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Exelixis (EXEL) Posts Narrower Loss in Q2, Beats on Revenues
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Exelixis, Inc. (EXEL - Free Report) posted a second-quarter 2016 loss of 16 cents, narrower than both the Zacks Consensus Estimate of a loss of 27 cents and the year-ago loss of 22 cents.
Net revenue came in at $36.2 million, up from $8.0 million, which easily surpassed the Zacks Consensus Estimate of $15.6 million.
Quarter in Detail
Exelixis' lead drug, Cometriq, is approved for the treatment of progressive, metastatic medullary thyroid cancer.
Of the total revenue, $31.6 million came from product sales. Cabozantinib is marketed in the capsule form as Cometriq for progressive, metastatic MTC. Exelixis was evaluating a tablet formulation of cabozantinib, distinct from the capsule form, for advanced renal cell carcinoma (RCC) in the METEOR trial. The company received a significant boost in Apr 2016, when the FDA approved its tablet formulation under the brand name, Cabometyx, for the treatment of RCC in patients who have received prior anti-angiogenic therapy.
In the reported quarter, research and development expenses decreased 6.2% to $23 million due to lower clinical trial costs and allocation of general corporate costs. Selling, general and administrative expenses jumped to $35.8 million from $12.8 million due to higher personnel-related expenses resulting from an increase in headcount, which in turn, was due to sales force expansion in the U.S. for supporting the launch of Cabometyx.
Pipeline Update
The European Medicines Agency (EMA) has accepted a Marketing Authorisation Application (MAA) for Cabometyx for review for the treatment of advanced RCC in adults following prior vascular endothelial growth factor (VEGF)-targeted therapy. The Committee for Medicinal Products for Human Use (CHMP) has given a positive opinion on an approval of Cabometyx.
In May 2016, the company announced that an independent randomized phase II trial, CABOSUN, on cabozantinib in patients with previously untreated advanced RCC, met its primary endpoint. The trial demonstrated a statistically significant and clinically meaningful improvement in progression-free survival, compared with sunitinib, in patients with advanced intermediate- or poor-risk RCC. Consequently, Exelixis is discussing the results with regulatory authorities and evaluating further actions in the development and submission strategy for cabozantinib as a first-line treatment for patients with advanced RCC.
We remind investors that Exelixis has an exclusive licensing agreement with Ipsen for the commercialization and further development of cabozantinib. Per the terms of the agreement, Ipsen will enjoy exclusive commercialization rights for current and potential future indications of the drug outside the U.S., Canada and Japan. The companies will jointly work for the development of cabozantinib in the current and future potential indications.
Meanwhile, Exelixis is evaluating cabozantinib in the CELESTIAL trial for advanced hepatocellular carcinoma. The company anticipates top-line results from the study in 2017.
Exelixis is also working with partner Roche Holding (RHHBY - Free Report) to commercialize Cotellic, the other drug in its portfolio, in the U.S. We note the drug was approved in the U.S. in Nov 2015 for the treatment for patients with a BRAF V600E or V600K mutation-positive advanced melanoma, in combination with Zelboraf. In Jun 2016, Roche initiated a phase III trial, COTEZO, on a combination of Cotellic and atezolizumab in unresectable locally advanced or metastatic colorectal cancer.
2016 Guidance Updated
Exelixis expects operating expenses of around $250–$270 million. This includes about $30 million of incremental, non-cash, stock-based compensation expenses.
Exelixis’ second-quarter results were impressive with the company reporting a narrower-than-expected loss and beating on revenues. Further, the FDA approval of Cabometyx is a major boost for the company. It is currently focused on launching Cabometyx tablets as a treatment for patients with advanced RCC. Initial uptake of the drug was encouraging and will propel the top line in the forthcoming quarters.
The successful commercialization of Cotellic in the U.S. will also boost the top line. However, expenses are expected to increase as the company focuses on commercializing Cabometyx in the U.S.
Exelixis currently carries a Zacks Rank #3 (Hold). A couple of better-ranked stocks in the healthcare sector are Actelion Ltd and Biogen, Inc. (BIIB - Free Report) . Both the stocks carry a Zacks Rank #2 (Buy).
