Exelixis, Inc. (EXEL) 2013年年度報告「NASDAQ」.pdf

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1、Committed to Patients.Making Every Moment Count.People living with cancer arent just patients.They are our family,friends,co-workers,and loved ones.Everyone at Exelixis has been touched by cancer,either through personal experience,or through our efforts at the company.We are dedicated to working on

2、behalf of all those fighting this terrible disease.That work includes two phase 3 pivotal trials of cabozantinib in men with metastatic castration-resistant prostate cancer(mCRPC):COMET-1 and COMET-2.Prostate cancer is currently the second leading cause of cancer death among men in the United States

3、,and patients with metastatic prostate cancer,including mCRPC,in the bone or other distant sites have a 5-year relative survival rate of only 28%.*We expect that top-line data from our COMET-1 trial this year will provide insights into the role that cabozantinib may play in improving survival for me

4、n with mCRPC.We also expect top-line data from COMET-2 before year end.If positive,results from COMET-2 could show that cabozantinib reduces both the pain associated with mCRPC as well as the usage of narcotic medication to manage that pain.In 2014,we also expect to complete the overall survival ana

5、lysis from EXAM,our phase 3 pivotal trial in progressive,metastatic medullary thyroid cancer that served as the basis for cabozantinibs first approvals in the United States and the European Union.Additional phase 3 pivotal trials are ongoing to evaluate cabozantinib in metastatic renal cell cancer a

6、nd advanced hepatocellular cancer,which also have poor survival rates.Our work on these pivotal trials is just one aspect of our commitment to deliver new treatment options to the patients that need them.Its a commitment that extends back to the earliest days of the company,and its what drives us to

7、 apply our knowledge,talents,and resources to oncology drug development and commercialization,day in and day out,in the hopes of making a difference for men and women living with cancer.For our family,friends,co-workers,and loved ones,and for yours and everyones.For patients.*http:/www.cancer.org/ca

8、ncer/prostatecancer/detailedguide/prostate-cancer-survival-ratesClinical TrialCabozantinibCobimetinib*Disease SettingExpected DataStatusCOMET-1Metastatic Castration-Resistant Prostate CancerPhase 3Top-Line Data,Overall Survival Endpoint 2014COMET-2Metastatic Castration-Resistant Prostate CancerPhase

9、 3Top-Line Data,Pain Palliation Endpoint 2014EXAMProgressive,Metastatic Medullary Thyroid CancerPhase 3Overall Survival Readout 2014METEORMetastatic Renal Cell CarcinomaPhase 3Top-Line Data,Progression-Free Survival Endpoint 2015CELESTIALAdvanced Hepatocellular CancerPhase 3Top-Line Data,Overall Sur

10、vival Endpoint 2016/2017 coBRIMLocally advanced/unresectable or metastatic melanoma with BRAF V600 mutationPhase 3Top-Line Data,Progression-Free Survival Endpoint 2014*Cobimetinib is being developed by Roche and Genentech,a member of the Roche Group,under a collaboration agreement with Exelixis.To O

11、ur StockholdersAmerica launched the war on cancer more than 40 years ago.Much has changed in the intervening decades,including the recognition that cancer is not a single disease.In fact,it is so highly individualized that we now talk about cancer prevention,diagnosis,and treatment in the context of

12、 personalized or precision medicine driven by the specific genetic signature of each patients tumor.The development of new generations of targeted cancer therapies seeks to harness this fact to provide improved treatment options for individual patients with different types of the disease.As the prac

13、tice of personalized medicine evolves,however,it can feel as if the language we use to describe oncology has not:large-scale and society-wide war metaphors still persist.But the fact is,for most patients and their families cancer remains an intensely personal struggle,and is better described as a se

14、ries of private,individual battles fought every day by people like you and me.Some of these battles are for survival.Some are fights to complete challenging treatment regimens.And others are a daily struggle to get to work or to celebrate lifes small pleasures.This reality challenges and motivates e

15、ach of us at Exelixis to advance novel therapies that may help improve survival,manage disease symptoms,and give patients hope for the future.Seeing how COMETRIQ(cabozantinib),our first approved product,helps patients with progressive,metastatic medullary thyroid cancer(MTC)gives us an even greater

16、sense of urgency to provide similar experiences to more patients who are each fighting their own personal battles with cancer.We want to help patients in their individual battles by maximizing cabozantinibs potential to treat a variety of cancers.The available clinical data demonstrate that cabozant

17、inib can improve progression-free survival in patients with progressive,Michael M.Morrissey,Ph.D.President and Chief Executive Officermetastatic MTC.Data from other investigational trials suggest cabozantinib may also provide clinical benefit in several other types of cancer,and these findings have

18、encouraged us to explore its use in multiple settings.Through our own studies,and our collaborations with the National Cancer Institute(NCI)and individual clinical investigators,cabozantinibs clinical development program now includes more than 50 clinical trials in diverse indications,including five

19、 phase 3 pivotal trials.Our current priority is to evaluate cabozantinib in metastatic castration-resistant prostate cancer(mCRPC).Despite important treatment advances over the past several years,the American Cancer Society estimates that nearly 30,000 men will die of prostate cancer in the United S

20、tates this year,and many more will struggle to live with it.*Our focus on mCRPC is based on phase 2 clinical data suggesting cabozantinib can provide diverse clinical benefits,including the ability to target both soft tissue lesions and bone metastases,and their associated pain.No approved therapy h

21、as been shown to address all three of these important aspects of the disease.So if cabozantinib is successful in phase 3 pivotal trials and approved,it could become a unique treatment option.Were conducting two phase 3 pivotal trials in mCRPC,and we expect top-line data from both in 2014.The trials

22、are in a late-stage setting,in men who have previously been treated with chemotherapy and at least one of two newer androgen pathway-targeting therapies.This patient population has not been extensively studied,and our work here reflects our commitment to develop new treatment options for the patient

23、s that need them most.Our COMET-1 trial is evaluating overall survival in patients treated with cabozantinib compared with prednisone.The trial is fully enrolled and,in March 2014,the Independent Data Monitoring Committee completed a pre-planned interim analysis and recommended COMET-1 proceed to it

24、s final analysis.Our COMET-2 trial is evaluating pain palliation in patients with bone metastases treated with cabozantinib compared with mitoxantrone and prednisone;this study continues to enroll.As we await the availability of top-line data from both trials,we are preparing to quickly file with U.

25、S.and European regulatory agencies should the data be positive.In 2013,we also initiated additional phase 1b/2 trials in patients with mCRPC to evaluate cabozantinib in combination with other agents in earlier lines of therapy.All of our work in prostate cancer is directed at broadening the potentia

26、l clinical utility of cabozantinib and expanding the number of patients who may benefit from it.We are keenly aware that patients with other cancers also face limited or suboptimal treatment options.To potentially meet these needs and support thousands of additional patients,we initiated pivotal tri

27、als of cabozantinib in metastatic renal Our work in metastatic castration-resistant prostate cancer reflects our commitment to develop new treatment options for the patients that need them most.*http:/www.cancer.org/cancer/prostatecancer/detailedguide/prostate-cancer-key-statisticscell cancer and ad

28、vanced hepatocellular cancer in 2013,and are planning to initiate a phase 2 clinical trial in a specific subset of non-small cell lung cancer patients who have RET gene fusions.An additional fourteen phase 1 and 2 clinical trials are being conducted under our collaboration with the NCI;data from the

29、se trials will help guide our selection of additional indications for pivotal studies.Our investigator-sponsored trial(IST)program further expands cabozantinibs clinical development program and enables clinicians to design trials that reflect patients unmet needs in real world settings.Cabozantinib

30、is not the only Exelixis-discovered compound with the potential to support patients in their battle with cancer.Roche and Genentech,Inc.,a member of the Roche Group,are developing cobimetinib for the treatment of locally advanced/unresectable or metastatic melanoma carrying a BRAF V600 mutation.Cobi

31、metinib is a highly selective inhibitor of MEK that Exelixis discovered,investigated in phase 1 clinical studies,and partnered with Genentech in 2006.Encouraging data from a phase 1 trial of cobimetinib in combination with vemurafenib were presented in 2013.Although the trial was primarily designed

32、to evaluate safety of the combination regimen,objective responses were observed in 85%of patients who received the combination and had not previously been treated with a BRAF inhibitor.Roche and Genentech are currently conducting a phase 3 pivotal trial evaluating vemurafenib alone or in combination

33、 with cobimetinib in previously untreated patients with malignant melanoma harboring the BRAF V600 mutation,and top-line data from this trial are expected this year.If cobimetinib successfully reaches the market,our agreement with Genentech includes a U.S.profit share and co-promotion agreement,and

34、Exelixis is also eligible for royalties on sales outside the United States.It is tempting to look at our opportunities with cabozantinib and cobimetinib and consider how the success of the current pivotal trials for either or both of these programs could transform Exelixis as a company.Yet we know t

35、hat our success will be defined not only by the number of products we commercialize or the size of the markets we serve,but also by the benefit we may bring to patients.We deeply appreciate the support of our stockholders and leaders in the oncology community,but it is our focus on supporting patien

36、ts and their families that gives us the greatest sense of purpose.In 2014,we remain committed to our efforts to help thousands of cancer patients with their own personal battles against this terrible disease.Michael M.Morrissey,Ph.D.President and Chief Executive OfficerWe know our success will be de

37、fined by the benefit we may bring to patients.UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549FORM 10-K(Mark One)ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended:December 27,2013 or TRANSITION REPORT PURSUANT TO SECTION 1

38、3 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the transition periodfrom toCommission File Number:0-30235EXELIXIS,INC.(Exact name of registrant as specified in its charter)Delaware04-3257395(State or other jurisdiction ofincorporation or organization)(I.R.S.EmployerIdentification Number)210 Eas

39、t Grand Ave.South San Francisco,CA 94080(650)837-7000(Address,including zip code,and telephone number,including area code,of registrants principal executive offices)Securities Registered Pursuant to Section 12(b)of the Act:Title of Each ClassName of Each Exchange on Which RegisteredCommon Stock$.001

40、 Par Value per ShareThe Nasdaq Stock Market LLCSecurities Registered Pursuant to Section 12(g)of the Act:NoneIndicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the SecuritiesAct.Yes No Indicate by check mark if the registrant is not required to file re

41、ports pursuant to Section 13 or 15(d)of theAct.Yes No Indicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of theSecurities Exchange Act of 1934 during the preceding 12 months(or for such shorter period that the registrant was required tofi

42、le such reports),and(2)has been subject to such filing requirements for the past 90 days.Yes No Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site,if any,every Interactive Data File required to be submitted and posted pursuant to Rule 405

43、of Regulation S-T during the preceding12 months(or for such shorter period that the registrant was required to submit and post such files).Yes No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein,and will not be contained,to the

