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Exelixis (EXEL) Gains 14.9% in a Week on Strong Q2 Results
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Exelixis' (EXEL - Free Report) shares have risen 14.9% in a week after the company reported better-than-expected second-quarter results on Aug 6. The industry grew 0.7% during the said timeframe.
It was a good quarter for Exelixis not just in terms of earnings and sales beat as the company made encouraging pipeline progress too which impressed investors.
Image Source: Zacks Investment Research
Earnings per share of 84 cents comfortably surpassed the Zacks Consensus Estimate of 37 cents, on the back of higher revenues and lower operating expenses.
Net revenues were $637.2 million easily beat the Zacks Consensus Estimate of $468 million. The top line surged 35.6% year over year, primarily due to higher license revenues.
Collaboration revenues, comprising license revenues and collaboration services revenues, totaled $199.6 million, up from $60.2 million in the year-ago quarter.
The surge in license revenues is mainly due to a $150 million commercial sales milestone payment recognized in the second quarter as a result of partner Ipsen's achievement of $600 million in cumulative net sales of cabozantinib in its related licensed territory over four consecutive quarters.
Net product revenues gained 6.8% year over year to $437.6 million due to a rise in sales volume and average net selling price.
Exelixis’ lead drug, Cabometyx (cabozantinib) maintains its status as the leading tyrosine kinase inhibitor (TKI) for the treatment of renal cell carcinoma (RCC). Cabometyx generated revenues of $433.3 million, which beat both the Zacks Consensus Estimate and our model estimate of $412 million.
The demand is being driven by its use in combination with Bristol Myers’ (BMY - Free Report) Opdivo in the first-line setting. Per Exelixis, Cabometyx in combination with Opdivo has achieved its highest market share to date and remains the number one TKI immuno-oncology (IO) combination in first-line RCC. In fact, this is the seventh full quarter in which Cabometyx plus Opdivo remained the number-one prescribed TKI plus IO combination in first-line RCC.
Prescriptions’ volume grew 6% year over year in the reported quarter. Cabometyx continued to perform well from both a marketplace and competitive perspective in the second quarter.
The drug is also approved for previously treated hepatocellular carcinoma.
Management is also focused on the label expansion of Cabometyx. The FDA accepted EXEL’s supplemental new drug application for cabozantinib for patients with previously treated advanced pancreatic neuroendocrine tumors (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.
A potential label expansion will further propel growth prospects.
Merck’s Keytruda and BMY’s Opdivo are leading IO drugs approved for various oncology indications.
The pipeline progress has been impressive as well, as Exelixis looks to expand its oncology portfolio beyond Cabometyx.
Other promising candidates in Exelixis’ pipeline include zanzalintinib, a next-generation oral TKI and XL309. The company has prioritized pipeline development with plans to initiate a new phase III study for zanzalintinib in NET, advance phase I efforts for XL309 and XB010, and discontinue development of XB002.
The successful development of additional drugs will broaden its portfolio and reduce its dependence on its lead drug, Cabometyx.
Meanwhile, the company is also making efforts to increase share holder value through repurchases. Exelixis completed its 2024 share repurchase program having repurchased 20.3 million shares of the company’s common stock for a total of $450 million at the end of the second quarter.
Consequently, the company returned $1 billion to shareholders since the initial $550 million stock repurchase program was authorized in March 2023.
Concurrently, EXEL is defending its intellectual property as well. In May, Exelixis entered into a settlement agreement with Cipla Ltd. and Cipla USA, Inc. The agreement resolves two patent litigations brought by Exelixis in response to Cipla’s abbreviated new drug application seeking approval to market generic versions of Cabometyx tablets (20 mg / 40 mg / 60 mg) prior to the expiration of the applicable patents.
Entrada’s loss per share estimate for 2024 has narrowed from 27 cents to 13 cents in the past 90 days and the same for 2025 has narrowed from $3.62 to $3.21.
Krystal Biotech’s earnings per share for 2024 has increased to $2.07 from $2.03 in the past seven days. Shares of KRYS have surged 48.7% year to date.
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Exelixis (EXEL) Gains 14.9% in a Week on Strong Q2 Results
Exelixis' (EXEL - Free Report) shares have risen 14.9% in a week after the company reported better-than-expected second-quarter results on Aug 6. The industry grew 0.7% during the said timeframe.
