Exelixis, Inc. (NASDAQ:EXEL) and Ipsen jointly announced an exclusive licensing agreement for the commercialization and further development of cabozantinib, Exelixis’ lead oncology drug. Under the agreement, Ipsenwill have exclusive commercialization rights for current and potential future cabozantinib indications outside of the United States, Canada and Japan. This agreement includes rights to COMETRIQ®, which is currently approved in the European Union (EU) for the treatment of adult patients with progressive, unresectable, locally advanced or metastatic medullary thyroid cancer (MTC). The companies have agreed to collaborate on the development of cabozantinib for current and potential future indications. Exelixis will maintain exclusive commercial rights for cabozantinib in the United States and Canada, and continue its discussions to partner commercial rights inJapan.

Under the agreement, Exelixis will receive a $200 million upfront payment. Exelixis is eligible to receive regulatory milestones, including $60 million upon the approval of cabozantinib in Europe for advanced renal cell carcinoma (RCC) and $50 million upon the filing and approval of cabozantinib in Europe for advanced hepatocellular carcinoma (HCC), as well as additional regulatory milestones for potential further indications. The agreement also includes up to $545 million of potential commercial milestones and provides for Exelixis to receive tiered royalties up to 26% on Ipsen’s net sales of cabozantinib in its territories.

Marc de Garidel, Chairman and Chief Executive Officer of Ipsen said: “The robust results from the METEOR study in advanced renal cell carcinoma demonstrate that cabozantinib has the potential to become a key oncology product in Europe. This transaction will help Ipsen accelerate the growth of the company and strengthen its oncology footprint in Europe. We are excited to bring cabozantinib to patients and clinicians around the world.”

Future commercial indications for cabozantinib could include advanced HCC, the subject of CELESTIAL, an Exelixis-sponsored phase 3 pivotal trial for which top-line results are anticipated in 2017. Additional earlier-stage studies are under way through Exelixis’ collaboration with the National Cancer Institute’s Cancer Therapy Evaluation Program (NCI-CTEP), and its ongoing Investigator-Sponsored Trial (IST) program. Through these two programs, there are more than 45 ongoing or planned studies including trials in advanced RCC, bladder cancer, colorectal cancer, non-small cell lung cancer, and endometrial cancer.

“In Ipsen, Exelixis has an ideal partner to maximize the potential for cabozantinib to have a positive impact on the treatment of cancer on a global basis,” said Michael M. Morrissey, Ph.D., President and Chief Executive Officer of Exelixis. “Ipsen’s established international oncology marketing presence, late-stage clinical development expertise and shared vision with Exelixis for the franchise potential of cabozantinib will accelerate cabozantinib’s commercialization in its territories, while Exelixis remains focused on our launch in the United States. While our immediate priority will be on advanced renal cell carcinoma, Exelixis and Ipsen are committed to exploring and potentially developing cabozantinib in a variety of cancer settings.” (Original Source)

Shares of Exelixis jumped nearly 12% in after-hours trading. EXEL has a 1-year high of $6.81 and a 1-year low of $2.45. The stock’s 50-day moving average is $4.31 and its 200-day moving average is $5.33.

On the ratings front, Exelixis has been the subject of a number of recent research reports. In a report issued on February 11, Cowen analyst Eric Schmidt reiterated a Buy rating on EXEL. Separately, on January 19, Leerink Swann’s Michael Schmidt upgraded the stock to Buy and has a price target of $7.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Eric Schmidt and Michael Schmidt have a total average return of 13.1% and -3.3% respectively. Schmidt has a success rate of 33.7% and is ranked #249 out of 3682 analysts, while Schmidt has a success rate of 45.7% and is ranked #2831.

Exelixis Inc is a biotechnology company that develops small molecule therapies for the treatment of cancer.