Market Overview

Exelixis Announces First Quarter 2018 Financial Results and Provides Corporate Update

Share:

- Total Revenues of $212.3 million -

- Cabozantinib Franchise Net Product Revenues of $134.3 million -

- Net Income of $115.9 million, Diluted EPS of $0.37 -

- Conference Call and Webcast Today at 5:00 PM Eastern Time -

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

"In the first quarter of 2018, Exelixis continued to make significant
progress in the ongoing commercialization of CABOMETYX® (cabozantinib)
for advanced renal cell carcinoma. Following FDA approval for its
expanded indication in advanced first-line renal cell carcinoma, our
team immediately began promoting CABOMETYX across all lines of therapy
for this patient population, resulting in further uptake from
prescribers at both major academic institutions and in the community
setting," said Michael M. Morrissey, Ph.D., President and Chief
Executive Officer of Exelixis. "The resulting growth in U.S. sales, as
well as the increasing collaboration revenues from our various partners,
were important contributors to our strong financial performance during
the quarter, leading to net income of $115.9 million or $0.37 per share
on a fully diluted basis."

Dr. Morrissey continued: "From its initial approval for a rare disease
indication five years ago, cabozantinib has grown to become an oncology
franchise with the potential for global impact. We and our collaboration
partners are committed to maximizing its opportunity to help patients
across multiple tumor types. This now includes our recent regulatory
submissions for previously treated advanced hepatocellular carcinoma, an
aggressive cancer with worldwide relevance. Our efforts in liver cancer,
as well as our plans to start additional phase 3 trials in other forms
of cancer later this year, are each reflective of the Exelixis corporate
mission to help patients with cancer recover stronger and live longer."

First Quarter 2018 Financial Results

Total revenues for the quarter ended March 31, 2018 were $212.3
million, compared to $80.9 million for the comparable period in 2017.

Total revenues include net product revenues of $134.3 million for the
quarter ended March 31, 2018, compared to $68.9 million 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 collaboration revenues of $78.1 million for
the quarter ended March 31, 2018 compared to $12.0 million for the
comparable period in 2017. The increase in collaboration revenues for
the quarter ended March 31, 2018 was primarily the result of recording
$45.8 million in revenue for a $50.0 million 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 $45.8
million 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 collaboration
revenues was also a result of a $20.0 million milestone from our
collaboration 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 due to 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, $258.5 million was recorded in stockholders'
equity relating primarily to a reduction in the remaining unrecognized
upfront and non-substantive milestone payments that had been received
from our collaboration partners and was included in deferred revenue at
December 31, 2017. For more information on our adoption of the new
revenue standard, see "Note 1. Organization and Summary of Significant
Accounting Policies - Revenue" contained in Part I, Item 1 of Exelixis'
Quarterly Report on Form 10-Q expected to be filed with the Securities
and Exchange Commission (SEC) on May 2, 2018.

Research and development expenses for the quarter ended March 31,
2018 were $37.8 million, compared to $23.2 million for the comparable
period in 2017. The increase in research and development expenses was
primarily related to an increase in personnel-related expenses resulting
from an increase in headcount in support of our development and
discovery efforts and an increase in clinical trial costs. Clinical
trial costs increased primarily due to start-up costs associated with
CheckMate 9ER, an ongoing phase 3 pivotal trial of cabozantinib plus
immunotherapy in patients with previously 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 completed
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 $3.0 million upfront payment for our
exclusive collaboration and license agreement with StemSynergy
Therapeutics, Inc. (StemSynergy).

Selling, general and administrative expenses for the quarter
ended March 31, 2018 were $52.6 million, compared to $34.3 million for
the comparable period in 2017. The increase in selling, general and
administrative expenses was primarily a result of increases in corporate
giving, personnel expenses and marketing activities. The increase in
personnel expense resulted from an increase 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 $115.9
million, or $0.39 per share, basic and $0.37 per share, diluted,
compared to a $16.7 million, or $0.06 per share, basic and $0.05 per
share diluted, for the comparable period in 2017. The increase in net
income was primarily the result of increases in net product revenues and
collaboration 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 $525.6
million at March 31, 2018, as compared to $457.2 million 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 million and $460
million. This guidance includes approximately $50 million of non-cash
costs and expenses related primarily to stock-based compensation expense.