It was a good quarter for Exelixis not just in terms of earnings and sales beat as the company made encouraging pipeline progress too which impressed investors.
Image Source: Zacks Investment Research
Earnings per share of 84 cents comfortably surpassed the Zacks Consensus Estimate of 37 cents, on the back of higher revenues and lower operating expenses.
Net revenues were $637.2 million easily beat the Zacks Consensus Estimate of $468 million. The top line surged 35.6% year over year, primarily due to higher license revenues.
Collaboration revenues, comprising license revenues and collaboration services revenues, totaled $199.6 million, up from $60.2 million in the year-ago quarter.
The surge in license revenues is mainly due to a $150 million commercial sales milestone payment recognized in the second quarter as a result of partner Ipsen's achievement of $600 million in cumulative net sales of cabozantinib in its related licensed territory over four consecutive quarters.
Net product revenues gained 6.8% year over year to $437.6 million due to a rise in sales volume and average net selling price.
Exelixis’ lead drug, Cabometyx (cabozantinib) maintains its status as the leading tyrosine kinase inhibitor (TKI) for the treatment of renal cell carcinoma (RCC). Cabometyx generated revenues of $433.3 million, which beat both the Zacks Consensus Estimate and our model estimate of $412 million.
The demand is being driven by its use in combination with Bristol Myers’ (BMY - Free Report) Opdivo in the first-line setting. Per Exelixis, Cabometyx in combination with Opdivo has achieved its highest market share to date and remains the number one TKI immuno-oncology (IO) combination in first-line RCC. In fact, this is the seventh full quarter in which Cabometyx plus Opdivo remained the number-one prescribed TKI plus IO combination in first-line RCC.
Prescriptions’ volume grew 6% year over year in the reported quarter. Cabometyx continued to perform well from both a marketplace and competitive perspective in the second quarter.
The drug is also approved for previously treated hepatocellular carcinoma.
Management is also focused on the label expansion of Cabometyx. The FDA accepted EXEL’s supplemental new drug application for cabozantinib for patients with previously treated advanced pancreatic neuroendocrine tumors (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.
A potential label expansion will further propel growth prospects.
Exelixis, Inc. Price, Consensus and EPS Surprise
Exelixis, Inc. price-consensus-eps-surprise-chart | Exelixis, Inc. Quote
Merck’s Keytruda and BMY’s Opdivo are leading IO drugs approved for various oncology indications.
The pipeline progress has been impressive as well, as Exelixis looks to expand its oncology portfolio beyond Cabometyx.
Other promising candidates in Exelixis’ pipeline include zanzalintinib, a next-generation oral TKI and XL309. The company has prioritized pipeline development with plans to initiate a new phase III study for zanzalintinib in NET, advance phase I efforts for XL309 and XB010, and discontinue development of XB002.
The successful development of additional drugs will broaden its portfolio and reduce its dependence on its lead drug, Cabometyx.
Meanwhile, the company is also making efforts to increase share holder value through repurchases. Exelixis completed its 2024 share repurchase program having repurchased 20.3 million shares of the company’s common stock for a total of $450 million at the end of the second quarter.
Consequently, the company returned $1 billion to shareholders since the initial $550 million stock repurchase program was authorized in March 2023.
Concurrently, EXEL is defending its intellectual property as well. In May, Exelixis entered into a settlement agreement with Cipla Ltd. and Cipla USA, Inc. The agreement resolves two patent litigations brought by Exelixis in response to Cipla’s abbreviated new drug application seeking approval to market generic versions of Cabometyx tablets (20 mg / 40 mg / 60 mg) prior to the expiration of the applicable patents.
Zacks Rank & Other Stocks to Consider
Exelixis currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the biotech sector are Entrada Therapeutics (TRDA - Free Report) and Krystal Biotech (KRYS - Free Report) , both carrying a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Entrada’s loss per share estimate for 2024 has narrowed from 27 cents to 13 cents in the past 90 days and the same for 2025 has narrowed from $3.62 to $3.21.
Krystal Biotech’s earnings per share for 2024 has increased to $2.07 from $2.03 in the past seven days. Shares of KRYS have surged 48.7% year to date.