44、best of registrants knowledge,in definitive proxy or information statements incorporated byreference in Part III of this Form 10-K or any amendment to this Form 10-K.Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer or asmaller re

45、porting company.See the definitions of“large accelerated filer,”“accelerated filer”and“smaller reportingcompany”in Rule 12b-2 of the Exchange Act.(Check one):Large accelerated filer Accelerated filer Non-accelerated filer(Do not check if a smaller reportingcompany)Smaller reporting company Indicate

46、by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of theAct).Yes No State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed byreference to the price at which the common equity was last sold,or the average bid and aske

47、d price of such common equity,asof the last business day of the registrants most recently completed second fiscal quarter:$820,780,802(Based on the closingsales price of the registrants common stock on that date.Excludes an aggregate of 3,315,554 shares of the registrantscommon stock held by persons

48、 who were directors and/or executive officers of the registrant at June 28,2013 on the basis thatsuch persons may be deemed to have been affiliates of the registrant at such date.Exclusion of such shares should not beconstrued to indicate that any such person possesses the power,direct or indirect,t

49、o direct or cause the direction of themanagement or policies of the registrant or that such person is controlled by or under common control with the registrant.)As of February 19,2014,there were 194,614,305 shares of the registrants common stock outstanding.DOCUMENTS INCORPORATED BY REFERENCECertain

50、 portions of the registrants definitive proxy statement to be filed with the Securities and Exchange Commissionpursuant to Regulation 14A,not later than April 26,2014,in connection with the registrants 2014 Annual Meeting ofStockholders are incorporated herein by reference into Part III of this Annu

51、al Report on Form 10-K.EXELIXIS,INC.ANNUAL REPORT ON FORM 10-KINDEXPagePART IItem 1.Business.3Item 1A.Risk Factors.24Item 1B.Unresolved Staff Comments.45Item 2.Properties.45Item 3.Legal Proceedings.46Item 4.Mine Safety Disclosures.46PART IIItem 5.Market for Registrants Common Equity,Related Stockhol

52、der Matters and Issuer Purchases ofEquity Securities.47Item 6.Selected Financial Data.49Item 7.Managements Discussion and Analysis of Financial Condition and Results of Operations.51Item 7A.Quantitative and Qualitative Disclosures About Market Risk.73Item 8.Financial Statements and Supplementary Dat

53、a.74Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.117Item 9A.Controls and Procedures.117Item 9B.Other Information.119PART IIIItem 10.Directors,Executive Officers and Corporate Governance.120Item 11.Executive Compensation.120Item 12.Security Ownership of

54、Certain Beneficial Owners and Management and Related StockholderMatters.120Item 13.Certain Relationships and Related Transactions,and Director Independence.122Item 14.Principal Accounting Fees and Services.122PART IVItem 15.Exhibits,Financial Statement Schedules.123SIGNATURES.124PART ISome of the st

55、atements under the captions“Risk Factors,”“Managements Discussion and Analysis ofFinancial Condition and Results of Operations”and“Business”and elsewhere in this Annual Report onForm 10-K are forward-looking statements.These statements are based on our current expectations,assumptions,estimates and

56、projections about our business and our industry and involve known and unknownrisks,uncertainties and other factors that may cause our companys or our industrys results,levels of activity,performance or achievements to be materially different from any future results,levels of activity,performance ora

57、chievements expressed or implied in,or contemplated by,the forward-looking statements.Words such as“believe,”“anticipate,”“expect,”“intend,”“plan,”“focus,”“assume,”“goal,”“objective,”“will,”“may,”“would,”“could,”“estimate,”“predict,”“potential,”“continue,”“encouraging”or the negative of such termsor

58、 other similar expressions identify forward-looking statements.Our actual results and the timing of events maydiffer significantly from the results discussed in the forward-looking statements.Factors that might cause such adifference include those discussed in“Item 1A.Risk Factors”as well as those d

59、iscussed elsewhere in this AnnualReport on Form 10-K.These and many other factors could affect our future financial and operating results.Weundertake no obligation to update any forward-looking statement to reflect events after the date of this report.Exelixis has adopted a 52-or 53-week fiscal year

60、 that generally ends on the Friday closest toDecember 31st.Fiscal year 2011,a 52-week year,ended on December 30,2011,fiscal year 2012,a 52-weekyear,ended on December 28,2012,fiscal year 2013,a 52-week year,ended on December 27,2013,and fiscalyear 2014,a 53-week year,will end on January 2,2015.For co

61、nvenience,references in this report as of and forthe fiscal years ended December 30,2011,December 28,2012 and December 27,2013,are indicated on acalendar year basis,ended December 31,2011,2012 and 2013,respectively.ITEM 1.BUSINESSOverviewExelixis,Inc.(“Exelixis,”“we,”“our”or“us”)is a biotechnology c

62、ompany committed to developing smallmolecule therapies for the treatment of cancer.Our two most advanced assets,COMETRIQ(cabozantinib),ourwholly-owned inhibitor of multiple receptor tyrosine kinases,and cobimetinib(GDC-0973/XL518),a potent,highly selective inhibitor of MEK,which we out-licensed to G

63、enentech,Inc.(a wholly-owned member of theRoche Group),or Genentech,are currently the subject of six ongoing phase 3 pivotal trials.Top-line results fromfour of these pivotal trials are expected in 2014.We are focusing our proprietary resources and development and commercialization efforts primarily

64、 onCOMETRIQ(cabozantinib),which was approved on November 29,2012,by the U.S.Food and DrugAdministration,or FDA,for the treatment of progressive,metastatic medullary thyroid cancer,or MTC,in theUnited States,where it became commercially available in late January 2013.In December 2013,the EuropeanComm

65、ittee for Medicinal Products for Human Use,or CHMP,issued a positive opinion on the MarketingAuthorization Application,or MAA,submitted to the European Medicines Agency,or EMA,for COMETRIQfor the proposed indication of progressive,unresectable,locally advanced,or metastatic MTC.The CHMPspositive opi

66、nion will be reviewed by the European Commission,which has the authority to approve medicinesfor the European Union.Cabozantinib is being evaluated in a broad development program,including two ongoing phase 3 pivotaltrials in metastatic castration-resistant prostate cancer,or CRPC,an ongoing phase 3

67、 pivotal trial in metastaticrenal cell cancer,or RCC,and an ongoing phase 3 pivotal trial in advanced hepatocellular cancer,or HCC.Webelieve cabozantinib has the potential to be a high-quality,broadly-active and differentiated anti-cancer agentthat can make a meaningful difference in the lives of pa

68、tients.Our objective is to develop cabozantinib into amajor oncology franchise,and we believe that the approval of COMETRIQ(cabozantinib)for the treatment ofprogressive,metastatic MTC provides us with the opportunity to establish a commercial presence in furtherance3of this objective.We currently ex

69、pect top-line data from our two phase 3 pivotal trials of cabozantinib in CRPCand the overall survival analysis of our phase 3 pivotal trial of cabozantinib in progressive,metastatic MTC in2014.Cobimetinib is also being evaluated in a broad development program,including a multicenter,randomized,doub

70、le-blind,placebo-controlled phase 3 clinical trial evaluating the combination of cobimetinib withvemurafenib versus vemurafenib in previously untreated BRAFV600 mutation positive patients withunresectable locally advanced or metastatic melanoma that was initiated on November 1,2012.Roche andGenentec

71、h have provided guidance that they expect top-line data from this trial in 2014.Under the terms of our co-development agreement with Genentech for cobimetinib,we are entitled to aninitial equal share of U.S.profits and losses for cobimetinib,which will decrease as sales increase,and will shareequall

72、y in the U.S.marketing and commercialization costs.The profit share has multiple tierswe are entitled to50%of profits from the first$200 million of U.S.actual sales,decreasing to 30%of profits from U.S.actualsales in excess of$400 million.We are entitled to low double-digit royalties on ex-U.S.net s

73、ales.In November2013,we exercised an option under the co-development agreement to co-promote in the United States.We willprovide up to 25%of the total sales force for cobimetinib in the United States if commercialized,and will call oncustomers and otherwise engage in promotional activities using tha

74、t sales force,consistent with the terms of theco-development agreement and a co-promotion agreement to be entered into by the parties.Our StrategyWe believe that the available clinical data demonstrate that cabozantinib has the potential to be a broadlyactive anti-cancer agent,and our objective is t

75、o build cabozantinib into a major oncology franchise.The initialregulatory approval of COMETRIQ(cabozantinib)to treat progressive,metastatic MTC provides a niche marketopportunity that allows us to gain commercialization experience while providing a solid foundation for potentialexpansion into large

76、r cancer indications.We are focusing our internal efforts on cancers for which we believe cabozantinib has significanttherapeutic and commercial potential in the near term,while utilizing our Cooperative Research andDevelopment Agreement,or CRADA,with the National Cancer Institutes Cancer Therapy Ev

77、aluation Program,or NCI-CTEP,and investigator sponsored trials,or ISTs,to generate additional data to allow us to prioritizefuture late stage trials in a cost-effective fashion.We believe that this staged approach to building valuerepresents the most rational and effective use of our resources.COMET

78、RIQ(R)(cabozantinib)COMETRIQ inhibits the activity of multiple tyrosine kinases,including RET,MET,and VEGFR2.Thesereceptor tyrosine kinases are involved in both normal cellular function and in pathologic processes such asoncogenesis,metastasis,tumor angiogenesis,and maintenance of the tumor microenv

79、ironment.OnNovember 29,2012,the FDA approved COMETRIQ for the treatment of progressive,metastatic MTC in theUnited States,and we commercially launched COMETRIQ in January 2013.The recommended dose of COMETRIQ in progressive,metastatic MTC is 140 mg orally,once daily(one80 mg capsule and three 20 mg

80、starting capsules)administered without food.This dose may be withheld inresponse to certain adverse reactions,and upon resolutions of adverse reactions may be reduced stepwise to100 or 60 mg once daily to appropriately adjust the dose to each individual patients tolerability.Permanentdiscontinuation

81、 is recommended for certain adverse reactions.The COMETRIQ label has boxed warnings concerning risk of gastrointestinal perforations and fistulas,andsevere hemorrhage.Other warnings and precautions include thrombotic events,wound complications,hypertension,osteonecrosis of the jaw,palmar-plantar ery

82、throdysesthesia,proteinuria,reversible posterior4leukoencephalopathy syndrome,caution regarding the potential for drug interactions with strong CYP3A4inducers or inhibitors,the recommendation against use in patients with moderate or severe hepatic impairment,and the potential for embryo-fetal toxici

