COLLABORATION AGREEMENT

[ * ] = C ERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT , MARKED BY BRACKETS , HAS BEEN OMITTED AND FILED SEPARATELY WITH THE S ECURITIES AND E XCHANGE C OMMISSION PURSUANT TO R ULE 24B-2 OF THE S ECURITIES E XCHANGE A CT OF 1934, AS AMENDED .

E XHIBIT 10.1

COLLABORATION AGREEMENT

T HIS C OLLABORATION A GREEMENT (the “ Agreement ”) is made and entered into as of March 20 ^th , 2006 (the “ Effective Date ”) by and between E XELIXIS , I NC ., a Delaware corporation having its principal place of business at 170 Harbor Way, P.O. Box 511, South San Francisco, California 94083-0511 (“ Exelixis ”), and S ANKYO C OMPANY , L IMITED , a Japanese corporation having its principal place of business at 3-5-1 Nihonbashi-honcho, Chuo-ku, Tokyo 103-8426 Japan (“ Sankyo ”). Exelixis and Sankyo are sometimes referred to herein individually as a “ Party ” and collectively as the “ Parties ”.

R ECITALS

A. Sankyo is a multinational health care company that has expertise and capability in researching, developing and commercializing human pharmaceuticals.

B. Exelixis is a drug discovery company that has expertise and proprietary technology relating to compounds that modulate the Mineralocorticoid Receptor.

C. Sankyo and Exelixis desire to establish a collaboration to apply such Exelixis technology and such expertise of Exelixis and Sankyo to the lead optimization and characterization of small molecule compounds that modulate the Mineralocorticoid Receptor, and to the development and commercialization of novel therapeutic and prophylactic products based on such compounds.

N OW T HEREFORE , Exelixis and Sankyo agree as follows:

Capitalized terms used in this Agreement (other than the headings of the Sections or Articles) shall have the following meaning set forth in this Article 1 , or, if not listed in this Article 1 , the meaning as designated in the text of this Agreement.

1.1 “Affiliate” means, with respect to a particular Party, a person, corporation, partnership, or other entity that controls, is controlled by or is under common control with such Party. For the purposes of the definition in this Section 1.1 , the word “control” (including, with correlative meaning, the terms “controlled by” or “under the common control with” ) means the actual power, either directly or indirectly through any intermediaries, to direct or cause the direction of the management and policies of such entity, whether by the ownership of at least fifty percent (50%) of the voting stock of such entity, or by contract or otherwise.

1.2 “Annual FTE Rate” means the amount to be paid by Sankyo to support one (1) FTE for one (1) year. The Annual FTE Rate during the Initial Research Term is [ * ] per year.

The Annual FTE Rate for the Research Term Extension, if any, shall be as agreed upon by the Parties pursuant to Section 2.5 .

1.3 “Back-up Compounds” means: (a) the following Small Molecule Compounds: [ * ] ; and (b)  [ * ] .

1.4 “Back-up Compound Know-How” means all Information that is Controlled by Exelixis and its Affiliates [ * ] that comprises Inventions [ * ] . Back-up Compound Know-How does not include any Back-up Compound Patent or any information licensed to Exelixis or its Affiliate [ * ] .

1.5 “Back-up Compound Patents” means all Patents that are Controlled by Exelixis and its Affiliates [ * ] and that claim Inventions [ * ] . Back-up Compound Patents do not include any Joint Patents or any Patents licensed to Exelixis or its Affiliate [ * ] .

1.6 “Collaboration” means all the activities performed by or on behalf of Exelixis or Sankyo in the course of performing work contemplated in Article 2 .

1.7 “Commercialize” or “Commercialization” means all activities that are undertaken after Regulatory Approval for a particular Product and that relate to the commercial marketing and sale of such Product including advertising, marketing, promotion, distribution, and post-approval clinical studies.

1.8 “Control” or “Controlled” means, with respect to any Small Molecule Compound, material, Information or intellectual property right, that the Party owns or has a license to such Small Molecule Compound, material, Information or intellectual property right and has the ability to grant to the other Party access, a license or a sublicense (as applicable) to such Small Molecule Compound, material, Information or intellectual property right as provided for herein without violating the terms of any agreement or other arrangements with any Third Party existing at the time such Party would be first required hereunder to grant the other Party such access, license or sublicense.

