Morningstar | Maintaining $28 FVE Following Exelixis' 1Q Results; Cabometyx Sales Boosted by Liver Cancer Approval
Exelixis reported a solid first quarter, with total revenue of $215.5 million, essentially flat from last year, and operating expenses ramping up in line with our expectations as the company has several late-stage trials ongoing. We don't anticipate any changes to our fair value estimate of $28 per share, and we are maintaining our no-moat rating for Exelixis.Cabometyx, approved in kidney cancer and second-line liver cancer, contributed nearly $176 million, up 36% from last year and 2.5% sequentially. Revenue was negatively impacted by inventory drawdown, which was expected and discussed on the earnings call last quarter, as well as changes to Medicare coverage, which increased average gross-to-net discounting. The approval of Cabometyx in second-line liver cancer in early 2019 helped drive this quarter's growth, with liver cancer and kidney cancer contributing about equally to new patient starts. We were pleased to see that Cabometyx's first-quarter market share (inclusive of all indications) surpassed that of competitors such as Inlyta, Votrient, and Sutent, according to Exelexis' earnings presentation and IQVIA data. Cabometyx remains the preferred tyrosine kinase inhibitor in kidney cancer, and it captures the majority of patients that progress from Bristol's first-line Opdivo and Yervoy.
Interestingly, the company announced a new phase 3 trial of a triplet combination of Cabometyx, Opdivo, and Yervoy compared with Opdivo and Yervoy alone in frontline kidney cancer. It is unclear why the triplet combination arm was previously eliminated from the ongoing Checkmate 9ER study, which is now fully enrolled, or why Exelixis has chosen to move forward with a triplet now. This new trial is based on an earlier study of both doublet (Opdivo and cabozantinib) and triplet (plus Yervoy) combinations in genitourinary malignancies, which established a tolerable dose but did not establish a statistically significant response in progression-free survival or overall survival. Further, a majority of patients in that study experienced serious side effects. However, we note that it is difficult to compare these results with a large study in solely kidney cancer.
Exelixis is an oncology-focused biotechnology company that involved in the discovery, development and commercialization of new medicines for cancers. The company's marketd products are: CABOMETYX? (cabozantinib) tablets for renal cell carcinoma and previously treated hepatocellular carcinoma; and COMETRIQ? (cabozantinib) capsules for progressive, metastatic medullary thyroid cancer. The company's products resulting from its discovery efforts are: COTELLIC? (cobimetinib), an inhibitor of MEK approved as part of a combination regimen to treat melanoma; and MINNEBRO? (esaxerenone), an oral, non-steroidal, selective blocker of the mineralocorticoid receptor approved for the treatment of hypertension in Japan.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
We have operations in 27 countries.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.