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Exelixis (EXEL) Q1 Earnings Miss, Cabometyx Sales Fall Short
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Exelixis, Inc. (EXEL - Free Report) reported lower-than-expected results for the first quarter. Its shares fell 7% in after-hours trading following the announcement. EXEL recorded earnings of 17 cents per share, which missed the Zacks Consensus Estimate of 28 cents. The company registered adjusted earnings of 16 cents per share in the first quarter of 2023.
Including stock-based compensation expense, EPS was 12 cents, flat year over year.
Net revenues were $425.2 million, which lagged the Zacks Consensus Estimate of $468 million. The top line, however, increased 4% year over year.
Exelixis’ shares have lost 2.2% year to date compared with the industry’s decline of 9.6%.
Image Source: Zacks Investment Research
Quarter in Detail
Net product revenues came in at $378.5 million, up 4.1% year over year. The increase in net product revenues was primarily due to a rise in sales volume, partially offset by a decrease in average net selling price.
Cabometyx (cabozantinib) generated revenues of $376.4 million, which missed the Zacks Consensus Estimate and our model estimate of $427 million and $413.4 million, respectively. The drug is approved for advanced renal cell carcinoma (RCC) and previously treated hepatocellular carcinoma. Cometriq (cabozantinib capsules) generated $2.1 million in net product revenues for treating medullary thyroid cancer.
Collaboration revenues, comprising license revenues and collaboration services revenues, totaled $46.7 million compared with $45.4 million in the year-ago quarter.
Research and development expenses amounted to $227.7 million, down 2.7% year over year. This decrease was primarily related to a drop in license and other collaboration costs, partially offset by an increase in clinical trial costs.
Selling, general and administrative expenses totaled $114 million, down 13.2% year over year. This was due to a decrease in corporate expenses and legal and advisory fees.
As of Mar 31, 2024, Exelixis had repurchased $190.7 million of the company’s common stock. In January 2024, EXEL announced that its board authorized the repurchase of up to an additional $450 million of the company’s common stock before the end of 2024. The company completed its previously announced (March 2023) repurchase of 26.2 million shares of its common stock for a total of $550 million in 2023.
Restructuring Update
Earlier in 2024, Exelixis announced that it would undertake a corporate restructuring program to prioritize the advancement of its deep pipeline of clinical and near-clinical programs. As a result, EXEL is set to reduce its headcount by approximately 175 or 13%. Restructuring expenses in the first quarter totaled $32.8 million.
Pipeline Updates
Management is focused on the label expansion of its lead drug, Cabometyx, in 2024. A regulatory filing for cabozantinib in advanced neuroendocrine tumors (NET), based on positive results from the pivotal phase III CABINET study evaluating cabozantinib versus placebo in patients with either advanced pancreatic NET or extra-pancreatic NET, is expected in the coming months.
The company is evaluating the combination of cabozantinib and Tecentriq (atezolizumab) versus a second novel hormonal therapy (NHT) in patients with metastatic castration-resistant prostate cancer (mCRPC) and measurable extra pelvic soft tissue disease, who have been previously treated with one NHT. A filing for this indication in the United States is also targeted in 2024.
Exelixis plans to accelerate the development of zanzalintinib, XB002 and XL309 in 2024.
Zanzalintinib, a third-generation tyrosine kinase inhibitor (TKI), is being evaluated in three ongoing pivotal trials, STELLAR-303, -304 and -305, in the forms of colorectal cancer, non-clear cell RCC and squamous cell carcinoma of the head and neck, respectively.
EXEL targets to file an investigational new drug application for XB010, XB628 and XL495 in 2024.
2024 Guidance Reaffirmed
Management reiterated its previously provided guidance for 2024. Total revenues are projected to be between $1.825 billion and $1.925 billion, while product revenues are estimated in the $1.65-$1.75 billion range. Research and development expenses are estimated to be in the band of $925-$975 million. Selling, general and administrative expenses are projected to be in the range of $425-$475 million.
Exelixis’ first-quarter results were disappointing, with the top and bottom lines missing their respective estimates. Typical seasonal headwinds and the implementation of the Inflation Reduction Act adversely impacted Cabometyx sales. Per management, despite the headwinds, CABOMETYX maintained its status as the leading TKI for RCC in both the first-line immune-oncology TKI market and the second-line monotherapy segment.
The potential label expansion of the drug in NET and mCRPC should boost sales of the drug.
Zacks Rank & Stocks to Consider
Exelixis currently carries a Zacks Rank #3 (Hold).
Image: Bigstock
Exelixis (EXEL) Q1 Earnings Miss, Cabometyx Sales Fall Short
Exelixis, Inc. (EXEL - Free Report) reported lower-than-expected results for the first quarter. Its shares fell 7% in after-hours trading following the announcement.
EXEL recorded earnings of 17 cents per share, which missed the Zacks Consensus Estimate of 28 cents. The company registered adjusted earnings of 16 cents per share in the first quarter of 2023.