1.9 “Derivatives” means all: (a) Small Molecule Compounds that [ * ] ; and (b)  [ * ] .

1.10 “Develop” or “Development” means, with respect to the Product, the performance of all research, pre-clinical, clinical and regulatory activities required to obtain Regulatory Approval of a Product.

1.11 “Diligent Efforts” means the carrying out of obligations or tasks in a sustained manner consistent with the efforts a Party devotes to a product or a research, development or marketing project of similar market potential, profit potential or strategic value resulting from its own research efforts, based on conditions then prevailing. Diligent Efforts requires that the Party: (a) promptly assign responsibility for such obligations to specific employee(s) who are held accountable for progress and monitor such progress on an on-going basis; (b) set and consistently seek to achieve specific and meaningful objectives for carrying out such obligations;

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and (c) consistently make and implement decisions and allocate resources designed to advance progress with respect to such objectives.

1.12 “EU” means the European Union, as its membership may be altered from time to time, and any successor thereto. The member countries of the European Union as of the Effective Date are Belgium, Denmark, Germany, Greece, Spain, France, Ireland, Italy, Luxemburg, Netherlands, Austria, Portugal, Finland, Sweden, the United Kingdom, Estonia, Latvia, Lithuania, Poland, the Czech Republic, Slovakia, Hungary, Slovenia, Malta, and Cyprus.

1.13 “Exelixis Know-How” means the Existing Compound Know-How and the Back-up Compound Know-How.

1.14 “Exelixis Net Sales” means net sales of any Product by Exelixis or its sublicensees pursuant to the license granted by Sankyo in Section 10.3(b) and Section 10.4(c) and as determined on the same basis as Net Sales, substituting Exelixis for Sankyo.

1.15 “Exelixis Patents” means the Existing Compound Patents and the Back-up Compound Patents.

1.16 “Existing Compounds” mean all: (a) the following Small Molecule Compounds: [ * ] ; and (b)  [ * ] .

1.17 “Existing Compound Know-How” means all Information that is Controlled by Exelixis and its Affiliates [ * ] Existing Compounds. Existing Compound Know-How does not include any Existing Compound Patent or any information licensed to Exelixis or its Affiliate [ * ] .

1.18 “Existing Compound Patents” means all Patents: (a) that are Controlled by Exelixis and its Affiliates [ * ] in Exhibit 1.18; or (b) issuing from or claiming priority to any of the foregoing. Existing Compound Patents do not include any Back-up Compound Patents, Joint Patents or any Patents licensed to Exelixis or its Affiliate [ * ] .

1.19 “FTE” means the equivalent of a single person working full time for Exelixis over a twelve (12) month period (including normal vacations, sick days and holidays).

1.20 “IND” means: (a) an Investigational New Drug Application filed with the U.S. Food and Drug Administration (the “ FDA ”) or its equivalent in any country outside the United States where a regulatory filing is required or obtained to conduct a clinical trial; or (b) with respect to any country where a regulatory filing is not required or obtained to conduct a clinical trial, the first enrollment of a human subject in the first trial involving the first use of a Product in humans.

1.21 “Information” means information, material, results and data of any type whatsoever, in any tangible or intangible form whatsoever, including databases, inventions, practices, methods, techniques, specifications, formulations, formulae, cell lines, cell media, knowledge, know-how, skill, experience, manufacturing materials, financial data, test data

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including pharmacological, biological, chemical, biochemical, toxicological and clinical test data, analytical and quality control data, quality assurance data, stability data, studies and procedures, and patent and other legal information or descriptions.

1.22 “Initial Research Term” means the period commencing on the Effective Date and ending fifteen (15) months later.

1.23 “Initiation” means, with respect to a Phase II Trial or Phase III Trial, the first enrollment of a patient in such trial.

1.24 “Invention” means any invention or improvement that in each case is made, conceived or reduced to practice by or on behalf of a Party or both Parties in the course of performing under this Agreement.

1.25 “Joint Patents” has the meaning set forth in Section 7.1 .

1.26 “Joint Research Committee” or “JRC” means the committee described in Section 2.2 .

