Exelixis Acquires Artemis Pharmaceuticals GmbH

Acquisition Enhances Drug Discovery Capabilities and Provides Global Presence



Apr 23, 2001, 01:00 ET from Exelixis, Inc.

    SOUTH SAN FRANCISCO, Calif., April 23 /PRNewswire Interactive News
 Release/ -- Exelixis, Inc., (Nasdaq: EXEL) and Artemis Pharmaceuticals GmbH,
 announced today that Exelixis has entered into a definitive agreement to
 acquire Artemis, a privately held genetics and functional genomics company, in
 a stock-for-stock transaction.  Located in Cologne, Germany, Artemis is
 focused on the use of vertebrate model genetic systems such as mice and
 zebrafish as tools for drug discovery.  Together with Nobel Laureate Professor
 Christiane Nusslein-Volhard, Professor Klaus Rajewsky, and CEO Peter Stadler,
 Exelixis founded Artemis in 1998 to expand Exelixis' access to vertebrate
 model system technologies.  Exelixis and Artemis have worked closely together
 since that time, and the acquisition formalizes the existing close business
 and scientific collaboration.  The transaction is expected to close by
 April 30, 2001.
     The acquisition of Artemis will result in a single, worldwide
 biopharmaceutical company with an extraordinary array of biological systems
 and other tools for rapid target identification and validation.  These
 capabilities, coupled with Exelixis' state-of-the-art drug discovery platform,
 provide an extremely powerful combination for the discovery and development of
 novel pharmaceuticals.  This acquisition is a continuation of Exelixis'
 strategy to optimize all aspects of the drug discovery process from target
 identification to clinical development.
     "The industry has come to realize the power of identifying and validating
 targets in living organisms where complex functional relationships that are
 too complicated or unexpected to predict by other methods can be identified.
 This has been Exelixis' approach from the beginning, and the proprietary
 vertebrate systems and tools developed at Artemis over the past two years are
 an important complement to the core Exelixis technologies," according to
 George A. Scangos, Ph.D., president and chief executive officer of Exelixis.
 "The Artemis systems not only enhance our target identification and validation
 capabilities, but also will contribute substantially to our drug discovery
 efforts. We believe that the mouse and zebrafish systems provide a new avenue
 for rational development of superior predictive pharmacology and toxicology
 models, in addition to their utility as disease models."
     "Exelixis has built a world-class discovery operation, and I am very
 pleased to have Artemis become an integral part of their exciting
 organization," stated Peter J.W. Stadler, Ph.D., chief executive officer of
 Artemis. "The integration of complementary technologies into one company will
 provide the expertise and resources for unprecedented discovery and
 development of drugs based on functional genomics."
     Under the terms of the agreement, Exelixis will issue a total of
 2,081,660 shares of common stock in exchange for the outstanding capital of
 Artemis that it does not currently own.  In addition, Exelixis will issue to
 Artemis employees rights to purchase approximately 187,000 shares of Exelixis
 common stock in exchange for outstanding vested employee rights in Artemis
 share capital.  Artemis will operate as a German-based subsidiary, and Peter
 Stadler will remain the managing director of Artemis.  The transaction will be
 reported using the purchase method of accounting.  The investors have agreed
 to a 90-day lock-up for shares of common stock received in the transaction.
 Exelixis has also agreed to file a registration statement on Form S-3 for the
 shares of Exelixis common stock issued in the transaction.
 
     Background on Artemis
     Artemis, working closely with Exelixis, was founded in June 1998 by
 Dr. Stadler and the scientific founders:  Christiane Nusslein-Volhard,
 Professor at the Max-Planck Institute in Turbingen, and Klaus Rajewsky,
 Professor and Director of the Institute for Genetics at the University of
 Cologne.  Professor Rajewsky is one of the world's leading scientists in the
 field of immunology and mice genetics.  Professor Nusslein-Volhard won the
 Nobel Prize for medicine in 1995 for her pioneering work in the use of
 Drosophila genetics.
     Artemis' approach is focused on target validation in both zebrafish and
 mice, systems that will substantially enhance the drug discovery efforts at
 Exelixis.  The degree of conservation between zebrafish and humans is very
 high.  There are several significant advantages to the company's zebrafish
 technology.  Zebrafish are a transparent species of vertebrate that develop
 externally.  They quickly change from egg to embryo within 24 hours and
 because they are transparent, the development cycle can be followed under a
 microscope.  Fish embryos develop bone and cartilage and quickly form blood
 vessels and beating hearts.  Thus, this organism can be used to study human
 disease states involving bone formation or degeneration (osteoporosis and
 osteoarthritis for example) and angiogenesis (heart disease and cancer).
     Artemis uses conditional knock-out mice in order to rapidly validate
 functional data identified in zebrafish. The Artemis mouse model system
 consists of unique proprietary conditional knock-out mice that can turn off a
 gene in one specific tissue, rather than affect the whole organism.  Thus, the
 effects of modulating a gene can be studied throughout the development of the
 life cycle of the mouse. This is particularly useful in disease conditions
 that do not present until later in development such as rheumatoid arthritis,
 which would be impossible to study with traditional knock-out mice technology.
 
