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Exelixis, Inc. (EXEL - Free Report) reported better-than-expected second-quarter results. Shares have risen following the announcement.
EXEL recorded earnings of 84 cents per share, which beat the Zacks Consensus Estimate of 37 cents. The company registered adjusted earnings of 31 cents per share in the second quarter of 2023. The upside is mainly driven by higher revenues and lower operating expenses.
Including stock-based compensation expense, earnings were 77 cents per share in the reported quarter.
Net revenues were $637.2 million, which easily beat the Zacks Consensus Estimate of $468 million. The top line surged 35.6% year over year, primarily due to higher license revenues.
Exelixis’ shares have gained 7.8% year to date against the industry’s decline of 4.4%.
Image Source: Zacks Investment Research
Quarter in Detail
Net product revenues were $437.6 million, up 6.8% year over year. The increase in net product revenues was primarily due to a rise in sales volume and average net selling price.
Cabometyx (cabozantinib) generated revenues of $433.3 million, which beat both the Zacks Consensus Estimate and our model estimate of $412 million. The drug is approved for advanced renal cell carcinoma (RCC) and previously treated hepatocellular carcinoma. Cometriq (cabozantinib capsules) generated $4.2 million in net product revenues for treating medullary thyroid cancer.
Collaboration revenues, comprising license revenues and collaboration services revenues, totaled $199.6 million, up from $60.2 million in the year-ago quarter. The increase was primarily driven by an increase in milestone-related revenues recognized in the quarter and higher royalty revenues from the sale of cabozantinib outside the country (generated by collaboration partners Ipsen Pharma and Takeda).
Exelixis earned and recognized in license revenues a $150-million commercial milestone from Ipsen during the second quarter of 2024. The payment triggered after Ipsen achieved $600 million in cumulative net sales of cabozantinib in its related license territory over four consecutive quarters. Exelixis expects to receive the milestone payment during the third quarter of 2024.
Research and development expenses amounted to $211.1 million, down 9.2% year over year. This decrease was primarily related to a drop in license and other collaboration costs, along with a decline in clinical trial costs.
Selling, general and administrative expenses totaled $132 million, down 6.8% year over year. This was due to a decrease in corporate expenses and legal and advisory fees.
As of Jun 30, 2024, Exelixis repurchased 20.3 million shares of the company’s common stock for a total of $450 million. Consequently, EXEL completed its stock repurchase program, which was announced in January 2024. With the completion of this 2024 stock repurchase program, EXEL returned $1 billion to shareholders since the initial $550 million stock repurchase program was authorized in March 2023.
The company’s board has authorized the repurchase of up to an additional $500 million of the company’s common stock through the end of 2025.
Management is focused on the label expansion of its lead drug, Cabometyx, in 2024. The FDA accepted EXEL’s supplemental new drug application (sNDA) for cabozantinib for patients with previously treated advanced pancreatic NET (pNET) and those with previously treated advanced extra-pancreatic NET (epNET). The FDA assigned a standard review with a target action date of Apr 3, 2025.
In July, Ipsen announced that it has opted into the late-stage CABINET pivotal study, expanding the existing collaboration and license agreement with Exelixis.
The final overall survival analysis for the phase III CONTACT-02 trial has been completed. This study is evaluating cabozantinib, in combination with atezolizumab, compared with a second novel hormonal therapy (NHT) in patients with mCRPC and measurable soft-tissue disease who have progressed after treatment with one prior NHT.
Exelixis announced that enrollment has been completed in the late-stage STELLAR-303 study evaluating zanzalintinib, in combination with Tecentriq (atezolizumab), compared with regorafenib in patients with metastatic refractory colorectal cancer that is not microsatellite instability-high or mismatch repair-deficient. Exelixis intends to submit an sNDA to the FDA this year
Exelixis will discontinue the development of XB002, the company’s tissue factor (TF)-targeting ADC, as part of its portfolio prioritization efforts.
2024 Guidance Updated
Total revenues are projected to be between $1.975 billion and $2.075 billion (previous range: $1.825-$1.925 billion). Product revenues are estimated to be 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 $450-$500 million (previous guidance: $425 million - $475 million).
Our Take
Exelixis’ second-quarter results were encouraging, with both the top and bottom lines beating their respective estimates. The upside was mainly driven by milestone payments from collaboration partners.
Cabometyx, too, maintained its status as the leading TKI for RCC in the United States.
The potential label expansion of the drug in NET should boost sales of the drug.
Zacks Rank & Stocks to Consider
Exelixis currently carries a Zacks Rank #3 (Hold).
In the past 60 days, estimates for Entrada Therapeutics’ 2024 loss per share have narrowed from 14 cents to 13 cents, and the same for 2025 have narrowed from $3.44 to $3.21.
In the past 60 days, the Zacks Consensus Estimate for Anixa Biosciences’ 2024 loss per share has narrowed from 44 cents to 43 cents. During the same time frame, the estimate for Anixa Biosciences’ 2025 loss per share has remained constant at 45 cents.
ANIX’s earnings beat estimates in three of the trailing four quarters and missed the mark once, delivering an average surprise of 2.27%.
In the past 60 days, estimates for Akero Therapeutics’ 2024 loss per share have narrowed from $3.87 to $3.82. During the same period, loss per share estimates for 2025 have remained constant at $4.29.
Akero’s earnings beat estimates in one of the trailing four quarters, missed twice and met in the other, delivering an average negative surprise of 5.10%.
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Exelixis (EXEL) Q2 Earnings Beat, Milestone Payments Fuel Revenues
Exelixis, Inc. (EXEL - Free Report) reported better-than-expected second-quarter results. Shares have risen following the announcement.