1.27 “Launch” means, for each Product in each country, the first arm’s-length sale to a Third Party (or an Affiliate of a Party if such Affiliate is the end user of such Product) in such country after Regulatory Approval of such Product in such country. A Launch shall not include any Product sold for use in clinical trials, for research or for other non-commercial uses, or that is supplied as part of a compassionate use or similar program.

1.28 “Lead Compound” means the Existing Compound, [ * ] .

1.29 “Licensed Compound” means any Existing Compound, Back-up Compound or Derivative.

1.30 “Major Country” means any of the following countries, and their respective territories and possessions: [ * ] .

1.31 “MR” means: (a) the gene for the Mineralocorticoid Receptor (for any species); (b) the protein encoded by such gene; and (c) all subtypes, mutants, variants and fragments thereof.

1.32 “NDA” means: (a) a New Drug Application (as more fully defined in 21 C.F.R. 314.5 et seq. ) and all amendments and supplements thereto filed with the FDA in order to obtain Regulatory Approval in the United States; or (b) an application for Regulatory Approval required before commercial sale or use of a Product as a drug in a regulatory jurisdiction other than the United States.

1.33 “NDA Acceptance” means the submission to the FDA in the United States or the corresponding authorities in a country other than the United States of an NDA for the Product and filing of such NDA in such country.

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1.34 “Net Sales” means, for any period, the gross amount invoiced or otherwise charged by Sankyo or its Affiliates or Sublicensees for the sale of any Product to any Third Party, less the following deductions to the extent actually incurred or allowed in connection with the sale of such Product (and in accordance with the integrated system of International Accounting Standards and International Financial Reporting Standards, consistently applied): (a) trade, quantity and cash discounts allowed; (b) commissions, discounts, refunds, rebates, charge-backs, retroactive price adjustments, and any other allowances which effectively reduce the net selling price; (c) actual Product returns and allowances; (d) delayed ship order credits and discounts pursuant to indigent patient programs and patient discount programs, including, but not limited to, “Together Rx” and coupon discounts; and (e) any tax imposed on the production, sale, delivery or use of the Product, including, without limitation, sales, use, excise or value added taxes.

In the event a Product is sold as an end-user product consisting of a combination of active functional elements or as a combined product and/or service, Net Sales, for purposes of determining royalty payments on such Product, shall be calculated by multiplying the Net Sales of the end-user product and/or service by the fraction A over A+B, in which A is the gross selling price of the Product portion of the end-user product and/or service when such Product is sold separately during the applicable accounting period in which the sales of the end-user product were made, and B is the gross selling price of the other active elements and/or service, as the case may be, of the end-user product and/or service sold separately during the accounting period in question. All gross selling prices of the elements of such end-user product and/or service shall be calculated as the average gross selling price of the said elements during the applicable accounting period for which the Net Sales are being calculated. In the event that, in any country or countries, no separate sale of either such above-designated Product or such above designated elements of the end-user product and/or service are made during the accounting period in which the sale was made or if gross retail selling price for an active functional element, component or service, as the case may be, cannot be determined for an accounting period, Net Sales allocable to the Product in each such country shall be determined by mutual agreement reached in good faith by the Parties prior to the end of the accounting period in question based on an equitable method of determining same that takes into account, on a country-by-country basis, variations in potency, the relative contribution of each active agent, component or service, as the case may be, in the combination, and relative value to the end user of each active agent, component or service, as the case may be. Notwithstanding the foregoing, the Parties agree that, for purposes of this paragraph, drug delivery vehicles, adjuvants, and excipients shall not be deemed to be “active ingredients” or “active functional elements” .

1.35 “Non-Disclosure Agreements” means: (a) the Confidential Disclosure Agreement among Sankyo, Exelixis and Exelixis’ Affiliate X-Ceptor Therapeutics, Inc., effective as of July 27, 2005, and all amendments thereto; and (b) the Consultant’s Confidential Disclosure Agreement among Exelixis, Sankyo, and Sankyo’s consultant Jim Zeller Consulting LLC, effective as of October 18, 2005.

1.36 “Patents” means all: (a) United States patents, re-examinations, reissues, renewals, extensions and term restorations, inventors’ certificates and non-U.S. counterparts

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thereof; (b) pending applications for United States patents, including provisional applications, continuations, continuations-in-part, continued prosecution, divisional and substitute applications; and (c) non-U.S. counterparts of the foregoing.

