Exelixis (EXEL) Beat Q4 Earnings and Revenue, Cabometyx Strong

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Exelixis, Inc.. EXEL reported fourth-quarter profit of 29 cents, well above Zacks’ consensus estimate of 7 cents. In the prior year quarter, the company reported earnings of 9 cents per share.

Excluding stock-based compensation expense, earnings per share were 35 cents, compared to 14 cents in the prior year quarter.

Net revenue was $451.1 million, up from $270 million in the year-ago quarter and topped Zacks’ consensus estimate of $358 million.

Shares of Exelixis have lost 17.4% over the past year, while the industry has lost 38.8%.

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Quarter in detail

Net product revenue was $302.7 million, compared to $200.3 million in the prior year quarter. The upside was primarily driven by an increase in sales volume which was primarily driven by strong adoption of the combination therapy of Cabometyx (cabozantinib tablets) and Bristol Myers BMY Opdivo (nivolumab) following FDA approval in January.

Bristol-Myers’ Opdivo is one of the company’s leading revenue generators and is approved for various oncology indications.

Cabometyx generated revenue of $295.1 million. Cabometyx 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 $7.6 million in net revenue.

Exelixis earned $29.3 million in royalties.

Collaboration revenue, including licensing revenue and revenue from collaboration services, was $148.5 million in the quarter.

In the fourth quarter, Exelixis recorded a licensing revenue milestone of $100.0 million from Ipsen on the achievement of $400.0 million in net sales in its related licensing territory over four consecutive quarters . Exelixis expects to receive this payment in the first quarter of 2022.

In the reported quarter, research and development expenses were $222.3 million, compared to $154.3 million in the prior year quarter. Selling, general and administrative expenses were $99.3 million, compared to $82.4 million in the prior year quarter.

2021 results

Revenue in 2021 was $1,435.0 million, compared to $987.5 million in 2020. Earnings per share were 72 cents, compared to 35 cents in 2020.

Pipeline update

Recruitment is complete for CONTACT-01, the Phase III study evaluating cabozantinib in combination with Tecentriq versus docetaxel in patients with metastatic non-small cell lung cancer (NSCLC). Interim data from the study are expected in the second half of 2022.

In December 2021, Exelixis announced the initiation of the dose escalation stage of STELLAR-002, a Phase Ib study evaluating XL092 in combination with immuno-oncology (IO) therapies in advanced solid tumors.

Orientation 2022

Revenue is projected between $1.525 billion and $1.625 billion, while product revenue is estimated between $1.325 billion and $1.425 billion.

Our opinion

Exelixis’ fourth quarter results were encouraging, with a beat on both counts. The approval of Cabometyx in combination with an immuno-oncology drug, Opdivo, for advanced RCC has boosted sales. However, competition is tough in this space and capturing additional market share might become difficult.

Merckfrom MRK Keytruda in combination with PfizerInlyta PFE is also indicated for the first-line treatment of patients with advanced RCC.

Merck’s Keytruda, an anti-PD-1 therapy, is approved for the adjuvant treatment of patients with RCC at intermediate-high or high risk of recurrence, following nephrectomy or nephrectomy and resection of metastatic lesions.

Pfizer’s Inlyta has shown strong performance, driven by continued adoption in the US and Europe. Pfizer’s older drug Sutent is also approved for advanced RCC.

Exelixis currently wears a Zacks Rank #3 (Hold). You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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