Exelixis Inc. (EXEL:US) is working with Goldman Sachs Group Inc. to prepare for potential takeover offers after its experimental drug helped prostate-cancer patients in a study, said people with knowledge of the matter.
Exelixis hired Goldman in anticipation of possible bids after preliminary data on the treatment, XL184, was published Nov. 17, said one of the people, who asked not to be identified because the situation is private. Some large pharmaceutical companies have shown interest, the person said.
“We don’t comment on those types of reports which have been around the company for a long time,” Charles Butler, Exelixis’s vice president for investor relations, said yesterday in a telephone interview. “We have a long standing relationship with Goldman Sachs, we just did a public offering with them.”
Shares of South San Francisco, California-based Exelixis have more than doubled (EXEL:US) since publishing the data, which showed the drug helped men with prostate cancer whose tumors had reached the bone. The company said in December it would cut 260 jobs, about 65 percent of its workforce, and focus exclusively on advancing XL184, also known as cabozantinib.
Exelixis has sole rights to the treatment, after New York-based Bristol-Myers Squibb Co. (BMY:US) ended a partnership with the company in June. Exelixis also has drug development agreements with closely held German drugmaker Boehringer Ingelheim GmbH and Paris-based Sanofi-Aventis SA. (SAN)
Goldman Sachs spokeswoman Andrea Rachman declined to comment.
Exelixis rose (EXEL:US) 36 cents, or 3.3 percent, to $11.41 at 4 p.m. New York time in Nasdaq Stock Market composite trading.
There have been 272 acquisitions of U.S. biotechnology companies announced in the past 12 months with an average disclosed deal size of $182 million and an average premium of 28 percent, according to Bloomberg data.
Michael Morrissey, a company executive since 2000, was named chief executive officer in July to replace George Scangos, who departed to become CEO of Weston, Massachusetts-based Biogen Idec Inc. (BIIB:US) Exelixis was founded in 1994, sold shares for the first time in 2000 and has conducted five additional share offerings since. The most recent offering, completed on March 9, raised $179 million.
The biotechnology company, which has no marketed products, lost $92.3 million in 2010. Exelixis has accumulated a net loss totaling almost $1.2 billion since it started and expects to continue losing money “for the foreseeable future,” according to the company’s annual report filed Feb. 22.
As part of its job reduction plan, Exelixis fired 143 employees in December and had 240 remaining employees as of Feb. 4, according to the annual report.
To contact the reporters on this story: Rob Waters in San Francisco at firstname.lastname@example.org; Sasha Damouni in New York at Sdamouni2@bloomberg.net
To contact the editor responsible for this story: Reg Gale at email@example.com