Despite producing positive phase 3 data for its cancer compound cabozantinib this year, Exelixis
So rather than add to the burn rate by bringing another drug into the clinic, Exelixis has out-licensed its preclinical PI3K-delta program, including the most advanced compound, XL499, to Merck
XL499 trails Gilead Sciences'
The space may be getting crowded, but there appears to be plenty of patients to treat. In addition to blood cancers, PI3K delta inhibitors might also be used to treat inflammatory diseases. While it might seem weird that a drug would treat cancer and something like rheumatoid arthritis, it makes sense because the goal of both treatments is to dial back the immune system. That strategy has already proved to work for inhibitors of other immune-cell proteins. Roche and Biogen Idec's
Giving up most of the rights to XL499 and the rest of the program will look like a bad move if one of the drugs turns out to be a blockbuster, but given Exelixis' current state, there doesn't seem to be much other choice. Surviving to see your first blockbuster should be goal No. 1.
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Fool contributor Brian Orelli holds no position in any company mentioned. Check out his holdings and a short bio. The Motley Fool owns shares of Exelixis. Motley Fool newsletter services have recommended buying shares of Gilead Sciences and Exelixis. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.