Environmental, Social & Governance
A commitment to our environment, society and governance
Exelixis’ mission is to help cancer patients recover stronger and live longer. As we strive to extend and improve cancer patients’ lives, we recognize the need also to contribute positively to society as a whole. To that end, Exelixis expects that its employees will commit to the highest standards of ethical behavior and maintain values and principles that reflect both global awareness and sustainability. This means integrating environmental, social and governance (ESG) considerations directly into our research and development (R&D) projects, business operations and investment processes as we strive to create sustained value for all our stakeholders by translating science into impact for patients and all those we serve.
Read about Exelixis’ commitment to ESG from our President and Chief Executive Officer, Michael M. Morrissey, Ph.D.
Our governance and compliance
At Exelixis, we recognize that good governance, corporate responsibility and accountability are critical to our quest to develop medicines in our ongoing mission to treat and defeat cancer. We embed strong compliance practices and oversight into our scientific and business activities with the goal that these activities be conducted in a legal and ethical manner and in the best interests of all Exelixis’ stakeholders, in particular, the patients we serve. We have created and work to uphold a rigorous culture of compliance at every level of our organization so that we can safely and effectively deliver on our ongoing mission.
Our internal governance structure
In order to assist members of the executive management team in their efforts to reinforce and enhance a culture of compliance throughout the organization and foster ethical decision making, Exelixis has established a governance structure that is designed to provide senior management with regular and systematic reports on matters relating to the commitments stated in the Company’s Corporate Code of Conduct, along with its compliance with applicable international, federal and state laws, regulations and guidelines.
At the top of Exelixis’ structure sits the Ethics Committee. Led by Exelixis’ President and Chief Executive Officer, the Ethics Committee is responsible for oversight of the Company’s business ethics, quality and compliance. Each of the Ethics Committee’s subcommittees includes deep expertise in the relevant areas of Exelixis’ operations, enabling us to identify, respond to and escalate key issues or concerns, as needed. The Ethics Committee also oversees and manages significant risks to our Company, and works to ensure that we are effectively ascertaining, addressing and mitigating those risks. The Ethics Committee reports to the Risk Committee of our Board of Directors, providing a regular and reliable flow of information so Board Members may fulfill their own duties.
There are five subcommittees that work together under the Ethics Committee’s guidance, while each maintains a designated area of focus. The five subcommittees under the Ethics Committee are:
- Quality Council: Governs the quality management system, which is designed to ensure that our preclinical research, clinical and manufacturing operations meet Good Practice (GxP) quality guidelines and regulator expectations throughout the lifecycle of our products. The Quality Council oversees the implementation and performance of Exelixis’ quality management system elements (including documentation, training and auditing) relating to the development and manufacture of Exelixis’ products. The Quality Council is also charged with the responsibility for oversight of the continuous improvement program designed to address areas of concern, assist with necessary remediation and ensure that the capabilities of the quality management system are not reduced or interrupted.
- Executive Safety Committee: Manages the evolving safety profile and safety-related labeling of our medicines to meet Good Pharmacovigilance Practices. The Executive Safety Committee provides the Company position for safety aspects of its investigational and marketed products and works to ensure that product risks are properly communicated to protect patient safety and public health.
- Healthcare Compliance Committee: Assesses risks and conducts other activities to evaluate the effectiveness of Exelixis’ healthcare compliance program, particularly with respect to our interactions with healthcare professionals. The Healthcare Compliance Committee focuses especially on achieving excellence in policy development, training, auditing and monitoring practices. In addition, the Healthcare Compliance Committee receives information about current and emerging risks and regulatory enforcement trends in healthcare-related areas that may affect the Company’s business, and also evaluates the internal mechanisms for reporting, investigating and correcting any violations of the Corporate Code of Conduct or other applicable policies.
- Privacy Review Team: Evaluates potential data privacy risks and the security of patients’ protected health information. The Privacy Review Team receives information about current and emerging risks and regulatory enforcement trends concerning data privacy relevant to the Company’s operations, and also implements the policies, procedures and training programs designed to maintain Exelixis’ compliance with applicable data protection laws and regulations.
