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Exelixis (EXEL) Down 7.9% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Exelixis (EXEL - Free Report) . Shares have lost about 7.9% 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 its most recent earnings report in order to get a better handle on the important catalysts.
Q4 Earnings Top, Revenues Beat on Cabometyx
Exelixis reported a loss of 3 cents per share for the fourth quarter of 2022, compared to earnings of 35 cents per share in the year-ago quarter, but it was narrower than the Zacks Consensus Estimate of a loss of 5 cents and our estimate of a loss of 6 cents.
Including stock-based compensation expense, loss per share came in at 9 cents as compared to earnings of 29 cents in the year-ago quarter due to an increase in operating expenses and a decline in revenues.
Net revenues came in at $423.9 million, which surpassed the Zacks Consensus Estimate of $422 million but was down from the $451 million reported in the year-ago quarter. Revenues also surpassed our estimate of $414 million.
Quarter in Detail
Net product revenues came in at $377.4 million, up from $302.7 million in the year-ago quarter. The increases in net product revenues were primarily due to increases in sales volume, which were partially offset by higher discounts and allowances, driven primarily by chargebacks related to the 340B Drug Pricing Program.
Cabometyx (cabozantinib) generated revenues of $372.6 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 $4.9 million in net product revenues.
Collaboration revenues, comprising license revenues and collaboration services revenues, were $46.5 million in the quarter, down from $148.5 million in the year-ago quarter. The decreases in collaboration revenues were primarily related to the low recognition of milestone-related revenues and in development cost reimbursements earned.
In the reported quarter, research and development expenses were $336.8 million, up from $222.3 million in the year-ago quarter. The increases in research and development expenses were primarily related to increases in license and other collaboration costs, personnel expenses, consulting and outside services costs and clinical trial costs. Selling, general and administrative expenses were $119.3 million, up from $99.3 million in the year-ago quarter.
Pipeline Update
In October 2022, Exelixis announced the expansion of its June 2021 Clinical Trial Collaboration and Supply Agreement with Bristol-Myers to include the use of the fixed-dose combination of Opdivo and relatlimab in the ongoing phase Ib STELLAR-002 clinical trial, which is evaluating zanzalintinib (formerly XL092) in combination with multiple immune checkpoint inhibitors in advanced solid tumors.
Bristol-Myers’ Opdivo, one of its leading revenue generators, is approved for various oncology indications.
In November 2022, Exelixis entered into an exclusive clinical development and option agreement with Sairopa B.V. for ADU-1805. Under the terms of the agreement, Exelixis has the option to obtain an exclusive, worldwide license to develop and commercialize ADU-1805 and other anti-SIRPα antibodies upon review of data from prespecified phase 1 clinical studies of ADU-1805 to be completed by Sairopa during the option period. Exelixis expects its partner Sairopa to file an investigational new drug application (IND) for ADU-1805 in the first quarter of 2023.
Exelixis also entered into an exclusive collaboration agreement with Cybrexa Therapeutics, which gave it the right to acquire CBX-12 (alphalex exatecan), a clinical-stage, first-in-class peptide-drug conjugate (PDC) that utilizes Cybrexa’s proprietary alphalex technology to enhance the delivery of exatecan to tumor cells.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
VGM Scores
Currently, Exelixis has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward 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.
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Exelixis (EXEL) Down 7.9% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Exelixis (EXEL - Free Report) . Shares have lost about 7.9% 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 its most recent earnings report in order to get a better handle on the important catalysts.
Q4 Earnings Top, Revenues Beat on Cabometyx
Exelixis reported a loss of 3 cents per share for the fourth quarter of 2022, compared to earnings of 35 cents per share in the year-ago quarter, but it was narrower than the Zacks Consensus Estimate of a loss of 5 cents and our estimate of a loss of 6 cents.
Including stock-based compensation expense, loss per share came in at 9 cents as compared to earnings of 29 cents in the year-ago quarter due to an increase in operating expenses and a decline in revenues.
Net revenues came in at $423.9 million, which surpassed the Zacks Consensus Estimate of $422 million but was down from the $451 million reported in the year-ago quarter. Revenues also surpassed our estimate of $414 million.
Quarter in Detail
Net product revenues came in at $377.4 million, up from $302.7 million in the year-ago quarter. The increases in net product revenues were primarily due to increases in sales volume, which were partially offset by higher discounts and allowances, driven primarily by chargebacks related to the 340B Drug Pricing Program.
Cabometyx (cabozantinib) generated revenues of $372.6 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 $4.9 million in net product revenues.
Collaboration revenues, comprising license revenues and collaboration services revenues, were $46.5 million in the quarter, down from $148.5 million in the year-ago quarter. The decreases in collaboration revenues were primarily related to the low recognition of milestone-related revenues and in development cost reimbursements earned.
In the reported quarter, research and development expenses were $336.8 million, up from $222.3 million in the year-ago quarter. The increases in research and development expenses were primarily related to increases in license and other collaboration costs, personnel expenses, consulting and outside services costs and clinical trial costs. Selling, general and administrative expenses were $119.3 million, up from $99.3 million in the year-ago quarter.
Pipeline Update
In October 2022, Exelixis announced the expansion of its June 2021 Clinical Trial Collaboration and Supply Agreement with Bristol-Myers to include the use of the fixed-dose combination of Opdivo and relatlimab in the ongoing phase Ib STELLAR-002 clinical trial, which is evaluating zanzalintinib (formerly XL092) in combination with multiple immune checkpoint inhibitors in advanced solid tumors.
Bristol-Myers’ Opdivo, one of its leading revenue generators, is approved for various oncology indications.
In November 2022, Exelixis entered into an exclusive clinical development and option agreement with Sairopa B.V. for ADU-1805. Under the terms of the agreement, Exelixis has the option to obtain an exclusive, worldwide license to develop and commercialize ADU-1805 and other anti-SIRPα antibodies upon review of data from prespecified phase 1 clinical studies of ADU-1805 to be completed by Sairopa during the option period. Exelixis expects its partner Sairopa to file an investigational new drug application (IND) for ADU-1805 in the first quarter of 2023.
Exelixis also entered into an exclusive collaboration agreement with Cybrexa Therapeutics, which gave it the right to acquire CBX-12 (alphalex exatecan), a clinical-stage, first-in-class peptide-drug conjugate (PDC) that utilizes Cybrexa’s proprietary alphalex technology to enhance the delivery of exatecan to tumor cells.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
VGM Scores
Currently, Exelixis has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward 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.