Bristol-Myers, Exelixis in Cancer Drug Pact

Updated from 1:26 a.m. EST

Bristol-Myers

(BMY) - Get Report

confirmed Friday it will pay at least $240 million to biotechnology company

Exelixis

(EXEL) - Get Report

to develop two experimental cancer drugs.

The agreement, first reported in the

Wall Street Journal

Friday, has been reached amid turmoil in the biotechnology industry, where the financial crisis has shut hundreds of companies out of the capital markets.

The

Journal

cites information from industry trade group BIO which says that 180, or 45%, of the 370 publicly traded biotech companies have less than one year of cash on hand, and most have little or no revenue.

Under the terms of the collaboration, Bristol-Myers Squibb said it agreed to pay Exelixis an upfront cash payment of $195 million for the development and commercialization rights to two programs, known as XL184 and XL281, and to make additional license payments of $45 million in 2009.

The $240 million upfront payment is one of the biggest amounts large pharmaceutical companies have paid in similar agreements, the newspaper reports.

Testing for XL184 is most advanced for thyroid cancer, but it is also in human studies for a brain cancer known as glioblastoma and for lung cancer. XL281 is in early-stage testing for several solid tumors.