83、ty.EXAM Pivotal TrialCOMETRIQs safety and efficacy were assessed in an international,multi-center,randomized double-blinded controlled trial of 330 patients with progressive,metastatic MTC,known as EXAM(Efficacy of XL184(Cabozantinib)in Advanced Medullary Thyroid Cancer).Patients were required to ha

84、ve evidence of activelyprogressive disease within 14 months prior to study entry.This assessment was performed by an IndependentRadiology Review Committee,or IRRC,in 89%of patients and by the treating physicians in 11%of patients.Patients were randomized(2:1)to receive COMETRIQ 140 mg(n=219)or place

85、bo(n=111)orally,once dailyuntil disease progression determined by the treating physician or until intolerable toxicity.Randomization wasstratified by age(65 years vs.65 years)and prior use of a tyrosine kinase inhibitor,or TKI.No cross-overwas allowed at the time of progression.The primary endpoint

86、was to compare progression-free survival,or PFS,in patients receiving COMETRIQ versus patients receiving placebo.Secondary endpoints included objectiveresponse rate and overall survival.The main efficacy outcome measures of PFS,objective response and responseduration were based on IRRC-confirmed eve

87、nts using modified Response Evaluation Criteria in Solid Tumors(RECIST),which is a widely used set of rules that define when cancer patients improve(“respond”),stay thesame(“stabilize”)or worsen(“progress”)during treatments.A statistically significant prolongation in PFS was demonstrated among COMET

88、RIQ-treated patientscompared to those receiving placebo HR 0.28(95%CI:0.19,0.40);p0.0001,with median PFS of 11.2 monthsin the COMETRIQ arm and 4.0 months in the placebo arm.Partial responses were observed only among patientsin the COMETRIQ arm(27%vs.0%;p0.0001).The median duration of objective respo

89、nse was 14.7 months(95%CI:11.1,19.3)for patients treated with COMETRIQ.There was no statistically significant difference inoverall survival between the treatment arms at the planned interim analysis.Postmarketing CommitmentsIn connection with the approval of COMETRIQ for the treatment of progressive

90、,metastatic MTC,we arerequired to provide the analysis of mature overall survival data from the EXAM trial when the required217 events(deaths)have occurred.We currently expect the overall survival analysis of EXAM to occur in 2014.We are also subject to the following postmarketing requirements:A pha

91、se 2 study comparing a lower dose of COMETRIQ with the labeled dose of 140 mg.This studywill evaluate safety and PFS in progressive,metastatic MTC patients.Two clinical pharmacology studies assessing the pharmacokinetics of COMETRIQ.One will addressthe effect of administering COMETRIQ in conjunction

92、 with agents that increase gastric pH such asproton pump inhibitors,and the other study will assess the pharmacokinetics of COMETRIQ inpatients with hepatic impairment.Four non-clinical studies to further assess the carcinogenicity,mutagenicity and teratogenicity ofCOMETRIQ.CommercializationCOMETRIQ

93、 became commercially available in the United States in January 2013 and is being marketed inthe United States principally through a small internal commercial team with relevant expertise in the promotion,distribution and reimbursement of oncology drugs.Effective October 29,2013,the wholesale acquisi

94、tion cost of5COMETRIQ is$10,395 for a 28-day supply.COMETRIQ has been flat priced,meaning each dosage strength ispriced the same.We currently estimate that there are between 500 and 700 first and second line metastatic MTCpatients diagnosed in the United States each year who will be eligible for COM

95、ETRIQ.We have scaled our commercial organization so that it is commensurate with the size of the marketopportunity for progressive,metastatic MTC.We have also designed our commercial organization to maintainflexibility,and to enable us to quickly scale up if additional indications are approved in th

96、e future.We believe wehave created an efficient commercial organization,taking advantage of outsourcing options where prudent tomaximize the effectiveness of our commercial expenditures.To help ensure that all eligible progressive,metastatic MTC patients have appropriate access toCOMETRIQ,we have es

97、tablished a comprehensive reimbursement and support program called Exelixis AccessServices.Through Exelixis Access Services,we:provide co-pay assistance to qualified,commercially insuredpatients to help minimize out-of-pocket costs;provide free drug to uninsured patients who meet certain clinicaland

98、 financial criteria;and make contributions to an independent co-pay assistance charity to help patients whodont qualify for our co-pay assistance program.In addition,Exelixis Access Services is designed to providecomprehensive reimbursement support services,such as prior authorization support,benefi

99、ts investigation,and ifneeded,appeals support.COMETRIQ is distributed in the United States exclusively through Diplomat Specialty Pharmacy,anindependent specialty pharmacy that allows for efficient delivery of the medication by mail directly to patients.To further support appropriate utilization of

100、COMETRIQ,our Medical Affairs department is responsible forresponding to physician inquiries with appropriate scientific and medical education and information.EMA Marketing Authorization Application for COMETRIQIn December 2013,the CHMP issued a positive opinion on the MAA,submitted to the EMA,forCOM

101、ETRIQ for the proposed indication of progressive,unresectable,locally advanced,or metastatic MTC.TheCHMPs positive opinion will be reviewed by the European Commission,which has the authority to approvemedicines for the European Union.COMETRIQ received orphan drug designation in the European Union fr

102、om the Committee for OrphanMedicinal Products for the treatment of MTC in February 2009.During 2013,we entered into an agreement with a term ending on December 31,2015,with SwedishOrphan Biovitrum,or Sobi,to support the distribution and commercialization of COMETRIQ for the approvedMTC indication pr

103、imarily in the European Union and potentially other countries in the event that COMETRIQ isapproved for commercial sale in such jurisdictions.No other indication is covered by this agreement,and wemaintain full commercial rights with respect to COMETRIQ in MTC outside the covered territory and for a

104、llother indications on a global basis.Under the terms of the agreement,we will continue to be responsible forregulatory approvals in the covered territory.Our payments to Sobi include certain pre-determined fixed fees aswell as potential performance-based milestones related to the commercialization

105、of the product in the coveredterritory.We have the ability to terminate the agreement at will at any time upon payment of certain pre-determined fees.Named Patient Use ProgramThrough our agreement with Sobi,we have established the infrastructure to make COMETRIQ availableunder a named patient use,or

106、 NPU,program in countries of the European Union and in other regions outside ofthe United States.An NPU program provides access to drugs unapproved in that country,but approvedelsewhere,for a single patient or a group of patients in a particular country.6Cabozantinib Development ProgramWe believe th

107、at cabozantinibs broad clinical profile is attractive and will allow commercial differentiation,assuming regulatory approval.The cabozantinib clinical development program is currently comprised of a totalof a broad array of trials,including five pivotal studies.A portion of these trials are being co

108、nducted through ourown internal development efforts and are funded by us,and the remainder are being conducted through ourCRADA with NCI-CTEP and our IST program.The most advanced clinical program for cabozantinib beyondprogressive,metastatic MTC are focused on the treatment of metastatic CRPC,metas

109、tatic RCC and advancedHCC.We expect to expand the cabozantinib development program to other tumor indications based onencouraging interim data that have emerged from our randomized discontinuation trial,or RDT,as well as otherclinical trials.Objective tumor responses have been observed in patients t

110、reated with cabozantinib in 15individual tumor types investigated in phase 1 and 2 clinical trials to date,reflecting the broad potential clinicalactivity and commercial opportunity of this product candidate.In addition to activity against bone and soft tissuelesions in patients with CRPC,we have al

111、so observed resolution of metastatic bone lesions on bone scan inpatients with metastatic breast cancer and melanoma in the RDT,in patients with RCC and patients withdifferentiated thyroid cancer in a phase 1 clinical trial,and in patients with bladder cancer in an NCI-CTEP-sponsored phase 2 clinica

112、l trial.To support the future development of cabozantinib,our Medical Affairsdepartment is responsible for responsible for responding to physician inquiries with appropriate scientific andmedical education and information,preparing scientific presentations and publications,and overseeing theprocess

113、for ISTs.It is a priority for us to continue to evaluate cabozantinib across a broad range of tumor types,including non-small cell lung cancer,or NSCLC,ovarian cancer,melanoma,breast cancer,differentiated thyroidcancer and others,to support further prioritization of our clinical and commercial optio

114、ns.In addition,postmarketing requirements in connection with the approval of COMETRIQ in progressive,metastatic MTCdictate that we conduct additional studies related to dosing in progressive,metastatic MTC,pharmacokinetics,carcinogenicity,mutagenicity and teratogenicity of COMETRIQ as more fully des

115、cribed above under“Postmarketing Commitments.”CRPCExelixis has implemented a focused clinical strategy to investigate cabozantinib in a comprehensivedevelopment program for CRPC that could potentially lead to a product that can effectively compete in theCRPC marketplace.Interim data from our RDT sug

116、gest that cabozantinib has novel activity against bone and softtissue lesions in patients with CRPC.Updated interim data from docetaxel-pretreated patients with metastaticCRPC and bone metastases treated with cabozantinib in an ongoing non-randomized expansion,or NRE,cohortof the RDT,reported at the

117、 American Society of Clinical Oncology Annual Meeting,or ASCO,in June 2013,showed a median overall survival of 10.8 months.A retrospective analysis of the updated interim data alsoshowed that early responses in bone scan,circulating tumor cell levels and pain were associated with longermedian overal

118、l survival as compared to non-responders.In addition,interim data demonstrated that CRPC patients with bone metastases and bone pain at baselineexperienced alleviation of pain,were able to reduce or discontinue narcotic medication and experienced areduction in circulating tumor cell count.Lower star

119、ting doses of cabozantinib have been evaluated in the NREcohort of CRPC patients treated at a daily dose of 40 mg,and in a dose-ranging study in CRPC patientsconducted through an IST.Interim data from this NRE reported at the European Society for Medical Oncology,or ESMO,Annual Meeting in September

120、2012 suggest that the 40 mg daily dose has similar clinical activity tothe 100 mg daily dose NRE cohort for key parameters,including reduction of metastatic bone and soft tissuedisease,and reduction of bone pain and narcotic use,with an apparent improvement in tolerability compared tothe 100 mg dose

121、 cohort.Interim data from the 40 mg cohort of the dose-ranging IST reported at ASCO in June2012 had demonstrated similar clinical activity.COMET Pivotal Trials.Two phase 3 pivotal trials,COMET-1(CabOzantinib MET Inhibition CRPCEfficacy Trial-1)and COMET-2,were designed to provide an opportunity to c

122、linically and commercially7differentiate cabozantinib as an oncology agent with a potentially beneficial impact on overall survival,pain,andnarcotic usage.We initiated the COMET-1 trial with an overall survival endpoint in May 2012 and we initiatedthe COMET-2 trial with a pain palliation endpoint in

123、 December 2011.In September 2013,COMET-1 reached itsenrollment target of 960 patients.We currently believe that the top-line results from the COMET-1 and COMET-2 trials will be available in 2014.COMET-1 is a double-blinded study comparing cabozantinib and prednisone that includes up to 280internatio

