Bristol-Myers in two new deals with Exelixis, worth a potential $565 million; will retain Big Pharma legacy

California-based drug developer Exelixis (Nasdaq: EXEL) saw its share price leap nearly 10% to $4.65 yesterday morning after it revealed that it has entered into two new collaboration agreements with US pharmaceutical major Bristol-Myers Squibb (NYSE: BMY). The company previously signed a deal with B-MS in 2008, worth a potential $240 million, but this summer the major returned rights to one of the developmental candidates, XL184 (The Pharma Letter June 22).

Under the first new deal, Exelixis will grant B-MS an exclusive license to its small-molecule TGR5 agonist program including backups. Under the second accord, the companies will collaborate to discover, optimize, and characterize small-molecule ROR antagonists. The companies have also made minor amendments to their original XL281 and liver X receptor (LXR) agreements. Finally, under the companies’ cancer collaboration agreement Exelixis has opted to exercise its right to opt out of further co-development of XL139 and will receive an accelerated milestone payment.

Under the terms of the new agreements, B-MS will make a combined initial payment of $60 million to Exelixis, which will be eligible for potential development and approval milestones of up to $250 million on TGR5 and $255 million on the ROR antagonists. Exelixis will also be eligible for combined sales performance milestones, and royalties on net sales of products from each of the TGR5 and ROR programs.