Heres Why Exelixis Stock Is Dropping Today – Motley Fool

https://www.fool.com/investing/2021/06/28/heres-why-exelixis-stock-is-dropping-today/


0

What happened

Shares of Exelixis (NASDAQ:EXEL), an oncology-focused biopharmaceutical company, started sliding Monday in response to a disappointing clinical trial readout. Investors responding to results that weren’t quite good enough have shaved 20.1% from the stock’s price as of 11:30 a.m. EDT. 

So what 

Along with collaboration partner Ipsen (OTC:IPSEY), Exelixis announced top-line results from the Cosmic-312 trial, which evaluates the use of cabozantinib in previously untreated liver cancer patients. This kinase inhibitor is approved as Cabometyx to treat liver cancer patients who have already relapsed following standard treatment, and is the company’s only source of revenue right now.

Investor watching a stock chart.

Image source: Getty Images.

Cabometyx is also approved to treat first-line kidney cancer patients, but sales aren’t growing as fast as investors would like them to. Total first-quarter revenue rose 19% year over year to $270 million this year and increasing its addressable patient population to include new first-line liver cancer patients could lead to a significant revenue bump.

Treatment with Cabometyx plus Tecentriq from Roche reduced patients’ risk of disease progression by 37% but the observed overall survival improvement fell short of statistical significance. The FDA could approve an expansion to the first-line setting with these results. Getting oncologists to actually prescribe it without proof of an overall survival benefit, though, would be an uphill battle.

Now what

Exelixis and Ipsen intend to keep running the Cosmic-312 study until completion, which will probably occur in 2022. It doesn’t happen often, but there’s still a chance that final overall survival results from this study will redeem Cabometyx plus Tecentriq as a first-line treatment option for liver cancer.

Exelixis shareholders should hang on tight and bargain shoppers might want to take a closer look. Following the recent beating, shares have been trading at just 7.5 times sales. This year, Exelixis expects sales and royalties from cabozantinib to reach between $1.15 billion and $1.25 billion. At the midpoint, that’s 22% more than the company reported in 2020.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.


Like it? Share with your friends!

0

0 Comments

Your email address will not be published. Required fields are marked *

Choose A Format
Personality quiz
Series of questions that intends to reveal something about the personality
Trivia quiz
Series of questions with right and wrong answers that intends to check knowledge
Poll
Voting to make decisions or determine opinions
Story
Formatted Text with Embeds and Visuals
List
The Classic Internet Listicles
Countdown
The Classic Internet Countdowns
Open List
Submit your own item and vote up for the best submission
Ranked List
Upvote or downvote to decide the best list item
Meme
Upload your own images to make custom memes
Video
Youtube, Vimeo or Vine Embeds
Audio
Soundcloud or Mixcloud Embeds
Image
Photo or GIF
Gif
GIF format