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Exelixis (EXEL) Q4 Earnings Beat on Lower R&D Spend, Sales Miss
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Exelixis, Inc. (EXEL - Free Report) reported earnings of 33 cents per share in the fourth quarter of 2023, which beat the Zacks Consensus Estimate of 31 cents. The company posted a net loss of 3 cents per share in the fourth quarter of 2022.
Including stock-based compensation expenses, earnings per share were 27 cents against a loss of 9 cents in the year-ago quarter due to an increase in revenues and lower expenses.
Net revenues were $479.6 million, marginally missing the Zacks Consensus Estimate of $481 million. Revenues increased 13.1% year over year.
Exelixis’ shares have gained 7.8% in the past six months compared with the industry’s growth of 0.9%.
Image Source: Zacks Investment Research
Quarter in Detail
Net product revenues came in at $429.3 million, up 13.7% year over year. The increase was primarily due to a rise in sales volume and the average net selling price.
Cabometyx (cabozantinib) generated revenues of $427.7 million and beat the Zacks Consensus Estimate and our model estimate of $427 million and $426.7 million, respectively. The drug is approved for advanced renal cell carcinoma (“RCC”) and previously treated hepatocellular carcinoma. Cometriq (cabozantinib capsules) generated $1.6 million in net product revenues for treating medullary thyroid cancer.
Collaboration revenues, comprising license revenues and collaboration services revenues, were $50.3 million in the quarter compared with $46.5 million in the year-ago quarter.
In the reported quarter, research and development expenses were $244.7 million, down 27.3% year over year due to a decrease in license and other collaboration costs.
Selling, general and administrative expenses were $131.4 million, up 10.1% due to an increase in personnel expenses.
In January 2024, Exelixis announced that its board authorized the repurchase of up to an additional $450 million of the company’s common stock before the end of 2024. Exelixis completed its previously announced (March 2023) repurchase of 26.2 million shares of its common stock for a total of $550 million in 2023.
Restructuring Update
Last month, Exelixis announced that it will undertake a corporate restructuring program to prioritize the advancement of its deep pipeline of clinical and near-clinical programs. As a result, EXEL will reduce its headcount by approximately 175 employees or 13%. The firm expects to substantially complete the restructuring in the first quarter of 2024 and incur a restructuring charge of approximately $25 million.
Management will focus on the label expansion of its lead drug, Cabometyx, in 2024. A potential regulatory filing for cabozantinib in advanced neuroendocrine tumors (“NET”) based on positive results from the pivotal phase III CABINET study, which evaluates cabozantinib versus placebo in patients with either advanced pancreatic NET or extra-pancreatic NET, is targeted in 2024.
The company is evaluating the combination of cabozantinib and Tecentriq (atezolizumab) versus a second novel hormonal therapy (“NHT”) in patients with metastatic castration-resistant prostate cancer (“mCRPC”) and measurable extra pelvic soft tissue disease who have been previously treated with one NHT. A potential filing for this indication in the United States is also targeted in 2024.
Exelixis plans to accelerate the development of zanzalintinib, XB002 and XL309 in 2024.
Zanzalintinib, a third-generation tyrosine kinase inhibitor (“TKI”), is being evaluated in three ongoing pivotal trials, STELLAR-303, -304 and -305, in forms of colorectal cancer, non-clear cell RCC and squamous cell carcinoma of the head and neck, respectively.
XB002 is a next-generation tissue factor-targeting antibody-drug conjugate that is being evaluated as a monotherapy and in combination regimens. This year, Exelixis is focused on advancing JEWEL-101, the phase I study of XB002 alone and in combination with immunotherapy in a variety of solid tumor settings, with the goal of prioritizing sensitive tumor types for full development.
In December 2023, Exelixis and Arcus Biosciences (RCUS - Free Report) announced entering into a clinical trial collaboration for STELLAR-009, a phase Ib/II trial evaluating zanzalintinib in combination with AB521, an inhibitor of the transcription factor HIF-2???, in patients with advanced solid tumors, including clear cell renal cell carcinoma.
The trial is divided into dose-escalation and expansion phases and patient enrollment in dose-escalation cohorts is ongoing. Exelixis is sponsoring STELLAR-009 and Arcus is co-funding the study and providing AB521 for use in the trial.
XL309, a potentially best-in-class small-molecule inhibitor of USP1, has emerged as a synthetic lethal target in the context of BRCA-mutated tumors.