- Securities Compliance Committee: Manages Exelixis employee activity related to Company stock for the purpose of complying with U.S. Securities and Exchange Commission regulations. The Securities Compliance Committee administers the Company’s Insider Trading Policy and determines appropriate trading practices for the Company’s employees (including the establishment of trading windows and blackout periods for executive management and certain other employees).
Commitment to high standards and ethics
We are proud of our comprehensive compliance program, which reflects commitments to the highest standards of corporate conduct and integrity, as outlined in Exelixis’ Corporate Code of Conduct and reflected by our internal policies (including our Policy for Recoupment of Variable Compensation, or Clawback Policy). These commitments are embodied in our products and reflected in our sustainability efforts; they influence not only what our employees do, but also how they do it.
Access to health
At Exelixis, we aim to be exceptional in what we do and how we lead, excelling for patients by going the extra mile to care for them and exceeding together as a business and contributor to the scientific community. By the time the data package for an Exelixis medicine is filed for approval with the U.S. Food and Drug Administration (FDA) and other regulatory agencies, it reflects research and development efforts undertaken by hundreds of people, over many years, investing hundreds of millions of dollars. We dedicate substantial financial resources and work tirelessly in our efforts to offer patients high-quality cancer treatments. Moreover, once our products are available, we have a firm, voluntary commitment that no patient prescribed an Exelixis medicine will go without it due to lack of insurance or inability to pay.
Dedicated R&D efforts
Exelixis is on a mission to help cancer patients recover stronger and live longer. A critical part of that mission is increasing patient access to new cancer-fighting medicines — a majority of which are created through years of extensive R&D.
R&D is and always has been the largest line item in Exelixis’ budget, and we maintain a high ratio of R&D investment to net revenue received relative to our industry. The revenue we receive from our commercialized products helps fuel the discovery and development of the next generation of drug candidates. Based on our calculations, we spent more than $2.6 billion on R&D over the course of more than 21 years on the way to the approval of our flagship medicine, CABOMETYX.
Biopharmaceutical R&D is so expensive because the process of discovering, refining and testing compounds for safety and effectiveness is long and labor intensive — as it should be. On average, it can take 10 to 15 years to develop a single new medicine, making it a very risky and iterative discovery and development process. Less than 12% of the investigational medicines that make it into phase 1 clinical trials are ultimately approved by the FDA.i Thousands of compounds are tested in the lab in order to select the best candidates for clinical trials in cancer patients. Hundreds of patients are then enrolled in these trials to assess the safety and efficacy of the potential medicine, and these data are reviewed by independent regulatory agencies, such as the FDA and the European Medicines Agency. Only if these agencies find that the drug has appropriate safety and efficacy and issue a formal regulatory approval can the drug be marketed. For example, cabozantinib, the compound from which our marketed products CABOMETYX and COMETRIQ are derived, has been tested in over 6,600 patients in various clinical trials through July 2019. Cabozantinib has been studied in more than 85 clinical trials as a single agent or in combination with other therapies, having shown potential to treat over 20 forms of solid cancer tumors, and is currently the subject of four phase 3 pivotal studies (CheckMate 9ER, COSMIC-311, COSMIC-312 and COSMIC-313) and a multi-cohort phase 1b study (COSMIC-021).
This process includes extensive trial and error, with the number of failures far exceeding the number of breakthroughs. Nevertheless, we believe these setbacks encountered by our industry help to inform and guide us toward eventually creating better treatments for patients.
Pricing and programs
Cancer is the second-leading cause of death worldwide,ii with more than 18 million new diagnosesiii in 2018. On top of the hardships of illness and recovery, patients with cancer commonly contend with financial and other challenges in their lives. We know oncology therapies are indispensable for the patients who are battling cancer and believe companies like ours should always strive to make these therapies accessible to all who need them. That is why we are committed to easing this burden by going well beyond the industry standards to make our medicines available with financial assistance or the provision of free product, as regulations allow.