124、nal sites.The trial is designed to enroll 960 patients with CRPC that is metastatic to the bone and whohave failed prior docetaxel therapy and have also failed prior abiraterone and/or enzalutamide therapies.There isno limit to the number,order or type of prior treatments.Patients are being randomiz

125、ed 2:1 to receivecabozantinib(60 mg daily,N=640)or prednisone(5 mg twice daily,N=320).Each arm is also receiving placeboto account for the once-daily versus twice-daily dosing regimens of cabozantinib and prednisone,respectively.The trial has 90%power to detect a 25%reduction in the risk of death(HR

126、=0.75).The final analysis will beevent driven,with 578 events(deaths)required.A single interim analysis is planned after 387 events.Thesecondary endpoint is bone scan response as assessed by an independent radiology facility.COMET-2 is a double-blinded study comparing cabozantinib and mitoxantrone/p

127、rednisone designed toenroll 246 patients with CRPC that is metastatic to the bone,who are suffering from moderate to severe bonepain despite optimized narcotic medication,and who have failed prior docetaxel therapy and have also failedprior abiraterone and/or enzalutamide therapies.The trial is bein

128、g conducted in English-speaking regions,including the United States,Canada,Australia,and the United Kingdom.Patients are being randomized 1:1 toreceive either cabozantinib or mitoxantrone/prednisone.Alleviation of bone pain will be determined bycomparing the percentage of patients in the two treatme

129、nt arms who achieve a pain response at Week 6 that isconfirmed at Week 12.The trial design assumes that 25%of patients in the cabozantinib arm will have a painresponse while 8%of patients in the mitoxantrone/prednisone arm will have a pain response.Prior torandomization,patients will undergo a perio

130、d during which their pain medication is optimized using one longacting narcotic medication and one immediate release narcotic medication.This optimization follows a standardapproach defined in the National Comprehensive Cancer Network guidelines.Patients in the cabozantinib armwill be dosed at 60 mg

131、 per day until the patient no longer receives clinical benefit.The definition of a responderwith respect to the bone pain endpoint is a greater than or equal to 30%decrease from baseline in the average ofthe daily worst pain intensity collected over seven days in Week 6 and confirmed in Week 12,with

132、 neither aconcomitant increase in average daily dose of any narcotic pain medication,nor addition of any new narcoticpain medication.Overall survival will be a secondary endpoint of the COMET-2 trial.The trial will be deemedsuccessful if the primary endpoint of statistically significant pain improve

133、ment is met and the overall survivalanalysis does not show an adverse impact on overall survival in the cabozantinib arm.Combination Trials.In December 2013 we initiated a phase 2 clinical trial evaluating cabozantinib incombination with abiraterone and prednisone versus abiraterone and prednisone i

134、n patients with CRPC that ismetastatic to the bone who have not been treated with chemotherapy.The trial will compare abiraterone andprednisone to abiraterone and prednisone in combination with one of the three cabozantinib doses:40 mg daily,20 mg daily or 20 mg every other day.The primary endpoint

135、for the randomized,open-label trial is radiographicPFS.The trial is expected to enroll 280 chemotherapy-nave CRPC patients who have bone metastases and willbe conducted at approximately 50 sites in North America.In addition to evaluating radiographic PFS,the trialincludes pre-specified outcome measu

136、res of safety and tolerability,pharmacokinetics of cabozantinib incombination with abiraterone,overall survival,and bone scan response by computer-aided detection.We are also planning to initiate a phase 1b clinical trial evaluating cabozantinib in combination withenzalutamide in patients with metas

137、tatic CRPC who have not received prior enzalutamide therapy orchemotherapy.8RCCMETEOR(Metastatic RCC Phase 3 Study Evaluating Cabozantinib vs.Everolimus),a phase 3 pivotal trialcomparing cabozantinib to everolimus in patients with metastatic RCC who have experienced diseaseprogression following trea

138、tment with at least one prior VEGFR TKI,was initiated in May 2013.The trial isdesigned to enroll 650 patients at approximately 200 sites.Patients are being stratified based on the number ofprior VEGFR-TKI therapies received and commonly applied RCC risk criteria.Patients are being randomized1:1 to r

139、eceive 60 mg of cabozantinib daily or 10 mg of everolimus daily,and no cross-over will be allowedbetween the study arms.The primary endpoint for METEOR is PFS,and the secondary endpoints are overallsurvival and objective response rate.HCCCELESTIAL(Cabozantinib Phase 3 Controlled Study In Hepatocellu

140、lar Carcinoma),a phase 3 pivotal trialcomparing cabozantinib with placebo in patients with advanced HCC who have previously been treated withsorafenib was initiated in September 2013.The trial is designed to enroll 760 patients at approximately 200 sites.Patients are being randomized 2:1 to receive

141、60 mg of cabozantinib daily or placebo.The primary endpoint forCELESTIAL is overall survival,and the secondary endpoints include objective response rate and PFS.NSCLCWe are planning to conduct a single arm trial in patients with NSCLC who are positive for a RET fusiongene.The trial will enroll appro

142、ximately 100 patients,and objective response rate will be the primary endpoint.Additionally,we will include exploratory cohorts of patients with other relevant molecular alterations targeted bycabozantinib.Other Cancer IndicationsWe are also evaluating the potential initiation of pivotal trials in o

143、ther tumor types.We believe the potentialinitiation of pivotal trials in other tumor types may increase the value of the cabozantinib franchise,acceleratepotential revenues,and spread the development and commercialization risk for cabozantinib across multipleopportunities.We have launched two initia

144、tives to expand the cabozantinib development program beyond ourinternal development efforts:our CRADA with NCI-CTEP and our IST program.We entered into our CRADA with NCI-CTEP in November 2011.The proposed clinical trials approved todate under the CRADA include the following:Phase 2 clinical trials

145、to help prioritize future pivotal trials of cabozantinib in disease settings wherethere is substantial unmet medical need and in which cabozantinib has previously demonstrated clinicalactivity,consisting of randomized phase 2 clinical trials in first line renal cell carcinoma,platinum-resistant or-r

146、efractory ovarian cancer,ocular melanoma and second line/third line NSCLC.Additional phase 2 clinical trials to explore cabozantinibs potential utility in other tumor types,including endometrial cancer,bladder cancer,sarcomas,second line NSCLC and second linedifferentiated thyroid cancer.Positive re

147、sults in these indications could lead to further study inrandomized phase 2 or phase 3 clinical trials.Additional phase 1 clinical trials to further evaluate cabozantinib,consisting of a trial evaluatingcabozantinib in combination with docetaxel in CRPC patients,a trial exploring the utility of comb

148、iningcabozantinib with vemurafenib,a BRAF inhibitor,in patients with BRAF-mutated melanoma,a trial toevaluate the safety and pharmacokinetics of cabozantinib in pediatric patients,and a trial ofcabozantinib in patients with advanced solid tumors and human immunodeficiency virus.9Commencement of each

149、 of the proposed trials approved under the CRADA is subject to protocoldevelopment and satisfaction of certain other conditions.The proposed trials approved under the CRADA will beconducted under an investigational new drug application held by NCI-CTEP.We believe our CRADA reflects amajor commitment

150、 by NCI-CTEP to support the broad exploration of cabozantinibs potential in a wide varietyof cancers that have substantial unmet medical needs.NCI-CTEP provides funding for as many as 20 activeclinical trials each year for a five-year period.We believe the agreement will enable us to broadly expand

151、thecabozantinib development program in a cost-efficient manner.We launched the IST program in October 2010,and it has already provided important interim data throughthe dose-ranging study in CRPC patients described above.These data were important for dose selection in theCOMET pivotal trial program.

152、Cabozantinib is being evaluated in a variety of ISTs.Currently there is onecompleted IST,18 ongoing ISTs,11 studies undergoing activation,and we expect to continue to consideradditional IST proposals for the foreseeable future.Cobimetinib CollaborationIn December 2006,we entered into a worldwide co-

153、development agreement with Genentech for thedevelopment and commercialization of cobimetinib.Cobimetinib is a potent,highly selective inhibitor of MEK,a serine/threonine kinase that is a component of the RAS/RAF/MEK/ERK pathway.This pathway mediatessignaling downstream of growth factor receptors,and

154、 is prominently activated in a wide variety of humantumors.In preclinical studies,oral dosing of cobimetinib resulted in potent and sustained inhibition of MEK inRAS-or BRAF-mutant tumor models.Exelixis discovered cobimetinib internally and advanced the compound toinvestigational new drug,or IND,sta

155、tus.Genentech paid upfront and milestone payments of$25.0 million in December 2006 and$15.0 million inJanuary 2007 upon signing of the co-development agreement and with the submission of the IND forcobimetinib.Under the terms of the agreement,we were responsible for developing cobimetinib through th

156、e endof a phase 1 clinical trial,and Genentech had the option to co-develop cobimetinib,which Genentech couldexercise after receipt of certain phase 1 data from us.In March 2008,Genentech exercised its option,triggering apayment to us of$3.0 million,which we received in April 2008.We were responsibl

157、e for the phase 1 clinicaltrial until the point that a maximum tolerated dose,or MTD,was determined.After MTD was determined,wegranted to Genentech an exclusive worldwide revenue-bearing license to cobimetinib in March 2009,at whichpoint Genentech became responsible for completing the phase 1 clinic

158、al trial and subsequent clinicaldevelopment.We received an additional$7.0 million payment in March 2010.Preliminary results from BRIM7,an ongoing phase 1b dose escalation study conducted by Roche andGenentech of the BRAF inhibitor vemurafenib in combination with cobimetinib in patients with locallya

159、dvanced/unresectable or metastatic melanoma carrying a BRAFV600 mutation were presented at the 2012ESMO Annual Meeting.Updated data from BRIM7 reported at the European Cancer Congress 2013 suggest thatthe preliminary safety profile and activity of the investigational combination of cobimetinib and v

160、emurafenib areencouraging in BRAF inhibitor-nave patients.Although the phase 1b dose escalation study was designed toevaluate the safety and tolerability of cobimetinib in combination with vemurafenib,objective responses(comprising complete or partial responses)were observed in 85%of the patients wh

161、o had not been previouslytreated with a BRAF inhibitor.As disclosed on ClinicalTrials.gov(NCT01689519),a multicenter,randomized,double-blind,placebo-controlled phase 3 clinical trial evaluating the combination of cobimetinib with vemurafenib versus vemurafenibin previously untreated BRAFV600 mutatio

162、n positive patients with unresectable locally advanced or metastaticmelanoma was initiated on November 1,2012.On January 14,2013,we received notice from Genentech that thefirst patient was dosed in this phase 3 pivotal trial.Roche and Genentech have provided guidance that they expecttop-line data fr

