UPDATE: J.P Morgan Raises Its PT On Exelixis Following Earnings

As Exelixis

continues its transformation into “the cabo company”, the P&L is changing rather dramatically. Taking into consideration the 143 job cuts in Dec and the exclusive spending focus on cabo going forward, EXEL's proprietary cash OpEx from continuing operations is expected to be ~$130-145M in 2011. This is roughly similar vs. 2010 despite absorption of all cabo expenses in 2011 due to the elimination of essentially all proprietary or non-reimbursed discovery and development expenses not covered under existing collaborations. EXEL ended the quarter with ~$256M in cash and expects to end 2011 with at least $200M. YE11 cash guidance assumes $130-145M in spend on cabo being partially offset by some milestone payments and cash inflows related to cabo as well as other proprietary assets. Most notably, J. P Morgan looks forward to top-line data from the pivotal Ph3 trial of cabo in medullary thyroid cancer in 1H11, a broader cabo update at ASCO in June, including more cabo data in CRPC, ovarian cancer, and RCC as well as from the overall RDT study, and potential strategic developments with cabo. J.P Morgan raises its PT from $7 to $10 and has a Neutral rating on EXEL EXEL is trading higher at $11.03