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Feeding the Machine: Exelixis Buys X-Ceptor

Executive Summary

Exelixis' needs to address its increasing burn rate--expected to hit 90 million this year. With a stock mired around $8, any significant equity financing would be dilutive. Partnering was the obvious answer--except that Exelixis didn't have much to partner. By acquiring X-Ceptor Therapeutics it gets a set of much-needed near-term partnering opportunities, and it did so without significantly increasing its projected burn.

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No Dilution Necessary: The Promise of Project Financing

Project financing, claim its proponents-in particular Symphony Capital-offers an alternative to highly dilutive equity offerings, preserving the upside from the development of a successful product for the biotech. That's true, though this expensive capital isn't for everyone. Yet as Big Pharma's productivity challenge deepens, project financing is helping to swing the balance of power further towards small companies.

No Dilution Necessary: The Promise of Project Financing

Project financing, claim its proponents-in particular Symphony Capital-offers an alternative to highly dilutive equity offerings, preserving the upside from the development of a successful product for the biotech. That's true, though this expensive capital isn't for everyone. Yet as Big Pharma's productivity challenge deepens, project financing is helping to swing the balance of power further towards small companies.

Exelixis/GSK: Using Project Financing to Accelerate R&D

Productivity in biotech is a better problem to have than its opposite-but paying the higher-than-expected development costs makes it still a problem. Thanks to a variety of new project financing sources, and a particularly clever approach to amending its alliance with GlaxoSmithKline, Exelixis is fact trying to turn research productivity into a source of non-dilutive capital.

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