163、om this trial in 2014.10In addition,as disclosed on ClinicalTrials.gov,on the basis of strong scientific rationale and encouragingpreclinical data,Genentech is initiating the following new clinical trials of cobimetinib in combination with otheragents under the agreement:A Phase 1b,Open-Label,Dose-E

164、scalation Study of the Safety,Tolerability,and Pharmacokinetics ofMEHD7945A and Cobimetinib in Patients with Locally Advanced or Metastatic Solid Tumors withMutant KRAS(NCT01986166);A Phase 1b,Open-Label Study Evaluating the Safety,Tolerability,and Pharmacokinetics ofOnartuzumab in Combination with

165、Vemurafenib and/or Cobimetinib in Patients with Advanced SolidMalignancies(NCT01974258);andA Phase 1b Study of the Safety and Pharmacology of MPDL3280A Administered with Cobimetinib inPatients with Locally Advanced or Metastatic Solid Tumors(NCT01988896).Under the terms of our agreement with Genente

166、ch,we are entitled to an initial equal share of U.S.profitsand losses for cobimetinib,which will decrease as sales increase,and will share equally in the U.S.marketingand commercialization costs.The profit share has multiple tierswe are entitled to 50%of profits from the first$200 million of U.S.act

167、ual sales,decreasing to 30%of profits from U.S.actual sales in excess of$400 million.We are entitled to low double-digit royalties on ex-U.S.net sales.In November 2013,we exercised our option toco-promote in the U.S.We will provide up to 25%of the total sales force for cobimetinib in the U.S.ifcomme

168、rcialized,and will call on customers and otherwise engage in promotional activities using that sales force,consistent with the terms of the co-development agreement and a co-promotion agreement to be entered into bythe parties.If Genentech terminates the co-development agreement without cause,all li

169、censes that were grantedto Genentech under the agreement terminate and revert to us.Additionally,we would receive,subject to certainconditions,licenses from Genentech to research,develop and commercialize reverted product candidates.Other CollaborationsWe have established collaborations with other l

170、eading pharmaceutical and biotechnology companies,including GlaxoSmithKline,Bristol-Myers Squibb Company,or Bristol-Myers Squibb,Sanofi,Merck(known asMSD outside of the United States and Canada)and Daiichi Sankyo Company Limited,or Daiichi Sankyo,forvarious compounds and programs in our portfolio.Pu

171、rsuant to these collaborations,we have out-licensedcompounds or programs to a partner for further development and commercialization,have no furtherdevelopment cost obligations related to such compounds or programs and may be entitled to receive contingentpayments and royalties or a share of profits

172、from commercialization.Several of these out-licensed compoundsare in multiple phase 2 studies.These partnered compounds could potentially be of significant value to us if theirdevelopment progresses successfully.With respect to these partnered compounds,we are eligible to receive potential contingen

173、t payments underour collaborations totaling approximately$2.4 billion in the aggregate on a non-risk adjusted basis,of whichapproximately 10%are related to clinical development milestones,approximately 41%are related to regulatorymilestones and approximately 49%are related to commercial milestones,a

174、ll to be achieved by the variouslicensees.GlaxoSmithKlineIn October 2002,we established a collaboration with GlaxoSmithKline to discover and develop noveltherapeutics in the areas of vascular biology,inflammatory disease and oncology.The collaboration involvedthree agreements:(1)a product developmen

175、t and commercialization agreement,(2)a stock purchase and stockissuance agreement and(3)a loan and security agreement.During the term of the collaboration,we received$65.0 million in upfront and milestone payments,$85.0 million in research and development funding and loansin the principal amount of$

176、85.0 million.In connection with the collaboration,GlaxoSmithKline purchased atotal of three million shares of our common stock.11In October 2008,the development term under the collaboration concluded as scheduled.Under the terms ofthe collaboration,GlaxoSmithKline had the right to select up to two o

177、f the compounds in the collaboration forfurther development and commercialization.GlaxoSmithKline selected foretinib(XL880),an inhibitor of METand VEGFR2,and had the right to choose one additional compound from a pool of compounds,which consistedof cabozantinib,XL281,XL228,XL820 and XL844 as of the

178、end of the development term.In July 2008,we achieved proof-of-concept for cabozantinib and submitted the corresponding data report toGlaxoSmithKline.In October 2008,GlaxoSmithKline notified us in writing that it decided not to selectcabozantinib for further development and commercialization and that

179、 it waived its right to select XL281,XL228,XL820 and XL844 for further development and commercialization.As a result,we retained the rights to develop,commercialize,and/or license all of the compounds,subject to payment to GlaxoSmithKline of a 3%royalty onnet sales of any product incorporating caboz

180、antinib.We have discontinued development of XL820,XL228 andXL844.GlaxoSmithKline continues to develop foretinib(XL880),and as disclosed on ClinicalTrials.gov,iscurrently recruiting patients into phase 1/2 trials studying the activity of foretinib in metastatic breast cancer bothas a single agent(NCT

181、01147484)and in combination with lapatinib(NCT01138384),and in NSCLC as a singleagent and in combination with erlotinib(NCT02034097).The$85.0 million loan we received from GlaxoSmithKline was repayable in three annual installments.Wepaid the final installment of principal and accrued interest under

182、the loan in shares of our common stock onOctober 27,2011,and GlaxoSmithKline subsequently released its related security interest in certain of ourpatents.Bristol-Myers SquibbROR Collaboration AgreementIn October 2010,we entered into a worldwide collaboration with Bristol-Myers Squibb pursuant to whi

183、cheach party granted to the other certain intellectual property licenses to enable the parties to discover,optimizeand characterize ROR antagonists that may subsequently be developed and commercialized by Bristol-MyersSquibb.In November 2010,we received a nonrefundable upfront cash payment of$5.0 mi

184、llion from Bristol-Myers Squibb.Additionally,for each product developed by Bristol-Myers Squibb under the collaboration,wewill be eligible to receive payments upon the achievement by Bristol-Myers Squibb of development andregulatory milestones of up to$255.0 million in the aggregate and commercializ

185、ation milestones of up to$150.0 million in the aggregate,as well as royalties on commercial sales of any such products.The collaborationagreement was amended and restated in April 2011 in connection with an assignment of patents to a wholly-owned subsidiary.Under the terms of the collaboration agree

186、ment,we were responsible for activities related to the discovery,optimization and characterization of the ROR antagonists during the collaborative research period.In July 2011,we earned a$2.5 million milestone payment for achieving certain lead optimization criteria.The collaborativeresearch period

187、began on October 8,2010 and ended on July 8,2013.Since the end of the collaborative researchperiod,Bristol-Myers Squibb has and will continue to have sole responsibility for any further research,development,manufacture and commercialization of products developed under the collaboration and will bear

188、 allcosts and expenses associated with those activities.Bristol-Myers Squibb may,at any time,terminate the collaboration agreement upon certain prior notice tous on a product-by-product and country-by-country basis.In addition,either party may terminate the agreementfor the other partys uncured mate

189、rial breach.In the event of termination by Bristol-Myers Squibb at will or by usfor Bristol-Myers Squibbs uncured material breach,the license granted to Bristol-Myers Squibb wouldterminate,the right to such product would revert to us and we would receive a royalty-bearing license for late-12stage re

190、verted compounds and a royalty-free license for early-stage reverted compounds from Bristol-MyersSquibb to develop and commercialize such product in the related country.In the event of termination by Bristol-Myers Squibb for our uncured material breach,Bristol-Myers Squibb would retain the right to

191、such product,subject to continued payment of milestones and royalties.LXR CollaborationIn December 2005,we entered into a collaboration agreement with Bristol-Myers Squibb for the discovery,development and commercialization of novel therapies targeted against LXR,a nuclear hormone receptorimplicated

192、 in a variety of cardiovascular and metabolic disorders.This agreement became effective in January2006,at which time we granted Bristol-Myers Squibb an exclusive worldwide license with respect to certainintellectual property primarily relating to compounds that modulate LXR,including BMS-852927(XL04

193、1).During the research term,we jointly identified drug candidates with Bristol-Myers Squibb that were ready forIND-enabling studies.After the selection of a drug candidate for further clinical development by Bristol-MyersSquibb,Bristol-Myers Squibb agreed to be solely responsible for further preclin

194、ical development as well asclinical development,regulatory,manufacturing and sales/marketing activities for the selected drug candidate.We do not have rights to reacquire the drug candidates selected by Bristol-Myers Squibb.The research termexpired in January 2010 and we transferred the technology t

195、o Bristol-Myers Squibb in 2011 to enable it tocontinue the LXR program.BMS has terminated development of XL041 and we have been advised that BMS iscontinuing additional preclinical research on the program.The collaboration agreement was amended andrestated in April 2011 in connection with an assignm

196、ent of patents to a wholly-owned subsidiary.Under the collaboration agreement,Bristol-Myers Squibb paid us a nonrefundable upfront cash payment inthe amount of$17.5 million and was obligated to provide research and development funding of$10.0 million peryear for an initial research period of two yea

197、rs.In September 2007,the collaboration was extended at Bristol-Myers Squibbs request through January 12,2009,and in November 2008,the collaboration was furtherextended at Bristol-Myers Squibbs request through January 12,2010.Under the collaboration agreement,Bristol-Myers Squibb is required to pay u

198、s contingent amounts associated with development and regulatorymilestones of up to$138.0 million per product for up to two products from the collaboration.In addition,we arealso entitled to receive payments associated with sales milestones of up to$225.0 million and royalties on salesof any products

199、 commercialized under the collaboration.In connection with the extension of the collaborationthrough January 2009 and subsequently through January 2010,Bristol-Myers Squibb paid us additional researchfunding of approximately$7.7 million and approximately$5.8 million,respectively.In December 2007,wer

200、eceived$5.0 million in connection with the achievement by Bristol-Myers Squibb of a development milestonewith respect to BMS-852927(XL041).SanofiIn May 2009,we entered into a global license agreement with Sanofi for SAR245408(XL147)andSAR245409(XL765),leading inhibitors of phosphoinositide-3 kinase,

201、or PI3K,and a broad collaboration for thediscovery of inhibitors of PI3K for the treatment of cancer.The license agreement and collaboration agreementbecame effective on July 7,2009.In connection with the effectiveness of the license and collaboration,onJuly 20,2009,we received upfront payments of$1

202、40.0 million($120.0 million for the license and$20.0 millionfor the collaboration),less applicable withholding taxes of$7.0 million,for a net receipt of$133.0 million.Wereceived a refund payment in December 2011 with respect to the withholding taxes previously withheld.Under the license agreement,Sa

203、nofi received a worldwide exclusive license to SAR245408(XL147)andSAR245409(XL765),which are in phase 1,phase 1b/2 and phase 2 clinical trials,and has sole responsibility forall subsequent clinical,regulatory,commercial and manufacturing activities.Sanofi is responsible for funding alldevelopment ac

204、tivities with respect to SAR245408(XL147)and SAR245409(XL765),including our activities.Following the effectiveness of the license agreement,we conducted the majority of the clinical trials forSAR245408(XL147)and SAR245409(XL765)at the expense of Sanofi.As provided for under the license13agreement,ho

205、wever,the parties transitioned all development activities for these compounds to Sanofi in 2011.As disclosed on ClinicalTrials.gov,SAR245408(XL147)is currently being studied in a clinical trial evaluatingpharmacokinetics of a tablet formulation in patients with solid tumors or lymphoma(NCT01943838).

