SOUTH SAN FRANCISCO, Calif., Nov. 5 /PRNewswire-FirstCall/ -- Exelixis, Inc. today reported financial results for the third quarter ended September 30, 2007.
Revenues for the quarter ended September 30, 2007 were $26.8 million, compared to $23.5 million for the comparable period in 2006. The increase in revenues from 2006 to 2007 was primarily due to revenue recognition associated with new collaboration agreements with Bristol-Myers Squibb Company for various oncology programs and Genentech, Inc. for the XL518 program. The increase was partially offset by the completion of revenue recognition related to the upfront payment associated with the collaboration agreement with Daiichi Sankyo Company Limited for our mineralocorticoid receptor (MR) program.
Research and development expenses for the quarter ended September 30, 2007 were $58.6 million, compared to $46.0 million for the comparable period in 2006. The increase from 2006 to 2007 was primarily due to increased development expenses associated with the continued expansion of our clinical trial activity and the advancement of our compounds through preclinical development.
General and administrative expenses for the quarter ended September 30, 2007 were $10.8 million, compared to $8.8 million for the comparable period in 2006. The increase from 2006 to 2007 was primarily due to personnel expenses and stock-based compensation expense to support our expanding operations.
Net loss for the quarter ended September 30, 2007 was $13.7 million, or $0.14 per share, compared to $25.2 million, or $0.30 per share, for the comparable period in 2006. The decrease in the net loss from 2006 to 2007 was primarily due to an $18.8 million gain on the sale of assets recognized in conjunction with our transaction with Agrigenetics Inc., a wholly-owned subsidiary of The Dow Chemical Company, which was accounted for as a sale of our plant trait business.
Cash and cash equivalents, short-term and long-term marketable securities, investments held by Symphony Evolution, Inc. (a consolidated clinical development financing vehicle) and restricted cash and investments totaled $297.6 million at September 30, 2007, compared to $263.2 million at December 31, 2006.
Recent Developments
We presented phase 2 data for XL647 and XL880, and phase 1 data for XL184, XL765 and XL147 at the 2007 AACR-NCI-EORTC International Conference on Molecular Targets and Cancer Therapeutics in San Francisco. In total, 13 abstracts were accepted for poster presentation at the conference, reporting data from clinical trials or preclinical studies of XL880, XL647, XL184, XL147, XL765, XL820, XL844 and XL518.
We also announced that a recently completed phase 2 trial of XL784 did not meet its primary endpoint of reducing proteinuria compared with placebo in patients with proteinuria associated with diabetic nephropathy. Various subgroup analyses suggest that the compound may have potential to benefit patients with this disease. We submitted the XL784 data report to GSK on October 22, 2007 and GSK has 90 days from the date of submission of the data report to determine whether it will select XL784 for further clinical development and commercialization.
"The third quarter of 2007 was marked by a number of milestones for Exelixis," said George A. Scangos, Ph.D., president and chief executive officer of Exelixis. "During the quarter, we clarified ownership of our lead compound, XL647, and began with GSK an accelerated review of XL880, which we believe to be the most advanced MET inhibitor in clinical development. We also presented encouraging phase 2 clinical data for XL647 and continued to make preparations to begin pivotal trials for the compound in the first half of next year. After the quarter closed, we presented encouraging clinical data on seven of our other pipeline compounds at the AACR-NCI-EORTC conference, as well as updated data for XL647. Throughout the quarter, we continued to effectively manage our finances and should finish the year with more than $270 million."
Financial Outlook
With respect to financial expectations for the full year 2007, we are reducing our revenue guidance to a range of $110.0 to $120.0 million from a range of $120.0 to $135.0 million due principally to a change in timing as it relates to a potential selection milestone under our collaboration with GSK. We are maintaining our operating expense guidance at $260.0 to $290.0 million and we are increasing our guidance for cash and cash equivalents, short-term and long-term marketable securities, investments held by Symphony Evolution, Inc. and restricted cash and investments to a balance of greater than $270.0 million at the end of the year.
Conference Call and Webcast
Exelixis' management will discuss the company's financial results for the quarter ended September 30, 2007, on a conference call beginning at 2:00 p.m. PT/ 5:00 p.m. ET today, Monday, November 5, 2007. To listen to a webcast of the discussion, visit the Event Calendar page under Investors at www.exelixis.com.
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 of 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.
Forward-Looking Statement
This press release contains forward-looking statements, including, without limitation, statements related to the future development and potential efficacy of XL647, the future development of our other compounds, the sufficiency of our resources to develop XL647 and our other compounds and pipeline, additional research funding to be received from Bristol-Myers Squibb, our estimated future revenues and expenses, our estimated future balances of cash and cash equivalents, short-term and long-term marketable securities, investments held by Symphony Evolution, Inc. and restricted cash and investments, and other matters discussed above under "Financial Outlook". Words such as "expect," "should," "initiate," "suggest," "may," "will" and "believe" and similar expressions are intended to identify forward-looking statements. These forward-looking statements are only predictions and are based upon our current plans, assumptions, beliefs and expectations. Forward-looking statements involve risks and uncertainties. Our 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 XL647 and our other compounds to demonstrate safety and efficacy in clinical testing, risks related to our dependence on and relationship with GSK and Symphony Evolution, Inc. and risks related to our need for additional financing. These and other risk factors are discussed under "Risk Factors" and elsewhere in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2007 and our other filings with the Securities and Exchange Commission. We expressly disclaim any duty, obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based.
CONTACT: Frank Karbe, Chief Financial Officer, +1-650-837-7565,
fkarbe@exelixis.com, or Charles Butler, Director, Investor Relations,
+1-650- 837-7277, cbutler@exelixis.com, both of Exelixis, Inc.
Web site: http://www.exelixis.com//
