It is obvious that Exelixis’ (EXEL) first quarter results do not justify the selling of EXEL during the whole quarter, but rather condemn it. It is an undeniable fact that Exelixis is doing a great job squeezing the best out of its approved drugs while conducting persistent research and development regarding its investigational pipeline products.
The unveiled facts comprise the following:
– Strong commercial performance for CABOMETYX in advanced renal cell carcinoma (RCC) where the product is now targeting the entire RCC patient population. The revenues have tremendously increased.
– Additional milestone revenues were generated thanks to the achievement of key regulatory milestones for cabozantinib in the European Union (EU) and of esaxerenone in Japan.
Esaxerenone is a nonsteroidal antimineralocorticoid discovered by Exelixis and developed in Japan by Daiichi Sankio for hypertension, essential hypertension, and diabetic nephropathy.
More Results and Additional Clinical Trials
– The successful outcome of the CELESTIAL clinical trial results led Exelixis to file sNDA for second-line hepatocellular carcinoma (HCC).
– Top-line results are expected in the first half of 2018 from the IMblaze370 pivotal trial, which is investigating the combination of cobimetinib and atezolizumab in second- and third-line colorectal cancer (CRC).
– Further development of cabozantinib plus immune checkpoint inhibitors in HCC, including front-line therapy.
– Collaborating with Bristol-Myers (BMY) on the Phase 3 Checkmate 9ER study in treatment-naïve RCC patients. This trial is based on the encouraging results from a Phase Ib trial combining BMY’s nivolumab and ipilimumab with cabozantinib in genitourinary cancers.
The trial is evaluating the combination of checkpoint inhibition therapy combined with cabozantinib compared to sunitinib, and enrollment in the trial is ongoing globally.
– Cabozantinib, nivolumab and ipilimumab combination continues to be evaluated in the ongoing Phase Ib trial in patients with advanced genitourinary cancers but has established the preliminary safety and tolerability and the recommended dose for this combination.
– A Phase 3 trial investigating the triplet combination versus nivolumab and ipilimumab in first-line RCC is in development.
Exelixis announced its plan to conduct late-stage cabozantinib trials in various indications and at different lines of therapy.
– Total revenues for the first quarter of 2018 were $212.3 million, with $115.9 million of net income and diluted GAAP earnings per share of $0.37 compared to total revenues of $80.9 million, net income of $16.7 million and diluted GAAP earnings per share of $0.05 for the same period last year.
The total revenues include net product revenues of $134.3 million for the quarter ended March 31, 2018, compared to $68.9 million for the comparable period in 2017.
The increase in product revenues reflects the continued growth of second approved lines in RCC with added sales following The FDA December 2017 approval of CABOMETYX for the first-line advanced RCC patients, which now encompasses all patients with advanced RCC.
Collaboration revenues were $78.1 million for the quarter compared to $12 million for the comparable period in 2017.
The increase in collaboration revenues for the first quarter of 2018 was primarily the result of recording $45.8 million in revenue for a $50 million milestone the firm expects to earn from Ipsen for the approval of cabozantinib for the first-line treatment of advanced RCC by the European Commission following a positive opinion from the CHMP in late March 2018.
The increase in collaboration was also a result of a $20 million milestone from Daiichi Sankyo, which was earned as a result of Daiichi Sankyo’s submission of a regulatory application in Japan for esaxerenone as a treatment for patients with essential hypertension.
In the conference call, the firm acknowledged the tremendous competition in the RCC market. and that the recent approval of ipilimumab and nivolumab for the treatment of poor and intermediate risk first-line RCC adds to that competition. That said, the firm expressed its conviction that the totality of strong RCC clinical data and broad label position – all would help Cabometyx to succeed.
WE REMIND THAT Cabometix is already in clinical trial in combination with nivolumab and ipilimumab.
Total Cost and Operating Expenses
Exelixis guidance is that the total cost and operating expenses for the full year will be between $430 million and $460 million.
This guidance includes approximately $50 million of noncash costs and expenses related primarily to stock-based compensation expense.
More activities, results, and trials will be revealed during 2018.
Exelixis management has proven itself. It demonstrated readiness, willingness and ability to take care of all the complications and problems, which usually arise after the approval of the firms’ first drugs. This firm is discovering each and every drop of benefit its approved products can offer, test them, confirm their efficacy in treating various diseases and obtain the authorities’ green line to market them. As we see above, Exelixis has tried its approved products in various combinations with checkpoint immunotherapy treatments and other treatments. It attracted many collaborators and generated revenues from them through milestone payments and approved products’ sales in Europe and Japan.
We trust Exelixis and believe its stock will reach our targets in 2018 and 2019.
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