Exelixis has a firm, voluntary commitment that no patient prescribed an Exelixis medicine will go without it due to lack of insurance coverage or inability to pay. This commitment includes providing mandatory and voluntary discounts and rebates to public and private insurers and safety net providers. If a patient with a prescription does not have insurance or cannot afford our product, we will provide financial assistance, if permitted, or will provide the patient with the drug for free.
We consider several factors in our pricing decisions:
- How to maximize appropriate patient access to Exelixis products and the Company’s mission to discover, develop and commercialize innovative therapies with the potential to improve the treatment of cancer.
- The value proposition for each of our products (including the strength of clinical data supporting use of the product relative to approved and late-stage investigational products in the same therapeutic category), healthcare economic information, and the product’s overall risk/benefit profile.
- The R&D costs associated with both the individual product under consideration and the Company’s aggregate R&D expenditures, as well as impact to patient access to the Company’s treatment for medically appropriate uses, and competitor prices and formulary positioning.
- The amounts we have invested in R&D and the need to reinvest in research to improve the drug, identify new clinical indications and discover new compounds.
- The manufacturing costs that we continue to invest in supporting a robust global supply chain and ongoing continued enhancement of our manufacturing operations, enabling us to continue to produce products of the highest quality standards for our patients.
Exelixis Access Services (EASE) is a resource for questions and needs related to insurance coverage, financial assistance and treatment support for U.S. patients who are prescribed CABOMETYX or COMETRIQ. The program connects healthcare providers and their patients with an EASE Case Manager who can assist with the access journey. Eligible patients benefit from a variety of services, including:
- Free Trial and Quick Start programs that provide free medicines to help patients start CABOMETYX quickly.
- EASE $0 Co-Pay Program that assists commercially insured patients with out-of-pocket medication costs.
- EASE Patient Assistance Program (PAP) that allows uninsured and underinsured patients who meet the program’s eligibility criteria to receive their medication free of charge.
- Dose Exchange Program that provides a free 15-tablet supply of CABOMETYX in a lower dose to help patients who require a dose reduction.
- Clinical outreach and support program that connects oncology nurses or other healthcare providers with patients to help them understand how to take their medicine and mitigate side effects.
We are committed to seeing that all patients who are prescribed Exelixis medications have access to therapy. EASE Case Managers serve as a single point of contact for both patients and healthcare providers, offering prompt support with payer coverage, financial assistance and treatment coordination.
Taking responsibility for our products
The well-being of patients is our top priority. Our Corporate Code of Conduct holds every Exelixis employee accountable to safe and ethical standards of work and behavior and is designed to ensure our products are developed in compliance with GxPs.
As a core tenet of Exelixis values, product responsibility is monitored by teams with a direct chain of reporting to our Board of Directors. This process is designed to allow us to escalate and address issues quickly and holistically.
Exelixis strives to assure quality by independently guiding and assessing adherence to procedures and compliance with regulatory standards and expectations. We work cross-functionally to design and maintain quality processes that support compliance with our internal procedures as well as regulatory expectations and standards, including those of national health authorities and those that are synchronized through cooperative agreements, such as the International Conference on Harmonization.
Ensuring Quality Assurance Internally
We audit our internal processes across departments and disciplines with qualified independent Quality Assurance auditors, who are knowledgeable of current compliance expectations and industry practice, in order to critically assess the capability of and adherence to our processes. The performance of the internal quality management system is assessed at the Quality Council and includes reviews of audit outcomes so that opportunities for continuous improvement can be identified and implemented. This feedback mechanism helps us to follow through on the integrity and ethical standards set by our Ethics Committee.
Ensuring Quality Assurance Externally
Externally, we audit our third-party materials and service suppliers, both before and after entering into a contract, and we regularly evaluate whether our level of oversight for each vendor is appropriate based on the criticality of the service or materials provided and the past performance of the vendor.
