March 10, 2010: Exelixis, Inc has announced a restructuring as a consequence of its continued strategy to focus resources on the development of its key late-stage compounds. As its first priority, the company will aggressively advance XL184, XL147 and XL765, each of which is the subject of a large clinical development programme. Additionally, Exelixis retains a fully integrated R&D organisation, and will continue to advance new compounds into development, although the number will be reduced for the foreseeable future. The company says it has retained the ability to meet all of its obligations to existing partners. Further, as a result of its retained R&D capabilities and its numerous unpartnered clinical and preclinical compounds, the company expects that its ongoing and future business development discussions will be unaffected.
The restructuring results in a reduction of Exelixis’ workforce by about 40 per cent, or 270 employees. As a result of the restructuring, the company estimates that its cumulative cash expenditures to 2011 will by reduced by about $90 million after payment of restructuring costs. The savings are primarily related to reductions in compensation and benefits, laboratory supplies and clinical trial costs. The company expects to record a restructuring charge of about $15 million in the first quarter of 2010, which may increase later in the year, depending on potential facility-related charges and other write-downs that have not yet been finalised.
In addition to XL184, XL147 and XL765, Exelixis will continue development of XL888, an orally available small-molecule inhibitor of HSP90 currently inPphase 1, XL139 and XL413, compounds co-developed with BMS, as well as its preclinical programme focused on PI3K delta.