     Background on Exelixis
     Exelixis, founded in 1995, is a leading life sciences biotechnology
 company focused on product development through its expertise in comparative
 genomics and model system genetics.  An outstanding team of company scientists
 has developed multiple fungal, nematode, insect, plant and vertebrate genetic
 systems.  Exelixis' proprietary model systems and comparative genomics
 technologies address gene function by using biologically relevant functional
 genomics information very early on in the process to rapidly, efficiently and
 cost-effectively translate sequence data to knowledge about the function of
 genes and the proteins that they encode.  The company has a significant
 internal cancer discovery and drug development program, through which a number
 of compounds are expected to complete screening by the end of the year.
 Exelixis believes that its technology is broadly applicable to all life
 science industries including pharmaceutical, diagnostic, agricultural
 biotechnology and animal health and the company has active partnerships with
 Aventis, Bayer, Pharmacia, Bristol-Myers Squibb and Dow AgroSciences.
     The forward-looking statements contained in this press release involve
 risks and uncertainties that may affect our business, as more fully discussed
 in the "Risk Factors" section of our filings with the U.S. Securities and
 Exchange Commission. These risks and uncertainties include, but are not
 limited to, our ability to close the acquisition, successfully integrate the
 employees, research and operations of Artemis, successfully utilize Artemis
 technology as part of our drug discovery efforts, generate additional revenues
 by entering into new collaborations, protect and exploit the intellectual
 property acquired and successfully continue the development of existing
 Artemis research programs and realize commercial value from those efforts.
 Exelixis directs readers to its reports filed with the U.S. Securities and
 Exchange Commission, including its Annual Report on Form 10-K for the year
 ended December 31, 2000.  The information in this press release is current as
 of its release date.  Exelixis assumes no responsibility to update the
 information.
     NOTE:  Exelixis and the Exelixis logo are registered U.S. trademarks.
 
                      MAKE YOUR OPINION COUNT - Click Here
                http://tbutton.prnewswire.com/prn/11690X85877631
 
 

SOURCE Exelixis, Inc.
    SOUTH SAN FRANCISCO, Calif., April 23 /PRNewswire Interactive News
 Release/ -- Exelixis, Inc., (Nasdaq: EXEL) and Artemis Pharmaceuticals GmbH,
 announced today that Exelixis has entered into a definitive agreement to
 acquire Artemis, a privately held genetics and functional genomics company, in
 a stock-for-stock transaction.  Located in Cologne, Germany, Artemis is
 focused on the use of vertebrate model genetic systems such as mice and
 zebrafish as tools for drug discovery.  Together with Nobel Laureate Professor
 Christiane Nusslein-Volhard, Professor Klaus Rajewsky, and CEO Peter Stadler,
 Exelixis founded Artemis in 1998 to expand Exelixis' access to vertebrate
 model system technologies.  Exelixis and Artemis have worked closely together
 since that time, and the acquisition formalizes the existing close business
 and scientific collaboration.  The transaction is expected to close by
 April 30, 2001.
     The acquisition of Artemis will result in a single, worldwide
 biopharmaceutical company with an extraordinary array of biological systems
 and other tools for rapid target identification and validation.  These
 capabilities, coupled with Exelixis' state-of-the-art drug discovery platform,
 provide an extremely powerful combination for the discovery and development of
 novel pharmaceuticals.  This acquisition is a continuation of Exelixis'
 strategy to optimize all aspects of the drug discovery process from target
 identification to clinical development.
     "The industry has come to realize the power of identifying and validating
 targets in living organisms where complex functional relationships that are
 too complicated or unexpected to predict by other methods can be identified.
 This has been Exelixis' approach from the beginning, and the proprietary
 vertebrate systems and tools developed at Artemis over the past two years are
 an important complement to the core Exelixis technologies," according to
 George A. Scangos, Ph.D., president and chief executive officer of Exelixis.
 "The Artemis systems not only enhance our target identification and validation
 capabilities, but also will contribute substantially to our drug discovery
 efforts. We believe that the mouse and zebrafish systems provide a new avenue
 for rational development of superior predictive pharmacology and toxicology
 models, in addition to their utility as disease models."
     "Exelixis has built a world-class discovery operation, and I am very
 pleased to have Artemis become an integral part of their exciting
 organization," stated Peter J.W. Stadler, Ph.D., chief executive officer of
 Artemis. "The integration of complementary technologies into one company will
 provide the expertise and resources for unprecedented discovery and
 development of drugs based on functional genomics."
     Under the terms of the agreement, Exelixis will issue a total of
 2,081,660 shares of common stock in exchange for the outstanding capital of
 Artemis that it does not currently own.  In addition, Exelixis will issue to
 Artemis employees rights to purchase approximately 187,000 shares of Exelixis
 common stock in exchange for outstanding vested employee rights in Artemis
 share capital.  Artemis will operate as a German-based subsidiary, and Peter
 Stadler will remain the managing director of Artemis.  The transaction will be
 reported using the purchase method of accounting.  The investors have agreed
 to a 90-day lock-up for shares of common stock received in the transaction.
 Exelixis has also agreed to file a registration statement on Form S-3 for the
 shares of Exelixis common stock issued in the transaction.
 
