Exelixis Restructures, Cuts 40% of Workforce

Exelixis, Inc. is restructuring as part of its continued strategy to focus resources on the development of its key late-stage compounds, XL184, XL147 and XL765. The restructuring also includes cutting its workforce by approximately 40%, or 270 employees. Although Exelixis will continue its efforts to advance other new compounds into development, the number will be reduced for the foreseeable future. The company has retained the ability to meet all of its existing obligations to partners and expects that future business development discussions for unpartnered clinical and preclinical compounds, will be unaffected.

As a result of the restructuring, the company estimates that its costs through 2011 will by reduced by approximately $90 million after restructuring costs. The savings are primarily related to reductions in compensation and benefits, lab supplies and clinical trial costs. The company expects to record a restructuring charge of approximately $15 million in 1Q10.

“The restructuring reflects our commitment to the strategic goals that we presented at our R&D Day in December 2009. We are focused on the aggressive development of our most advanced clinical compounds XL184, XL147 and XL765. Along with our investigators and partners, we remain enthusiastic about their potential as new anti-cancer agents and have retained the development expertise and capabilities to advance these compounds expeditiously. Our priority is to see ourselves through to the anticipated filing of our first NDA for XL184 in the second half of 2011,” said George A. Scangos, president and CEO of Exelixis, Inc. “We are convinced that the restructuring is the right step for the company and positions us well to move into the future. However, it is extremely difficult to release many people who have contributed substantially to the company over the years and who are our friends and colleagues.”

In addition to XL184, XL147 and XL765, the company will pursue development of XL888, an orally available small molecule inhibitor of HSP90 currently in Phase I, XL139 and XL413, compounds co-developed with BMS, as well as its preclinical program focused on PI3K delta.