Exelixis’ clinical development priorities for XL309 include accelerating its development as a potential therapy for tumors that have become refractory to PARP inhibitor (“PARPi”) therapy, including forms of ovarian, breast and prostate cancers, pursuing potential PARPi combinations and moving beyond the PARPi market into new areas.
EXEL plans to file an investigational new drug application for XB010, XB628 and XL495 in 2024 if preclinical data continues to remain supportive.
Revenues in 2023 were $1.8 billion, up 13.6% from 2022. Earnings per share of 90 cents were up from 82 cents in 2022 and beat the Zacks Consensus Estimate of 86 cents.
2024 Guidance
Management reiterated its previously provided guidance for 2024. Revenues are projected between $1.825 billion and $1.925 billion, while product revenues are projected to be $1.65-$1.75 billion. Research and development expenses are estimated to be $925-$975 million. Selling, general and administrative expenses are projected to be $425-$475 million.
Our Take
Exelixis beat on earnings in fourth quarter results on higher revenues and lower R&D expenses. While revenues were marginally short of the consensus estimate, Cabometyx revenues are being driven by its use in combination with Opdivo in the first-line setting.
The potential label expansion of the drug in NET and mCRPC will further boost sales of the drug.
In the past 30 days, the Zacks Consensus Estimate for Puma Biotech’s 2023 earnings per share (EPS) has remained constant at 73 cents. During the same time frame, the consensus estimate for Puma Biotech’s 2024 EPS has remained steady at 69 cents. Over the past year, shares of PBYI have gained 8.6%.
PBYI beat estimates in three of the last four quarters while missing on one occasion, delivering a four-quarter average earnings surprise of 76.55%.
In the past 30 days, Sarepta’s loss estimates for 2023 have improved from a loss of $6.80 per share to $6.57 per share. During the same period, earnings estimates per share for 2024 have risen from $1.71 to $2.14.
Sarepta’s earnings beat estimates in each of the last four quarters, delivering an average surprise of 48.67%. In the previous reported quarter, its earnings beat estimates by 72.29%.
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Exelixis (EXEL) Q4 Earnings Beat on Lower R&D Spend, Sales Miss
Exelixis, Inc. (EXEL - Free Report) reported earnings of 33 cents per share in the fourth quarter of 2023, which beat the Zacks Consensus Estimate of 31 cents. The company posted a net loss of 3 cents per share in the fourth quarter of 2022.
Including stock-based compensation expenses, earnings per share were 27 cents against a loss of 9 cents in the year-ago quarter due to an increase in revenues and lower expenses.
Net revenues were $479.6 million, marginally missing the Zacks Consensus Estimate of $481 million. Revenues increased 13.1% year over year.
Exelixis’ shares have gained 7.8% in the past six months compared with the industry’s growth of 0.9%.
Image Source: Zacks Investment Research
Quarter in Detail
Net product revenues came in at $429.3 million, up 13.7% year over year. The increase was primarily due to a rise in sales volume and the average net selling price.
Cabometyx (cabozantinib) generated revenues of $427.7 million and beat the Zacks Consensus Estimate and our model estimate of $427 million and $426.7 million, respectively. The drug is approved for advanced renal cell carcinoma (“RCC”) and previously treated hepatocellular carcinoma. Cometriq (cabozantinib capsules) generated $1.6 million in net product revenues for treating medullary thyroid cancer.
Collaboration revenues, comprising license revenues and collaboration services revenues, were $50.3 million in the quarter compared with $46.5 million in the year-ago quarter.
In the reported quarter, research and development expenses were $244.7 million, down 27.3% year over year due to a decrease in license and other collaboration costs.
Selling, general and administrative expenses were $131.4 million, up 10.1% due to an increase in personnel expenses.
In January 2024, Exelixis announced that its board authorized the repurchase of up to an additional $450 million of the company’s common stock before the end of 2024. Exelixis completed its previously announced (March 2023) repurchase of 26.2 million shares of its common stock for a total of $550 million in 2023.
Restructuring Update
Last month, Exelixis announced that it will undertake a corporate restructuring program to prioritize the advancement of its deep pipeline of clinical and near-clinical programs. As a result, EXEL will reduce its headcount by approximately 175 employees or 13%. The firm expects to substantially complete the restructuring in the first quarter of 2024 and incur a restructuring charge of approximately $25 million.
Management will focus on the label expansion of its lead drug, Cabometyx, in 2024. A potential regulatory filing for cabozantinib in advanced neuroendocrine tumors (“NET”) based on positive results from the pivotal phase III CABINET study, which evaluates cabozantinib versus placebo in patients with either advanced pancreatic NET or extra-pancreatic NET, is targeted in 2024.
