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Exelixis, Inc. (EXEL - Free Report) reported earnings of 31 cents per share in the first quarter of 2023, which comfortably beat the Zacks Consensus Estimate of 22 cents and increased from 28 cents per share in the year-ago quarter.
Including stock-based compensation expense, earnings per share came in at 25 cents compared with 22 cents per share in the year-ago quarter, due to an increase in revenues.
Net revenues came in at $469.8 million, which beat the Zacks Consensus Estimate of $449 million. Revenues were up 12% year over year.
Exelixis’ shares have gained 22.3% in the year so far against the industry’s decline of 11.3%.
Image Source: Zacks Investment Research
Quarter in Detail
Net product revenues came in at $409.6 million, up 18% year over year. The increases in net product revenues were primarily due to a rise in sales volume and the average net selling price.
Cabometyx (cabozantinib) generated revenues of $403.3 million and beat the Zacks Consensus Estimate and our model estimate of $392 million and $389.6 million, respectively. The drug is approved for advanced renal cell carcinoma (RCC) and previously treated hepatocellular carcinoma (HCC). Cometriq (cabozantinib capsules) for treating medullary thyroid cancer generated $6.4 million in net product revenues.
Collaboration revenues, comprising license revenues and collaboration services revenues, were $60.2 million in the quarter compared with $72.4 million in the year-ago quarter.
In the reported quarter, research and development expenses were $232.6 million, up 16.6% year over year due to higher manufacturing costs. Selling, general and administrative expenses were $141.7 million, up 15.4% due to an increase in personnel expenses.
In March, Exelixis announced that its board authorized the repurchase of up to $550 million of the company’s common stock before the end of 2023. Under this program, Exelixis repurchased $127.0 million of the company’s common stock at an average price of $19.22 per share as of Jun 30.
In July, Exelixis announced that it entered into a settlement and license agreement with Teva Pharmaceuticals (TEVA - Free Report) . This settlement resolves patent litigation brought by Exelixis in response to Teva’s abbreviated new drug application seeking approval to market a generic version of Cabometyx prior to the expiration of the applicable patents. Per the settlement terms, Exelixis will grant Teva a license to market its generic version of the drug in the United States beginning on Jan 1, 2031, upon the FDA’s approval.
Consequently, both companies will terminate the ongoing litigation.
Pipeline Updates
Exelixis completed enrollment in multiple expansion cohorts of the phase I STELLAR-001 study for zanzalintinib and progressed the ongoing phase III studies.
The company also continued to advance the phase I JEWEL-101 study for XB002, selecting the single-agent dose from the dose-escalation stage of the study and initiating the cohort expansion stage, with the goal of moving the program into full development before year’s end.
2023 Guidance Reiterated
Revenues are projected between $1.775 billion and $1.875 billion, while product revenues are estimated in the range of $1.575-1.675 billion.
Our Take
Exelixis’ second-quarter results were better than expected as Cabometyx maintained its status as the leading tyrosine kinase inhibitor for the treatment of RCC, driven by its use in combination with Bristol Myers’ (BMY - Free Report) Opdivo in the first-line setting. The drug also maintained growth in HCC indication. Exelixis is also striving hard to develop its portfolio beyond Cabometyx and has advanced the STELLAR-303 and STELLAR-304 phase III studies for zanzalintinib, as well as the single-agent and combination dose-escalation cohorts of the phase I trial of XB002.
Bristol-Myers’ Opdivo, one of its leading revenue generators, is approved for various oncology indications.
Zacks Rank & Stocks To Consider
Exelixis currently carries a Zacks Rank #3 (Hold).
The Zacks Consensus Estimate for Alkermes’ earnings per share has moved up from 50 cents to $1.47 for 2023 and from $1.78 to $2.04 for 2024 in the past 60 days. The stock has risen 9.2% in the year-to-date period.
ALKS’ earnings beat estimates in all the trailing four quarters, the average surprise being 81.98%.
