-aventis. It is in mid-stage studies as a therapy for NSCLC and various other solid tumors. XL765, also partnered with sanofi-aventis, is in Phase II trials in NSCLC, glioblastoma, and solid tumors.
Exelixis says that it has retained a fully integrated R&D team to support these programs. Additionally, the company expects to continue to leverage its R&D capabilities to advance new compounds into the clinic, albeit at a slower pace. “We have scaled our fully integrated drug discovery and preclinical development organization to deliver one new IND per year,” says George A. Scangos, president and CEO.
“Our priority is to see ourselves through to the anticipated filing of our first NDA for XL184 in the second half of 2011. We are convinced that the restructuring is the right step for the company and positions us well to move into the future.”
In addition to XL184, XL147, and XL765, Exelixis will continue development of XL888, an orally available small molecule inhibitor of HSP90 currently in Phase I, and XL139 and XL413, compounds co-developed with BMS that are being tested in Phase I as treatments for solid tumors and hematological cancer, respectively. The firm says that it will also continue to advance its preclinical program focused on PI3K delta. Exelixis has an additional Phase I anticancer compound, XL518, that is being developed with Genentech.