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Exelixis Beats on Q3 Earnings and Sales, Raises Annual Outlook
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Exelixis, Inc. (EXEL - Free Report) reported better-than-expected third-quarter results. Its shares have risen following the announcement.
EXEL recorded earnings of 47 cents per share, which beat the Zacks Consensus Estimate of 42 cents. The company registered adjusted earnings of 10 cents per share in the third quarter of 2023. The upside was mainly driven by higher revenues and lower operating expenses.
Including stock-based compensation expense, earnings were 40 cents per share in the reported quarter.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Net revenues were $539.5 million, which easily beat the Zacks Consensus Estimate of $491 million. The top line surged 14.3% year over year.
Exelixis’ shares have risen 19.8% year to date against the industry’s decline of 3%.
Image Source: Zacks Investment Research
EXEL's Third Quarter Highlights
Net product revenues were $478 million, up 12.1% year over year. The increase in net product revenues was primarily driven by a rise in sales volume and average net selling price.
Cabometyx (cabozantinib) generated revenues of $475.7 million, which beat both the Zacks Consensus Estimate of $439 million and our model estimate of $434.6 million. The drug is approved for advanced renal cell carcinoma (RCC) and previously treated hepatocellular carcinoma. Cometriq (cabozantinib capsules) generated $2.4 million in net product revenues for treating medullary thyroid cancer.
Prescription volume grew 9% year over year.
Collaboration revenues, comprising license revenues and collaboration services revenues, totaled $61.5 million, up from $45.4 million in the year-ago quarter. The increase was primarily driven by an increase in milestone-related revenues recognized in the quarter and higher royalty revenues from the sale of cabozantinib outside the country (generated by collaboration partners Ipsen Pharma and Takeda).
Research and development expenses amounted to $222.6 million, down 33.1% year over year. This decrease was primarily related to a drop in license and other collaboration costs.
Selling, general and administrative expenses totaled $111.8 million, down 19% year over year. This was due to a decline related to decreases in corporate giving, stock-based compensation expenses and legal and advisory fees.
In August, Exelixis announced that the board of directors authorized the repurchase of up to $500 million of the company’s common stock. As of Sept. 30, 2024, Exelixis had repurchased $12.4 million of the company’s common stock at an average price of $25.61 per share.
Regulatory Updates
Exelixis announced that the District Court of Delaware has ruled in its favor in the second patent litigation against MSN Laboratories. MSN is seeking approval for its generic product of Exelixis’ cabozantinib. The Delaware District Court ruled in Exelixis’ favor, rejecting MSN’s challenge to three Orange Book-listed patents related to cabozantinib, including U.S. Patents No. 11,091,439 (crystalline salt), 11,091,440 (pharmaceutical compositions) and 11,098,015 (methods of treatment).
If the FDA approves MSN’s abbreviated new drug application, the earliest it may be permitted to commercially launch its proposed generic product in the United States is January 2030, subject to any appeal or additional regulatory exclusivity.
Pipeline Updates
Management is focused on the label expansion of its lead drug, Cabometyx, in 2024. The FDA accepted EXEL’s supplemental new drug application (sNDA) for cabozantinib for patients with previously treated advanced pancreatic NET (pNET) and those with previously treated advanced extra-pancreatic NET (epNET). The regulatory body assigned a standard review with a target action date of April 3, 2025. It also granted the orphan drug designation to cabozantinib for the treatment of pNET.
Exelixis intends to submit an sNDA with the FDA later this year for cabozantinib, in combination with Tecentriq (atezolizumab), for metastatic castration-resistant prostate cancer.
Enrollment has been completed in the late-stage STELLAR-303 study evaluating zanzalintinib, in combination with Tecentriq, compared with regorafenib in patients with metastatic refractory colorectal cancer that is not microsatellite instability-high or mismatch repair-deficient. Preliminary results from the study are expected in 2025.
Exelixis recently collaborated with pharma giant Merck (MRK - Free Report) to evaluate zanzalintinib in combination with Merck’s blockbuster anti-PD-1 therapy Keytruda (pembrolizumab) in a late-stage study for treating patients with head and neck squamous cell carcinoma (HNSCC).
Both the companies will also evaluate zanzalintinib with Merck’s oral hypoxia-inducible factor-2 alpha (HIF-2α) inhibitor Welireg (belzutifan) in a phase I/II study and two phase III studies for the treatment of patients with RCC.
Per the terms of the agreement, Merck will supply Keytruda for the ongoing, Exelixis-sponsored phase III STELLAR-305 study in previously untreated PD-L1 positive recurrent or metastatic HNSCC.
Additionally, Merck will sponsor a phase I/II trial and two phase III studies in RCC. While Merck will fund one of these phase III studies, Exelixis will co-fund the phase I/II study and the other phase III study, as well as supply zanzalintinib and cabozantinib.
EXEL Raises 2024 Revenue Guidance
Total revenues are projected to be between $2.150 billion and $2.2 billion (previous guidance: $1.975-$2.075 billion). Product revenues are estimated to be in the band of $1.775-$1.825 billion (previous guidance: $1.65-$1.75 billion).
Research and development expenses are now estimated to be in the band of $925-$950 million (previous guidance: $925-$975 million). Selling, general and administrative expenses are projected to be in the range of $475-$500 million (previous guidance: $450-$500 million).
Our Take on EXEL’s Q3 Performance
Exelixis’ third-quarter results were encouraging, with both the top and bottom lines beating their respective estimates. Cabometyx maintained its status as the leading TKI for RCC in the United States.
The potential label expansion of the drug in NET should boost sales of the drug.
The increase in annual guidance was positive as well. EXEL’s efforts to develop other pipeline candidates look impressive.
EXEL’s Zacks Rank & Stocks to Consider
Exelixis currently carries a Zacks Rank #3 (Hold).
In the past 90 days, the 2024 loss per share estimate for Amarin has narrowed 2 cents. AMRN’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 118.75%.
In the past 60 days, estimates for Alnylam’s 2024 loss per share have narrowed from $2.20 to 64 cents. Loss per share estimates for 2025 have narrowed from 61 cents to 27 cents during the same period. Year to date, shares of ALNY have risen 48.8%.
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Exelixis Beats on Q3 Earnings and Sales, Raises Annual Outlook
Exelixis, Inc. (EXEL - Free Report) reported better-than-expected third-quarter results. Its shares have risen following the announcement.
EXEL recorded earnings of 47 cents per share, which beat the Zacks Consensus Estimate of 42 cents. The company registered adjusted earnings of 10 cents per share in the third quarter of 2023. The upside was mainly driven by higher revenues and lower operating expenses.
Including stock-based compensation expense, earnings were 40 cents per share in the reported quarter.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Net revenues were $539.5 million, which easily beat the Zacks Consensus Estimate of $491 million. The top line surged 14.3% year over year.
Exelixis’ shares have risen 19.8% year to date against the industry’s decline of 3%.
Image Source: Zacks Investment Research
EXEL's Third Quarter Highlights
Net product revenues were $478 million, up 12.1% year over year. The increase in net product revenues was primarily driven by a rise in sales volume and average net selling price.
Cabometyx (cabozantinib) generated revenues of $475.7 million, which beat both the Zacks Consensus Estimate of $439 million and our model estimate of $434.6 million. The drug is approved for advanced renal cell carcinoma (RCC) and previously treated hepatocellular carcinoma. Cometriq (cabozantinib capsules) generated $2.4 million in net product revenues for treating medullary thyroid cancer.
Prescription volume grew 9% year over year.
Collaboration revenues, comprising license revenues and collaboration services revenues, totaled $61.5 million, up from $45.4 million in the year-ago quarter. The increase was primarily driven by an increase in milestone-related revenues recognized in the quarter and higher royalty revenues from the sale of cabozantinib outside the country (generated by collaboration partners Ipsen Pharma and Takeda).
Research and development expenses amounted to $222.6 million, down 33.1% year over year. This decrease was primarily related to a drop in license and other collaboration costs.
Selling, general and administrative expenses totaled $111.8 million, down 19% year over year. This was due to a decline related to decreases in corporate giving, stock-based compensation expenses and legal and advisory fees.
In August, Exelixis announced that the board of directors authorized the repurchase of up to $500 million of the company’s common stock. As of Sept. 30, 2024, Exelixis had repurchased $12.4 million of the company’s common stock at an average price of $25.61 per share.
Regulatory Updates
Exelixis announced that the District Court of Delaware has ruled in its favor in the second patent litigation against MSN Laboratories. MSN is seeking approval for its generic product of Exelixis’ cabozantinib. The Delaware District Court ruled in Exelixis’ favor, rejecting MSN’s challenge to three Orange Book-listed patents related to cabozantinib, including U.S. Patents No. 11,091,439 (crystalline salt), 11,091,440 (pharmaceutical compositions) and 11,098,015 (methods of treatment).
If the FDA approves MSN’s abbreviated new drug application, the earliest it may be permitted to commercially launch its proposed generic product in the United States is January 2030, subject to any appeal or additional regulatory exclusivity.
Pipeline Updates
Management is focused on the label expansion of its lead drug, Cabometyx, in 2024. The FDA accepted EXEL’s supplemental new drug application (sNDA) for cabozantinib for patients with previously treated advanced pancreatic NET (pNET) and those with previously treated advanced extra-pancreatic NET (epNET). The regulatory body assigned a standard review with a target action date of April 3, 2025. It also granted the orphan drug designation to cabozantinib for the treatment of pNET.
Exelixis intends to submit an sNDA with the FDA later this year for cabozantinib, in combination with Tecentriq (atezolizumab), for metastatic castration-resistant prostate cancer.
Enrollment has been completed in the late-stage STELLAR-303 study evaluating zanzalintinib, in combination with Tecentriq, compared with regorafenib in patients with metastatic refractory colorectal cancer that is not microsatellite instability-high or mismatch repair-deficient. Preliminary results from the study are expected in 2025.
Exelixis recently collaborated with pharma giant Merck (MRK - Free Report) to evaluate zanzalintinib in combination with Merck’s blockbuster anti-PD-1 therapy Keytruda (pembrolizumab) in a late-stage study for treating patients with head and neck squamous cell carcinoma (HNSCC).
Both the companies will also evaluate zanzalintinib with Merck’s oral hypoxia-inducible factor-2 alpha (HIF-2α) inhibitor Welireg (belzutifan) in a phase I/II study and two phase III studies for the treatment of patients with RCC.
Per the terms of the agreement, Merck will supply Keytruda for the ongoing, Exelixis-sponsored phase III STELLAR-305 study in previously untreated PD-L1 positive recurrent or metastatic HNSCC.
Additionally, Merck will sponsor a phase I/II trial and two phase III studies in RCC. While Merck will fund one of these phase III studies, Exelixis will co-fund the phase I/II study and the other phase III study, as well as supply zanzalintinib and cabozantinib.
EXEL Raises 2024 Revenue Guidance
Total revenues are projected to be between $2.150 billion and $2.2 billion (previous guidance: $1.975-$2.075 billion). Product revenues are estimated to be in the band of $1.775-$1.825 billion (previous guidance: $1.65-$1.75 billion).
Research and development expenses are now estimated to be in the band of $925-$950 million (previous guidance: $925-$975 million). Selling, general and administrative expenses are projected to be in the range of $475-$500 million (previous guidance: $450-$500 million).
Our Take on EXEL’s Q3 Performance
Exelixis’ third-quarter results were encouraging, with both the top and bottom lines beating their respective estimates. Cabometyx maintained its status as the leading TKI for RCC in the United States.
The potential label expansion of the drug in NET should boost sales of the drug.
The increase in annual guidance was positive as well. EXEL’s efforts to develop other pipeline candidates look impressive.
EXEL’s Zacks Rank & Stocks to Consider
Exelixis currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the biotech sector are Amarin (AMRN - Free Report) and Alnylam Pharmaceuticals (ALNY - Free Report) . While AMRN sports a Zacks Rank #1 (Strong Buy), ALNY carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 90 days, the 2024 loss per share estimate for Amarin has narrowed 2 cents. AMRN’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 118.75%.
In the past 60 days, estimates for Alnylam’s 2024 loss per share have narrowed from $2.20 to 64 cents. Loss per share estimates for 2025 have narrowed from 61 cents to 27 cents during the same period. Year to date, shares of ALNY have risen 48.8%.