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Why Is Exelixis (EXEL) Down 20.9% Since the Last Earnings Report?
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It has been about a month since the last earnings report for Exelixis, Inc. (EXEL - Free Report) . Shares have lost about 20.9% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Exelixis Posts Earnings in Q1, Cabometyx in Focus
Exelixis posted first-quarter 2017 earnings of $0.05 against a loss of $0.26 per share in the year-ago quarter. The Zacks Consensus Estimate was a loss of $0.01.
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.
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 Genentech and stock-based compensation.
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 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 enrolment 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.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an upward trend in fresh estimates. There has been one revision higher for the current quarter.
At this time, Exelixis' stock has a great Growth Score of 'A', a grade with the same score on the momentum front. However, the stock was allocated a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregte VGM Score of 'A'. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is suitable for growth and momentum investors.
Outlook
While estimates have been trending upward for the stock, the magnitude of these revisions is net zero. Notably, the stock has a Zacks Rank #3 (Hold). We expect in-line returns from the stock in the next few months.
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Why Is Exelixis (EXEL) Down 20.9% Since the Last Earnings Report?
It has been about a month since the last earnings report for Exelixis, Inc. (EXEL - Free Report) . Shares have lost about 20.9% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Exelixis Posts Earnings in Q1, Cabometyx in Focus
Exelixis posted first-quarter 2017 earnings of $0.05 against a loss of $0.26 per share in the year-ago quarter. The Zacks Consensus Estimate was a loss of $0.01.
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.
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 Genentech and stock-based compensation.
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 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 enrolment 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.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an upward trend in fresh estimates. There has been one revision higher for the current quarter.
Exelixis, Inc. Price and Consensus
Exelixis, Inc. Price and Consensus | Exelixis, Inc. Quote
VGM Scores
At this time, Exelixis' stock has a great Growth Score of 'A', a grade with the same score on the momentum front. However, the stock was allocated a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregte VGM Score of 'A'. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is suitable for growth and momentum investors.
Outlook
While estimates have been trending upward for the stock, the magnitude of these revisions is net zero. Notably, the stock has a Zacks Rank #3 (Hold). We expect in-line returns from the stock in the next few months.