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Exelixis (EXEL) Posts Earnings in Q1, Cabometyx in Focus
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Exelixis, Inc. (EXEL - Free Report) posted first-quarter 2017 earnings of 5 cents, compared with a loss of 26 cents per share in the year-ago quarter. The Zacks Consensus Estimate was a loss of 1 cent.
Net revenue came in at $80.9 million, significantly up from $15.4 million in the prior-year quarter. Revenues also surpassed the Zacks Consensus Estimate of $65.6 million. Revenues were boosted by the FDA approval of a tablet formulation of cabozantinib, (distinct from the capsule form) under the brand name Cabometyx in Apr 2016 for the treatment of RCC in patients who have received prior anti-angiogenic therapy.
Exelixis’ share price has increased 62.2% year to date compared with the Zacks classified Medical - Biomedical and Genetics industry’s gain of 5.5%.
Quarter in Detail
Total product revenue was $68.9 million, up from $9.1 million in the year-ago quarter. Cabometyx generated $62.4 million in net product revenue, up 657% year over year and up 33% sequentially. Cometriq (cabozantinib) capsules for the treatment of medullary thyroid cancer generated $6.5 million in net product revenue. Customer demand increased by approximately 40% in the first quarter compared to the fourth quarter driven by improvements in new patient starts, refills for patients already on therapy and broad expansion of the Cabometyx prescriber base.
Total collaboration revenue was at $12.0 million compared to $6.3 million in the year-ago quarter.
In the reported quarter, research and development expenses declined 19.8% to $23.2 million due to decrease in research and development expenses as a result of fall in clinical trial costs for the phase III trial, METEOR, in advanced RCC and share-based compensation. Selling, general and administrative expenses were $34.3 million, down 1.7% from a year ago due to decline in marketing costs rising from a decreasing losses under the collaboration agreement with Roche’s (RHHBY - Free Report) Genentech and stock-based compensation.
The company continues to focus on the launch of Cabometyx in the U.S. Exelixis plans to file a supplemental New Drug Application (sNDA) for cabozantinib as a treatment for previously-untreated patients with advanced RCC in third-quarter 2017 based on the positive data from the randomized phase II trial, CABOSUN.
In Mar 2017, the FDA granted cabozantinib orphan drug designation for the treatment of HCC. A phase III trial, CELESTIAL is currently ongoing in patients with advanced HCC. The company now expects completing the second intermin analysis at 75% of the events in the second half of 2017.
During the first quarter, Exelixis announced agreements with The Bristol-Myers Squibb Company (BMY - Free Report) and Roche to collaborate on the development of cabozantinib in combination with immunotherapy agents.
Meanwhile, Exelixis and Roche announced that the phase III trial evaluating the combination of Cotellic and Tecentriq in third-line advanced or metastatic colorectal cancer, achieved full enrollment in first-quarter 2017. Roche also announced that IMspire150 TRILOGY, which evaluates the combination of Cotellic, atezolizumab, and Xelboraf in first-line BRAF V600 mutation-positive metastatic or unresectable locally advanced melanoma, enrolled its first patient in Jan 2017 while IMspire170, the trial evaluating the combination of Cotellic and atezolizumab versus pembrolizumab in first-line BRAF wild-type metastatic or unresectable locally advanced melanoma, is likely to enroll its first patient in the second quarter of this year.
2017 Guidance
Exelixis expects total costs and operating expenses for 2017 in the range of $290 million–$310 million. This guidance includes about $25 million of non-cash costs and expenses related primarily to stock-based compensation expense.
Our Take
Exelixis posted an earnings in the first quarter compared to a loss in the year-ago quarter which was encouraging. The sequential increase in Cabometyx sales is a positive for the company. Going forward, we expect investor on further label expansion of cabozantinib and Cotellic.
Zacks Rank & Key Pick
Exelixis currently carries a Zacks Rank #3 (Hold).
A better-ranked stock in the healthcare sector is Heska Corporation which sports a Zacks Rank #1 (Strong Buy). Heska’s earnings estimates for 2017 have increased to $1.65 from $1.53 over the last 60 days. The company posted positive surprises all the four trailing quarters with an average beat of 291.54%. Its share price has increased 47.2% this year so far.
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Exelixis (EXEL) Posts Earnings in Q1, Cabometyx in Focus
Exelixis, Inc. (EXEL - Free Report) posted first-quarter 2017 earnings of 5 cents, compared with a loss of 26 cents per share in the year-ago quarter. The Zacks Consensus Estimate was a loss of 1 cent.
