Genentech will take over development once a maximum tolerated dose is achieved.

Genentech has decided to opt into the development of Exelixis’ early-stage anticancer agent pursuant to a January 2007 deal between the firms. Exelixis will receive $3 million with Genentech exercising  this option.

Genentech has already paid $40 million in upfront and milestone payments under the original agreement covering XL518, an MEK inhibitor. Exelixis will be responsible for the Phase I trial until a maximum tolerated dose (MTD) is determined. After MTD is achieved, Genentech will be in charge of further development.

Another $7 million is due when the Phase II program is initiated. Exelixis has the option to copromote in the U.S. and will initially get an equal share in profits from this region. The profit-sharing ratio will decrease as sales increase. Exelixis will receive royalties on ex-U.S. sales.

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