Cabozantinib Highlights

Strong Growth in Cabozantinib Franchise Net Revenues. Cabozantinib
generated $134.3 million in net product revenues during the first
quarter of 2018, an increase of 95 percent year-over-year. During the
first quarter of 2018, CABOMETYX generated $128.9 million in net product
revenues and COMETRIQ® (cabozantinib) capsules for the treatment of
patients with progressive, metastatic medullary thyroid cancer generated
an additional $5.3 million in net product revenues.

Amendment to Clinical Research Protocol for Phase 1b Trial of
Cabozantinib in Combination with Atezolizumab in Patients with Locally
Advanced or Metastatic Solid Tumors.
In January, Exelixis announced
an amendment to the protocol for the phase 1b trial of cabozantinib in
combination with atezolizumab in patients with locally advanced or
metastatic solid tumors. The amendment added four new expansion cohorts
to the trial, which now includes patients with non-small cell lung
cancer and castration-resistant prostate cancer, in addition to
previously included patients with RCC and urothelial carcinoma (UC). The
primary objective in the expansion stage of this trial remains to
determine the objective response rate in each cohort.

Cabozantinib Data at the ASCO 2018 Genitourinary Cancers Symposium
(ASCO-GU).
In February, cabozantinib was the subject of 14
presentations at the 2018 ASCO-GU Symposium in San Francisco. Updated
results from the ongoing phase 1 trial of cabozantinib in combination
with nivolumab, with or without ipilimumab, in patients with refractory
genitourinary tumors were the subject of a poster presentation, with the
two combination regimens demonstrating an acceptable tolerability
profile, and high rates of durable responses in the previously treated
metastatic UC and metastatic RCC cohorts. This phase 1 trial informed
the design of CheckMate 9ER.

Cabozantinib Data at the 2018 Multidisciplinary Head and Neck Cancers
Symposium.
Also in February, cabozantinib was the subject of an oral
presentation at this medical meeting held in Scottsdale, Arizona.
Investigators presented results from the ongoing investigator-sponsored
phase 2 trial of cabozantinib in patients with radioiodine-refractory
differentiated thyroid carcinoma (DTC) in the first-line setting. Based
on these results and data from other studies of cabozantinib in
previously treated DTC, Exelixis plans to initiate a pivotal phase 3
study with cabozantinib in patients with advanced DTC later this year.

Submission of Supplemental New Drug Application (sNDA) for CABOMETYX
as a Treatment for Patients with Previously Treated Advanced
Hepatocellular Carcinoma (HCC).
In March, Exelixis announced it had
completed the submission of its sNDA to the FDA for CABOMETYX as a
treatment for patients with previously treated advanced HCC. The sNDA
submission is based on results from the CELESTIAL randomized pivotal
phase 3 trial, data from which were presented in January at the American
Society of Clinical Oncology 2018 Gastrointestinal Cancers Symposium
(ASCO-GI). At ASCO-GI, Exelixis and Ipsen hosted a live briefing
event for the financial community to discuss cabozantinib data presented
at the conference. The replay of the briefing is available on the News &
Events / Event Calendar page at www.exelixis.com.

European Medicines Agency (EMA) Validation of the Application for a
New Indication for CABOMETYX for Previously Treated Advanced HCC.
Also
in March, Exelixis' partner Ipsen announced its application for
variation to the CABOMETYX marketing authorization had been validated by
the EMA for the addition of a new indication for patients with
previously treated advanced HCC. Upon the acceptance of this filing,
Exelixis will receive a $10.0 million milestone payment per the terms of
the company's collaboration agreement with Ipsen.

CABOMETYX Receives Positive CHMP Opinion for Previously Untreated
Intermediate- or Poor-Risk Advanced RCC.
In March, Exelixis' partner
Ipsen received a positive opinion from the CHMP, the scientific
committee of the EMA, for CABOMETYX for the first-line treatment of
adults with intermediate- or poor-risk advanced RCC. The positive CHMP
opinion is being reviewed by the EC, which has the authority to approve
medicines for the European Union.

