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Exelixis (EXEL) Q1 Earnings and Revenues Surpass Estimates
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Exelixis, Inc. (EXEL - Free Report) delivered better-than-expected results for first-quarter 2020, wherein earnings and revenues beat estimates.
The company reported earnings of 15 cents per share, beating the Zacks Consensus Estimate of 13 cents. The bottom-line figure, however, declined from the year-ago quarter’s 24 cents per share due to higher R&D expenses.
Net revenues came in at $226.9 million, increasing from the $215.5 million reported in the year-ago quarter. Revenues also beat the Zacks Consensus Estimate of $212.5 million.
Quarter in Detail
Net product revenues came in at $193.9 million, up 7.9% from the year-ago quarter due to an increase in the average net selling price and sales volume.
Lead drug, Cabometyx, is approved in the United States for the treatment of advanced renal cell carcinoma (RCC). The drug was also approved for the treatment of patients with hepatocellular carcinoma, who have been previously treated with sorafenib, in January 2019. The label expansion of the drug into this indication in the United States also boosted product sales.
Cabometyx generated $189.2 million of revenues. Cometriq (cabozantinib capsules) for the treatment of medullary thyroid cancer generated $4.7 million in net product revenues. Exelixis earned $17.9 million in royalty revenues on the basis of cabozantinib-related revenues generated by its partner Ipsen in the first quarter of 2020.
Total collaboration revenues were $33 million, down from the $35.9 million recorded in the year-ago quarter.
In the reported quarter, research and development expenses increased significantly to $101.9 million from the $63.3 million due to a rise in clinical trial costs and personnel expenses. Selling, general and administrative (SG&A) expenses were $62.9 million, up from $60.1 million in the year-ago quarter.
Pipeline Update
In January 2020, Exelixis announced plans to further expand an existing metastatic castration-resistant prostate cancer (mCRPC) cohort (Cohort 6) of COSMIC-021, the phase Ib trial of cabozantinib in combination with Roche’s (RHHBY - Free Report) Tecentriq in patients with locally advanced or metastatic solid tumors.
Last month, Exelixis and Bristol-Myers (BMY - Free Report) announced that CheckMate -9ER, the phase III study evaluating Opdivo in combination with Cabometyx compared to Sutent in previously untreated advanced or metastatic RCC, met its primary endpoint of progression-free survival at the final analysis as well as the secondary endpoints of overall survival at a pre-specified interim analysis and objective response rate. This preliminary analysis of data showed a favorable safety profile for the combination of a 40 mg dose of cabozantinib with nivolumab, with a low frequency of treatment discontinuations due to adverse events.
2020 Guidance Reiterated
Revenues are projected at $850-$900 million, while product revenues are estimated in the range of $725-$775 million for 2020. Per the company, the COVID-19 pandemic has had a relatively modest impact on Exelixis’ business operations, particularly on the clinical studies and drug discovery activities.
Our Take
Exelixis’ reported better-than-expected results for the first quarter. The pipeline progress too has been encouraging and positive results of CheckMate -9ER bodes well for Cabometyx, as a tentative approval will boost demand. However, competition has stiffened from the recently-approved combination therapies. Last year, the FDA approved Merck’s (MRK - Free Report) Keytruda in combination with Inlyta for the first-line treatment of patients with advanced RCC. Given the increasing use of these therapies, we expect investors to focus on the label expansions of cabozantinib in the ongoing combination trials.
Shares of Exelixis have surged 43.6% in the year so far compared with the industry’s growth of 1.7%.
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Exelixis (EXEL) Q1 Earnings and Revenues Surpass Estimates
Exelixis, Inc. (EXEL - Free Report) delivered better-than-expected results for first-quarter 2020, wherein earnings and revenues beat estimates.
The company reported earnings of 15 cents per share, beating the Zacks Consensus Estimate of 13 cents. The bottom-line figure, however, declined from the year-ago quarter’s 24 cents per share due to higher R&D expenses.
Net revenues came in at $226.9 million, increasing from the $215.5 million reported in the year-ago quarter. Revenues also beat the Zacks Consensus Estimate of $212.5 million.
Quarter in Detail
Net product revenues came in at $193.9 million, up 7.9% from the year-ago quarter due to an increase in the average net selling price and sales volume.
Lead drug, Cabometyx, is approved in the United States for the treatment of advanced renal cell carcinoma (RCC). The drug was also approved for the treatment of patients with hepatocellular carcinoma, who have been previously treated with sorafenib, in January 2019. The label expansion of the drug into this indication in the United States also boosted product sales.
Cabometyx generated $189.2 million of revenues. Cometriq (cabozantinib capsules) for the treatment of medullary thyroid cancer generated $4.7 million in net product revenues. Exelixis earned $17.9 million in royalty revenues on the basis of cabozantinib-related revenues generated by its partner Ipsen in the first quarter of 2020.
Total collaboration revenues were $33 million, down from the $35.9 million recorded in the year-ago quarter.
In the reported quarter, research and development expenses increased significantly to $101.9 million from the $63.3 million due to a rise in clinical trial costs and personnel expenses. Selling, general and administrative (SG&A) expenses were $62.9 million, up from $60.1 million in the year-ago quarter.
Pipeline Update
In January 2020, Exelixis announced plans to further expand an existing metastatic castration-resistant prostate cancer (mCRPC) cohort (Cohort 6) of COSMIC-021, the phase Ib trial of cabozantinib in combination with Roche’s (RHHBY - Free Report) Tecentriq in patients with locally advanced or metastatic solid tumors.
Last month, Exelixis and Bristol-Myers (BMY - Free Report) announced that CheckMate -9ER, the phase III study evaluating Opdivo in combination with Cabometyx compared to Sutent in previously untreated advanced or metastatic RCC, met its primary endpoint of progression-free survival at the final analysis as well as the secondary endpoints of overall survival at a pre-specified interim analysis and objective response rate. This preliminary analysis of data showed a favorable safety profile for the combination of a 40 mg dose of cabozantinib with nivolumab, with a low frequency of treatment discontinuations due to adverse events.
2020 Guidance Reiterated
Revenues are projected at $850-$900 million, while product revenues are estimated in the range of $725-$775 million for 2020. Per the company, the COVID-19 pandemic has had a relatively modest impact on Exelixis’ business operations, particularly on the clinical studies and drug discovery activities.
Our Take
Exelixis’ reported better-than-expected results for the first quarter. The pipeline progress too has been encouraging and positive results of CheckMate -9ER bodes well for Cabometyx, as a tentative approval will boost demand. However, competition has stiffened from the recently-approved combination therapies. Last year, the FDA approved Merck’s (MRK - Free Report) Keytruda in combination with Inlyta for the first-line treatment of patients with advanced RCC. Given the increasing use of these therapies, we expect investors to focus on the label expansions of cabozantinib in the ongoing combination trials.
Shares of Exelixis have surged 43.6% in the year so far compared with the industry’s growth of 1.7%.
Exelixis currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
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