As Exelixis utilizes third-party contract manufacturing organizations (CMOs) to manufacture our commercial and clinical products, we continually evaluate their ability to meet the appropriate quality standards and their compliance with applicable Good Manufacturing Practices. When selecting potential CMOs, we evaluate their technical expertise, regulatory track-record and other aspects such as those with respect to environmental, health and safety matters, as well as their overall business reputation. Our CMO selection criteria also includes assessing whether candidates have had any product recalls, use of insufficiently trained workforce, child labor or other human rights abuses, regulatory violations, or embargoes or sanctions. In addition, given the increase in commercial and clinical demand for our products, we assess each potential CMO’s financial stability and business continuity management plan. After contracting with a CMO, we continue to conduct audits and periodic reviews designed to ensure the consistent supply of safe and efficacious products for our patients.
As part of ensuring a robust global supply chain, we have established a strong network of highly competent and reputable manufacturers and suppliers who manufacture our products to meet our inventory targets, and we continue to enhance our supply chain by incrementally adding additional suppliers where needed. In addition, as part of our governance structure with our manufacturers and suppliers, we have established an ongoing cross-functional and team-based communication plan with appropriate management and executive oversight between Exelixis and these third parties. The communication plan is designed to ensure that: (a) our CMOs continue to meet our on-time product delivery needs; (b) we continue to both monitor and continually address any issues that arise during the manufacturing process; and (c) we continue to enhance our manufacturing processes appropriately. The cross-functional teams consist of both Quality Assurance and technical experts.
The Exelixis Drug Safety team is responsible for monitoring the safety of Exelixis’ products through the entire product lifecycle; from pre-clinical and clinical trials, through the post-market experience. The safety of the patients we serve is of paramount importance.
Exelixis monitors and reacts to reports of adverse drug effects experienced during clinical trials. Our goal is to minimize risks to patients and to proactively address and manage the product, as we develop well-characterized benefit-risk profiles based on available safety and efficacy information.
Post-regulatory approval, Exelixis continues to collect safety data relating to adverse events on an ongoing basis in order to maintain comprehensive safety profiles for our products. Aggregate reviews of safety data allow Exelixis to perform signal detection and signal management, which involve looking at the adverse reaction data to see if there are new risks associated with a product or whether current risks have changed.
Above all, we strive to help keep patients safe and healthcare providers informed, while meeting our global regulatory reporting obligations and maintaining Exelixis’ corporate integrity.
Exelixis requires that patient data are secure during and after a clinical trial. All of our computerized systems used in relation to clinical trials are assessed to maximize cybersecurity and the protection of data integrity, and we require that all clinical trial patient data be pseudonymized before it gets to Exelixis. Each patient is assigned a unique identification number, and we work only with relevant descriptive information about the patient, such as age, sex and health condition as it pertains to the trial. It is our policy not to process patient-identifying information, and we do not have access to any clinical records that might identify specific patients.
We are also diligent in providing patients with an informed consent document that contains the information they need throughout their participation in a study:
- Patients provide informed consent via signature before they can enroll in the study.
- The informed consent document is updated as new information becomes known, for example, resulting from internal surveillance processes or upon receipt of new guidance from a partner whose product we are using in a given study.
- Exelixis reviews the informed consent document at least once per year to determine whether changes need to be made and consent needs to be renewed.
We believe this system of keeping patients informed on an ongoing basis is critical for protecting them as we work together to unlock treatments for various types of cancers.
Product integrity and tracking
Exelixis strives to safeguard the integrity of the Company’s products with careful anticounterfeiting and serialization practices. We review our procedures relating to counterfeit prevention and response on an annual basis and revise it as needed. As part of the requirements of the Drug Supply Chain Security Act, every unit of a finished Exelixis product is now given a unique serial number, creating a data chain that allows us to track that unit in our supply chain.
We also have a system in place to manage product recalls, which entails internal procedures, terms and requirements with our suppliers, and communication to the proper authorities in the event it should be necessary. Although we have never conducted a product recall, our procedures do require biennial mock recalls to confirm that our systems stay robust and appropriate based on our distribution channels globally. Our patients put their health and trust in our hands, and we are ready to act immediately and comprehensively should the need arise.
