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Exelixis Announces Settlement of Dispute with Genentech Regarding Companies’ Collaboration Agreement for Cobimetinib

SOUTH SAN FRANCISCO, Calif.--(BUSINESS WIRE)--Exelixis, Inc. (NASDAQ:EXEL) announced today a settlement of the company’s dispute with Genentech, a member of the Roche Group, concerning the parties’ collaboration for the development and commercialization of cobimetinib, which is marketed as COTELLIC®. Effective July 1, 2017, as part of the settlement the companies entered into an amendment (the “Amendment”) to the existing Collaboration Agreement, dated December 22, 2006, to revise the revenue and cost-sharing arrangements for the collaboration. The Amendment resolves the companies’ dispute pursuant to the arbitration demand filed on June 3, 2016, and aligns both companies’ interests in advancing cobimetinib as a promising therapy for patients with multiple forms of cancer.

The Amendment applies to COTELLIC®’s initial commercial application in combination with ZELBORAF® (vemurafenib), as well as future commercial uses of COTELLIC®, alone or in combination. Under its terms, Exelixis continues to be entitled to an initial equal share of U.S. profits and losses, which will decrease as sales increase as specified in the original 2006 agreement. However, effective as of July 1, 2017, the revenue applied to the profit and loss statement for the COTELLIC® collaboration (“the Collaboration P&L”) will be calculated using the average of the quarterly net selling prices of COTELLIC® and any additional branded Genentech product(s) prescribed with COTELLIC®. Exelixis will continue to share U.S. commercialization costs, while Genentech’s portion of these costs will now be allocated to the Collaboration P&L based on the number of products in the combination. Exelixis will continue to co-promote COTELLIC® in the U.S., providing up to 25 percent of the U.S. sales force. Outside of the U.S., Exelixis remains eligible for royalties on COTELLIC® sales according to the terms of the original 2006 agreement.

“The settlement and revised revenue and commercial cost-sharing arrangements lay the groundwork for our continued work together to maximize cobimetinib’s potential to help patients,” said Michael M. Morrissey, Ph.D., President and Chief Executive Officer of Exelixis. “Since signing our collaboration agreement with Genentech more than ten years ago, cobimetinib has advanced from our discovery and early clinical efforts into Genentech’s global clinical development organization – where it is now the subject of three ongoing or planned pivotal trials – and into commercial use around the world. With this new framework in place, we look forward to continuing our collaborative efforts with Genentech to maximize this promising medicine’s impact on the treatment of cancer.”

Genentech has been responsible for cobimetinib’s clinical development since it opted to further develop the compound following Exelixis’ determination of a maximum tolerated dose in phase 1 clinical trials. Since then, Genentech has undertaken a clinical development program focused on evaluating cobimetinib’s potential in combination with investigational and approved therapies. This program includes three phase 3 pivotal trials: IMblaze370, an ongoing and fully enrolled study evaluating cobimetinib and atezolizumab in third-line advanced or metastatic colorectal cancer; IMspire150 TRILOGY, an ongoing trial evaluating the combination of cobimetinib, atezolizumab and vemurafenib in patients with previously untreated BRAF V600 mutation-positive metastatic or unresectable locally advanced melanoma; and IMspire170, a planned study evaluating cobimetinib plus atezolizumab in patients with previously untreated BRAF wild-type metastatic or unresectable locally advanced melanoma expected to start in the third quarter of this year.

About the Cobimetinib Development Collaboration

Exelixis discovered cobimetinib internally and advanced the compound to investigational new drug (IND) status. In late 2006, Exelixis entered into a worldwide collaboration agreement with Genentech, under which Exelixis received initial upfront and milestone payments for signing the agreement and submitting the IND. Following the determination of the maximum tolerated dose in phase 1 by Exelixis, Genentech exercised its option to further develop cobimetinib.

Under the terms of the collaboration, Exelixis is entitled to an initial equal share of U.S. profits and losses, which will decrease as sales increase, and shares U.S. commercialization costs. In November 2013, Exelixis exercised its option to co-promote cobimetinib in the United States and fields 25 percent of the U.S. sales force, closely coordinating its efforts with Genentech. Outside of the United States, Exelixis is eligible to receive royalties on any sales.

Cobimetinib is now approved in multiple countries, including the U.S., European Union, Switzerland, Canada, Australia and Brazil, to treat specific forms of BRAF mutation-positive unresectable or metastatic melanoma, in combination with vemurafenib. The trade name for cobimetinib is COTELLIC®. Cobimetinib is also the subject of a clinical development program aimed at evaluating its potential in combination with a variety of investigational and approved therapies in disease settings including metastatic melanoma, triple-negative breast cancer and colorectal carcinoma.

Important: If a patient’s healthcare provider prescribes ZELBORAF® (vemurafenib), the patient should also read the Medication Guide that comes with ZELBORAF®.

COTELLIC® Indication

COTELLIC® is a prescription medicine that is used with the medicine ZELBORAF® to treat a type of skin cancer called melanoma:

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