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Why Is Exelixis (EXEL) Down 3.1% Since Last Earnings Report?

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A month has gone by since the last earnings report for Exelixis (EXEL - Free Report) . Shares have lost about 3.1% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Exelixis due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Exelixis Q1 Earnings Beat, Revenues Miss Estimates

Exelixis reported earnings of 21 cents for the first quarter of 2022, beating the Zacks Consensus Estimate of 14 cents. In the year-ago quarter, the company 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.

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 Opdivo 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.

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.

 

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates revision.

VGM Scores

At this time, Exelixis has a strong Growth Score of A, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions has been net zero. Notably, Exelixis has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Exelixis belongs to the Zacks Medical - Biomedical and Genetics industry. Another stock from the same industry, Moderna (MRNA - Free Report) , has gained 20.3% over the past month. More than a month has passed since the company reported results for the quarter ended March 2022.

Moderna reported revenues of $6.07 billion in the last reported quarter, representing a year-over-year change of +213.2%. EPS of $8.58 for the same period compares with $2.84 a year ago.

For the current quarter, Moderna is expected to post earnings of $4.73 per share, indicating a change of -26.8% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.3% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Moderna. Also, the stock has a VGM Score of A.


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