206、Asdisclosed on ClinicalTrials.gov,SAR245409(XL765)is currently being studied in clinical trials in patients withlymphoma either as a single agent(NCT01403636)or in combination with bendamustine and/or rituximab(NCT01410513).In addition SAR245409(XL765)is being studied in combination with a MEK inhib

207、itor inpatients with locally advanced or metastatic solid tumors(NCT01390818).We will be eligible to receive contingent payments associated with development,regulatory and commercialmilestones under the license agreement of$745.0 million in the aggregate,as well as royalties on sales of anyproducts

208、commercialized under the license.Sanofi may,upon certain prior notice to us,terminate the license as to products containing SAR245408(XL147)and SAR245409(XL765).In the event of such termination election,Sanofis license relating to suchproduct would terminate and revert to us,and we would receive,sub

209、ject to certain terms,conditions and potentialpayment obligations,licenses from Sanofi to research,develop and commercialize such products.In December 2011,we and Sanofi entered into an agreement pursuant to which the parties terminated thediscovery collaboration agreement and released each other fr

210、om any potential liabilities arising under thecollaboration agreement prior to effectiveness of the termination in December 2011.Each party retainsownership of the intellectual property that it generated under the collaboration agreement,and we granted Sanoficovenants not-to-enforce with respect to

211、certain of our intellectual property rights.The termination agreementalso provided that Sanofi would make a payment to us of$15.3 million,which we received in January 2012.Ifeither party or its affiliate or licensee develops and commercializes a therapeutic product containing an isoform-selective PI

212、3K inhibitor that arose from such partys work(or was derived from such work)under thecollaboration agreement,then such party will be obligated to pay royalties to the other party based upon the netsales of such products.The termination agreement provides that Sanofi will make a one-time payment to u

213、s uponthe first receipt by Sanofi or its affiliate or licensee of marketing approval for the first therapeutic productcontaining an isoform-selective PI3K inhibitor that arose from Sanofis work(or was derived from such work)under the collaboration agreement.MerckIn December 2011,we entered into an a

214、greement with Merck pursuant to which we granted Merck anexclusive worldwide license to our PI3K-delta,or PI3K-d,program,including XL499 and other relatedcompounds.Pursuant to the terms of the agreement,Merck has sole responsibility to research,develop,andcommercialize compounds from our PI3K-d prog

215、ram.The agreement became effective in December 2011.Merck paid us an upfront cash payment of$12.0 million in January 2012 in connection with the agreement.We will be eligible to receive payments associated with the successful achievement of potential development andregulatory milestones for multiple

216、 indications of up to$239.0 million.We will also be eligible to receivepayments for combined sales performance milestones and royalties on net-sales of products emerging from theagreement.Contingent payments associated with milestones achieved by Merck and royalties are payable oncompounds emerging

217、from our PI3K-d program or from certain compounds that arise from Mercks internaldiscovery efforts targeting PI3K-d during a certain period.Merck may at any time,upon specified prior notice to us,terminate the license.In addition,either party mayterminate the agreement for the other partys uncured m

218、aterial breach.In the event of termination by Merck atwill or by us for Mercks uncured material breach,the license granted to Merck would terminate.In the event ofa termination by us for Mercks uncured material breach,we would receive a royalty-free license from Merck todevelop and commercialize cer

219、tain joint products.In the event of termination by Merck for our uncured materialbreach,Merck would retain the licenses from us,and we would receive reduced royalties from Merck oncommercial sales of products.14Daiichi SankyoIn March 2006,we entered into a collaboration agreement with Daiichi Sankyo

220、 for the discovery,development and commercialization of novel therapies targeted against the mineralocorticoid receptor,or MR,anuclear hormone receptor implicated in a variety of cardiovascular and metabolic diseases.Under the terms ofthe agreement,we granted to Daiichi Sankyo an exclusive,worldwide

221、 license to certain intellectual propertyprimarily relating to compounds that modulate MR,including CS-3150(XL550).Daiichi Sankyo is responsiblefor all further preclinical and clinical development,regulatory,manufacturing and commercialization activitiesfor the compounds and we do not have rights to

222、 reacquire such compounds,except as described below.Daiichi Sankyo paid us a nonrefundable upfront payment in the amount of$20.0 million and was obligatedto provide research and development funding of$3.8 million over a 15-month research term.In June 2007,ourcollaboration agreement with Daiichi Sank

223、yo was amended to extend the research term by six months over whichDaiichi Sankyo was required to provide$1.5 million in research and development funding.In November 2007,the parties decided not to further extend the research term.For each product from the collaboration,we are alsoentitled to receiv

224、e payments upon attainment of pre-specified development,regulatory and commercializationmilestones.In December 2010,we received a milestone payment of$5.0 million in connection with an INDfiling made by Daiichi Sankyo for CS-3150(XL550)and,in August 2012,we received a milestone of$5.5million in conn

225、ection with the initiation of a phase 2 clinical trial for CS-3150(XL550).We are eligible toreceive additional development,regulatory and commercialization milestones of up to$145.0 million.Inaddition,we are also entitled to receive royalties on any sales of certain products commercialized under the

226、collaboration.Daiichi Sankyo may terminate the agreement upon 90 dayswritten notice in which case DaiichiSankyos payment obligations would cease,its license relating to compounds that modulate MR would terminateand revert to us and we would receive,subject to certain terms and conditions,licenses fr

227、om Daiichi Sankyo toresearch,develop and commercialize compounds,that were discovered under the collaboration.Manufacturing and DistributionWe contract with third parties to manufacture the raw materials,the active pharmaceutical ingredient,orAPI,and finished solid dose COMETRIQ products for clinica

228、l and commercial uses.We currently do not operatemanufacturing facilities for clinical or commercial production of COMETRIQ.In addition,we expect for theforeseeable future to continue to rely on third parties for the manufacture of the raw materials,API and finisheddrug product for COMETRIQ.In this

229、manner,we continue to build and maintain our supply chain.Our multi-step supply chain for the manufacture and distribution of COMETRIQ consists of severalsuppliers located in multiple countries.Raw materials required for the production of the API are generallysourced from multiple third-party suppli

230、ers.Contract manufacturers in Europe and North America convert theseraw materials into API for clinical and commercial purposes,respectively.We use a single third party tomanufacture drug product for clinical purposes.We use a different third party to manufacture drug product andpackage and to label

231、 the finished product for commercial purposes.We use a single third party logistics providerto handle shipping and warehousing of our commercial supply of COMETRIQ in the United States and a singlespecialty pharmacy to dispense COMETRIQ to patients in fulfillment of prescriptions.We will also rely o

232、n athird party,Sobi,to distribute and commercialize COMETRIQ for the treatment of metastatic MTC in theEuropean Union in the event that COMETRIQ is approved for commercial sale in such jurisdictions.Sobi iscurrently supporting access to cabozantinib under an NPU program in the European Union and oth

233、er regionsoutside of the United States.We may not be able to obtain sufficient quantities of COMETRIQ if our designated manufacturers do nothave the capacity or capability to manufacture the product according to our schedule and specifications.If any ofthese suppliers were to become unable or unwill

234、ing to supply us with API or finished product that complies withapplicable regulatory requirements,we could incur significant delays in our clinical trials or interruption ofcommercial supply which could have a material adverse effect on our business.15Our third-party manufacturers are independent e

235、ntities,under contract with us,who are subject to their ownunique operational and financial risks which are out of our control.If we or any of our third-party manufacturersfail to perform as required,this could impair our ability to deliver COMETRIQ on a timely basis or cause delaysin our clinical t

236、rials and commercial activities.To the extent these risks materialize and affect their performanceobligations to us,our financial results may be adversely affected.We believe the processes used to manufacture our products are proprietary.For products manufactured byour third-party contract manufactu

237、rers,we have licensed the necessary aspects of these processes that we believeare proprietary to us to enable them to manufacture the products for us.We have agreements with these third-party manufacturers that are intended to restrict these manufacturers from using or revealing our processes,butwe

238、cannot be certain that these third-party manufacturers will comply with these restrictions.While we believe there are multiple third parties capable of providing most of the materials and services weneed to manufacture and distribute COMETRIQ,and that supply of materials that cannot be second-source

239、d canbe managed with inventory planning,there is always a risk that we may underestimate demand,and that ourmanufacturing capacity through third-party manufacturers may not be sufficient.In addition,because of thesignificant lead times involved in our supply chain for COMETRIQ,we may have less flexi

240、bility to adjust oursupply in response to changes in demand than if we had shorter lead times.Government RegulationThe following section contains some general background information regarding the regulatory environmentand processes affecting our industry and is designed to illustrate in general term

241、s the nature of our business andthe potential impact of government regulations on our business.It is not intended to be comprehensive orcomplete.Depending on specific circumstances,the information below may or may not apply to us or any of ourproduct candidates.In addition,the information is not nec

242、essarily a description of activities that we haveundertaken in the past or will undertake in the future.The regulatory context in which we operate is complex andconstantly changing.The FDA and comparable regulatory agencies in state and local jurisdictions and in foreign countriesimpose substantial

243、requirements upon the clinical development,manufacture and marketing of pharmaceuticalproducts.These agencies and other federal,state and local entities regulate research and development activitiesand the testing,manufacture,quality control,safety,effectiveness,labeling,storage,record keeping,approv

244、al,advertising and promotion of our products.The process required by the FDA before product candidates may be marketed in the United States generallyinvolves the following:preclinical laboratory and animal tests that must be conducted in accordance with Good LaboratoryPractices;submission of an IND,

245、which must become effective before clinical trials may begin;adequate and well-controlled human clinical trials to establish the safety and efficacy of the proposeddrug candidate for its intended use;pre-approval inspection of manufacturing facilities and selected clinical investigators for theircom

246、pliance with Good Manufacturing Practices,or GMP,and Good Clinical Practices;andFDA approval of a New Drug Application,or NDA,for commercial marketing,or NDA supplement,for an approval of a new indication if the product is already approved for another indication.The testing and approval process requ

