Exelixis fourth-quarter revenues rise from $29.6M to $44.1M

Mar 9 2010

Exelixis, Inc. (Nasdaq:EXEL) today reported financial results for the fourth quarter and year ended December 31, 2009.

“We have further focused our resources on XL184, XL147 and XL765. We made substantial progress on these and other programs during 2009, and I look forward to presenting the results at ASCO in June.”

Revenues for the fourth quarter ended December 31, 2009 were $44.1 million, compared to $29.6 million for the comparable period in 2008. The increase in revenues was primarily due to increased license revenue from our 2008 collaboration with Bristol-Myers Squibb Company for XL184 and XL281 in addition to our 2009 collaboration with sanofi-aventis for XL147 and XL765. These increases in revenue were partially offset by a decrease in milestones related to our 2006 oncology collaboration with Bristol-Myers Squibb Company and the conclusion of various collaboration agreements with GlaxoSmithKline, Bristol-Myers Squibb Company and Genentech.

Revenues for the year ended December 31, 2009 were $151.8 million, compared to $117.9 million in 2008. The increase in revenues for the full year was primarily due to increased revenue relating to our new collaborations with sanofi-aventis for XL147 and XL765, our 2008 collaboration with Bristol-Myers Squibb Company for XL184 and XL281 and our 2009 collaboration with Boehringer Ingelheim for the S1P1 agonist program. These increases were partially offset by a decrease in milestones related to our 2006 oncology collaboration with Bristol-Myers Squibb Company, fluctuations in contract revenue related to milestones, and the conclusion of various collaboration agreements with GlaxoSmithKline, Bristol-Myers Squibb Company and Genentech.

Research and development expenses for the fourth quarter 2009 were $64.1 million compared to $56.9 million for the comparable period in 2008; and for the year were $234.7 million compared to $257.4 million for 2008. The increase in expenses in the quarter is primarily due to the increased development activities related mainly to XL184. The decrease in expenses for the full year reflects decreased personnel costs due to our November 2008 restructuring, the impact from other cost containment measures initiated in 2008, and the wind down of development expenses for discontinued programs, which were partially offset by increased development activities related mainly to XL184.

General and administrative expenses for the fourth quarter 2009 were $8.5 million compared to $9.1 million for the comparable period in 2008. General and administrative expenses for the year were $34.4 million compared to $36.9 million for 2008. The decrease in expense for the quarter is related primarily to a reduction in outside services and stock based compensation expense. The decrease for the year primarily reflects lower expenses for outside services as well as decreased personnel costs due to our November 2008 restructuring, partially offset by an increase in facilities costs.

Collaboration cost-sharing expenses for the fourth quarter 2009 were $1.8 million compared to $0.3 million of reimbursements for the comparable period in 2008. Collaboration cost-sharing expenses for the year were $4.6 million compared to $0.3 million of reimbursements for 2008. The increase in expense for both the quarter and full year reflects the net impact of the amount due under the agreement with Bristol-Myers Squibb Company for expenses incurred by Bristol-Myers Squibb Company on XL184 offset by our spend on XL281, for which we are fully reimbursed.

Other income (expense) for the fourth quarter 2009 was ($5.8) million compared to ($1.4) million for the comparable period in 2008. Other income (expense) for the year was ($18.9) million compared to $3.7 million in 2008. The increase in expense for the quarter and the year primarily reflects a charge to interest expense relating to the termination of the Deerfield credit facility. The increase in expense for the year also includes a one-time charge of $9.8 million as a result of the deconsolidation of Symphony Evolution, Inc. in June 2009.

Tax benefit for the fourth quarter 2009 was $7.3 million and for the full year was $1.3 million. The tax benefit for the quarter was primarily due to an amendment of the tax treaty between the United States and France in December 2009, which resulted in the reversal of $7.0 million recorded in the third quarter, relating to withholding tax to the French authorities associated with our license and collaboration agreement with sanofi-aventis. The income tax benefit for the full year reflects a $1.3 million refundable income tax credit generated by the Housing and Economic Recovery Act of 2008 and the American Recovery and Reinvestment Act of 2009.

Net loss attributable to Exelixis, Inc. for the quarter ended December 31, 2009 was $28.8 million, or $0.27 per share, compared to $38.0 million, or $0.36 per share, for the comparable period in 2008. For the year ended December 31, 2009, net loss was $135.2 million or $1.26 per share, compared to $162.9 million, or $1.54 per share in 2008. The decrease in net loss attributable to Exelixis, Inc. from 2008 to 2009 for both the quarter and the full year was primarily due to increases in revenue from our various collaborations as described above.

Cash and cash equivalents, marketable securities and restricted cash and investments totaled $221.0 million at December 31, 2009, compared to $284.2 million at December 31, 2008.

2009 Q4 Business Highlights and Recent Developments:

• Reported new data from a phase 2 trial of XL184 in patients with glioblastoma multiforme (GBM) at the 2009 Joint Meeting of the Society for Neuro-Oncology and the AANS/CNS Section on Tumors. The data were encouraging and demonstrate that XL184 is clinically active in this indication.
• Presented 13 posters on multiple Exelixis compounds at the 2009 AACR-NCI-EORTC International Conference.
• Expanded the clinical development programs for XL184 and XL147/XL765 in conjunction with Bristol-Myers Squibb Company and sanofi-aventis, respectively.
• Announced a restructuring yesterday that resulted in a reduction in our workforce of approximately 40%, or 270 employees, as a consequence of our continued strategy to focus resources on the development of our lead clinical compounds, XL184, XL147 and XL765, which are being studied in numerous trials from phases 1 to 3 in multiple different tumor types. We expect to save an estimated $90 million through 2011 and to record a restructuring charge of approximately $15 million in the first quarter of 2010.

"We are pleased with our accomplishments in 2009, which are clearly reflected in the significantly improved financial performance of the company. Our revenue has increased substantially as a result of our partnering efforts, and our expenses and net loss for 2009 are down compared to the prior year. Furthermore, with over $220 million in cash at the end of 2009, we comfortably met our cash guidance for the year,” said George A. Scangos, Ph.D., President and Chief Executive Officer of Exelixis. “We have further focused our resources on XL184, XL147 and XL765. We made substantial progress on these and other programs during 2009, and I look forward to presenting the results at ASCO in June."

Financial Outlook

For the full year 2010, we expect revenues in the range of $210 million to $240 million and operating expenses in the range of $280 million to $310 million, including a restructuring charge of approximately $15 million and stock-based compensation and other non-cash charges of approximately $16 million. The restructuring charge may increase significantly later in the year depending on additional charges that have not yet been finalized. The Company’s cash, cash equivalents, marketable securities and restricted cash balance at the end of 2010 is expected to be approximately $200 million.