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Exelixis (EXEL) Q2 Earnings Top, Cabometyx Drives Growth
Exelixis, Inc. (EXEL - Free Report) reported earnings of 31 cents per share in the first quarter of 2023, which comfortably beat the Zacks Consensus Estimate of 22 cents and increased from 28 cents per share in the year-ago quarter.
Including stock-based compensation expense, earnings per share came in at 25 cents compared with 22 cents per share in the year-ago quarter, due to an increase in revenues.
Net revenues came in at $469.8 million, which beat the Zacks Consensus Estimate of $449 million. Revenues were up 12% year over year.
Exelixis’ shares have gained 22.3% in the year so far against the industry’s decline of 11.3%.
Image Source: Zacks Investment Research
Quarter in Detail
Net product revenues came in at $409.6 million, up 18% year over year. The increases in net product revenues were primarily due to a rise in sales volume and the average net selling price.
Cabometyx (cabozantinib) generated revenues of $403.3 million and beat the Zacks Consensus Estimate and our model estimate of $392 million and $389.6 million, respectively. The drug is approved for advanced renal cell carcinoma (RCC) and previously treated hepatocellular carcinoma (HCC). Cometriq (cabozantinib capsules) for treating medullary thyroid cancer generated $6.4 million in net product revenues.
Collaboration revenues, comprising license revenues and collaboration services revenues, were $60.2 million in the quarter compared with $72.4 million in the year-ago quarter.
In the reported quarter, research and development expenses were $232.6 million, up 16.6% year over year due to higher manufacturing costs. Selling, general and administrative expenses were $141.7 million, up 15.4% due to an increase in personnel expenses.
In March, Exelixis announced that its board authorized the repurchase of up to $550 million of the company’s common stock before the end of 2023. Under this program, Exelixis repurchased $127.0 million of the company’s common stock at an average price of $19.22 per share as of Jun 30.
Exelixis, Inc. Price, Consensus and EPS Surprise
Exelixis, Inc. price-consensus-eps-surprise-chart | Exelixis, Inc. Quote
Litigation Update
In July, Exelixis announced that it entered into a settlement and license agreement with Teva Pharmaceuticals (TEVA - Free Report) . This settlement resolves patent litigation brought by Exelixis in response to Teva’s abbreviated new drug application seeking approval to market a generic version of Cabometyx prior to the expiration of the applicable patents. Per the settlement terms, Exelixis will grant Teva a license to market its generic version of the drug in the United States beginning on Jan 1, 2031, upon the FDA’s approval.
Consequently, both companies will terminate the ongoing litigation.
Pipeline Updates
Exelixis completed enrollment in multiple expansion cohorts of the phase I STELLAR-001 study for zanzalintinib and progressed the ongoing phase III studies.
The company also continued to advance the phase I JEWEL-101 study for XB002, selecting the single-agent dose from the dose-escalation stage of the study and initiating the cohort expansion stage, with the goal of moving the program into full development before year’s end.
2023 Guidance Reiterated
Revenues are projected between $1.775 billion and $1.875 billion, while product revenues are estimated in the range of $1.575-1.675 billion.
Our Take
Exelixis’ second-quarter results were better than expected as Cabometyx maintained its status as the leading tyrosine kinase inhibitor for the treatment of RCC, driven by its use in combination with Bristol Myers’ (BMY - Free Report) Opdivo in the first-line setting. The drug also maintained growth in HCC indication. Exelixis is also striving hard to develop its portfolio beyond Cabometyx and has advanced the STELLAR-303 and STELLAR-304 phase III studies for zanzalintinib, as well as the single-agent and combination dose-escalation cohorts of the phase I trial of XB002.
Bristol-Myers’ Opdivo, one of its leading revenue generators, is approved for various oncology indications.
Zacks Rank & Stocks To Consider
Exelixis currently carries a Zacks Rank #3 (Hold).
A better-ranked stock in the biotech sector is Alkermes (ALKS - Free Report) , carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Alkermes’ earnings per share has moved up from 50 cents to $1.47 for 2023 and from $1.78 to $2.04 for 2024 in the past 60 days. The stock has risen 9.2% in the year-to-date period.
ALKS’ earnings beat estimates in all the trailing four quarters, the average surprise being 81.98%.