- Total Revenue of $226.9 Million,
Cabozantinib Franchise Revenue of $193.9 Million -
- GAAP Diluted EPS of $0.15, Non-GAAP
Diluted EPS of $0.19 -
- Conference Call and Webcast Today at 5:00
PM Eastern Daylight Time -
Exelixis, Inc. (Nasdaq: EXEL) today reported financial results
for the first quarter of 2020 and provided an update on progress
toward fulfilling its key corporate objectives, as well as
commercial and clinical development milestones.
“Exelixis remained productive with strong performance in the
first quarter of 2020, despite the significant challenges
introduced by the COVID-19 pandemic in the U.S. and around the
world,” said Michael M. Morrissey, Ph.D., President and Chief
Executive Officer of Exelixis. “I’m proud of the commitment
demonstrated by our team to help patients with cancer fight their
disease in these difficult times, while ensuring the safety of our
employees and oncology healthcare professionals. Patient access to
our medicines remains a top priority for Exelixis, both on the
commercial and investigational fronts.”
“Recently, we and our partner Bristol Myers Squibb announced
positive top-line results from CheckMate -9ER, the pivotal phase 3
study evaluating the combination of nivolumab and cabozantinib in
first-line RCC,” continued Dr. Morrissey. “The trial met its
primary endpoint of progression-free survival, as well as secondary
endpoints of overall survival and objective response rate. Together
with Bristol Myers Squibb, we are now moving rapidly to submit
regulatory applications in the U.S. and European Union in the next
few months. We look forward to continuing to provide updates on our
other programs and milestones as the year progresses.”
First Quarter 2020 Financial
Results
Total revenues for the quarter ended March 31, 2020 were
$226.9 million, compared to $215.5 million for the comparable
period in 2019.
Total revenues for the quarter ended March 31, 2020 included net
product revenues of $193.9 million, compared to $179.6 million for
the comparable period in 2019. The increase in net product revenues
reflected an increase in the average net selling price and an
increase in sales volume.
Collaboration revenues, comprising license revenues and
collaboration services revenues, were $33.0 million for the quarter
ended March 31, 2020, compared to $35.9 million for the comparable
period in 2019. The decrease in collaboration revenues was
primarily related to a decrease in the recognition of milestone
related revenues, which was partially offset by higher royalty
revenues for the sales of cabozantinib outside of the U.S.
generated by Exelixis’ partner, Ipsen Pharma SAS (Ipsen).
Research and development expenses for the quarter ended
March 31, 2020 were $101.9 million, compared to $63.3 million for
the comparable period in 2019. The increase in research and
development expenses was primarily related to the increases in
clinical trial costs and personnel expenses. The increase in
clinical trial costs was primarily due to costs associated with the
expanding clinical trial program for cabozantinib, which includes
COSMIC-312, COSMIC-313 and COSMIC-021. The increase in personnel
expenses was primarily due to an increase in headcount to support
Exelixis’ expanding discovery and development efforts.
Selling, general and administrative expenses for the
quarter ended March 31, 2020 were $62.9 million, compared to $60.1
million for the comparable period in 2019. The increase in selling,
general and administrative expenses was primarily related to
increases in the Branded Prescription Drug Fee and personnel
expenses, which were partially offset by decreases in marketing
costs and corporate giving. The increase in personnel expenses was
primarily due to an increase in administrative headcount to support
Exelixis’ commercial and research and development
organizations.
Provision for income taxes for the quarter ended March
31, 2020 decreased to $11.4 million, compared to $14.9 million for
the comparable period in 2019, primarily due to a decrease in
pre-tax income.
GAAP net income for the quarter ended March 31, 2020 was
$48.6 million, or $0.16 per share, basic and $0.15 per share,
diluted, compared to GAAP net income of $75.8 million, or $0.25 per
share, basic and $0.24 per share, diluted, for the comparable
period in 2019. The decrease in GAAP net income was primarily
related to an increase in research and development expenses, which
was partially offset by an increase in net product revenues.
Non-GAAP net income for the quarter ended March 31, 2020
was $59.4 million, or $0.19 per share, basic and $0.19 per share,
diluted, compared to non-GAAP net income of $85.5 million, or $0.28
per share, basic and $0.27 per share, diluted, for the comparable
period in 2019. Non-GAAP net income excludes stock-based
compensation, adjusted for the related income tax effect.
Cash and investments increased $51.8 million during the
quarter ended March 31, 2020 to over $1.4 billion.
Non-GAAP Financial
Measures
To supplement Exelixis’ financial results presented in
accordance with U.S. Generally Accepted Accounting Principles
(GAAP), Exelixis presents non-GAAP net income (and the related per
share measures), which excludes from GAAP net income (and the
related per share measures) stock-based compensation expense,
adjusted for the related income tax effect for all periods
presented.
Exelixis believes that the presentation of these non-GAAP
financial measures provides useful supplementary information to,
and facilitates additional analysis by, investors. In particular,
Exelixis believes that these non-GAAP financial measures, when
considered together with its financial information prepared in
accordance with GAAP, can enhance investors’ and analysts’ ability
to meaningfully compare Exelixis’ results from period to period,
and to identify operating trends in Exelixis’ business. Exelixis
has excluded stock-based compensation expense, adjusted for the
related income tax effect, because it is a non-cash item that may
vary significantly from period to period as a result of changes not
directly or immediately related to the operational performance for
the periods presented. Exelixis also regularly uses these non-GAAP
financial measures internally to understand, manage and evaluate
its business and to make operating decisions.
