Exelixis reported earnings on Tuesday, and as usual, the pipeline was much more important for the biotech than its revenue and profit.
Exelixis results: The raw numbers
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Source: company press release.
What happened with Exelixis this quarter?
- While revenue increased substantially, it's still small compared with the company's burn and $3 million of the revenue was from a milestone payment from Merck , so Cometriq sales went up only slightly year over year.
- Without a doubt, the most important event in the third quarter was the positive data for the Meteor trial, testing Cometriq (cabozantinib) in second-line kidney cancer. The company expects to complete the FDA application to get the drug approved for the new indication by the end of the year, and the European application should be filed early next year. The drug used for kidney cancer is a slightly different formulation -- capsules versus tablets -- than Cometriq, so it'll be a new application, rather than a supplement, and may need a new brand name. Fortunately in both the U.S. and Europe, the drug should get quicker-than-normal reviews since it beat the current standard of care.
- On the same day as earnings, Exelixis' partner, Roche, announced the FDA approval of Cotellic (cobimetinib) for melanoma. The melanoma market has become very crowded with the approvals of Bristol-Myers Squibb's Opdivo and Merck's Keytruda since Exelixis and Roche started the clinical trial marathon. Fortunately for Exelixis, Roche should be motivated to promote Cotellic since it's used in combination with Zelboraf another Roche drug. The best opportunity for Cotellic might be as a combination treatment with other drugs including Roche's atezolizumab, which is in the same general class as Bristol-Myers Squibb's and Merck's immuno-oncology drugs.
- Exelixis raised approximately $146 million in the quarter, which will help with the launch of Cotellic and cabozantinib in kidney cancer.
What management had to sayMike Morrissey, Exelixis' president and CEO, reiterated plans to license out the rights to cabozantinib outside the U.S. rather than launching there on its own: "Before we capitalize on the broad global commercial opportunity, Exelixis is seeking an ex-US partner for cabozantinib. We believe that both the strengthening of the METEOR and the additional cash from our July financing puts us in a strong negotiating position as potential partnering discussions continue to advance."
"We're certainly very excited about the opportunity that is presenting there, in terms of what those combinations could do to help patients, and certainly expand -- again using the Roche terminology -- 'the Cotellic franchise,' but that's all data dependent,"Morrissey said of the possibility to expand Cotellic's market by using it in combination with other drugs.
Looking forwardIt's a waiting game for Exelixis. The next major catalysts are likely to be an FDA approval of cabozantinib in kidney cancer and the announcement of a European partnership to sell cabozantinib there.
Beyond second-line kidney cancer, Exelixis is testing cabozantinib compared with Pfizer's Sutentin first-line kidney cancer in a phase 2 trial that's supposed to read out in the first half of next year. And the company is exploring combination treatments with Bristol-Myers Squibb's immuno-oncology drugs Opdivo and Yervoy.
The article Exelixis, Inc. Earnings: Riding the Meteor originally appeared on Fool.com.
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