Cancer treatment developer Exelixis Inc. (NASDAQ: EXEL) is trading very heavy volume today and getting a sharp price boost following a positive result in a phase 3 pivotal trial of a combination of drugs including the company’s cobimetinib delivered a statistically significant increase in progression-free survival for a certain type of melanoma. The drug was used in conjunction with vemurafenib in a trial led by Exelixis partner Genentech.
Exelixis discovered the cobimetinib drug and entered a co-development agreement with Genentech in 2006 which paid Exelixis initial upfront and milestone payments for signing the agreement and submitting the investigational new drug application. Exelixis completed the first phase developing the drug before turning the development work over to Genentech.
Exelixis exercised an option in November 2013 to co-promote the drug, if it is approved, in the U.S. The company is entitled to an initial equal share in U.S. profits and losses. The company’s share will decrease as sales increase and Exelixis will also help pay marketing and commercialization costs. The company may also receive royalties for sales outside the U.S.
The company is recovering from a sharp dip last March when shares fell 35% following an report on another of the company’s drugs.
Shares of Exelixis are up about 22% late Monday afternoon at $4.06 in a 52-week range of $3.02 to $8.41.
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