     Background on Artemis
     Artemis, working closely with Exelixis, was founded in June 1998 by
 Dr. Stadler and the scientific founders:  Christiane Nusslein-Volhard,
 Professor at the Max-Planck Institute in Turbingen, and Klaus Rajewsky,
 Professor and Director of the Institute for Genetics at the University of
 Cologne.  Professor Rajewsky is one of the world's leading scientists in the
 field of immunology and mice genetics.  Professor Nusslein-Volhard won the
 Nobel Prize for medicine in 1995 for her pioneering work in the use of
 Drosophila genetics.
     Artemis' approach is focused on target validation in both zebrafish and
 mice, systems that will substantially enhance the drug discovery efforts at
 Exelixis.  The degree of conservation between zebrafish and humans is very
 high.  There are several significant advantages to the company's zebrafish
 technology.  Zebrafish are a transparent species of vertebrate that develop
 externally.  They quickly change from egg to embryo within 24 hours and
 because they are transparent, the development cycle can be followed under a
 microscope.  Fish embryos develop bone and cartilage and quickly form blood
 vessels and beating hearts.  Thus, this organism can be used to study human
 disease states involving bone formation or degeneration (osteoporosis and
 osteoarthritis for example) and angiogenesis (heart disease and cancer).
     Artemis uses conditional knock-out mice in order to rapidly validate
 functional data identified in zebrafish. The Artemis mouse model system
 consists of unique proprietary conditional knock-out mice that can turn off a
 gene in one specific tissue, rather than affect the whole organism.  Thus, the
 effects of modulating a gene can be studied throughout the development of the
 life cycle of the mouse. This is particularly useful in disease conditions
 that do not present until later in development such as rheumatoid arthritis,
 which would be impossible to study with traditional knock-out mice technology.
 
     Background on Exelixis
     Exelixis, founded in 1995, is a leading life sciences biotechnology
 company focused on product development through its expertise in comparative
 genomics and model system genetics.  An outstanding team of company scientists
 has developed multiple fungal, nematode, insect, plant and vertebrate genetic
 systems.  Exelixis' proprietary model systems and comparative genomics
 technologies address gene function by using biologically relevant functional
 genomics information very early on in the process to rapidly, efficiently and
 cost-effectively translate sequence data to knowledge about the function of
 genes and the proteins that they encode.  The company has a significant
 internal cancer discovery and drug development program, through which a number
 of compounds are expected to complete screening by the end of the year.
 Exelixis believes that its technology is broadly applicable to all life
 science industries including pharmaceutical, diagnostic, agricultural
 biotechnology and animal health and the company has active partnerships with
 Aventis, Bayer, Pharmacia, Bristol-Myers Squibb and Dow AgroSciences.
     The forward-looking statements contained in this press release involve
 risks and uncertainties that may affect our business, as more fully discussed
 in the "Risk Factors" section of our filings with the U.S. Securities and
 Exchange Commission. These risks and uncertainties include, but are not
 limited to, our ability to close the acquisition, successfully integrate the
 employees, research and operations of Artemis, successfully utilize Artemis
 technology as part of our drug discovery efforts, generate additional revenues
 by entering into new collaborations, protect and exploit the intellectual
 property acquired and successfully continue the development of existing
 Artemis research programs and realize commercial value from those efforts.
 Exelixis directs readers to its reports filed with the U.S. Securities and
 Exchange Commission, including its Annual Report on Form 10-K for the year
 ended December 31, 2000.  The information in this press release is current as
 of its release date.  Exelixis assumes no responsibility to update the
 information.
     NOTE:  Exelixis and the Exelixis logo are registered U.S. trademarks.
 
                      MAKE YOUR OPINION COUNT - Click Here
                http://tbutton.prnewswire.com/prn/11690X85877631
 
 SOURCE  Exelixis, Inc.