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Exelixis (EXEL) Down 3.4% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Exelixis (EXEL - Free Report) . Shares have lost about 3.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Exelixis due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Exelixis 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 was mainly driven by higher revenues and lower operating expenses.
Including stock-based compensation expense, earnings were 77 cents per share.
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.
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. This 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 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 decline in license and other collaboration costs, along with a drop 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.
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-$475 million).
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
The consensus estimate has shifted 5.4% due to these changes.
VGM Scores
At this time, Exelixis has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Following the exact same course, 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 upward for the stock, and the magnitude of these revisions looks promising. 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, Axsome Therapeutics (AXSM - Free Report) , has gained 14% over the past month. More than a month has passed since the company reported results for the quarter ended June 2024.
Axsome reported revenues of $87.17 million in the last reported quarter, representing a year-over-year change of +86.7%. EPS of -$1.24 for the same period compares with -$1 a year ago.
Axsome is expected to post a loss of $1.34 per share for the current quarter, representing a year-over-year change of -1.5%. Over the last 30 days, the Zacks Consensus Estimate has changed -6%.
Axsome has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.
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Exelixis (EXEL) Down 3.4% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Exelixis (EXEL - Free Report) . Shares have lost about 3.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Exelixis due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Exelixis Q2 Earnings Beat, Milestone Payments Fuel Revenues
Exelixis 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 was mainly driven by higher revenues and lower operating expenses.
Including stock-based compensation expense, earnings were 77 cents per share.
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.
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. This 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 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 decline in license and other collaboration costs, along with a drop 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.
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-$475 million).
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
The consensus estimate has shifted 5.4% due to these changes.
VGM Scores
At this time, Exelixis has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Following the exact same course, 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 upward for the stock, and the magnitude of these revisions looks promising. 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, Axsome Therapeutics (AXSM - Free Report) , has gained 14% over the past month. More than a month has passed since the company reported results for the quarter ended June 2024.
Axsome reported revenues of $87.17 million in the last reported quarter, representing a year-over-year change of +86.7%. EPS of -$1.24 for the same period compares with -$1 a year ago.
Axsome is expected to post a loss of $1.34 per share for the current quarter, representing a year-over-year change of -1.5%. Over the last 30 days, the Zacks Consensus Estimate has changed -6%.
Axsome has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.