Active Stock Evaluation: Exelixis, Inc. (NASDAQ: EXEL)

On Monday, Shares of Exelixis, Inc. (NASDAQ: EXEL) dropped -3.73% to $21.04. The stock opened its trade at $21.80 and after floating in a price range of $20.99 to $21.98; the stock grabbed the investor’s attention and traded 2.21M shares as compared to its average daily volume of 4.51M shares. The stock’s institutional ownership stands at 79.60%.

Exelixis, Inc. (EXEL) recently stated financial results for the first quarter of 2018 and offered an update on progress toward fulfilling its key corporate objectives, as well as commercial and clinical development milestones.

First Quarter 2018 Financial Results:

Total revenues for the quarter ended March 31, 2018 were $212.30M, contrast to $80.90M for the comparable period in 2017.

Total revenues include net product revenues of $134.30M for the quarter ended March 31, 2018, contrast to $68.90M for the comparable period in 2017. The increase in net product revenues reflects the growth of our second and later-line advanced renal cell carcinoma (RCC) business and the impact of additional sales following the U.S. Food and Drug Administration’s (FDA) approval in December 2017 of the expanded indication for CABOMETYX, which now encompass all patients with advanced RCC.

Total revenues also include partnership revenues of $78.10M for the quarter ended March 31, 2018 contrast to $12.00M for the comparable period in 2017. The increase in partnership revenues for the quarter ended March 31, 2018 was mainly the result of recording $45.80M in revenue for a $50.00M milestone from Ipsen Pharma SAS (Ipsen) we expect to earn in the second quarter of 2018 for the approval of cabozantinib for the first-line treatment of advanced RCC by the European Commission (EC). The determination to recognize the $45.80M in revenue was made following the Committee for Medicinal Products for Human Use’s (CHMP) positive opinion of cabozantinib for the first-line treatment of advanced RCC. The increase in partnership revenues was also a result of a $20.00M milestone from our partnership partner Daiichi Sankyo Company, Limited (Daiichi Sankyo), which was earned as a result of Daiichi Sankyo’s submission of a regulatory application to the Japanese Pharmaceutical and Medical Devices Agency for esaxerenone (CS-3150) as a treatment for patients with essential hypertension. These increases were partially offset by a decrease in the recognition of deferred revenue because of our adoption of Accounting Standards Update No. 2014-09 Revenue from Contracts with Customers (Accounting Standards Codification Topic 606) on January 1, 2018. As a result, $258.50M was recorded in stockholders’ equity relating mainly to a reduction in the remaining unrecognized upfront and non-substantive milestone payments that had been received from our partnership partners and was included in deferred revenue at December 31, 2017.

Research and development expenses for the quarter ended March 31, 2018 were $37.80M, contrast to $23.20M for the comparable period in 2017. The increase in research and development expenses was mainly related to a boost in personnel-related expenses resulting from a boost in headcount in support of our development and discovery efforts and a boost in clinical trial costs. Clinical trial costs increased mainly because of start-up costs associated with CheckMate 9ER, an ongoing phase 3 pivotal trial of cabozantinib plus immunotherapy in patients with formerly untreated RCC that is being conducted with Bristol-Myers Squibb Company, and start-up costs associated with our phase 1b trial of cabozantinib and atezolizumab in locally advanced or metastatic solid tumors; those increases were partially offset by decreases in costs related to METEOR, our accomplished phase 3 pivotal trial comparing CABOMETYX to everolimus in patients with advanced RCC. Research and development expenses for the quarter ended March 31, 2018 also included a $3.00M upfront payment for our exclusive partnership and license agreement with StemSynergy Therapeutics, Inc. (StemSynergy).

Selling, general and administrative expenses for the quarter ended March 31, 2018 were $52.60M, contrast to $34.30M for the comparable period in 2017. The increase in selling, general and administrative expenses was mainly a result of increases in corporate giving, personnel expenses and marketing activities. The increase in personnel expense resulted from a boost in general and administrative headcount to support the company’s commercial and research and development organizations.

Net income for the quarter ended March 31, 2018 was $115.90M, or $0.39 per share, basic and $0.37 per share, diluted, contrast to a $16.70M, or $0.06 per share, basic and $0.05 per share diluted, for the comparable period in 2017. The increase in net income was mainly the result of increases in net product revenues and partnership revenues, which was partially offset by the increases in research and development and selling, general and administrative expenses.

Cash and cash equivalents, short- and long-term investments and short- and long-term restricted cash and investments totaled $525.60M at March 31, 2018, as contrast to $457.20M at December 31, 2017.

2018 Financial Guidance:

The company is maintaining its guidance that total costs and operating expenses for the full year will be between $430.0M and $460.0M. This guidance includes about $50.0M of non-cash costs and expenses related mainly to stock-based compensation expense.

EXEL has a market value of $6.42B while its EPS was booked as $0.81 in the last 12 months. The stock has 293.47M shares outstanding. In the profitability analysis, the company has gross profit margin of 97.00% while net profit margin was 43.40%. Beta value of the company was 2.06; beta is used to measure riskiness of the security. Analyst recommendation for this stock stands at 1.90.

Marion Frost

Marion Frost

I am Marion Frost and I have over 16 years experience in the financial services industry giving me a vast understanding of how news affects the financial markets. I am an active day trader spending the majority of my time analyzing earnings reports and watching commodities and derivatives. I have a Masters Degree in Economics from Westminster University with previous roles counting Investment Banking.