South San Francisco, California
August 8,  2001

Exelixis, Inc., (Nasdaq: EXEL) today reported financial results for the quarter ended June 30, 2001. For the second quarter, Exelixis reported a net loss of approximately $13.5 million, or $0.30 per share, excluding non-cash charges for stock compensation expense, acquired in-process research
and development and amortization of goodwill and intangibles. For the second quarter of 2000, the net loss was approximately $5.7 million, or $0.15 per share on a pro forma basis (i.e., assuming conversion of then outstanding preferred stock), excluding non-cash charges for stock compensation expense.

At June 30, 2001, cash, cash equivalents and short-term investments totaled approximately $123.1 million, compared to $112.6 million at December 31, 2000.

For the quarter ended June 30, 2001, total revenues increased to $8.6 million from $5.6 million for the same period of 2000. The increase was due primarily to increases in research and development performed and milestones earned under collaborations with Bayer Corporation, Pharmacia Corporation and Bristol-Myers Squibb Company. The second quarter of 2001 also included research and development revenues earned from collaborations with Dow AgroSciences LLC entered into in July 2000 and Aventis Crop Sciences resulting from our December 2000 acquisition of Agritope, Inc., now renamed Exelixis Plant Sciences, Inc., as well as revenues earned under a new collaboration with Protein Design Labs entered into in May 2001.

Research and development expenses for the quarter ended June 30, 2001 were $18.9 million, excluding stock compensation expense of $1.6 million, compared to $9.4 million, excluding stock compensation expense of approximately $4.0 million, for the equivalent period of 2000. The increase was due to the expansion of our research and development organization to support new collaborations, expansion into a new drug discovery facility and the significant build-out of our drug discovery organization. In the second quarter of 2001, general and administrative expense totaled $4.3 million, excluding stock compensation expense of $0.7 million, compared to $3.6 million, excluding stock compensation expense of approximately $1.3 million, in the second quarter of 2000. The increase resulted primarily from additional staffing required to support our expanding research and development operations. The second quarter also included non-cash charges of $7.9 million for the amortization of goodwill and intangibles and acquired in-process research and development expenses from recent acquisitions.

Exelixis reports revenues in accordance with Securities and Exchange Commission Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements" (SAB 101). SAB 101 was issued in December 1999, and under SAB 101 Exelixis generally recognizes up-front payments, milestones and license fees over the term of the underlying agreement.

Recent Highlights

-- Collaborations:
-- Bristol-Myers Squibb Company and Exelixis entered into a broad collaboration and licensing agreement to create a new generation of cancer drugs that selectively destroy cancers that harbor
defects in tumor suppressor gene pathways. Each company retains rights to half of the targets identified under the collaboration.
-- Protein Design Labs and Exelixis signed a collaboration, which uses Exelixis' expertise in target identification and validation to discover novel antibody targets, and PDL's proficiency in antibody clinical development and manufacturing to create humanized antibodies for the diagnosis, prevention and treatment of cancer.
-- Exelixis continued to deliver targets and assays to partners throughout the course of the quarter, earning milestone payments in most cases.

-- Internal Programs:
-- Exelixis announced the expansion of its internal programs to add metabolic diseases to cancer and angiogenesis as franchise areas for the company's pharmaceutical business. Exelixis' new
programs, resulting from the conclusion of its research collaboration with Pharmacia in February 2002, will focus on developing therapies for cardiovascular disease, obesity and diabetes.
-- The Tuebingen zebrafish screen resulted in the first "functional mapping" of a vertebrate species, linking genes to biological activity. This screen could one day lead to treatments for heart, bone, cartilage, vascular and nervous system disorders.

-- Management:
-- The following members were added to Exelixis' management team: Jeffrey R. Latts, M.D. as chief medical officer and senior vice president of clinical affairs and Mary Callan, Ph.D., director of
business development. In addition, as a result of the acquisition of Artemis, Peter Stadler, Ph.D. and Paul Rounding, Ph.D., have been named managing director and vice president of business
development, respectively, of the Artemis subsidiary of Exelixis.

Outlook

The following statements are based on current expectations. These statements are forward-looking and actual results may differ materially. Except as expressly set forth below, these statements do not include the potential impact of any mergers, acquisitions or other business combinations that may be closed or entered into after July 31, 2001.

With respect to our corporate goals for the remainder of 2001, we continue to expect to achieve one new collaboration.

Due to expenses anticipated for the manufacture and clinical development of the Phase I/II cancer compound acquired from Bristol-Myers Squibb and the continued expansion of our research efforts in angiogenesis and our proprietary cancer drug development program, our planned growth in headcount and expenses for the remainder of the year will increase above those originally planned. For the third quarter, Exelixis anticipates that revenues will increase in the range of 35-40%, and expenses, excluding non-cash charges, will increase in the range of 20-25% from the second quarter levels. For 2001, Exelixis expects to report a cash burn in the range of $42-47 million based on total revenues in the range of $40-45 million. We also expect to report a cash balance in excess of the $112.6 million reported at December 31, 2000.

Exelixis, Inc. is a leading genomics-based drug discovery company focused on product development through its expertise in comparative genomics and model system genetics. These technologies provide a rapid, efficient and cost effective way to move from DNA sequence data to knowledge about the function of genes and the proteins they encode. The company's technology
is broadly applicable to all life sciences industries including pharmaceutical, diagnostic, agricultural biotechnology and animal health. Exelixis has collaborations with Aventis, Bayer, Bristol-Myers Squibb, Pharmacia, Protein Design Labs and Dow AgroSciences and is building its internal development program in the area of oncology. For more information, please visit the
company's web site at www.exelixis.com. 

Company news release
N3716