Exelixis has seized on the newfound momentum for its experimental prostate cancer drug by raising a big new load of cash.
The South San Francisco-based drug developer (NASDAQ: EXEL) said today it has grossed $165 million through a new stock offering, and will take home about $156 million after paying expenses. The company sold 15 million new shares of stock at $11 apiece, and is granting its underwriters an option to buy another 2.25 million more shares over the coming 30 days. Goldman, Sachs, and Cowen & Co. co-led the offering, and were assisted by Citi and Lazard Capital Markets.
Exelixis was ice-cold a year ago, but it has been red-hot for a few months now as more data has emerged to support its lead drug candidate, cabozantinib (XL184), for patients with prostate cancer. Last year, the company endured a mass layoff; a major partner (Bristol-Myers Squibb) walked away from its interest in XL184; and the CEO at the time quit to take a bigger job at Weston, MA-based Biogen Idec (NASDAQ: BIIB). The stock fell as low as $2.86 back in August, as I described in a feature story in which I interviewed CEO Mike Morrissey last fall.
Morrissey assured me then that things were about to turn around at a medical meeting in November, and they did. The company reported at a meeting in Berlin, Germany that 19 out of 20 patients with prostate cancer had at least partial clearance of bone lesions where the cancer had spread. More confirmatory data emerged on Feb. 17 at a symposium of the American Society of Clinical Oncology when Exelixis had more follow up data from 100 patients, which continued to show what amounts to an unprecedented effect against bone lesions—which are signs of serious bone pain that patients dread.
Exelixis will have to generate a lot more proof, on standard questions the FDA wants answered, like whether the drug can keep tumors from spreading and/or help people live longer. But by adding this much cash—on top of its existing cash stockpile of $256 million heading into this year—will give Exelixis a lot more flexibility in how hard and fast it wants to push this drug forward in clinical trials.
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