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Exelixis' (EXEL) Q3 Loss Wider Than Expected, Revenues Beat
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Exelixis, Inc. (EXEL - Free Report) reported a loss of 10 cents per share in the third quarter of 2020, wider than the Zacks Consensus Estimate of a loss of 5 cents. The bottom-line figure also declined from the year-ago quarter’s earnings of 31 cents per share due to higher R&D expenses and lower revenues.
Net revenues came in at $231.1 million, which declined from the $271.7 million reported in the year-ago quarter but beat the Zacks Consensus Estimate of $216 million.
Shares of Exelixis have rallied 25.7% in the year so far against the industry’s decline of 1.1%.
Quarter in Detail
Net product revenues came in at $168.6 million, down from $191.8 reported in the year-ago quarter due to a decrease in sales volume stemming from lower prescriptions and reduced customer inventory.
Cabometyx generated $159.6 million of revenues. Cabometyx (cabozantinib) tablets are approved for advanced renal cell carcinoma (RCC) and previously treated hepatocellular carcinoma (HCC). Cometriq (cabozantinib capsules) for the treatment of medullary thyroid cancer generated $9 million in net product revenues. Exelixis earned $19.9 million in royalty revenues on the basis of cabozantinib-related revenues generated by its partner, Ipsen.
Collaboration revenues, comprising license revenues and collaboration services revenues, were $62.5 million in the quarter under review compared with $79.9 million. The downside in collaboration revenues was primarily related to a decrease in the recognition of milestone-related revenues.
In the reported quarter, research and development expenses increased to $176.8 million from the year-ago quarter’s $97.3 million due to a rise in clinical trial costs (COSMIC-312, COSMIC-313, CONTACT-02 and COSMIC-021). Selling, general and administrative (SG&A) expenses were $88.2 million, up from $51.3 million in the year-ago quarter.
Pipeline Update
In August 2020, Exelixis announced the submission of a supplemental New Drug Application (sNDA) to the FDA for cabozantinib in combination with Bristol-Myers’ (BMY - Free Report) Opdivo in patients with advanced RCC. The sNDA submission was based on the positive results of the phase III CheckMate -9ER study. In October 2020, Exelixis and Bristol-Myers announced that the FDA accepted Exelixis’ sNDA and Bristol-Myers’ supplemental Biologics License Application (sBLA), granted Priority Review to both applications and assigned a target action date of Feb 20, 2021.
In July 2020, Exelixis announced the initiation of CONTACT-03, a phase III study of cabozantinib in combination with Roche’s (RHHBY - Free Report) Tecentriq in patients with inoperable, locally advanced or metastatic RCC who progressed during or following treatment with an immune checkpoint inhibitor as the immediate preceding therapy.
In October 2020, Exelixis announced the enrollment of the first patient in the dose-escalation cohort of the combination arm of the phase I study evaluating the safety, tolerability, PK and preliminary anti-tumor activity of XL092 alone and in combination with Tecentriq in patients with advanced solid tumors.
2020 Guidance Updated
Revenues are projected at $900-$950 million (same as before), while product revenues are now estimated in the range of $700-$725 million (previous range: $725-$775 million) for 2020.
Our Take
Exelixis’ reported mixed results for the third quarter as higher R&D costs and lower revenues hurt the bottom line.
Nevertheless, the pipeline progress has been encouraging and a potential approval of Cabometyx in combination with immuno-oncology drug, Opdivo, for advanced RCC should bode well. However, competition is stiff from the recently-approved combination therapies. Last year, the FDA approved Merck’s (MRK - Free Report) Keytruda in combination with Inlyta for the first-line treatment of patients with advanced RCC. Given the increasing use of these therapies, we expect investors to focus on the label expansions of cabozantinib in the ongoing combination trials.
Zacks Rank
Exelixis currently carries a Zacks Rank #4 (Sell).
