It has been about a month since the last earnings report for Exelixis (EXEL Quick QuoteEXEL - Free Report) . Shares have added about 0.4% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Exelixis due for a pullback? Before we dive into how investors and analysts have reacted as 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 Q3 Earnings & Sales Top, Cabometyx Aids Growth

Exelixis reported earnings of 31 cents per share for the third quarter of 2022, up from 20 cents per share in the year-ago quarter and beat the Zacks Consensus Estimate of 25 cents.

Including stock-based compensation expense, earnings per share came in at 23 cents, up from 12 cents in the year-ago quarter. The year-over-year increase in earnings was mainly due to higher revenues.

Quarter in Detail

Net product revenues came in at $366.5 million, up from $263.1 million in the year-ago quarter. The upside was primarily led by higher sales volume.

Cabometyx (cabozantinib) generated revenues of $361.4 million. It is approved for advanced renal cell carcinoma (RCC) and previously treated hepatocellular carcinoma (HCC). Cometriq (cabozantinib capsules), for the treatment of medullary thyroid cancer, generated $5.1 million in net product revenues.

EXEL earned $30.3 million in royalty revenues.

Collaboration revenues, comprising license revenues and collaboration services revenues, were $45.3 million in the quarter compared with $65.3 million in the year-ago quarter. The decrease in collaboration revenues was primarily related to decreases in recognition of milestone-related revenues and reimbursement of development costs.

In the reported quarter, research and development expenses were $198.8 million, up from $163.4 million in the year-ago quarter. The increase was primarily related to the rise in clinical trial costs, personnel expenses, consulting and outside service expenses and stock-based compensation expenses. Selling, general and administrative expenses were $115 million, up from $101.6 million in the year-ago quarter.

Pipeline Update

In September, Exelixis presented results from the dose-escalation stage of STELLAR-001, an ongoing phase Ib study evaluating XL092 as a single agent and in combination with atezolizumab in patients with locally advanced or metastatic solid tumors. Data showed that XL092 demonstrated preliminary clinical activity similar to that observed with cabozantinib in phase 1 across a range of solid tumors and dose levels with a manageable safety profile.

Last month, Exelixis expanded its 2021 Clinical Trial Collaboration and Supply Agreement with Bristol Myers Squibb to include the use of the fixed-dose combination of Opdivo and relatlimab in the ongoing phase Ib STELLAR-002 study, which is evaluating XL092 in combination with multiple immune checkpoint inhibitors in advanced solid tumors.

Exelixis entered into an exclusive clinical development and option agreement with Sairopa B.V. for ADU-1805. Per the terms, Exelixis will make an upfront payment of $40 million to Sairopa and an additional $70 million in near-term milestone payments for an option to obtain an exclusive, worldwide license to develop and commercialize ADU-1805 and other anti-SIRPα antibodies and for certain expenses to be incurred by Sairopa in conducting prespecified phase I studies of ADU-1805 during the option period.

Exelixis also entered into an exclusive collaboration agreement with Cybrexa Therapeutics, which gave it the right to acquire CBX-12 (alphalex exatecan), a clinical-stage, first-in-class peptide-drug conjugate (PDC) that utilizes Cybrexa’s proprietary alphalex technology to enhance the delivery of exatecan to tumor cells.

2022 Guidance Updated

Revenues are projected between $1.575 billion and $1.600 billion (previous guidance: $1.525-$1.625 billion), while product revenues are estimated in the range of $1.375 billion to $1.400 billion (previous range: $1.325-$1.425 billion).

 

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review.

The consensus estimate has shifted -157.81% due to these changes.

VGM Scores

Currently, Exelixis has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Exelixis has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Exelixis belongs to the Zacks Medical - Biomedical and Genetics industry. Another stock from the same industry, Gilead Sciences (GILD Quick QuoteGILD - Free Report) , has gained 12.8% over the past month. More than a month has passed since the company reported results for the quarter ended September 2022.

Gilead reported revenues of $7.04 billion in the last reported quarter, representing a year-over-year change of -5.1%. EPS of $1.90 for the same period compares with $2.65 a year ago.

Gilead is expected to post earnings of $1.50 per share for the current quarter, representing a year-over-year change of +117.4%. Over the last 30 days, the Zacks Consensus Estimate has changed +1.7%.

Gilead has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.