Exelixis(NASDAQ: EXEL) reported earnings after the bell on Thursday, delighting investors with a continuation of the solid launch of its kidney cancer drug, Cabometyx.
Exelixis results: The raw numbers
Q3 2016 Actuals
Q3 2015 Actuals
Income (loss) from operations
(Loss) per share
Data source: Company press release. YOY = year over year.
What happened with Exelixis this quarter?
Revenue -- which also contains royalty, license, and milestone revenue -- isn't the best measure of Exelixis' success, nor are year-over-year comparisons since Cabometyx wasn't approved a year ago. The better comparison is quarter-over-quarter product sales, which increased from $31.6 million in the second quarter to $42.7 million in the third quarter. A not-too-shabby 35% quarter-over-quarter increase.
The first sales of Cabometyx in Germany occurred recently, triggering a $10 million milestone payment from Ipsen.
All told, Exelixis expects $85 million in milestones later this year, adding to the almost $380 million the biotech had in the bank at the end of the third quarter.
Data from the CABOSUN trial showing that Cabometyx beat Pfizer's Sutent in previously untreated patients with advanced kidney cancer with intermediate- or poor-risk disease was presented at the European Society for Medical Oncology (ESMO). At the conference, Exelixis announced plans to use the CABOSUN data to get Cabometyx approved as a first-line treatment.
Also at ESMO, Exelixis presented promising early-stage data combining Cabometyx and Bristol-Myers Squibb's (NYSE: BMY) Opdivo.
An Exelixis-discovered drug that was licensed to Daiichi Sankyo, CS-3150, has moved into a phase 3 pivotal trial in Japanese patients with hypertension. Data from the trial are expected in the second half of next year. If approved, Exelixis is due milestone and royalty payments.
What management had to say
Image source: Exelixis.
"We have great data and a superior label and are off to a solid start with market share of approximately 20% in the second line and 35% in the third line," PJ Haley, Exelixis's VP Commercial, commented on the launch of Cabometyx. But he's not really satisfied with stopping there:
We think we have opportunity to compete and gain market share relative to the other oral [tyrosine kinase inhibitors], which have about 40% -- or excuse me, 45% share in the second and third lines, and also immunotherapy in the second line setting where there is an incremental 38% share we can go after.
Mike Morrissey, Exelixis' president and CEO, talked about the potential to license or acquire new products to spur growth beyond Cabometyx, but he cautioned, "We're going to take our time and do this right. We are not going to rush into doing anything that doesn't make sense."
In addition to the continued launch of Cabometyx in its current indication, Exelixis has plans to expand the approval into other indications, which should spur sales growth in the years ahead. The biotech still has to do some work on the CABOSUN data, so management isn't giving specifics about when the data might be ready for the FDA to see.
Further back, after the relatively successful data for Cabometyx and Opdivo, Exelixis and Bristol-Myers Squibb are moving forward with a triple combination of Cabometyx, Opdivo, and Bristol-Myers' other immuno-onocology drug, Yervoy.
Next year, we'll get data from the CELESTIAL trial testing Cabometyx in patients with liver cancer, which could open up a whole new type of cancer Cabometyx can expand into.
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