Net revenue came in at $80.9 million, significantly up from $15.4 million in the prior-year quarter. Revenues also surpassed the Zacks Consensus Estimate of $65.6 million. Revenues were boosted by the FDA approval of a tablet formulation of cabozantinib, (distinct from the capsule form) under the brand name Cabometyx in Apr 2016 for the treatment of RCC in patients who have received prior anti-angiogenic therapy.
Exelixis’ share price has increased 62.2% year to date compared with the Zacks classified Medical - Biomedical and Genetics industry’s gain of 5.5%.
Quarter in Detail
Total product revenue was $68.9 million, up from $9.1 million in the year-ago quarter. Cabometyx generated $62.4 million in net product revenue, up 657% year over year and up 33% sequentially. Cometriq (cabozantinib) capsules for the treatment of medullary thyroid cancer generated $6.5 million in net product revenue. Customer demand increased by approximately 40% in the first quarter compared to the fourth quarter driven by improvements in new patient starts, refills for patients already on therapy and broad expansion of the Cabometyx prescriber base.
Total collaboration revenue was at $12.0 million compared to $6.3 million in the year-ago quarter.
In the reported quarter, research and development expenses declined 19.8% to $23.2 million due to decrease in research and development expenses as a result of fall in clinical trial costs for the phase III trial, METEOR, in advanced RCC and share-based compensation. Selling, general and administrative expenses were $34.3 million, down 1.7% from a year ago due to decline in marketing costs rising from a decreasing losses under the collaboration agreement with Roche’s (RHHBY - Free Report) Genentech and stock-based compensation.
Exelixis, Inc. Price and EPS Surprise
Exelixis, Inc. Price and EPS Surprise | Exelixis, Inc. Quote
Pipeline Update
The company continues to focus on the launch of Cabometyx in the U.S. Exelixis plans to file a supplemental New Drug Application (sNDA) for cabozantinib as a treatment for previously-untreated patients with advanced RCC in third-quarter 2017 based on the positive data from the randomized phase II trial, CABOSUN.
In Mar 2017, the FDA granted cabozantinib orphan drug designation for the treatment of HCC. A phase III trial, CELESTIAL is currently ongoing in patients with advanced HCC. The company now expects completing the second intermin analysis at 75% of the events in the second half of 2017.
During the first quarter, Exelixis announced agreements with The Bristol-Myers Squibb Company (BMY - Free Report) and Roche to collaborate on the development of cabozantinib in combination with immunotherapy agents.
Meanwhile, Exelixis and Roche announced that the phase III trial evaluating the combination of Cotellic and Tecentriq in third-line advanced or metastatic colorectal cancer, achieved full enrollment in first-quarter 2017. Roche also announced that IMspire150 TRILOGY, which evaluates the combination of Cotellic, atezolizumab, and Xelboraf in first-line BRAF V600 mutation-positive metastatic or unresectable locally advanced melanoma, enrolled its first patient in Jan 2017 while IMspire170, the trial evaluating the combination of Cotellic and atezolizumab versus pembrolizumab in first-line BRAF wild-type metastatic or unresectable locally advanced melanoma, is likely to enroll its first patient in the second quarter of this year.
2017 Guidance
Exelixis expects total costs and operating expenses for 2017 in the range of $290 million–$310 million. This guidance includes about $25 million of non-cash costs and expenses related primarily to stock-based compensation expense.
Our Take
Exelixis posted an earnings in the first quarter compared to a loss in the year-ago quarter which was encouraging. The sequential increase in Cabometyx sales is a positive for the company. Going forward, we expect investor on further label expansion of cabozantinib and Cotellic.
Zacks Rank & Key Pick
Exelixis currently carries a Zacks Rank #3 (Hold).
A better-ranked stock in the healthcare sector is Heska Corporation which sports a Zacks Rank #1 (Strong Buy). Heska’s earnings estimates for 2017 have increased to $1.65 from $1.53 over the last 60 days. The company posted positive surprises all the four trailing quarters with an average beat of 291.54%. Its share price has increased 47.2% this year so far.
You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
5 Trades Could Profit "Big-League" from Trump Policies
If the stocks above spark your interest, wait until you look into companies primed to make substantial gains from Washington's changing course.
Today Zacks reveals 5 tickers that could benefit from new trends like streamlined drug approvals, tariffs, lower taxes, higher interest rates, and spending surges in defense and infrastructure. See these buy recommendations now >>