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Exelixis (EXEL) Posts Narrower Loss in Q2, Beats on Revenues
Exelixis, Inc. (EXEL - Free Report) posted a second-quarter 2016 loss of 16 cents, narrower than both the Zacks Consensus Estimate of a loss of 27 cents and the year-ago loss of 22 cents.
Net revenue came in at $36.2 million, up from $8.0 million, which easily surpassed the Zacks Consensus Estimate of $15.6 million.
Quarter in Detail
Exelixis' lead drug, Cometriq, is approved for the treatment of progressive, metastatic medullary thyroid cancer.
Of the total revenue, $31.6 million came from product sales. Cabozantinib is marketed in the capsule form as Cometriq for progressive, metastatic MTC. Exelixis was evaluating a tablet formulation of cabozantinib, distinct from the capsule form, for advanced renal cell carcinoma (RCC) in the METEOR trial. The company received a significant boost in Apr 2016, when the FDA approved its tablet formulation under the brand name, Cabometyx, for the treatment of RCC in patients who have received prior anti-angiogenic therapy.
In the reported quarter, research and development expenses decreased 6.2% to $23 million due to lower clinical trial costs and allocation of general corporate costs. Selling, general and administrative expenses jumped to $35.8 million from $12.8 million due to higher personnel-related expenses resulting from an increase in headcount, which in turn, was due to sales force expansion in the U.S. for supporting the launch of Cabometyx.
Pipeline Update
The European Medicines Agency (EMA) has accepted a Marketing Authorisation Application (MAA) for Cabometyx for review for the treatment of advanced RCC in adults following prior vascular endothelial growth factor (VEGF)-targeted therapy. The Committee for Medicinal Products for Human Use (CHMP) has given a positive opinion on an approval of Cabometyx.
In May 2016, the company announced that an independent randomized phase II trial, CABOSUN, on cabozantinib in patients with previously untreated advanced RCC, met its primary endpoint. The trial demonstrated a statistically significant and clinically meaningful improvement in progression-free survival, compared with sunitinib, in patients with advanced intermediate- or poor-risk RCC. Consequently, Exelixis is discussing the results with regulatory authorities and evaluating further actions in the development and submission strategy for cabozantinib as a first-line treatment for patients with advanced RCC.
We remind investors that Exelixis has an exclusive licensing agreement with Ipsen for the commercialization and further development of cabozantinib. Per the terms of the agreement, Ipsen will enjoy exclusive commercialization rights for current and potential future indications of the drug outside the U.S., Canada and Japan. The companies will jointly work for the development of cabozantinib in the current and future potential indications.
Meanwhile, Exelixis is evaluating cabozantinib in the CELESTIAL trial for advanced hepatocellular carcinoma. The company anticipates top-line results from the study in 2017.
Exelixis is also working with partner Roche Holding (RHHBY - Free Report) to commercialize Cotellic, the other drug in its portfolio, in the U.S. We note the drug was approved in the U.S. in Nov 2015 for the treatment for patients with a BRAF V600E or V600K mutation-positive advanced melanoma, in combination with Zelboraf. In Jun 2016, Roche initiated a phase III trial, COTEZO, on a combination of Cotellic and atezolizumab in unresectable locally advanced or metastatic colorectal cancer.
2016 Guidance Updated
Exelixis expects operating expenses of around $250–$270 million. This includes about $30 million of incremental, non-cash, stock-based compensation expenses.
EXELIXIS INC Price and Consensus
EXELIXIS INC Price and Consensus | EXELIXIS INC Quote
Our Take
Exelixis’ second-quarter results were impressive with the company reporting a narrower-than-expected loss and beating on revenues. Further, the FDA approval of Cabometyx is a major boost for the company. It is currently focused on launching Cabometyx tablets as a treatment for patients with advanced RCC. Initial uptake of the drug was encouraging and will propel the top line in the forthcoming quarters.
The successful commercialization of Cotellic in the U.S. will also boost the top line. However, expenses are expected to increase as the company focuses on commercializing Cabometyx in the U.S.
Exelixis currently carries a Zacks Rank #3 (Hold). A couple of better-ranked stocks in the healthcare sector are Actelion Ltd and Biogen, Inc. (BIIB - Free Report) . Both the stocks carry a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>