During the William Blair 28th Annual Growth Stock Conference in Chicago, the CFO of Exelixis, Inc. (EXEL), Frank Karbe, presented on the company’s corporate relationships with biotechnology and pharmaceutical companies, recent company funding, and other company news. Exelixis, Inc. is a developmental stage biotechnology company that has dedicated their efforts to the discovery and development of small molecule therapeutics for the treatment of cancer and other serious diseases.
Mr. Karbe explained how Exelixis established important relationships with major pharmaceutical companies, “We are unique in the industry and have established a leadership position in a number of key targets and pathways in the oncology and metabolic disease space. We have consistently filed three to four high-quality INDs over the last several years that have resulted in well over a dozen compounds put into clinical development. Some of these are moving forward in the very capable hands of our partners, and some of them are being developed by us.” The companies that Exelixis has alliances with include GlaxoSmithKline, Bristol-Myers Squibb, Genentech, Wyeth Pharmaceuticals, and Daiichi-Sankyo.
The company has invested in their fully integrated drug discovery platform to expand the growth of their development pipeline, which primarily focuses on cancer research. Their product pipeline includes investigational compounds in phases 1 and 2 of clinical development. Recently, the company signed a $150 million funding agreement with Deerfield Management, one of the company’s largest shareholders.
Mr. Karbe noted, “This funding agreement allows us to access it in increments at our discretion at any time during the next 18 months. If we were to use it, we can repay at any time at our discretion over the next five years. This gives us substantial flexibility and allows us to manage our cost of capital and manage dilution. This was the right deal at the right time. We have been quite thoughtful over the last few years regarding the funding of the company. In fact, the majority of our funding has come from non-dilutive sources. Only one third of the $700 million that has been raised over the last several years has come from the capital market. We expect to end this year with about $100 million-$130 million in revenue. Operating expenses are expected to be around $300 million. Our cash balance should be approximately $200 million at the end of the year.”
Frank Karbe has been with the company since July 2007, and is the executive vice president and CFO. From 1997 to January 2004, Mr. Karbe worked as an investment banker for Goldman Sachs & Co., where he became vice president in the healthcare group focusing on corporate finance, merger agreements, and acquisition in the biotechnology industry. Prior to his involvement with Goldman Sachs, he held various positions in the finance department of The Royal Dutch/Shell Group in Europe.
Let us hear your thoughts below:
