Exelixis, Inc.(EXEL - Free Report) posted third-quarter 2016 loss of 4 cents, narrower than both the Zacks Consensus Estimate of a loss of 13 cents and the year-ago loss of 21 cents.
Higher revenues and lower R&D costs led to the narrower loss in the quarter.
Net revenue came in at $62 million, considerably up from $9.9 million in the prior-year quarter. Revenues also surpassed the Zacks Consensus Estimate of $47 million.
Quarter in Detail
The California-based biopharmaceutical company is focused on developing and commercializing small-molecule therapies for the treatment of cancer.
Of the total revenue, $42.7 million came from product sales much higher than $6.9 million in the prior year quarter. The higher product sales reflect higher sales from Cometriq, Exelixis’ lead marketed product, as well as the commercial launch of Cabometyx in late April 2016,
While Cometriq, the capsule form of cabozantinib, is approved for the treatment of progressive metatstaic medullary thyroid cancer (MTC), Cabometyx, a tablet formulation of cabozantinib is approved for the treatment of patients with advanced renal cell carcinoma (RCC) who have received prior anti-angiogenic therapy.
In the reported quarter, research and development expenses decreased 22.2% to $20.3 million due to lower share-based compensation, clinical trial costs and allocation of general corporate costs.
Selling, general and administrative expenses were $32.5 million, up 83% from $17.8 million a year ago. This was 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.
In Sep 2016, Exelixis declared that the European Commission (EC) has approved Cabometyx tablets for the treatment of advanced RCC in adults who have received prior vascular endothelial growth factor (VEGF)-targeted therapy. The approval of Cabometyx by the EC triggered a milestone payment of $60 million to Exelixis.
In Oct 2016, the company announced positive results from the phase II CABOSUN study on cabozantinib against sunitinib in formerly untreated advanced RCC, which was presented at ESMO 2016.
Based on the CABOSUN results, the company has planned to submit a supplemental New Drug Application (sNDA) for cabozantinib for treating advanced RCC. Exelixis is working with The Alliance to transfer the complete CABOSUN clinical database to Exelixis and will facilitate an independent radiological review of the CABOSUN imaging data in preparation for the filing.
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.
In Sep 2016, Exelixis announced that its partner Daiichi Sankyo has initiated a phase III pivotal trial that will evaluate their pipeline candidate CS-3150, for the treatment of essential hypertension in Japanese patients. CS-3150 is an oral, non-steroidal, selective mineralocorticoid receptor antagonist. Upon Daiichi Sankyo enrollment of first patient in the trial, the company becomes eligible to receive $15 million milestone payment, which is expected in the fourth quarter of 2016.
2016 Guidance Updated
Exelixis lowered its operating expense guidance for 2016. It stated that operating expenses for the full year 2016 will be approximately $245 million, including approximately $25 million of non-cash items primarily related to stock-based compensation expense.
Exelixis currently sports a Zacks Rank #1 (Strong Buy). Other favorably stocks in the healthcare sector include Infinity Pharmaceuticals, Inc. (INFI - Free Report) , Bovie Medical Corporation (BVX - Free Report) and Anika Therapeutics Inc. (ANIK - Free Report) . Each of the stocks sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Infinity’s loss estimates narrowed from $3.84 to $3.79 for 2016 but remained unchanged for 2017 over the last 60 days. The company posted positive surprises in all of the four trailing quarters with an average beat of 67.62%.
Bovie’s loss estimates remained unchanged for 2016 but narrowed from 8 cents to 3 cents for 2017 over the last 60 days. The company posted positive surprises in three of four trailing quarters with an average beat of 28.69%.
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