Exelixis Inc. is looking to test the public market waters with a plan to sell 10 million common shares as part of a previously filed shelf registration statement.

The South San Francisco-based firm's stock (NASDAQ:EXEL) closed at $9.38 Thursday, its highest price in at least a year. At that price the offering would raise $93.8 million. The shares fell 58 cents Friday to close at $8.80.

Exelixis, which said in its prospectus that it would have 69.9 million shares outstanding after the offering, also plans to sell 1.5 million more shares as part of an underwriter option. Its April 2000 initial public offering garnered $118 million.

The company, which did not specify when it expected the offering to close, plans to use the proceeds to fund clinical development and for working capital and general corporate purposes. High on its list of upcoming priorities sits the anticancer compound XL119, a rebeccamycin analogue that Exelixis plans to push into a Phase III program late this year or early next year.

Nearly two years ago, it filed a $150 million shelf registration to help pay for development and manufacturing of the compound it had just acquired. The product, in-licensed from New York-based Bristol-Myers Squibb Co. weeks before as part of a cancer research collaboration, is being studied in patients with bile duct tumors. (See BioWorld Today, July 31, 2001, and July 19, 2001.)

Exelixis reported Phase II data earlier this month at the American Society of Clinical Oncology meeting in Chicago, revealing that the 33 patients treated with XL119 showed encouraging early results relative to overall survival and progression-free survival. The National Cancer Institute in Bethesda, Md., sponsored the trial.

Exelixis holds exclusive worldwide rights to XL119. But the company, which reported a first-quarter loss of $23.1 million for the period ended March 31, countered by $203.9 million in cash, cash equivalents and short-term securities, said it expects operating expenses to increase significantly in the near term as a result of such clinical development, hence its need to generate additional capital. Exelixis reported a full-year loss of $86.1 million in 2002.

Other upcoming clinical plans include a Phase I trial of XL784, another anticancer compound. The company submitted an investigational new drug application to the FDA in March for the small molecule, designed to target a cell-surface protease and cause its inhibition to result in anti-angiogenic and anti-proliferative effects. The first clinical trial of the orally active compound was scheduled to begin this quarter.

Exelixis also has been busy on the partnership front in the past year, entering a collaboration with London-based GlaxoSmithKline plc last fall to develop therapeutics in the vascular biology, inflammatory disease and oncology areas. The deal included guaranteed funding of $134 million for Exelixis, an $85 million loan facility and milestones and royalties that could push the totals even higher. (See BioWorld Today, Oct. 30, 2002.)

Goldman, Sachs & Co. is the offering's lead and book-running manager, while SG Cowen Securities Corp. is acting as co-manager.