Exelixis is committed to conducting business in a way that respects our environment and the Earth’s changing climate, and that is also consistent with providing a high state of wellness for our patients, employees and all our stakeholders. To date, we have incorporated environmentally sustainable practices into certain of our facilities and operations, and we plan to invest in more of these practices as we continue to grow. Our Business Operations team has the important responsibility of overseeing our environmental sustainability commitments and our environmental, health and safety programs.
As part of our commitment, we recognize that climate change threatens human safety and well-being on a dramatic scale. We feel all businesses — especially those like ours that are dedicated to human health — have a duty to minimize their impact on climate change and promote a long and prosperous future for all of Earth’s inhabitants.
As a growing healthcare company with over 600 employees and energy-intensive R&D operations, we prioritize reducing our energy use where possible and reallocating our energy use to renewable sources.
In 2018, we moved our headquarters to a state-of-the-art facility in Alameda, CA, which meets and, in many cases, exceeds building code standards for energy efficiency and environmental impact, and is designed to help maximize collaboration among employees and enable novel drug discovery. For example, we installed all new LED light sources, occupancy sensors and daylight sensors to minimize our energy usage for lighting in all of our newly constructed offices and labs. We also installed four new electric vehicle (EV) charging stations to supplement the eight stations already existing in our business park in order to support our staff members who commute via EV. In addition, our power in Alameda comes from Alameda Municipal Power, which delivers 100% clean energy. Its power mix easily exceeds California’s current requirements for clean power. Finally, in October 2019, we signed a build-to-suit lease for a new ~220,000 square foot building adjacent to our current campus in Alameda. We have committed to a 100% carbon-neutral energy footprint for the operation of that building, which we anticipate occupying in late 2021.
Greenhouse gas emissions from employee commuting
Reducing the emission of greenhouse gases is an important factor in combating climate change and protecting our planet. To help reduce the carbon footprint of our commuting workforce, we offer an extensive commuter support program to replace single-occupancy vehicle trips with shared transport. Transportation options include:
- Private shuttle fleet
- Vanpool fleet
- Carpool program
- Subsidies for employees using mass transit or carpooling
- Emergency ride home program
From March 2019 through December 2019, our commuter support programs resulted in approximately 26% of our workforce based in the Alameda campus utilizing means other than single-occupant vehicles for their commute to work, reducing CO2 emissions by nearly 700 tons — equivalent to taking more than 150 cars off the road for a year.*
*Per EPA estimate of 4.6 metric tons of CO2 emitted by the average passenger vehicle in one year.
**From March 2019 through December 2019, we also utilized a private ferry service connecting Oyster Point in South San Francisco to Harbor Bay in Alameda as part of our commuter support program. The information presented in this chart includes the impact on emissions from employee use of the ferry service during this time. The ferry service was subsequently discontinued in February 2020.
Chemical waste and potentially harmful materials are necessary consequences of the drug discovery process. As an organization, we aim for strict adherence to applicable laws and regulations with regard to our handling of hazardous materials and wastes that are used or generated in the course of our business. In addition, we have instituted measures to minimize the amount of office waste that we produce, with a strong focus on reducing, reusing and recycling.
- We have eliminated our use of radioactive isotopes through safer alternatives.
- We do not provide waste bins in individual workspaces and instead provide waste sorting stations throughout our buildings in order to facilitate proper sorting of compostable and recyclable waste. This approach has the added benefit of dramatically reducing our consumption of plastic can liners, which themselves lead to unnecessary waste and environmental contamination. We encourage our employees to appropriately sort their waste in order to reduce the impact our growing workforce has on the environment.
- We provide reusable, stainless steel utensils instead of disposable utensils for our employees to use during meal times.
- We provide eco-friendly, BPI-certified compostable paper plates, cups and napkins for our employees to use during meal times.
Human capital management
Our mission to help cancer patients recover stronger and live longer depends on the talent and dedication of our employees. Therefore, we invest in building their collective strength as a team by fostering growth opportunities for individuals.
At Exelixis, we value being exceptional in what we do and how we lead, excelling for patients by going the extra mile to care for them and exceeding together as a business and contributor to the scientific community. We live these values every day across the Company, integrating them into everything from our new hire interview process to our performance evaluation and promotion criteria. The power of our values shines through in the high quality of our workforce and their achievements.