Including stock-based compensation expense, EPS was 12 cents, flat year over year.
Net revenues were $425.2 million, which lagged the Zacks Consensus Estimate of $468 million. The top line, however, increased 4% year over year.
Exelixis’ shares have lost 2.2% year to date compared with the industry’s decline of 9.6%.
Image Source: Zacks Investment Research
Quarter in Detail
Net product revenues came in at $378.5 million, up 4.1% year over year. The increase in net product revenues was primarily due to a rise in sales volume, partially offset by a decrease in average net selling price.
Cabometyx (cabozantinib) generated revenues of $376.4 million, which missed the Zacks Consensus Estimate and our model estimate of $427 million and $413.4 million, respectively. The drug is approved for advanced renal cell carcinoma (RCC) and previously treated hepatocellular carcinoma. Cometriq (cabozantinib capsules) generated $2.1 million in net product revenues for treating medullary thyroid cancer.
Collaboration revenues, comprising license revenues and collaboration services revenues, totaled $46.7 million compared with $45.4 million in the year-ago quarter.
Research and development expenses amounted to $227.7 million, down 2.7% year over year. This decrease was primarily related to a drop in license and other collaboration costs, partially offset by an increase in clinical trial costs.
Selling, general and administrative expenses totaled $114 million, down 13.2% year over year. This was due to a decrease in corporate expenses and legal and advisory fees.
As of Mar 31, 2024, Exelixis had repurchased $190.7 million of the company’s common stock. In January 2024, EXEL announced that its board authorized the repurchase of up to an additional $450 million of the company’s common stock before the end of 2024. The company completed its previously announced (March 2023) repurchase of 26.2 million shares of its common stock for a total of $550 million in 2023.
Restructuring Update
Earlier in 2024, Exelixis announced that it would undertake a corporate restructuring program to prioritize the advancement of its deep pipeline of clinical and near-clinical programs. As a result, EXEL is set to reduce its headcount by approximately 175 or 13%. Restructuring expenses in the first quarter totaled $32.8 million.
Pipeline Updates
Management is focused on the label expansion of its lead drug, Cabometyx, in 2024. A regulatory filing for cabozantinib in advanced neuroendocrine tumors (NET), based on positive results from the pivotal phase III CABINET study evaluating cabozantinib versus placebo in patients with either advanced pancreatic NET or extra-pancreatic NET, is expected in the coming months.
The company is evaluating the combination of cabozantinib and Tecentriq (atezolizumab) versus a second novel hormonal therapy (NHT) in patients with metastatic castration-resistant prostate cancer (mCRPC) and measurable extra pelvic soft tissue disease, who have been previously treated with one NHT. A filing for this indication in the United States is also targeted in 2024.
Exelixis plans to accelerate the development of zanzalintinib, XB002 and XL309 in 2024.
Zanzalintinib, a third-generation tyrosine kinase inhibitor (TKI), is being evaluated in three ongoing pivotal trials, STELLAR-303, -304 and -305, in the forms of colorectal cancer, non-clear cell RCC and squamous cell carcinoma of the head and neck, respectively.
EXEL targets to file an investigational new drug application for XB010, XB628 and XL495 in 2024.
2024 Guidance Reaffirmed
Management reiterated its previously provided guidance for 2024. Total revenues are projected to be between $1.825 billion and $1.925 billion, while product revenues are estimated in the $1.65-$1.75 billion range. Research and development expenses are estimated to be in the band of $925-$975 million. Selling, general and administrative expenses are projected to be in the range of $425-$475 million.
Exelixis, Inc. Price, Consensus and EPS Surprise
Exelixis, Inc. price-consensus-eps-surprise-chart | Exelixis, Inc. Quote
Our Take
Exelixis’ first-quarter results were disappointing, with the top and bottom lines missing their respective estimates. Typical seasonal headwinds and the implementation of the Inflation Reduction Act adversely impacted Cabometyx sales. Per management, despite the headwinds, CABOMETYX maintained its status as the leading TKI for RCC in both the first-line immune-oncology TKI market and the second-line monotherapy segment.
The potential label expansion of the drug in NET and mCRPC should boost sales of the drug.
Zacks Rank & Stocks to Consider
Exelixis currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the biotech sector are ANI Pharmaceuticals, Inc. (ANIP - Free Report) , Amarin (AMRN - Free Report) and Voyager Therapeutics (VYGR - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, estimates for ANI Pharmaceuticals’ 2024 EPS have improved from $4.25 to $4.44. Shares of ANIP have jumped 19.7% year to date.
ANIP’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 109.06%.
In the past 90 days, loss per share estimates for AMRN for 2024 have narrowed by two cents. Shares of Amarin have risen 5.9% year to date.
AMRN’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 175.00%.
Loss per share estimates for VYGR have narrowed by 27 cents to $1.64 in the past 60 days. Shares of Voyager have risen 21.6% in the past six months.