Cobimetinib Highlights

Phase 1b Results for the Combination of Cobimetinib and Atezolizumab
in Metastatic Colorectal Cancer (CRC) at ASCO-GI.
In January,
updated safety and efficacy results from the phase 1b clinical trial
sponsored by Genentech, Inc. (a member of the Roche Group) (Genentech)
evaluating cobimetinib in combination with atezolizumab in patients with
metastatic CRC were presented at ASCO-GI. Initial results reported from
this study presented at the 2016 ASCO Annual Meeting led to the
initiation of IMblaze370 (formerly COTEZO), a phase 3 pivotal trial
evaluating both the combination of cobimetinib and atezolizumab and
atezolizumab alone versus regorafenib in patients with unresectable
locally advanced or metastatic CRC, for which Genentech has guided it
expects top-line results in the first half of 2018.

IMspire150 TRILOGY Trial Reaches Full Enrollment. The Roche Group
recently confirmed that IMspire150 TRILOGY, its phase 3 pivotal trial
evaluating the combination of cobimetinib, atezolizumab and vemurafenib
in patients with first-line BRAF V600 mutation-positive metastatic or
unresectable locally advanced melanoma, completed enrollment. The trial
began enrolling patients in January 2017.

Corporate Highlights

Exclusive Licensing Agreement with StemSynergy for the Discovery and
Development of Novel Anticancer Therapies.
In January, Exelixis
announced it had entered into an exclusive collaboration and license
agreement with StemSynergy for the discovery and development of novel
oncology compounds targeting Casein Kinase 1 alpha, a component of the
Wnt signaling pathway implicated in key oncogenic processes.

Daiichi Sankyo's Submission of Regulatory Filing for Esaxerenone
(CS-3150) in Japan.
In February, Exelixis announced its partner
Daiichi Sankyo submitted its regulatory application for esaxerenone as a
treatment for patients with hypertension to the Japanese Pharmaceutical
and Medical Devices Agency. The application was based on the results of
phase 3 studies including ESAX-HTN, a randomized, double-blind,
three-arm parallel group comparison study evaluating the efficacy and
safety of esaxerenone versus eplerenone in patients with essential
hypertension in Japan. As a result of the submission, Exelixis received
a $20.0 million milestone payment in March 2018 per the collaboration
agreement.

Election of Dr. Maria Freire to Exelixis' Board of Directors. In
April, Exelixis announced the election of biomedical research executive
Maria C. Freire, Ph.D. to the company's Board of Directors. Dr. Freire
currently serves as President and Executive Director and as a member of
the board of directors of the Foundation for the National Institutes of
Health, an independent 501(c)(3) charitable organization established by
Congress to support the National Institutes of Health by raising private
funds for biomedical research and fostering partnerships and alliances
around the world.

Basis of Presentation

Exelixis has adopted a 52- or 53-week fiscal year that generally ends on
the Friday closest to December 31st. For convenience,
references in this press release as of and for the fiscal periods
ended March 30, 2018, December 29, 2017 and March 31, 2017 are indicated
as being as of and for the periods ended March 31, 2018, December 31,
2017 and March 31, 2017, respectively.

Conference Call and Webcast

Exelixis management will discuss the company's financial results for the
first quarter of 2018 and provide a general business update during a
conference call beginning at 5:00 p.m. ET / 2:00 p.m. PT today,
Wednesday, May 2, 2018.

To access the webcast link, log onto www.exelixis.com
and proceed to the News & Events / Event Calendar page under the
Investors & Media heading. Please connect to the company's website at
least 15 minutes prior to the conference call to ensure adequate time
for any software download that may be required to listen to the webcast.
Alternatively, please call 855-793-2457
(domestic) or 631-485-4921 (international)
and provide the conference call passcode 7895176 to join by phone.

A telephone replay will be available until 8:30 p.m. EDT on May 4, 2018.
Access numbers for the telephone replay are: 855-859-2056
(domestic) and 404-537-3406
(international); the passcode is 7895176. A webcast replay will also be
archived on www.exelixis.com
for one year.

About Exelixis

Founded in 1994, Exelixis, Inc. (NASDAQ:EXEL) is a commercially
successful, oncology-focused biotechnology company that strives to
accelerate the discovery, development and commercialization of new
medicines for difficult-to-treat cancers. Following early work in model
genetic systems, we established a broad drug discovery and development
platform that has served as the foundation for our continued efforts to
bring new cancer therapies to patients in need. We discovered our lead
compounds, cabozantinib and cobimetinib, and advanced them into clinical
development before entering into partnerships with leading
biopharmaceutical companies in our efforts to bring these medicines to
patients globally. We are steadfast in our commitment to prudently
reinvest in our business to maximize the potential of our pipeline. We
intend to supplement our existing therapeutic assets with targeted
business development activities and internal drug discovery - all to
deliver the next generation of Exelixis medicines and help patients
recover stronger and live longer. Exelixis recently earned a spot on
Deloitte's Technology Fast 500 list, a yearly award program honoring the
500 fastest-growing companies over the past four years. For more
information about Exelixis, please visit www.exelixis.com,
follow @ExelixisInc on Twitter or like Exelixis, Inc. on Facebook.

