South San Francisco, California
November 13,  2001

Exelixis, Inc. (Nasdaq:EXEL) today reported financial results for the quarter ended September 30, 2001. For the quarter, the company reported a net loss of approximately $13.4 million, or $0.28 per share, excluding non-cash charges for stock compensation expense, and amortization of goodwill and intangibles. For the third quarter of 2000, the net loss was approximately $5.5 million, or $0.13 per share, excluding non-cash charges.

At September 30, 2001, cash, cash equivalents and short-term investments totaled approximately $132.3 million, compared to $112.6 million at December 31, 2000.

For the quarter ended September 30, 2001, total revenues almost doubled to $11.9 million from $6.1 million for the same period of 2000. The increase was due primarily to new collaborations formed with Bristol-Myers Squibb and Protein Design Labs, in addition to increased contract revenues from existing collaborations. The third quarter of 2001 also included revenues from Aventis CropScience resulting from the December 2000 acquisition of Agritope, Inc. (now Exelixis Plant Sciences, Inc.) and revenues from government grants resulting from the May 2001 acquisition of Artemis Pharmaceuticals GmbH.

Research and development expenses for the third quarter of 2001 were $21.3 million, excluding stock compensation expense of $1.1 million, compared to $11.1 million, excluding stock compensation expense of approximately $2.3 million, for the equivalent period of 2000. The increase reflects expenses from both Exelixis Plant Sciences and Artemis Pharmaceuticals, neither of which were part of Exelixis a year ago, as well as expansion of South San Francisco research and development to support new collaborations and the continued expansion of our drug discovery organization. For the quarter ended September 30, 2001, general and administrative expenses totaled $4.8 million, excluding stock compensation expense of $0.6 million, compared to $2.6 million, excluding stock compensation expense of approximately $1.2 million, in the third quarter of 2000. The increase resulted primarily from additional staffing required to support our expanding worldwide research and development efforts. The third quarter of 2001 also included $1.4 million for the amortization of goodwill and intangibles from recent acquisitions.

"The third quarter was highly productive for Exelixis, both in establishing key strategic partnerships with leading companies such as Bristol-Myers Squibb and Elan and in moving our internal programs forward aggressively," said George A. Scangos, Ph.D., president and chief executive officer of Exelixis, Inc. "We are confident in the robust potential of our internal pipeline and remain on track to announce our first lead compound by year end."

Recent Highlights:

• During the third quarter, Exelixis entered into a new collaboration with Bristol-Myers Squibb to discover a new generation of cancer drugs. As part of the collaboration, BMS purchased $20 million of common stock at $33.30 per share. Under the agreement, each company receives half of the targets generated under the collaboration, and Exelixis also received royalty-free rights to DEAE rebeccamycin, a cancer compound in Phase II clinical development.
• Exelixis signed chemistry collaborations with Elan Pharmaceuticals and Scios, for the generation of high-quality, small molecule compound libraries for high-throughput screening. Exelixis receives financial compensation for the compounds, which reduces the cost of developing its internal libraries, and can use these compounds for its internal programs in addition to its partnered programs.
• As part of the initiation of a new inflammation program, scientists at Exelixis and the Institute of Molecular and Cellular Biology in Strasbourg, France, identified and characterized a gene involved in mediating the innate immune response, a discovery that could have significant implications in treating a wide variety of human inflammatory diseases, such as rheumatoid arthritis, asthma, atherosclerosis and inflammatory bowel disease. The findings were published in the October 11th issue of Developmental Cell.
• Protein Design Labs accepted several cancer antibody targets from Exelixis for further research and development. Under the agreement, Exelixis retains the right to co-fund and co-develop antibodies resulting from the collaboration. For antibody products developed by Protein Design Labs that Exelixis elects not to co-develop, Exelixis will be entitled to specified milestone payments and royalty payments on any product sales.
• Exelixis continued to deliver targets and assays to partners throughout the course of the quarter, earning milestone payments in most cases.

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 October 31, 2001.

For the fourth quarter, Exelixis anticipates that revenues will increase in the range of 5-10%. Due to continued expansion of the drug discovery operations and clinical development to support our effort to file our first IND for a proprietary lead compound in 2002 as well as manufacture and develop our Phase II cancer product, expenses, excluding non-cash charges, will increase in the range of 10-15% from the third quarter levels.  For 2001, Exelixis continues to expect a cash burn in the range of $42-47 million based on total revenues of $40-45 million. Exelixis also continues to expect to report a cash, cash equivalents and short term investments balance in excess of the $112.6 million reported at December 31, 2000.

Exelixis, Inc. is a leading worldwide genomics-based drug discovery 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 collaborations with Aventis CropScience, Bayer, Bristol-Myers Squibb, Elan Pharmaceuticals, Pharmacia, Protein Design Labs, Scios 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
N3952