GlaxoSmithKline, via its Centre Of Excellence for External Drug Discovery, exercises its options to further develop and commercialise Exelixis’ anti-cancer C-Met inhibitior XL880

Exelixis, Inc. (Nasdaq: EXEL) today announced that GlaxoSmithKline (GSK) has exercised its option to exclusively license XL880 for further development and commercialisation. XL880 is a small molecule compound currently being evaluated in phase 2 trials in patients with papillary renal cell carcinoma (PRC), gastric cancer and head and neck cancer. Under the terms of the collaboration between Exelixis and GSK initiated in October 2002 and amended in January 2005, GSK’s selection of XL880 entitles Exelixis to a selection milestone of $35 million and additional payments upon the attainment of specific development and commercialisation milestones. The $35 million selection milestone will be applied to repayment of an advance that GSK paid to Exelixis in 2005. Exelixis is also entitled to receive double-digit royalties on product sales if the compound is approved for marketing and commercialised. Exelixis will have certain co-promotion rights to XL880 in North America.

“XL880 is the first MET inhibitor to be evaluated in phase 2 trials, and the clinical data generated to date for this compound has been very compelling,” said George A. Scangos, Ph.D., President and Chief Executive Officer of Exelixis. “We believe that XL880 has substantial potential as a first-in-class therapy, and GSK and Exelixis look forward to the completion of the ongoing XL880 phase 2 trials and evaluation of pivotal trial options. We are pleased that GSK shares our belief in the significant clinical and commercial potential of this compound. Additionally, we believe that GSK’s selection of XL880 validates our strategy of building a franchise in the area of MET inhibition to exploit the potential of this promising target.”

“The exercise of the XL880 option confirms GSK’s growing status as a world leader in the development of new oncology medicines for use in thetreatment, prevention and supportive care of cancer patients,” commented Paolo Paoletti, MD, Senior Vice President of the Oncology Medicines Development Centre at GSK. “It further strengthens our oncology pipeline and demonstrates our commitment to identifying compounds that have the potential to deliver real benefit to patients. The data we have seen from trials conducted by Exelixis have given us confidence in the potential of XL880 for treating diseases for which there is high unmet medical need.”

The collaboration between Exelixis and GSK, which is managed by GSK’s Centre of Excellence for External Drug Discovery (CEEDD), covers seven compounds and their back-up and follow-up compounds currently in the Exelixis development pipeline. Under the terms of the collaboration, Exelixis submits the covered compounds to GSK as they achieve clinical proof-of-concept, which is a pre-determined measure of efficacy, generally based on phase 2 trial data, and GSK has the option to select two compounds, and potentially a third compound, for further clinical development and commercialisation. However, in the case of XL880, GSK requested in August 2007 to review the compound’s data prior to achievement of proof-of-concept. Exelixis agreed to the request and submitted the XL880 data package to GSK in September 2007.

Interim data from an ongoing phase 2 trial of XL880 in patients with PRC were presented in October 2007 at the 2007 AACR-NCI-EORTC International Conference on Molecular Targets and Cancer Therapeutics. Investigators reported at the conference that 15 of 19 patients (79%) with measurable disease evaluable for tumor response at the time of the data presentation had a decrease in tumour size (4-33%), including one patient with a partial response per RECIST criteria. All 19 evaluable patients with at least one post-baseline tumour assessment were reported to have had stable disease for at least three months, including 12 patients with stable disease for 6 to 15+ months. In 16 patients evaluable for safety at the time of the data presentation, the majority (72%) of adverse events (AEs) related to XL880 were Grade 1, 21% were Grade 2, and 5% were Grade 3 or higher. The Grade 3 AEs were hypertension in three patients. No Grade 4 or 5 AEs related to XL880 treatment were reported by investigators. A total of 15 serious adverse events (SAEs) in seven patients were reported, of which three were considered related to XL880 (two events of vomiting in one patient and hypertension in another patient).

Data from a phase 1 study of XL880 in patients with advanced solid tumours also were presented at the AACR-NCI-EORTC International Conference. Consistent with data previously reported from the phase 1 study, XL880 was reported to be generally well tolerated when given once daily over a 28-day cycle. Ten of 22 patients showed stable disease for at least three months. In a preliminary analysis of plasma samples from 21 patients, statistically significant changes in pharmacodynamic biomarkers were detected in the phase 1 clinical trial consistent with effects reported with other anti-angiogenic agents. This finding is also consistent with the hypertension that has been observed in patients receiving XL880.