Exelixis is an equal opportunity employer and prohibits unlawful discrimination based on race, color, religion, gender, sexual orientation, gender identity/expression, national origin/ancestry, age, disability, marital and veteran status. Our anti-discrimination policy and complaint procedures are included in our employee handbook and reiterated in periodic trainings given to all employees and managers.
We are proud to employ a diverse workforce that, as of the end of 2019, is 49% non-white and 51% women. In addition, 44% of our people management and executive leadership positions are held by women.
Following the positive top-line results of our METEOR trial in 2015, employee turnover has remained below the industry average, even after our recent move from South San Francisco to our new headquarters in Alameda, which is located on the East side of the San Francisco Bay. More than 10% of our employees have been with us for more than five years, and many of our current employees have returned to Exelixis after working elsewhere. Our longest tenured employee has been with Exelixis for 21 years. We generally fill open positions quickly (70 days on average), which we believe reflects our competitive employment offerings, strong corporate values and belief in our mission.
We insist on providing employees with the tools and environment they need to perform their work safely. We strive to adhere to the standards set by the Occupational Safety and Health Administration (OSHA), Cal-OSHA and Bay Area Air Quality Management District, among other governing bodies to ensure compliance with laws and regulations to maintain a safe working environment. All new laboratory staff are trained on chemical hygiene, the use of personal protective equipment, and other relevant laboratory safety topics, including working with blood-borne pathogens, and current staff are retrained regularly. We also extend these trainings to facilities staff and others who support our work in the labs.
To maintain a safe environment for all staff, we regularly perform thorough safety inspections of our laboratories, and continuously update our procedures based on the observations made during these inspections. Additionally, we regularly test and certify fume hoods, biosafety cabinets and other individual pieces of equipment on which employees rely to maintain a safe work environment.
Because of our training and inspection practices, we have an excellent safety record:
- From 2014-2019, we recorded only thirteen minor work-related injuries, resulting in only thirteen days of missed work, across a workforce ranging from 200 to more than 600 employees during that time period. After reviewing each incident, we found that none resulted from insufficient safety procedures, and we provided retraining to employees as necessary.
In addition, we make ergonomic workspace evaluations a priority for all new hires and existing employees who request them to ensure that they have a comfortable work environment.
Employee benefits and culture
We provide a variety of programs and services to help employees meet and balance their needs at work, at home and in life.
A full list of our benefits programs is available online at our Careers page.
We strive to be a workplace where everyone can be their authentic selves and feel safe and encouraged to excel together. That’s how we bring value to the individual Exelixis employee — and how our employees bring value to all those we serve.
The statements in this publication relating to Exelixis’ continued commitment to R&D spending and patient access, strategies for quality monitoring and regulatory compliance in developing its products, potential to attain future environmental sustainability and workplace safety goals, ability to maintain high ethical standards among employees and partners, and dedication to delivering sustained value for all stakeholders are forward-looking statements that involve risks and uncertainties. Actual results and the timing of events could differ materially from those anticipated in the forward-looking statements as a result of the risks and uncertainties discussed under the caption “Risk Factors” in Exelixis’ Quarterly Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on February 25, 2020, and in Exelixis’ future filings with the SEC. All forward-looking statements in this publication are based on information available to Exelixis as of the date of this publication, and Exelixis undertakes no obligation to update or revise any forward-looking statements contained herein.
- PhRMA Chart Pack. Biopharmaceuticals in Perspective. Available at https://www.phrma.org/-/media/Project/PhRMA/PhRMA-Org/PhRMA-Org/PDF/PhRMA_2019_ChartPack_Final.pdf. Accessed December 2019.
- World Health Organization. Cancer Key Facts. Available at https://www.who.int/news-room/fact-sheets/detail/cancer. Accessed November 2019.
- World Health Organization’s International Agency for Research on Cancer. All Cancers Fact Sheet. Globocan 2018. Available at https://gco.iarc.fr/today/data/factsheets/cancers/39-All-cancers-fact-sheet.pdf. Accessed November 2019.