This genomics-based company has used business development as a strategic tool, swapping for key capacities that have helped it quickly leap forward. As the company demonstrated the merits of its model-organism platform, it began asking partners not for the most money they would give--but for assets that would help it forward integrate. One deal that started small expanded into a life-changing technology swap: from BMS, Exelixis got combinatorial chemistry capacity that it can now use to make compounds against its own targets. It also got a Phase II drug candidate for cancer, and rights to half of the molecules it makes for BMS, and Exelixis has used its new chemistry capacity to sign other barter-driven deals. Rapid evolution has risks: unless Exelixis accesses other fairly mature drug candidates, there will be a gap between launch of its first product and other compounds that haven't been tried yet in humans.
Money isn't everything. This old adage has been a driving force
behind dealmaking at Exelixis Inc.
—a company that began life as a pure platform player but is
managing quickly, though not yet completely—to transform
itself into a fully integrated organization. The key growth
promoter at Exelixis has been the understanding that in dealmaking,
cash is sometimes less valuable than other assets.
A glance at the company's evolutionary path—in particular a cluster of deals signed a year ago—demonstrates the power of barter....