1.37 “Phase II Trial” means a human clinical trial of the Product, the principal purpose of which is to make a preliminary determination that such Product is safe for its intended use and to obtain sufficient information about such Product’s efficacy to permit the design of further clinical trials, and generally consistent with 21 C.F.R. § 312.21(b), as amended (or its successor regulation).

1.38 “Phase III Trial” means a pivotal human clinical trial of a Product, which trial is designed to: (a) establish that the Product is safe and efficacious for its intended use; (b) define warnings, precautions and adverse reactions that are associated with the Product in the dosage range to be prescribed; (c) support Regulatory Approval of such Product; and (d) be generally consistent with 21 C.F.R. § 312.21(c), as amended (or its successor regulation).

1.39 “Product” means any human therapeutic or prophylactic product that contains or comprises any Licensed Compounds as a main ingredient.

1.40 “Regulatory Approval” means any and all approvals (including supplements, amendments, pre- and post-approvals, pricing and reimbursement approvals), licenses, registrations or authorizations of any national, supra-national (e.g., the European Commission or the Council of the European Union), regional, state or local regulatory agency, department, bureau, commission, council or other governmental entity, that are necessary for the manufacture, distribution, use or sale of a Product in a regulatory jurisdiction.

1.41 “Research Plan” shall have the meaning set forth in Section 2.3 .

1.42 “Research Term” means the period of the Initial Research Term plus any extension agreed upon by the Parties pursuant to Section 2.5 .

1.43 “Sankyo Know-How” means all Information that is Controlled by Sankyo or its Affiliates [ * ] , excluding any Information jointly owned by the Parties. Sankyo Know-How does not include any Sankyo Patents.

1.44 “Sankyo Patents” means all Patents Controlled by Sankyo or its Affiliates [ * ] , but excluding any Joint Patents.

1.45 “Small Molecule Compound” means a molecule with a molecular weight less than or equal to [ * ] .

1.46 “Sublicensee” means a person, corporation, partnership or other entity, other than an Affiliate, that is granted a sublicense by Sankyo under the grant in Section 4.1 or that is granted a license to develop and/or commercialize Products.

1.47 “Term” means the period beginning on the Effective Date and ending on the expiration or earlier termination of this Agreement.

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1.48 “Third Party ” means any person or entity other than Exelixis, Sankyo or an Affiliate of Exelixis or Sankyo.

1.49 “Valid Claim” means: (a) any claim of an issued Patent in the Exelixis Patents, Joint Patents or the Sankyo Patents that has not (i) expired or been abandoned, (ii) been held invalid or unenforceable by a court of competent jurisdiction from which no appeal can be taken or has been taken within the required time period or (iii) been admitted to be invalid or unenforceable through reissue, disclaimer or otherwise; or, [ * ] , (b) any claim under a application for a Patent in the Exelixis Patents, Joint Patents or the Sankyo Patents that has not been abandoned, canceled, withdrawn from consideration, or finally determined to be unallowable in a decision from which no appeal can be taken.

2.1 Overview. The general goals and intent of the Collaboration are to apply each Party’s technology and expertise to optimize and characterize Licensed Compounds that may be developed into Products. During the Initial Research Term of the Collaboration: (a) Sankyo will focus on the completing the characterization of the Lead Compound for the filing of an IND and on the optimization of Licensed Compounds (other than the Lead Compound) through the creation and testing of Derivatives; and (b) Exelixis will focus on the optimization of Licensed Compounds (other than the Lead Compound) through the creation and testing of Derivatives. The details of the work to be conducted under the Collaboration will be set forth in the Research Plan, as described in Section 2.3 .

2.2 Joint Research Committee.

(a) Membership . The Joint Research Committee (the “ JRC ”) shall be composed of [ * ] members. Within [ * ] days after the Effective Date, each Party shall appoint [ * ] to the JRC, with one (1) of those representatives being the individual at the Party with primary responsibility for the day-to-day management and execution of the Research Plan. Each Party may replace its appointed JRC representatives at any time upon written notice to the other Party. [ * ] shall designate one (1) of its representatives as Chairperson of the JRC. The Chairperson shall be responsible for scheduling meetings, preparing and circulating an agenda in advance of each meeting, and preparing and issuing minutes of each meeting within [ * ] days thereafter. Any JRC member may add topics to the draft agenda.