Dr. Scangos noted, “We believe the selection of XL880 is a significant event that reflects the maturation of our pipeline and our discovery and development capabilities. XL880 represents one of many potentially significant compounds in our pipeline that we hope will help people with cancer. We believe that GSK’s selection of this novel compound will expedite the development of XL880 and may provide us with additional resources to advance our other compounds into and through clinical development.”

The effectiveness of GSK’s election to develop and commercialise XL880 and the associated technology transfer by Exelixis to GSK are subject to antitrust clearance, which is expected to occur in the first quarter of 2008.

About XL880

XL880 has attractive pharmaceutical properties, with high solubility and oral bioavailability. In preclinical studies, XL880 potently inhibited both MET and VEGFR with nanomolar potency, and retained potent activity against mutationally activated forms of MET found in hereditary papillary renal cell carcinomas. The compound also demonstrated dose-dependent tumor growth inhibition in models of breast cancer, colorectal cancer, non-small cell lung cancer, and glioblastoma, and has been shown to cause substantial tumor regression in all models tested. Significantly, a single dose of XL880 completely inhibited tumor growth for 21 days in a glioblastoma model. Three phase 2 trials of XL880 are ongoing in patients with PRC, gastric cancer and head and neck cancer.

About GlaxoSmithKline

GlaxoSmithKline - one of the world’s leading research-based pharmaceutical and healthcare companies - is committed to improving the quality of human life by enabling people to do more, feel better, and live longer. For company information, visit GlaxoSmithKline at www.gsk.com.

GSK Oncology is dedicated to producing innovations in cancer that will make profound differences in the lives of patients. Through GSK’s “bench to bedside” approach, we are transforming the way treatments are discovered and developed, resulting in one of the most robust pipelines in the oncology sector. Our worldwide research in oncology includes partnerships with more than 160 cancer centres. GSK is developing a new generation of patient focused cancer treatments in prevention, supportive care, chemotherapy and targeted therapies.

About the GSK CEEDD

GlaxoSmithKline is enhancing the way it discovers and develops drugs by creating a small, dedicated team that will feed the GSK pipeline solely through the efforts of its external alliances. The CEEDD (Centre of Excellence for External Drug Discovery) was formed as further validation of GSK’s strategy to create small, independent and accountable R&D teams (known as Centres of Excellence for Drug Discovery or CEDDs). In essence, the CEEDD is virtualising a portion of the GSK pipeline; namely from target to clinical proof-of-concept, by forming multiple risk-sharing/reward sharing alliances. Capitalising on the speed and efficiency of its collaborators will allow GSK to deliver pharmaceutical products faster to patients. For more information, visit the CEEDD at www.ceedd.com.


GlaxoSmithKline forward-looking statements

Under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, GSK cautions investors that any forward-looking statements or projections made by GSK, including those made in this announcement, are subject to risks and uncertainties that may cause actual results to differ materially from those projected. Factors that may affect GSK’s operations are described under ’Risk Factors’ in the Operating and Financial Review and Prospects in the company’s Annual Report on Form 20-F for 2006.

About Exelixis

Exelixis, Inc. is a development-stage biotechnology company dedicated to the discovery and development of novel small molecule therapeutics for the treatment of cancer and other serious diseases. The company is leveraging its fully integrated drug discovery platform to fuel the growth of its development pipeline, which is primarily focused on cancer. Currently, Exelixis’ broad product pipeline includes investigational compounds in phase 2 and phase 1 clinical development for cancer and renal disease. Exelixis has established strategic corporate alliances with major pharmaceutical and biotechnology companies, including GlaxoSmithKline, Bristol-Myers Squibb Company, Genentech, Wyeth Pharmaceuticals and Daiichi-Sankyo. For more information, please visit the company’s web site at http://www.exelixis.com.

Exelixis forward-looking statements

This press release contains forward-looking statements, including, without limitation, statements related to the future development and potential efficacy of XL880 and Exelixis’ potential receipt of milestone payments and royalties from GlaxoSmithKline. Words such as “will,” “entitled, ” “believe,” “potential,” “promising,” “may,” “could”, “look forward” and similar expressions are intended to identify forward-looking statements. These forward-looking statements are based upon Exelixis’ current plans, assumptions, beliefs and expectations. Forward-looking statements involve risks and uncertainties. Exelixis’ actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties, which include, without limitation, the potential failure of XL880 to demonstrate safety and efficacy in clinical testing and risks related to Exelixis’ dependence on and relationship with GlaxoSmithKline. These and other risk factors are discussed under “Risk Factors” and elsewhere in Exelixis’ quarterly report on Form 10-Q for the fiscal quarter ended September 30, 2007 and Exelixis’ other filings with the Securities and Exchange Commission. Exelixis expressly disclaims any duty, obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Exelixis’ expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based.