Success could equal $120 million for Exelixis.

Exelixis and Bristol-Myers Squibb reported a worldwide collaboration to discover, develop, and commercialize novel targeted therapies for the treatment of cancer.

Under the collaboration, which will become effective upon antitrust clearance, Exelixis will deploy its drug discovery platform and be fully responsible for the identification and preclinical development of small molecule drug candidates directed against mutually selected targets. Bristol- Myers Squibb will have the right to select up to three IND candidates against three different targets. Following selection by Bristol-Myers Squibb, the company will lead all global activities, although the parties will co-develop and co-commercialize the programs in the United States.

Under the terms of the agreement, Bristol-Myers Squibb will pay to Exelixis an upfront payment of $60 million in cash. Exelixis will also receive $20 million for each of up to three different drug candidates selected by Bristol-Myers Squibb. The parties plan to equally share development costs, commercial profits, and co-promotion responsibilities in the U.S. Exelixis will also receive royalties on product sales outside of the U.S. For each program selected by Bristol-Myers Squibb, Exelixis may opt out of the co-development or co-promotion in the United States, in which case Exelixis would receive milestones and royalties in lieu of a U.S. profit share.

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