Exelixis, Inc. (NASDAQ: EXEL) is a commercially successful, oncology-focused biotechnology company that strives to accelerate the discovery, development, and commercialization of new medicines for difficult-to-treat cancers.

 

On November 1st, the company reported financial results for the third quarter of 2018 and provided an update on progress toward fulfilling its key corporate objectives, as well as commercial and clinical development milestones.

 

Key highlights:

• During the third quarter of 2018, the company continued to grow its commercial business and make significant clinical development and regulatory progress for its pipeline.
• Cabozantinib franchise net product revenues during the quarter were $162.9 million, which represents a 12 percent increase compared to the second quarter of 2018.
• The company also initiated the next wave of cabozantinib pivotal trials with the announcement of the COSMIC-311 study in differentiated thyroid cancer and expected additional pivotal trials are launching later this year and into 2019.
• This will include studies evaluating cabozantinib in combination with leading immunotherapies, an approach supported by encouraging clinical data, including phase 1b dose escalation results of cabozantinib plus atezolizumab in advanced renal cell carcinoma presented at the 2018 European Society for Medical Oncology Congress last month.
• The company is looking forward to the U.S. Food and Drug Administration’s upcoming decision on its supplemental New Drug Application for CABOMETYX® in previously-treated advanced hepatocellular carcinoma, which has a January 14, 2019 action date, and for which it is fully launched ready.
• The company is also making steady progress with Ipsen’s regulatory process, including gaining a positive opinion in the European Union for previously-treated hepatocellular carcinoma, and Canadian regulatory approval for advanced renal cell carcinoma. Each of these milestones has the potential to support broadened access to CABOMETYX in key regions and underscores EXEL’s commitment to making Exelixis-discovered medicines globally available to cancer patients in need.

 

Upcoming presentation: On Nov. 06, 2018, the company announced that Michael M. Morrissey, Ph.D., the company’s President, and Chief Executive Officer, will provide an overview of the company at the Stifel 2018 Healthcare Conference taking place November 13-14 in New York, NY. The Exelixis presentation is scheduled for 10:15 AM EST / 7:15 AM PST on Tuesday, November 13, 2018.

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Analyst tracking the stock believes that the company’ progress throughout 2018 reflects the team’s strong performance across all components of the company business. For the sector of small, midcap biotech companies, which includes Exelixis, CABOMETYX has been the leading commercial launch across both oncology and other therapeutic areas with the highest quarterly and cumulative U.S. sales of any drug launched since 2014 and is firmly on its way to becoming a $1 billion global brand.

 

Considering all this, the company’ business and marketing profile are in a critical inflection point. Thus, value investors should consider exposure in this sector as the backdrop remains favorable. Per www.marketbeat.com, Their average twelve-month price target is $30.00, suggesting that the stock has a possible upside of 79.96%. The high price target for EXEL is $40.00, and the low-price target for EXEL is $19.00. There is currently one sell rating, two hold ratings and 8 buy ratings for the stock, resulting in a consensus rating of “Buy.”

 

Below are the excerpts of recent ratings by brokerage house:

 

About the Company: Founded in 1994, Exelixis, Inc. (Nasdaq: EXEL) is a commercially successful, oncology-focused biotechnology company that strives to accelerate the discovery, development, and commercialization of new medicines for difficult-to-treat cancers.

 

Following early work in model genetic systems, EXEL established a broad drug discovery and development platform that has served as the foundation for its continued efforts to bring new cancer therapies to patients in need.

 

The company discovered its three commercially available products, CABOMETYX®(cabozantinib), COMETRIQ® (cabozantinib) and COTELLIC® (cobimetinib) and have entered into partnerships with leading pharmaceutical companies to bring these important medicines to patients worldwide. Supported by revenues from its marketed products and collaborations, the company is committed to prudently reinvesting in its business to maximize the potential of its pipeline.

 

Other announcements:

• CELESTIAL Phase 3 Pivotal Trial Results Published in The New England Journal of Medicine (NEJM).
• National Comprehensive Cancer Network (NCCN) Updates Clinical Practice Guidelines with New Recommendations for CABOMETYX.
• Health Canada Approves CABOMETYX for Previously-treated Advanced RCC.
• Positive Committee for Medicinal Products for Human Use (CHMP) Opinion for CABOMETYX for Previously-treated HCC.
• Initiation of COSMIC-311, Phase 3 Pivotal Trial of Cabozantinib in Patients with Radioiodine-refractory DTC Who Have Progressed After Prior VEGFR-Targeted Therapy
• CABOMETYX as a Treatment for Advanced RCC Approved in Brazil and Taiwan
• Inclusion on Standard & Poor’s (S&P) MidCap 400 Index.

 

Financial Results –

• Total revenues for the quarter ended September 30, 2018, were $225.4 million, compared to $152.5 million for the comparable period in 2017. Total revenues include net product revenues of $162.9 million for the quarter ended September 30, 2018, compared to $96.4 million for the comparable period in 2017, representing a 69 percent increase year-over-year. The increase in net product revenues reflects the continued growth of CABOMETYX in the U.S. for the treatment of advanced renal cell carcinoma (RCC).
• Profitability:  Net income for the quarter ended September 30, 2018, was $126.6 million, or $0.42 per share, basic and $0.41 per share, diluted, compared to $81.4 million, or $0.28 per share, basic and $0.26 per share, diluted, for the comparable period in 2017. The increase in net income was primarily the result of increases in net product revenues and collaboration revenues, which was partially offset by the increases in research and development and selling, general and administrative expenses.
• Liquidity and financial flexibility: Cash and cash equivalents, short- and long-term investments and short- and long-term restricted cash and investments totalled $750.3 million at September 30, 2018, as compared to $457.2 million at December 31, 2017.

 

2018 Financial Guidance: The company is updating its guidance that total costs and operating expenses for the full year will be between $410 million and $420 million. This guidance includes approximately $50 million of non-cash costs and expenses related primarily to stock-based compensation expense.

 

Key risk factors and potential stock drivers:

• The Company’ ability to maintain liquidity and financial flexibility to fund its incremental capital requirements will remain a challenge for the company.
• The company near to medium term performance is dependent upon the successful commercialization of CABOMETYX for the treatment of advanced RCC in territories where it has been or may soon be approved and in potential other indications for which the company is in late-stage development or intend to seek regulatory reviews, such as previously-treated advanced HCC and previously-treated radioiodine refractory DTC.
• The commercial opportunity for CABOMETYX as a treatment for advanced RCC remains subject to various internal and external factors including market acceptance, competitive pressure, regulatory requirements amongst others.
• The company’ business is exposed to risk related to competitive pressure, and its revenues may suffer from competitive pressure.
• The company’s business is also exposed to regulatory risk and its adverse impact on the overall business risk profile.

 

Stock Performance

Comments:

• On Friday, November 9th, 2018, closed at $16.67, on an above average volume of 4.2 million shares exchanging hands. Market capitalization is $4.984 billion. The current RSI is 52.43
• In the past 52 weeks, shares of EXEL have traded as low as $13.42 and as high as $32.20
• At $16.67, shares of EXEL are trading below its 50-day moving average (MA) at $16.75 & below its 200-day moving average (MA) at $20.93
• The present support and resistance levels for the stock are at $15.92 & $17.60 respectively.

 

 

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