The company is evaluating the combination of cabozantinib and Tecentriq (atezolizumab) versus a second novel hormonal therapy (“NHT”) in patients with metastatic castration-resistant prostate cancer (“mCRPC”) and measurable extra pelvic soft tissue disease who have been previously treated with one NHT. A potential filing for this indication in the United States is also targeted in 2024.
Exelixis plans to accelerate the development of zanzalintinib, XB002 and XL309 in 2024.
Zanzalintinib, a third-generation tyrosine kinase inhibitor (“TKI”), is being evaluated in three ongoing pivotal trials, STELLAR-303, -304 and -305, in forms of colorectal cancer, non-clear cell RCC and squamous cell carcinoma of the head and neck, respectively.
XB002 is a next-generation tissue factor-targeting antibody-drug conjugate that is being evaluated as a monotherapy and in combination regimens. This year, Exelixis is focused on advancing JEWEL-101, the phase I study of XB002 alone and in combination with immunotherapy in a variety of solid tumor settings, with the goal of prioritizing sensitive tumor types for full development.
In December 2023, Exelixis and Arcus Biosciences (RCUS - Free Report) announced entering into a clinical trial collaboration for STELLAR-009, a phase Ib/II trial evaluating zanzalintinib in combination with AB521, an inhibitor of the transcription factor HIF-2???, in patients with advanced solid tumors, including clear cell renal cell carcinoma.
The trial is divided into dose-escalation and expansion phases and patient enrollment in dose-escalation cohorts is ongoing. Exelixis is sponsoring STELLAR-009 and Arcus is co-funding the study and providing AB521 for use in the trial.
XL309, a potentially best-in-class small-molecule inhibitor of USP1, has emerged as a synthetic lethal target in the context of BRCA-mutated tumors.
Exelixis’ clinical development priorities for XL309 include accelerating its development as a potential therapy for tumors that have become refractory to PARP inhibitor (“PARPi”) therapy, including forms of ovarian, breast and prostate cancers, pursuing potential PARPi combinations and moving beyond the PARPi market into new areas.
EXEL plans to file an investigational new drug application for XB010, XB628 and XL495 in 2024 if preclinical data continues to remain supportive.
Exelixis, Inc. Price, Consensus and EPS Surprise
Exelixis, Inc. price-consensus-eps-surprise-chart | Exelixis, Inc. Quote
2023 Results
Revenues in 2023 were $1.8 billion, up 13.6% from 2022. Earnings per share of 90 cents were up from 82 cents in 2022 and beat the Zacks Consensus Estimate of 86 cents.
2024 Guidance
Management reiterated its previously provided guidance for 2024. Revenues are projected between $1.825 billion and $1.925 billion, while product revenues are projected to be $1.65-$1.75 billion. Research and development expenses are estimated to be $925-$975 million. Selling, general and administrative expenses are projected to be $425-$475 million.
Our Take
Exelixis beat on earnings in fourth quarter results on higher revenues and lower R&D expenses. While revenues were marginally short of the consensus estimate, Cabometyx revenues are being driven by its use in combination with Opdivo in the first-line setting.
The potential label expansion of the drug in NET and mCRPC will further boost sales of the drug.
Zacks Rank & Other Stocks to Consider
Exelixis currently carries a Zacks Rank #2 (Buy).
A couple of other top-ranked stocks in the biotech sector are Puma Biotechnology, Inc. (PBYI - Free Report) and Sarepta Therapeutics (SRPT - Free Report) . PBYI currently sports a Zacks Rank #1 (Strong Buy) and SRPT carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 30 days, the Zacks Consensus Estimate for Puma Biotech’s 2023 earnings per share (EPS) has remained constant at 73 cents. During the same time frame, the consensus estimate for Puma Biotech’s 2024 EPS has remained steady at 69 cents. Over the past year, shares of PBYI have gained 8.6%.
PBYI beat estimates in three of the last four quarters while missing on one occasion, delivering a four-quarter average earnings surprise of 76.55%.
In the past 30 days, Sarepta’s loss estimates for 2023 have improved from a loss of $6.80 per share to $6.57 per share. During the same period, earnings estimates per share for 2024 have risen from $1.71 to $2.14.
Sarepta’s earnings beat estimates in each of the last four quarters, delivering an average surprise of 48.67%. In the previous reported quarter, its earnings beat estimates by 72.29%.