247、ires substantial time,effort and financial resources.Prior tocommencing the first clinical trial with a product candidate,we must submit an IND to the FDA.The IND16automatically becomes effective 30 days after receipt by the FDA,unless the FDA,within the 30-day timeperiod,raises concerns or question

248、s about the conduct of the clinical trial.In such a case,the IND sponsor andthe FDA must resolve any outstanding concerns before the clinical trial can begin.Submission of an IND maynot result in FDA authorization to commence a clinical trial.A separate submission to the existing IND must bemade for

249、 each successive clinical trial conducted during product development.Further,an independentinstitutional review board for each medical center proposing to conduct the clinical trial must review and approvethe plan for any clinical trial and its informed consent form before the trial commences at tha

250、t center.Regulatoryauthorities or an institutional review board or the sponsor may suspend a clinical trial at any time on variousgrounds,including a finding that the subjects or patients are being exposed to an unacceptable health risk.For purposes of NDA approval,human clinical trials are typicall

251、y conducted in three sequential phases thatmay overlap.Phase 1 Studies are initially conducted in a limited patient population to test the product candidate forsafety,dosage tolerance,absorption,metabolism,distribution and excretion in healthy humans orpatients.Phase 2 Studies are conducted with gro

252、ups of patients afflicted with a specified disease in order toprovide enough data to evaluate the preliminary efficacy,optimal dosages and expanded evidence ofsafety.Multiple phase 2 clinical trials may be conducted by the sponsor to obtain information prior tobeginning larger and more expensive pha

253、se 3 clinical trials.In some cases,a sponsor may decide to runwhat is referred to as a“phase 2b”evaluation,which is a second,confirmatory phase 2 trial that could,if positive,serve as a pivotal trial in the approval of a product candidate.Phase 3 When phase 2 evaluations demonstrate that a dosage ra

254、nge of the product is effective and hasan acceptable safety profile,phase 3 trials are undertaken in large patient populations to furtherevaluate dosage,to provide replicate statistically significant evidence of clinical efficacy and to furthertest for safety in an expanded patient population at mul

255、tiple clinical trial sites.The FDA may require,or companies may pursue,additional clinical trials after a product is approved.Theseso-called phase 4 studies may be made a condition to be satisfied after a drug receives approval.Failure to satisfysuch postmarketing commitments can result in FDA enfor

256、cement action,up and to including withdrawal of NDAapproval.The results of phase 4 studies can confirm the effectiveness of a product candidate and can provideimportant safety information to augment the FDAs adverse drug reaction reporting system.The results ofproduct development,preclinical studies

257、 and clinical trials are submitted to the FDA as part of an NDA,or aspart of an NDA supplement.The submission of an NDA or NDA supplement requires payment of a substantialUser Fee to FDA.The FDA may convene an advisory committee to provide clinical insight on NDA reviewquestions.The FDA may deny app

258、roval of an NDA or NDA supplement by way of a Complete Response letter ifthe applicable regulatory criteria are not satisfied,or it may require additional clinical data and/or an additionalpivotal phase 3 clinical trial.Even if such data are submitted,the FDA may ultimately decide that the NDA orNDA

259、 supplement does not satisfy the criteria for approval.An NDA may be approved with significantrestrictions on its labeling,marketing and distribution under a Risk Evaluation and Mitigation Strategy.Onceissued,the FDA may withdraw product approval if ongoing regulatory standards are not met or if saf

260、etyproblems occur after the product reaches the market.In addition,the FDA may require testing and surveillanceprograms to monitor the effect of approved products that have been commercialized,and the FDA has the powerto prevent or limit further marketing of a product based on the results of these p

261、ostmarketing programs.Satisfaction of FDA requirements or similar requirements of state,local and foreign regulatory agenciestypically takes several years and the actual time required may vary substantially based upon the type,complexityand novelty of the product or disease.Government regulation may

262、 delay or prevent marketing of productcandidates or new diseases for a considerable period of time and impose costly procedures upon our activities.The FDA or any other regulatory agency may not grant approvals for new indications for our product candidateson a timely basis,if at all.Success in earl

263、y stage clinical trials does not ensure success in later stage clinicaltrials.Targets and pathways identified in vitro may be determined to be less relevant in clinical studies and17results in animal model studies may not be predictive of human clinical results.Data obtained from clinicalactivities

264、is not always conclusive and may be susceptible to varying interpretations,which could delay,limit orprevent regulatory approval.Even if a product candidate receives regulatory approval,the approval may besignificantly limited to specific disease states,patient populations and dosages.Further,even a

265、fter regulatoryapproval is obtained,later discovery of previously unknown problems with a product may result in restrictions onthe product or even complete withdrawal of the product from the market.Any products manufactured or distributed by us pursuant to FDA approvals are subject to continuingregu

266、lation by the FDA,including record-keeping requirements and reporting of adverse experiences with thedrug.Drug manufacturers and their subcontractors are required to register their establishments with the FDA andcertain state agencies,and are subject to periodic unannounced inspections by the FDA an

267、d certain state agenciesfor compliance with GMP,which impose certain procedural and documentation requirements upon us and ourthird-party manufacturers.We cannot be certain that we or our present or future suppliers will be able to complywith the GMP regulations and other FDA regulatory requirements

268、.If our present or future suppliers are not ableto comply with these requirements,the FDA may halt our clinical trials,require us to recall a drug fromdistribution,or withdraw approval of the NDA for that drug.The FDA closely regulates the marketing and promotion of drugs.A company can make only tho

269、se claimsrelating to safety and efficacy that are approved by the FDA.Failure to comply with these requirements canresult in adverse publicity,warning letters,corrective advertising and potential civil and criminal penalties.Physicians may prescribe legally available drugs for uses that are not desc

270、ribed in the products labeling and thatdiffer from those tested by us and approved by the FDA.Such off-label uses are common across medicalspecialties.Physicians may believe that such off-label uses are the best treatment for many patients in variedcircumstances.The FDA does not regulate the behavio

271、r of physicians in their choice of treatments.The FDAdoes,however,restrict manufacturers communications on the subject of off-label use.The FDAs policies may change and additional government regulations may be enacted which could preventor delay regulatory approval of our product candidates or appro

272、val of new diseases for our product candidates.We cannot predict the likelihood,nature or extent of adverse governmental regulation that might arise fromfuture legislative or administrative action,either in the United States or abroad.The United States Orphan Drug Act promotes the development of pro

273、ducts that demonstrate promise for thediagnosis and treatment of diseases or conditions that affect fewer than 200,000 people in the United States.Upon FDA receipt of Orphan Drug Designation,the sponsor is eligible for tax credits of up to 50%for qualifiedclinical trial expenses,the ability to apply

274、 for annual grant funding,waiver of Prescription Drug User Fee Actapplication fee,and upon approval,the potential for seven years of market exclusivity for the orphan-designatedproduct for the orphan-designated indication.Regulation Outside of the United StatesIn addition to regulations in the Unite

275、d States,we will be subject to regulations of other countries governingclinical trials and commercial sales and distribution of our products.Whether or not we obtain FDA approval fora product,we must obtain approval by the comparable regulatory authorities of countries outside of the UnitedStates be

276、fore we can commence clinical trials in such countries and approval of the regulators of such countriesor economic areas,such as the European Union,before we may market products in those countries or areas.Theapproval process and requirements governing the conduct of clinical trials,product licensin

277、g,pricing andreimbursement vary greatly from place to place,and the time may be longer or shorter than that required for FDAapproval.Under European Union regulatory systems,a company may submit marketing authorization applicationseither under a centralized or decentralized procedure.The centralized

278、procedure provides for the grant of a single18marketing authorization that is valid for all European Union member states.The decentralized procedureprovides for mutual recognition of national approval decisions.Under this procedure,the holder of a nationalmarketing authorization may submit an applic

279、ation to the remaining member states.Within 90 days of receivingthe applications and assessments report,each member state must decide whether to recognize approval.If amember state does not recognize the marketing authorization,the disputed points are eventually referred to theEuropean Commission,wh

280、ose decision is binding on all member states.As in the United States,we may apply for designation of a product as an Orphan Drug for the treatment of aspecific indication in the European Union before the application for marketing authorization is made.OrphanDrugs in Europe enjoy economic and marketi

281、ng benefits,including up to ten years of market exclusivity for theapproved indication unless another applicant can show that its product is safer,more effective or otherwiseclinically superior to the orphan-designated product.Healthcare RegulationFederal and state healthcare laws,including fraud an

282、d abuse and health information privacy and securitylaws,are also applicable to our business.If we fail to comply with those laws,we could face substantial penaltiesand our business,results of operations,financial condition and prospects could be adversely affected.The lawsthat may affect our ability

283、 to operate include:the federal Anti-Kickback Statute,which prohibits soliciting,receiving,offering or paying remuneration,directly or indirectly,to induce,or in return for,the purchase orrecommendation of an item or service reimbursable under a federal healthcare program,such as the Medicareand Med

284、icaid programs;and federal civil and criminal false claims laws and civil monetary penalty laws,whichprohibit,among other things,individuals or entities from knowingly presenting,or causing to be presented,claims for payment from Medicare,Medicaid,or other third-party payers that are false or fraudu

285、lent.State lawequivalents of each of the above federal laws,many of which differ from each other in significant ways and maynot have the same effect,further complicate compliance efforts.Numerous federal and state laws,including state security breach notification laws,state health informationprivacy

286、 laws and federal and state consumer protection laws,govern the collection,use and disclosure ofpersonal information.Other countries also have,or are developing,laws governing the collection,use andtransmission of personal information.In addition,most healthcare providers who are expected to prescri

287、be ourproducts and from whom we obtain patient health information are subject to privacy and security requirementsunder the Health Insurance Portability and Accountability Act of 1996,as amended by the Health InformationTechnology and Clinical Health Act,or HIPPA.Although we are not directly subject

288、 to HIPPA,we could besubject to criminal penalties if we knowingly obtain individually identifiable health information from a HIPAA-covered entity in a manner that is not authorized or permitted by HIPAA.The legislative and regulatorylandscape for privacy and data protection continues to evolve,and

289、there has been an increasing amount of focuson privacy and data protection issues with the potential to affect our business,including recently enacted laws ina majority of states requiring security breach notification.These laws could create liability for us or increase ourcost of doing business.Int

290、ernational laws,such as the EU Data Privacy Directive(95/46/EC)and Swiss FederalAct on Data Protection,regulate the processing of personal data within Europe and between European countriesand the United States.Failure to provide adequate privacy protections and maintain compliance with safe harborme

291、chanisms could jeopardize business transactions across borders and result in significant penalties.There are also an increasing number of state laws that require manufacturers to make reports to states onpricing and marketing information.In addition,beginning in 2014,a similar federal requirement wi