(b) Decision-making . The [ * ] JRC representatives of each Party shall collectively have one (1) vote, and the JRC shall operate by unanimous consent of all JRC members present and in accordance with the principles set forth in this Article 2 . In the event of a dispute between the Parties with regard to the performance of the Collaboration, the matter shall be elevated to the [ * ] . If these two (2) individuals are unable to agree, then the matter shall be elevated to the [ * ] . Notwithstanding anything to the contrary, no decision by a Party shall require the other Party to: (i) breach any obligation or agreement that such other Party may have with or to a Third Party; (ii) perform any activities that are materially different or greater in

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scope than those provided for in the then-current Research Plan; or (iii) incur any material financial costs in addition to those expressly described in Article 5 of this Agreement.

(c) Responsibilities . The JRC shall be responsible for the planning and execution of the Collaboration, and it may appoint various scientific working groups that will report to the JRC and that will manage the day-to-day activities and decisions required under the Collaboration. At its meetings, the JRC shall evaluate the data generated by the Parties in the course of carrying out the Research Plan, shall prioritize projects within the Research Plan, shall perform those activities specifically described in this Agreement, and may propose revisions to the Research Plan in accordance with Section 2.3 . To the extent necessary to carry out its responsibilities, a Party’s JRC members shall be granted access to the other Party’s Confidential Information relevant to any decision required to be made by the JRC.

(d) Meetings. During the Research Term, the JRC shall meet quarterly by audio or video teleconference and, at a minimum, once each [ * ] in person. Such quarterly meetings of the JRC shall be held on an alternating basis at Sankyo’s facilities in Shinagawa, Tokyo and at Exelixis’ facilities in South San Francisco or San Diego (as applicable). With the consent of the representatives of each Party serving on a particular committee, other representatives of each Party may attend meetings of that committee as nonvoting observers. Meetings of the JRC shall be effective only if at least one (1) representative of each Party is present or participating. Each Party shall be responsible for all of its own expenses of participating in the committee meetings. The Parties shall endeavor to schedule meetings of the JRC at least [ * ] in advance.

2.3 Research Plan. The Parties have agreed in writing upon a detailed plan for the research to be carried out by the Parties during the Research Term, which is incorporated herein by reference to the Disclosure Letter (the “ Disclosure Letter ”) between the Parties of even date herewith (the “ Research Plan ”). The Research Plan includes each Party’s respective obligations in furtherance of the Collaboration and timelines for performance of such obligations. The Research Plan shall call for at least [ * ] FTEs throughout the Initial Research Term. Sankyo shall compensate Exelixis, in accordance with Section 5.2 , for all FTEs called for in the Research Plan, and Exelixis shall not have any obligation to devote more than such number of FTEs in the performance of its obligations under the Research Plan. The JRC shall review the Research Plan at least [ * ] and may propose revisions to the Research Plan that are consistent with the terms of this Agreement. The revised Research Plan may only be approved with the mutual written agreement of the Parties. Once so approved, such revised Research Plan shall replace the prior Research Plan.

2.4 Compound Transfer. Within [ * ] of the Effective Date, Exelixis shall use commercially reasonable efforts to transfer to Sankyo the items listed on Exhibit 2.4 . Upon Sankyo’s reasonable request, Exelixis shall facilitate the transfer of technology relating to the manufacturing process, if any, for the Existing Compounds to Sankyo, at any time during the period of [ * ] following the Effective Date. During the Research Term, within [ * ] of receiving Sankyo’s reasonable request for one or more particular items of Information that is in Exelixis’ possession, including any [ * ] , and that is generated by Exelixis under the Research Plan,

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Exelixis shall use commercially reasonable efforts to transfer such items to Sankyo. Sankyo shall reimburse Exelixis for any out-of-pocket costs incurred by Exelixis in connection with this Section 2.4 and for reasonable travel expenses incurred by Exelixis to attend, at Sankyo’s request, any meetings not held at an Exelixis facility.