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Exelixis' (EXEL) Q3 Loss Wider Than Expected, Revenues Beat
Exelixis, Inc. (EXEL - Free Report) reported a loss of 10 cents per share in the third quarter of 2020, wider than the Zacks Consensus Estimate of a loss of 5 cents. The bottom-line figure also declined from the year-ago quarter’s earnings of 31 cents per share due to higher R&D expenses and lower revenues.
Net revenues came in at $231.1 million, which declined from the $271.7 million reported in the year-ago quarter but beat the Zacks Consensus Estimate of $216 million.
Shares of Exelixis have rallied 25.7% in the year so far against the industry’s decline of 1.1%.
Quarter in Detail
Net product revenues came in at $168.6 million, down from $191.8 reported in the year-ago quarter due to a decrease in sales volume stemming from lower prescriptions and reduced customer inventory.
Cabometyx generated $159.6 million of revenues. Cabometyx (cabozantinib) tablets are approved for advanced renal cell carcinoma (RCC) and previously treated hepatocellular carcinoma (HCC). Cometriq (cabozantinib capsules) for the treatment of medullary thyroid cancer generated $9 million in net product revenues. Exelixis earned $19.9 million in royalty revenues on the basis of cabozantinib-related revenues generated by its partner, Ipsen.
Collaboration revenues, comprising license revenues and collaboration services revenues, were $62.5 million in the quarter under review compared with $79.9 million. The downside in collaboration revenues was primarily related to a decrease in the recognition of milestone-related revenues.
In the reported quarter, research and development expenses increased to $176.8 million from the year-ago quarter’s $97.3 million due to a rise in clinical trial costs (COSMIC-312, COSMIC-313, CONTACT-02 and COSMIC-021). Selling, general and administrative (SG&A) expenses were $88.2 million, up from $51.3 million in the year-ago quarter.
Pipeline Update
In August 2020, Exelixis announced the submission of a supplemental New Drug Application (sNDA) to the FDA for cabozantinib in combination with Bristol-Myers’ (BMY - Free Report) Opdivo in patients with advanced RCC. The sNDA submission was based on the positive results of the phase III CheckMate -9ER study. In October 2020, Exelixis and Bristol-Myers announced that the FDA accepted Exelixis’ sNDA and Bristol-Myers’ supplemental Biologics License Application (sBLA), granted Priority Review to both applications and assigned a target action date of Feb 20, 2021.
In July 2020, Exelixis announced the initiation of CONTACT-03, a phase III study of cabozantinib in combination with Roche’s (RHHBY - Free Report) Tecentriq in patients with inoperable, locally advanced or metastatic RCC who progressed during or following treatment with an immune checkpoint inhibitor as the immediate preceding therapy.
In October 2020, Exelixis announced the enrollment of the first patient in the dose-escalation cohort of the combination arm of the phase I study evaluating the safety, tolerability, PK and preliminary anti-tumor activity of XL092 alone and in combination with Tecentriq in patients with advanced solid tumors.
2020 Guidance Updated
Revenues are projected at $900-$950 million (same as before), while product revenues are now estimated in the range of $700-$725 million (previous range: $725-$775 million) for 2020.
Our Take
Exelixis’ reported mixed results for the third quarter as higher R&D costs and lower revenues hurt the bottom line.
Exelixis, Inc. Price, Consensus and EPS Surprise
Exelixis, Inc. price-consensus-eps-surprise-chart | Exelixis, Inc. Quote
Nevertheless, the pipeline progress has been encouraging and a potential approval of Cabometyx in combination with immuno-oncology drug, Opdivo, for advanced RCC should bode well. However, competition is stiff from the recently-approved combination therapies. Last year, the FDA approved Merck’s (MRK - Free Report) Keytruda in combination with Inlyta for the first-line treatment of patients with advanced RCC. Given the increasing use of these therapies, we expect investors to focus on the label expansions of cabozantinib in the ongoing combination trials.
Zacks Rank
Exelixis currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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