292、ll requiremanufacturers to track and report to the federal government certain payments made to physicians and teachinghospitals made in the previous calendar year.These laws may affect our sales,marketing,and other promotionalactivities by imposing administrative and compliance burdens on us.In addi

293、tion,given the lack of clarity withrespect to these laws and their implementation,our reporting actions could be subject to the penalty provisions ofthe pertinent state,and soon federal,authorities.19ReimbursementSales of COMETRIQ and any future products of ours will depend,in part,on the extent to

294、which their costswill be covered by third-party payors,such as government health programs,commercial insurance and managedhealthcare organizations.These third-party payors are increasingly challenging the prices charged for medicalproducts and services.Additionally,the containment of healthcare cost

295、s has become a priority of federal andstate governments and the prices of drugs have been a focus in this effort.The U.S.government,state legislaturesand foreign governments have shown significant interest in implementing cost-containment programs,includingprice controls,restrictions on reimbursemen

296、t and requirements for substitution of generic products,whenavailable.Adoption of price controls and cost-containment measures,and adoption of more restrictive policies injurisdictions with existing controls and measures,could further limit our product revenue and results.If thesethird-party payors

297、do not consider our products to be cost-effective compared to other therapies,they may notcover our products or,if they do,the level of payment may not be sufficient to allow us to sell our products on aprofitable basis.The Medicare Prescription Drug,Improvement,and Modernization Act of 2003,or the

298、MMA,imposed newrequirements for the distribution and pricing of prescription drugs for Medicare beneficiaries.Under Part D,Medicare beneficiaries may enroll in prescription drug plans offered by private entities which will providecoverage of outpatient prescription drugs.Part D plans include both st

299、and-alone prescription drug benefit plansand prescription drug coverage as a supplement to Medicare Advantage plans.Unlike Medicare Part A and B,Part D coverage is not standardized.Part D prescription drug plan sponsors are not required to pay for all coveredPart D drugs,and each drug plan can devel

300、op its own drug formulary that identifies which drugs it will cover andat what tier or level.However,Part D prescription drug formularies must include drugs within each therapeuticcategory and class of covered Part D drugs,though not necessarily all the drugs in each category or class.Anyformulary u

301、sed by a Part D prescription drug plan must be developed and reviewed by a pharmacy andtherapeutic committee.Government payment for some of the costs of prescription drugs may increase demandfor our products for which we receive marketing approval.However,any negotiated prices for our productscovere

302、d by a Part D prescription drug plan will likely be lower than the prices we might otherwise obtain.Moreover,while the MMA applies only to drug benefits for Medicare beneficiaries,private payors often followMedicare coverage policy and payment limitations in setting their own payment rates.Any reduc

303、tion in paymentthat results from the MMA may result in a similar reduction in payments from non-governmental payors.The Patient Protection and Affordable Care Act,as amended by the Health Care and EducationAffordability Reconciliation Act of 2010,collectively referred to as the PPACA,enacted in Marc

304、h 2010,isexpected to have a significant impact on the health care industry.The PPACA is expected to expand coverage forthe uninsured while at the same time containing overall healthcare costs.With regard to pharmaceutical products,the PPACA is expected to,among other things,expand and increase indus

305、try rebates for drugs covered underMedicaid programs and make changes to the coverage requirements under the Medicare Part D program.Wecannot predict the full impact of the PPACA on our operations,as many of PPACAs reforms require thepromulgation of detailed regulations implementing the statutory pr

306、ovisions,which has not yet occurred.In June2012,the U.S.Supreme Court upheld the constitutionality of the PPACA,except that the Court heldunconstitutional the provision of PPACA authorizing the Secretary of the U.S.Department of Health and HumanServices to withdraw all of a states Medicaid funding i

307、f the state declines to participate in the PPACAsexpansion of Medicaid eligibility.Yet,some states have indicated that they intend to not implement certainsections of the PPACA,and some members of the U.S.Congress are still working to repeal the PPACA.As aresult,the PPACA and/or certain of its provi

308、sions may be modified or eliminated by future legislation orlitigation.In addition,in some non-U.S.jurisdictions,the proposed pricing for a drug must be approved before it maybe lawfully marketed.The requirements governing drug pricing vary widely from country to country.Forexample,the European Unio

309、n provides options for its member states to restrict the range of medicinal productsfor which their national health insurance systems provide reimbursement and to control the prices of medicinalproducts for human use.A member state may approve a specific price for the medicinal product or it may ins

310、tead20adopt a system of direct or indirect controls on the profitability of the company placing the medicinal product onthe market.There can be no assurance that any country that has price controls or reimbursement limitations forpharmaceutical products will allow favorable reimbursement and pricing

311、 arrangements for any of our products.Historically,products launched in the European Union do not follow the price structures of the United States andgenerally tend to be priced significantly lower.CompetitionThere are many companies focused on the development of small molecules and antibodies for c

312、ancer.Ourcompetitors and potential competitors include major pharmaceutical and biotechnology companies,as well asacademic research institutions,clinical reference laboratories and government agencies that are pursuing researchactivities similar to ours.Many of our competitors and potential competit

313、ors have significantly more financial,technical and other resources than we do,which may allow them to have a competitive advantage.We believe that our ability to successfully compete will depend on,among other things:efficacy,safety and reliability of COMETRIQ(cabozantinib);timing and scope of regu

314、latory approval;the speed at which we develop cabozantinib for the treatment of additional tumor types beyondprogressive,metastatic MTC;our ability to complete preclinical testing and clinical development and obtain regulatory approvals forcabozantinib;our ability to manufacture and sell commercial

315、quantities of COMETRIQ(cabozantinib)to the market;our ability to successfully commercialize COMETRIQ(cabozantinib)and secure reimbursement inapproved indications;product acceptance by physicians and other health care providers;quality and breadth of our technology;skills of our employees and our abi

316、lity to recruit and retain skilled employees;protection of our intellectual property;andthe availability of substantial capital resources to fund development and commercialization activities.We believe that the quality and breadth of activity observed with cabozantinib,the skill of our employeesand

317、our ability to recruit and retain skilled employees,our patent portfolio and our capabilities for research anddrug development are competitive strengths.However,many large pharmaceutical and biotechnology companieshave significantly larger intellectual property estates than we do,more substantial ca

318、pital resources than we have,and greater capabilities and experience than we do in preclinical and clinical development,sales,marketing,manufacturing and regulatory affairs.The markets for which we intend to pursue regulatory approval of cabozantinib are highly competitive.Weare aware of products in

319、 research or development by our competitors that are intended to treat all of the tumortypes we are targeting,and any of these products may compete with cabozantinib.Our competitors may succeedin developing their products before we do,obtaining approvals from the FDA or other regulatory agencies for

320、their products more rapidly than we do,or developing products that are more effective than cabozantinib.Theseproducts or technologies might render our technology obsolete or noncompetitive.There may also be drugcandidates of which we are not aware at an earlier stage of development that may compete

321、with cabozantinib.Inaddition,cabozantinib may compete with existing therapies that have long histories of use,such as chemotherapyand radiation treatments in cancer indications.21We believe that the principal competing anti-cancer therapy to COMETRIQ in progressive,metastatic MTCis AstraZenecas RET,

322、VEGFR and EGFR inhibitor vandetanib,which has been approved by the FDA and theEMA for the treatment of symptomatic or progressive MTC in patients with unresectable,locally advanced,ormetastatic disease.In addition,we believe that COMETRIQ also faces competition as a treatment forprogressive,metastat

323、ic MTC from off-label use of Bayers and Onyx Pharmaceuticals(a wholly-ownedsubsidiary of Amgen)multikinase inhibitor sorafenib,Pfizers multikinase inhibitor sunitinib,and AriadPharmaceuticals multikinase inhibitor ponatinib.We believe that if cabozantinib is approved for the treatment of the indicat

324、ions for which we currently haveongoing phase 3 pivotal trials,its potential principal competition in such indications may include the following:CRPC:Bayers alpha-pharmaceutical(radium 223);Janssen Biotechs CYP17 inhibitor abiraterone;Medivations androgen receptor inhibitor enzalutamide;and chemothe

325、rapeutic agents,includingSanofis cabazitaxel and generic docetaxel;RCC:Pfizers axitinib,sunitinib and temsirolimus;Novartiseverolimus;Bayers and OnyxPharmaceuticalssorafenib;GlaxoSmithKlines pazopanib;and Genentechs bevacizumab;andHCC:Bayers and Onyx Pharmaceuticalssorafenib;Bayers regorafenib;ImClo

326、ne Systemsramucirumab;and ArQules tivantinib.Examples of potential competition for cabozantinib in other cancer indications include:other VEGFpathway inhibitors,including Genentechs bevacizumab;other RET inhibitors including Eisais lenvatinib;andother MET inhibitors,including Amgens AMG 208,Pfizers

327、crizotinib,ArQules tivantinib,GlaxoSmithKlinesforetinib(XL880)and Genentechs onartuzumab.Research and Development ExpensesResearch and development expenses consist primarily of personnel expenses,laboratory supplies,consultingand facilities costs.Research and development expenses were$178.8 million

328、for the year ended December 31,2013,compared to$128.9 million for the year ended December 31,2012 and$156.8 million for the year endedDecember 31,2011.RevenuesIn 2013,we derived 52%and 45%of our revenues from Bristol-Myers Squibb and Diplomat SpecialtyPharmacy,respectively.We operate as a single bus

329、iness segment and have operations solely in the United States.Information regarding total revenues,net loss and total assets is set forth in our financial statements included inItem 8 of this Form 10-K.Patents and Proprietary RightsWe actively seek patent protection in the United States,the European

330、 Union,and selected other foreigncountries to cover our drug candidates and related technologies.Patents extend for varying periods according tothe date of patent filing or grant and the legal term of patents in the various countries where patent protection isobtained.The actual protection afforded

331、by a patent,which can vary from country to country,depends on thetype of patent,the scope of its coverage and the availability of legal remedies in the country.We have numerouspatents and pending patent applications that relate to methods of screening drug targets,compounds thatmodulate drug targets

332、,as well as methods of making and using such compounds.While many patent applicationshave been filed relating to the drug candidates that we have developed,the majority of these are not yet issued orallowed.22Cabozantinib is covered by an issued patent in the United States(U.S.Pat.No.7,579,473)for t

333、hecomposition-of-matter of cabozantinib and pharmaceutical compositions thereof.Cabozantinib is also covered byan additional issued patent in the United States(covering certain methods of use)and also by an issued patent inEurope(covering cabozantinibs composition-of-matter and certain methods of use).These issued patents willexpire in September 2024,subject to any available extensions.Foreign cou