EXEL recorded earnings of 84 cents per share, which beat the Zacks Consensus Estimate of 37 cents. The company registered adjusted earnings of 31 cents per share in the second quarter of 2023. The upside is mainly driven by higher revenues and lower operating expenses.
Including stock-based compensation expense, earnings were 77 cents per share in the reported quarter.
Net revenues were $637.2 million, which easily beat the Zacks Consensus Estimate of $468 million. The top line surged 35.6% year over year, primarily due to higher license revenues.
Exelixis’ shares have gained 7.8% year to date against the industry’s decline of 4.4%.
Image Source: Zacks Investment Research
Quarter in Detail
Net product revenues were $437.6 million, up 6.8% year over year. The increase in net product revenues was primarily due to a rise in sales volume and average net selling price.
Cabometyx (cabozantinib) generated revenues of $433.3 million, which beat both the Zacks Consensus Estimate and our model estimate of $412 million. The drug is approved for advanced renal cell carcinoma (RCC) and previously treated hepatocellular carcinoma. Cometriq (cabozantinib capsules) generated $4.2 million in net product revenues for treating medullary thyroid cancer.
Collaboration revenues, comprising license revenues and collaboration services revenues, totaled $199.6 million, up from $60.2 million in the year-ago quarter. The increase was primarily driven by an increase in milestone-related revenues recognized in the quarter and higher royalty revenues from the sale of cabozantinib outside the country (generated by collaboration partners Ipsen Pharma and Takeda).
Exelixis earned and recognized in license revenues a $150-million commercial milestone from Ipsen during the second quarter of 2024. The payment triggered after Ipsen achieved $600 million in cumulative net sales of cabozantinib in its related license territory over four consecutive quarters. Exelixis expects to receive the milestone payment during the third quarter of 2024.
Research and development expenses amounted to $211.1 million, down 9.2% year over year. This decrease was primarily related to a drop in license and other collaboration costs, along with a decline in clinical trial costs.
Selling, general and administrative expenses totaled $132 million, down 6.8% year over year. This was due to a decrease in corporate expenses and legal and advisory fees.
As of Jun 30, 2024, Exelixis repurchased 20.3 million shares of the company’s common stock for a total of $450 million. Consequently, EXEL completed its stock repurchase program, which was announced in January 2024. With the completion of this 2024 stock repurchase program, EXEL returned $1 billion to shareholders since the initial $550 million stock repurchase program was authorized in March 2023.
The company’s board has authorized the repurchase of up to an additional $500 million of the company’s common stock through the end of 2025.
Exelixis, Inc. Price, Consensus and EPS Surprise
Exelixis, Inc. price-consensus-eps-surprise-chart | Exelixis, Inc. Quote
Pipeline Updates
Management is focused on the label expansion of its lead drug, Cabometyx, in 2024. The FDA accepted EXEL’s supplemental new drug application (sNDA) for cabozantinib for patients with previously treated advanced pancreatic NET (pNET) and those with previously treated advanced extra-pancreatic NET (epNET). The FDA assigned a standard review with a target action date of Apr 3, 2025.
In July, Ipsen announced that it has opted into the late-stage CABINET pivotal study, expanding the existing collaboration and license agreement with Exelixis.
The final overall survival analysis for the phase III CONTACT-02 trial has been completed. This study is evaluating cabozantinib, in combination with atezolizumab, compared with a second novel hormonal therapy (NHT) in patients with mCRPC and measurable soft-tissue disease who have progressed after treatment with one prior NHT.
Exelixis announced that enrollment has been completed in the late-stage STELLAR-303 study evaluating zanzalintinib, in combination with Tecentriq (atezolizumab), compared with regorafenib in patients with metastatic refractory colorectal cancer that is not microsatellite instability-high or mismatch repair-deficient. Exelixis intends to submit an sNDA to the FDA this year
Exelixis will discontinue the development of XB002, the company’s tissue factor (TF)-targeting ADC, as part of its portfolio prioritization efforts.
2024 Guidance Updated
Total revenues are projected to be between $1.975 billion and $2.075 billion (previous range: $1.825-$1.925 billion). Product revenues are estimated to be 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 $450-$500 million (previous guidance: $425 million - $475 million).
Our Take
Exelixis’ second-quarter results were encouraging, with both the top and bottom lines beating their respective estimates. The upside was mainly driven by milestone payments from collaboration partners.
Cabometyx, too, maintained its status as the leading TKI for RCC in the United States.
The potential label expansion of the drug in NET 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 Entrada Therapeutics (TRDA - Free Report) , Anixa Biosciences (ANIX - Free Report) and Akero Therapeutics (AKRO - Free Report) . While TRDA sports a Zacks Rank #1 (Strong Buy), ANIX and AKRO carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, estimates for Entrada Therapeutics’ 2024 loss per share have narrowed from 14 cents to 13 cents, and the same for 2025 have narrowed from $3.44 to $3.21.
In the past 60 days, the Zacks Consensus Estimate for Anixa Biosciences’ 2024 loss per share has narrowed from 44 cents to 43 cents. During the same time frame, the estimate for Anixa Biosciences’ 2025 loss per share has remained constant at 45 cents.
ANIX’s earnings beat estimates in three of the trailing four quarters and missed the mark once, delivering an average surprise of 2.27%.
In the past 60 days, estimates for Akero Therapeutics’ 2024 loss per share have narrowed from $3.87 to $3.82. During the same period, loss per share estimates for 2025 have remained constant at $4.29.
Akero’s earnings beat estimates in one of the trailing four quarters, missed twice and met in the other, delivering an average negative surprise of 5.10%.