Forward-Looking Statements

This press release contains forward-looking statements, including,
without limitation, statements related to: the potential for
cabozantinib to become an oncology franchise with global impact and
Exelixis' commitment to maximizing its opportunity to help patients
across multiple tumor types; Exelixis' plans to conduct future clinical
studies; Exelixis' expectations related to the receipt of milestone
payments in connection with the EC's approval of cabozantinib as a
first-line treatment of advanced RCC and the EMA's validation of Ipsen's
application for variation to the CABOMETYX marketing authorization for
the added indication of patients with previously treated advanced HCC;
Exelixis' guidance for 2018 total costs and operating expenses,
including non-cash costs and expenses; Exelixis' plans to initiate a
pivotal phase 3 study with cabozantinib in patients with advanced DTC
later this year; Exelixis' expectation of top-line results in the first
half of 2018 from the phase 3 pivotal trial of cobimetinib in
combination with Genentech's atezolizumab in advanced CRC; Exelixis'
plans to reinvest in its business to maximize the potential of the
company's pipeline, including through targeted business development
activities and internal drug discovery; and Exelixis' mission to deliver
the next generation of Exelixis medicines and help patients recover
stronger and live longer. Words such as "focused," "mission," "future,"
"expect," "plans," "committed," "will," "guidance," "commitment,"
"potential," "intend," or other similar expressions identify
forward-looking statements, but the absence of these words does not
necessarily mean that a statement is not forward-looking. In addition,
any statements that refer to expectations, projections or other
characterizations of future events or circumstances are forward-looking
statements. These forward-looking statements are based upon Exelixis'
current plans, assumptions, beliefs, expectations, estimates and
projections. Forward-looking statements involve risks and uncertainties.
Actual results and the timing of events could differ materially from
those anticipated in the forward-looking statements as a result of these
risks and uncertainties, which include, without limitation: the degree
of market acceptance of CABOMETYX, COMETRIQ and COTELLIC and the
availability of sufficient coverage and adequate reimbursement for these
products; risks and uncertainties related to regulatory review and
approval processes and Exelixis' compliance with applicable legal and
regulatory requirements; risks related to the potential failure of
cabozantinib and cobimetinib, both alone and in combination with other
therapies, to demonstrate safety and efficacy in clinical testing; the
availability of data at the referenced times; Exelixis' dependence on
its relationship with its collaboration partners, including the level of
their investment in the resources necessary to successfully
commercialize partnered compounds in the territories where they are
approved; Exelixis' ability and the ability of its collaborators to
conduct clinical trials of cabozantinib and cobimetinib, both alone and
in combination with other therapies, sufficient to achieve a positive
completion; the level of costs associated with Exelixis'
commercialization, research and development, in-licensing or acquisition
of product candidates, and other activities; Exelixis' dependence on
third-party vendors for the development, manufacture and supply of its
product; Exelixis' ability to protect its intellectual property rights;
market competition, including the potential for competitors to obtain
approval for generic versions of Exelixis' marketed products; changes in
economic and business conditions, and other factors discussed under the
caption "Risk Factors" in Exelixis' Annual Report on Form 10-K filed
with the SEC on February 26, 2018, and in Exelixis' future filings with
the SEC, including, without limitation, Exelixis' Quarterly Report on
Form 10-Q expected to be filed with the SEC on May 2, 2018. The
forward-looking statements made in this press release speak only as of
the date of this press release. Exelixis expressly disclaims any duty,
obligation or undertaking to release publicly any updates or revisions
to any forward-looking statements contained herein to reflect any change
in Exelixis' expectations with regard thereto or any change in events,
conditions or circumstances on which any such statements are based.

Exelixis, the Exelixis logo, CABOMETYX, COMETRIQ and COTELLIC are
registered U.S. trademarks.

EXELIXIS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

 
Three Months Ended March 31,
2018
View Comments and Join the Discussion!
 
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com