2.5 Extension of Research Term. The Parties may mutually agree to extend the Research Term beyond the end of the Initial Research Term for an additional two (2) year period, during which time Sankyo shall fund at least [ * ] FTEs per year at the Annual FTE Rate(s) to be agreed upon by the Parties and such FTEs shall either: (a)  [ * ] ; or (b) develop [ * ] . If the Parties intend to so extend the Research Term, then at least [ * ] prior to the end of the Initial Research Period, the Parties shall agree upon a written Research Plan that covers such extension period and specifies the applicable Annual FTE Rate(s) and shall amend this Agreement as necessary including, if applicable, to clarify each Parties’ rights and obligations with respect to the [ * ] and [ * ] .

2.6 Obligations of Parties. Exelixis and Sankyo shall provide the JRC and its authorized representatives with reasonable access during regular business hours to all records, documents, and Information relating to the Collaboration which such committee may reasonably require in order to perform its obligations hereunder, provided that if such documents are under a bona fide obligation of confidentiality to a Third Party, then Exelixis or Sankyo, as the case may be, may withhold access thereto to the extent necessary to satisfy such obligation.

2.7 Collaboration Guidelines. Subject to the terms of this Agreement, the activities and resources of each Party shall be managed by such Party, acting independently and in its individual capacity. The relationship between Exelixis and Sankyo is that of independent contractors, and neither Party shall have the power to bind or obligate the other Party in any manner, other than as is expressly set forth in this Agreement.

2.8 Conduct of Research. The Parties shall use Diligent Efforts to conduct their respective tasks throughout the Collaboration and shall conduct the Collaboration in good scientific manner, and in compliance in all material respects with the requirements of applicable laws, rules and regulations and all applicable good laboratory practices to attempt to achieve their objectives as efficiently and expeditiously as reasonably practicable. Except as set forth in Section 5.2 , each Party shall bear its own costs in performing its obligations under the Collaboration.

2.9 Records. Each Party shall maintain complete and accurate records of all work conducted under the Collaboration and all results, data and developments made pursuant to its efforts under the Collaboration. Such records shall be complete and accurate and shall fully and properly reflect all work done and results achieved in the performance of the Collaboration in sufficient detail and in good scientific manner appropriate for patent and regulatory purposes.

2.10 Reports. During the Research Term, each Party shall report to the JRC no less than [ * ] and will submit to the other Party and the JRC a [ * ] written progress report summarizing the work performed under the Collaboration. If reasonably necessary for a Party to perform its work under the Collaboration or to exercise its rights under the Agreement, such

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Party may request that the other Party provide more detailed information and data regarding such results reported by such other Party, and such other Party shall promptly provide the requesting Party with information and data as is reasonably related to such request. All such reports shall be considered Confidential Information of the Party providing same.

2.11 Review of Licensed Compounds. As part of the criteria for the submission of a Licensed Compound for [ * ] (a “ Development Candidate ”), Exelixis shall review the results of all [ * ] conducted by either Party in the normal course of performing research under the Research Plan or by Sankyo in the normal course of performing research after the expiration of the Research Term. In the event review by Exelixis is after the expiration of the Research Term, Sankyo shall provide Exelixis with the results of all [ * ] for such Development Candidate, and sufficient samples of any such Development Candidate to have such assays conducted. Exelixis may use such results and samples for the sole purpose of performing assays to verify that such Development Candidate does not display [ * ] (“ [ * ] Activity ”). [ * ] shall be responsible for having such assays conducted as well as any costs associated with such assays. If Exelixis notifies Sankyo in writing within [ * ] of receiving a sample of a submitted Development Candidate that such Development Candidate displays [ * ] Activity, then Sankyo shall not [ * ] such Development Candidate, and Sankyo’s licenses [ * ] such Development Candidate shall terminate (solely with respect to such Development Candidate). In the event that Exelixis does not provide written notice to Sankyo with respect to the [ * ] Activity of a submitted Development Candidate within such [ * ] period, then Sankyo shall be free to develop and commercialize such Development Candidate on the terms and conditions set forth in this Agreement.

If Sankyo is required to [ * ] of a Development Candidate under this Section 2.11 due to a [ * ] , Sankyo may choose from the following options:

(a) Sankyo may [ * ] or derivatize away the [ * ] Activity; or

(b) Sankyo may select a different Licensed Compound for [ * ] . Furthermore, any substitution of a Licensed Compound under this Section 2.11 [ * ] .

