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Exelixis (EXEL) Q1 Earnings Beat, Revenues Miss Estimates

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Exelixis, Inc. (EXEL - Free Report) reported earnings of 21 cents for the first quarter of 2022, beating the Zacks Consensus Estimate of 14 cents. In the year-ago quarter, EXEL had reported breakeven earnings.

Excluding stock-based compensation expense, earnings per share came in at 26 cents, up from 9 cents in the year-ago quarter.

Net revenues came in at $355.9 million, which increased from $270 million reported in the year-ago quarter but missed the Zacks Consensus Estimate of $379 million. 

Exelixis’ shares have gained 11.4% in the year so far against the industry’s decline of 26.3%.

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Quarter in Detail

Net product revenues came in at $310.3 million, up 3% from the year-ago quarter’s level. The upside was primarily led by higher sales volume, driven by the strong uptake of the combo therapy of Cabometyx (cabozantinib tablets) and Bristol-Myers’ (BMY - Free Report) Opdivo (nivolumab) following the FDA approval in 2021 as well as the initial impact of the Cabometyx’ recent label expansion into differentiated thyroid cancer in the United States.

Bristol-Myers’ Opdivo is one of its leading revenue generators is approved for various oncology indications.

Cabometyx generated revenues of $302.8 million. It is approved for advanced renal cell carcinoma (RCC) and previously treated hepatocellular carcinoma (HCC). Cometriq (cabozantinib capsules) for the treatment of medullary thyroid cancer generated $7.5 million of net product revenues.  EXEL earned $27 million of royalty revenues.

Collaboration revenues, comprising license revenues and collaboration services revenues, were $45.7 million in the quarter compared with $43.0 million in the year-ago quarter. 

In the reported quarter, research and development expenses were $156.7 million, down from $159.3 million in the year-ago quarter. Selling, general and administrative expenses were $102.8 million, up from $102.3 million in the year-ago quarter.

Pipeline Update

Enrollment is completed for CONTACT-03, the global phase III study evaluating cabozantinib in combination with Tecentriq versus cabozantinib alone in patients with locally advanced or metastatic clear cell or non-clear cell RCC, who progressed during or following treatment with an immune checkpoint inhibitor (ICI).

In May 2022, Exelixis announced that its partner Ipsen secured approval from the EC for Cabometyx as a monotherapy to treat adult patients with locally advanced or metastatic differentiated thyroid cancer (DTC), refractory or not eligible to radioactive iodine ( RAI) and who progressed during or after prior systemic therapy.

In April 2022, Exelixis initiated the dose-escalation stage of the first-in-human phase I trial of XL114, a novel anti-cancer compound that inhibits the CARD11-BCL10-MALT1 complex as a monotherapy in patients with NHL who received prior standard therapies.

2022 Guidance

Revenues are projected within $1.525-$1.625 billion, while product revenues are estimated in the range of $1.325-$1.425 billion.

 

Exelixis, Inc. Price, Consensus and EPS Surprise Exelixis, Inc. Price, Consensus and EPS Surprise

Exelixis, Inc. price-consensus-eps-surprise-chart | Exelixis, Inc. Quote

Our Take

Exelixis’ first-quarter results were mixed with earnings beating expectations but sales missing the mark.  The approval of Cabometyx combined with the immuno-oncology drug Opdivo for advanced RCC boosted sales. However, competition is stiff in this space and capturing additional market share might become tough.

Merck’s (MRK - Free Report) Keytruda in combination with Pfizer’s (PFE - Free Report) Inlyta is also indicated for the first-line treatment of patients with advanced RCC.

MRK’s Keytruda, an anti-PD-1 therapy, is approved for the adjuvant treatment of patients with RCC at intermediate-high or high risk of recurrence following nephrectomy or nephrectomy and resection of metastatic lesions.

PFE’s Inlyta showed a strong performance, boosted by a continued adoption in the United States and Europe. Pfizer’s older drug Sutent is also approved for advanced RCC.

Exelixis currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.