Exelixis (NASDAQ:EXEL), Inc. EXEL and partner Aurigene announced that the former has exercised its exclusive option for the latter’s novel CDK7 inhibitor under their 2019 agreement.
As a result, the company now assumed responsibility for the future clinical development, commercialization and global manufacturing of the compound, now known as XL102 (formerly AUR102).
XL102 is a potent, selective and orally bioavailable covalent inhibitor of cyclin-dependent kinase 7 (CDK7), which is an important regulator of the cellular transcriptional and cell cycle machinery.
Exelixis also submitted an Investigational New Drug Application (IND) to the FDA for evaluating XL102 alone or in a combination therapy for the treatment of inoperable locally advanced or metastatic solid tumors. The phase I study is expected to begin in the first quarter of 2021.
We note that Aurigene is a development-stage biotech company and a wholly-owned subsidiary of Dr. Reddy’s Laboratories Ltd. RDY.
The addition of the candidate will solidify Exelixis’ pipeline.
Per the terms of the agreement, Exelixis made an upfront payment of $10 million for exclusive options to license three pre-existing programs including XL102 from Aurigene.
Additionally, Exelixis and Aurigene initiated three drug discovery programs, led by the latter on mutually agreed-upon targets, in exchange for an additional upfront option payment of $2.5 million per program.
The company is also contributing to Aurigene’s research funding for facilitating the discovery and preclinical development work on all six programs. Exelixis will have the opportunity to exercise an exclusive option for each program until the time of IND filing acceptance as the programs mature. Upon exercising an option, Exelixis will make an option exercise payment to the latter and assume responsibility for that program’s future clinical development and commercialization including global manufacturing. Notably, the company will make an option exercise payment of $12 million to exercise its option for XL102.
Aurigene will also be eligible for clinical development, regulatory and sales milestones as well as royalties on sales after Exelixis in-licenses a program. Under the terms of their deal, the partner entity retains the limited development and commercial rights for India and Russia.
Last week, Exelixis exercised its exclusive option for Iconic’s lead oncology antibody-drug conjugate (ADC) program under the companies’ May 2019 agreement.
Shares of Exelixis have increased 7.6% in the year so far compared with the industry’s growth of 5.9%.
The pipeline progress has been encouraging in the year so far. Cabometyx tablets are approved for advanced renal cell carcinoma (RCC) and the previously-treated hepatocellular carcinoma (HCC).
In August 2020, Exelixis announced the submission of a supplemental new drug application (sNDA) to the FDA for cabozantinib in combination with Bristol-Myers’ BMY Opdivo for patients with advanced RCC. In October 2020, both companies announced that the FDA accepted Exelixis’ sNDA and Bristol-Myers’ supplemental biologics license application (sBLA), granted a Priority Review to both applications and assigned a target action date of Feb 20, 2021.
Exelixis currently carries a Zacks Rank #5 (Strong Sell).
A better-ranked player in the biotech space is Halozyme (NASDAQ:HALO) Therapeutics, Inc. HALO, which carries a Zacks Rank #2 (Buy), presently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Halozyme’s current-year earnings estimates have been revised 21 cents upward in the past 60 days.
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