Lexicon Genetics Expands Alliance With Genentech to Discover and Develop Biotherapeutic Drugs

Broad alliance to accelerate the development and commercialization of drugs from Genentech's SPDI program


Lexicon Genetics Incorporated announced the expansion of its drug discovery alliance with Genentech, Inc. to include the advanced research, development and commercialization of new biologic drugs. Under the expanded alliance, Lexicon will conduct advanced research on a broad subset of targets included in Genentech's Secreted Protein Discovery Initiative (SPDI) program and validated using Lexicon's proprietary gene knockout technology. Lexicon may develop and commercialize drugs modulating up to six of these targets. Genentech retains an option on the potential development and commercialization of these drugs under a cost and profit sharing arrangement, with Lexicon having certain conditional rights to co-promote drugs on a worldwide basis.

Lexicon will receive a total of $25 million in upfront and milestone payments and research funding during the three-year advanced research portion of the expanded alliance. Lexicon will also receive payments from Genentech upon achievement of milestones related to the development and regulatory approval of certain drugs resulting from the alliance that are developed and commercialized by Genentech. Lexicon is entitled to receive royalties on net sales of these products, provided they are not included in a cost and profit sharing arrangement. Genentech is entitled to receive milestone payments in the event of regulatory approval and royalties on net sales of products commercialized by Lexicon outside of a cost and profit sharing arrangement.

The expanded alliance is designed to combine Lexicon's novel target validation capabilities with Genentech's expertise in research, clinical development, biologics manufacturing and commercialization to advance the development of targets within Genentech's SPDI program. Lexicon will conduct advanced preclinical research to further elucidate the functions of certain potential therapeutic proteins and antibody targets identified in the companies' initial alliance. Genentech has granted Lexicon the exclusive right to develop and commercialize drugs modulating up to six of these targets. Two targets for metabolic disease have already been designated as Lexicon targets and are currently in preclinical research at Lexicon. Lexicon retains non-exclusive rights for the development and commercialization of small molecule drugs addressing the targets included in the alliance.

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