3.1 Sankyo Development and Commercialization. As between the Parties, Sankyo (or its Affiliates or sublicensees) have sole authority to conduct, at its own expense, all clinical development, manufacturing and commercialization activities, including all regulatory activities, with respect to any Products. All regulatory applications with respect to the Products will be owned by Sankyo and/or its Affiliates or sublicensee(s), as applicable. Upon [ * ] , Exelixis shall cooperate with Sankyo in connection with regulatory submissions related to any Product, including, but not limited to [ * ] . Sankyo shall have sole control and responsibility for, and shall bear all of its costs and expenses associated with, the development, manufacture (including formulation) and commercialization of all Products, as applicable.

3.2 Diligence. Sankyo shall use Diligent Efforts to [ * ] and shall be deemed to have fully discharged its diligence obligation upon [ * ] . Exelixis may notify Sankyo in writing if

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[ * ] = C ERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT , MARKED BY BRACKETS , HAS BEEN OMITTED AND FILED SEPARATELY WITH THE S ECURITIES AND E XCHANGE C OMMISSION PURSUANT TO R ULE 24B-2 OF THE S ECURITIES E XCHANGE A CT OF 1934, AS AMENDED .

Exelixis in good faith believes that Sankyo is not meeting its diligence obligations set forth in this Section 3.2 , and may further request review of Sankyo’s records generated and maintained as required under Section 3.5 , to the extent those records relate to [ * ] . Promptly after receiving such notice, Sankyo shall meet with Exelixis and discuss the matter in good faith. Exelixis may terminate this Agreement pursuant to Section 10.4 if Sankyo fails to meet such diligence obligations.

3.3 Progress Reporting. Sankyo will keep Exelixis appropriately informed about Sankyo’s Development and Commercialization efforts with respect to Products. Without limiting the generality of the foregoing, Sankyo shall provide Exelixis with written notice within [ * ] of the occurrence of any of the milestone events listed in Section 5.3 . Sankyo shall also provide Exelixis with [ * ] written reports on the general progress of Sankyo’s efforts to Develop and Commercialize Products, including a [ * ] . Additionally, Sankyo shall provide Exelixis with a [ * ] written report describing Sankyo’s progress at Developing and Commercializing Products. If reasonably necessary or useful for Exelixis to exercise its rights under this Agreement, Exelixis may request that Sankyo provide more detailed information and data regarding the work reported by Sankyo, and Sankyo will, without delay, provide Exelixis with information and data as is reasonably related to such request. All such reports shall be considered Confidential Information of Sankyo.

3.4 Compliance with Laws. Sankyo shall perform, and shall ensure that its Affiliates, Sublicensees and Third Party contractors perform, all Development and Commercialization activities for which it is responsible under this Agreement in good scientific and medical manner and in compliance with all applicable laws, rules and regulations.

3.5 Records. Sankyo shall maintain complete and accurate records of all Development, manufacturing and Commercialization conducted by it or on its behalf related to each Product, and all Information generated by it or on its behalf in connection with development under this Agreement with respect to each such Product. Sankyo shall maintain such records until the later of: (a)  [ * ] after such records are created, or (b)  [ * ] after the Launch of the Product to which such records pertain. Such records shall be at a level of detail appropriate for [ * ] purposes. Exelixis shall have the right to review and copy such records of Sankyo at reasonable times to the extent necessary or useful for Exelixis to conduct its obligations or enforce its rights under this Agreement.

4.1 Exclusive Licenses.

(a) Subject to the terms and conditions of this Agreement, Exelixis hereby grants to Sankyo a worldwide, exclusive, royalty-bearing license (with the right to sublicense), under the Existing Compound Patents, the Existing Compound Know-How and Exelixis’ interest in the Joint Patents, to make, have made, use, develop, sell, offer for sale and import Products containing or comprising Existing Compounds or Derivatives thereof (but not Back-up Compounds or Derivatives thereof).

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[ * ] = C ERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT , MARKED BY BRACKETS , HAS BEEN OMITTED AND FILED SEPARATELY WITH THE S ECURITIES AND E XCHANGE C OMMISSION PURSUANT TO R ULE 24B-2 OF THE S ECURITIES E XCHANGE A CT OF 1934, AS AMENDED .

(b) Subject to the terms and conditions of this Agreement, Exelixis hereby grants to Sankyo a worldwide, exclusive, royalty-bearing