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WIKI ANALYSIS
Exelixis (NYSE: EXEL) is a drug discovery and development company that earns revenue from the out-licensing of potential therapies that it discovers to big pharma collaborators. In 2010, Bristol-Myers Squibb Company (BMY) returned the rights to develop cancer drug, Cabozantinib, back to Exelixis.[1] Since acquiring full rights to Cabozantinib, Exelixis has focused much of its operations on the development of the compound.
The valuation of Exelixis depends significantly on the progress of the clinical trials that it is conducting for cabozantinib.
Business Growth (For the fiscal year ending December 31, 2010)[2]
- Revenue increased 22% to $185 million
- Net loss decreased 32% to $92 million
Revenue growth in 2010 was largely due to payments from collaborations with Sanofi-Aventis SA (SNY) and Bristol-Myers Squibb Company (BMY). In 2011, Exelixis expects revenues in the range of $145-160 million, with expenses of $190-220 million.[3]
Pipeline
Exelixis is developing its lead compound, cabozantinib, to treat a variety of cancers:
- Phase III: Exelixis has begun phase III clinical trials to evaluate the use of cabozantinib to treat patients with Medullary Thyroid Cancer.
- Phase II: Exelixis has begun non-randomized studies to evaluate the use of cabozantinib to treat patients with ovarian cancer and a form of Prostate Cancer. In addition, Exelixis has begun randomized trials to evaluate cabozantinib in Breast Cancer, Gastric/GE Junctional Cancer, Hepatocellular Carcinoma, Melanoma, Castration-Resistant Prostate Cancer, Lung Cancer, Ovarian Cancer, and Pancreatic Cancer.
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- Phase I: Exelixis is evaluating cabozantinib in Phase I trials to treat patients with Differentiated Thyroid Cancer and Renal Cell Carcinoma.
Trends and Forces
Exelixis Needs to Obtain Regulatory Approval in Order to Earn Significant Revenue
To date, all of Exelixis's revenue has been earned from milestone and royalty payments paid by pharmaceutical partners. In order to make the full transition from a development-stage company to a fully commercial pharmaceutical company, Exelixis needs to obtain regulatory approval for cabozantinib. Exelixis is currently in the midst of phase III clinical trials, which are the final, but most costly and risky stage of clinical development. Exelixis expects to receive an FDA decision on the use of cabozantinib to treat medullary thyroid cancer by the end of 2012.[4]
Exelixis's Ability to Develop Cabozantinib for Multiple Cancers will Impact Revenue
Exelixis is currently develop cabozantinib as a therapy for 13 different types of cancer.[5] Each of these cancer types represents a new market and additional revenue for Exelixis down the road. Exelixis's ability to obtain FDA approval for these additional markets will impact its bottom line.
Competition
- AstraZeneca (AZN): In April of 2011, Vandetanib was approved by the FDA to treat patients with medullary thyroid cancer, the leading indication for Cabozantinib.[6]
- Roche Pharmaceuticals (RHHBY): Manufactures Avastin, a cancer drug that works using a similar mechanism as cabozantinib. Avastin is approved to treat several forms of cancer, including lung cancer, breast cancer, and colon cancer.[7]
- GlaxoSmithKline (GSK): Manufactures Tykerb, a cancer drug with a similar mechanism of action as cabozantinib that is approved to treat breast, lung, and oral cancer.[8]
References
- ↑ Bristol-Myers Squibb returns rights to Exelixis cancer drug
- ↑ EXEL 2011 10K
- ↑ Exelixis Announces Fourth Quarter and Full Year 2010 Financial Results
- ↑ Exelixis Provides Update on Cabozantinib Development Activities
- ↑ Exelixis Clinical Trial Information
- ↑ AstraZeneca Gets FDA Approval For Cancer Drug Vandetanib
- ↑ Bevacizumab Injection
- ↑ Lapatinib
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