These non-GAAP financial measures are in addition to, not a
substitute for, or superior to, measures of financial performance
prepared in accordance with GAAP. Exelixis encourages investors to
carefully consider its results under GAAP, as well as its
supplemental non-GAAP financial information and the reconciliation
between these presentations, to more fully understand Exelixis’
business. Reconciliations between GAAP and non-GAAP results are
presented in the tables of this release.
2020 Financial Guidance
Exelixis is maintaining the following previously provided
financial guidance for fiscal year 2020:
Total revenues
$850 million - $900 million
Net product revenues
$725 million - $775 million
Cost of goods sold
4% - 5% of net product
revenues
Research and development expenses(1)
$460 million - $500 million
Selling, general and administrative
expenses(2)
$230 million - $250 million
Effective tax rate
20% - 22%
Cash and investments(3)
$1.5 billion - $1.6 billion
(1)
Includes $25 million of non-cash
stock-based compensation expense.
(2)
Includes $30 million of non-cash
stock-based compensation expense.
(3)
This cash guidance does not include any
potential new business development activity, which remains a key
priority for Exelixis as it continues to build toward becoming a
multi-product oncology company.
Cabozantinib Highlights
Continued Growth in Cabozantinib Franchise Net Product
Revenues and Royalties. Net product revenues generated by the
cabozantinib franchise in the U.S. were $193.9 million during the
first quarter of 2020, an increase of 8.0% year-over-year, with net
product revenues of $189.2 million from CABOMETYX and $4.7 million
from COMETRIQ® (cabozantinib). Based upon cabozantinib-related
revenues generated by Exelixis’ partner Ipsen in the first quarter
of 2020, Exelixis earned $17.9 million in royalty revenues.
Further Expansion of Prostate Cancer Cohort in Phase 1b
COSMIC-021 Trial of Cabozantinib in Combination with Atezolizumab
in Patients with Advanced Solid Tumors. In January 2020,
Exelixis announced plans to further expand an existing metastatic
castration-resistant prostate cancer (mCRPC) cohort (Cohort 6) of
COSMIC-021, the phase 1b trial of cabozantinib in combination with
atezolizumab in patients with locally advanced or metastatic solid
tumors. Cohort 6, which was previously expanded from 30 to 80
patients in July 2019, will now include up to 130 patients.
Presentation of Clinical Results from CheckMate 040 Clinical
Trial of the Combination of Cabozantinib and Nivolumab with or
without Ipilimumab in Advanced Hepatocellular Carcinoma (HCC).
In January 2020, Exelixis announced phase 1/2 clinical trial
results from the combination of cabozantinib and nivolumab with or
without ipilimumab in advanced HCC. Data from the cabozantinib
combination cohort of the CheckMate 040 trial were presented on
Friday, January 24th at American Society of Clinical Oncology’s
(ASCO) Gastrointestinal Cancers Symposium, which was held in San
Francisco, California. These data support Exelixis’ clinical
development program of cabozantinib plus immune checkpoint
inhibitors in advanced HCC, including the ongoing COSMIC-312 phase
3 pivotal trial of cabozantinib plus atezolizumab versus sorafenib
in previously untreated patients.
Readout of Phase 1b COSMIC-021 Trial mCRPC Cohort at ASCO’s
Genitourinary Cancers Symposium. In February 2020, Exelixis
announced positive efficacy and safety results from an interim
analysis of the mCRPC Cohort 6 of COSMIC-021. The data were
presented on Thursday, February 13th at ASCO’s Genitourinary
Cancers Symposium, which was held in San Francisco, California.
Based on regulatory feedback from the U.S. Food and Drug
Administration (FDA) and if supported by the clinical data from the
recently expanded existing cohort and added mCRPC cohorts from
COSMIC-021, Exelixis intends to file with the FDA for accelerated
approval in an mCRPC indication as early as 2021.
Enrollment Completion of First 100 Patients in Phase 3
COSMIC-311 Pivotal Trial of Cabozantinib in Relapsed Radioiodine
(RAI)-Refractory Differentiated Thyroid Cancer (DTC). In
February 2020, Exelixis announced enrollment of the first 100
patients in COSMIC-311, a phase 3 pivotal trial evaluating
CABOMETYX versus placebo in patients with RAI-refractory DTC who
have progressed after up to two vascular endothelial growth factor
receptor-targeted therapies.
Exelixis Partner Takeda Pharmaceutical Company Limited
(Takeda) Receives Approval in Japan for CABOMETYX Tablets for the
Treatment of Curatively Unresectable or Metastatic Renal Cell
Carcinoma (RCC). In March 2020, Exelixis announced that Takeda,
its partner responsible for the clinical development and
commercialization of CABOMETYX in Japan, received approval from the
Japanese Ministry of Health, Labour and Welfare to manufacture and
market CABOMETYX as a treatment for patients with curatively
unresectable or metastatic RCC. Cabozantinib continues to expand
its global footprint, where it is currently approved in 55
countries.
Positive Top-line Results from Pivotal Phase 3 CheckMate -9ER
Trial Evaluating Nivolumab in Combination with Cabozantinib in
Previously Untreated Advanced RCC. In April 2020, Exelixis and
Bristol Myers Squibb (BMS) announced that CheckMate -9ER, the
pivotal phase 3 trial evaluating nivolumab in combination with
cabozantinib compared to sunitinib in previously untreated advanced
or metastatic RCC, met its primary endpoint of progression-free
survival at final analysis, as well as the secondary endpoints of
overall survival at a pre-specified interim analysis, and objective
response rate. This preliminary analysis of data showed a favorable
safety profile for the combination of a 40 mg dose of cabozantinib
with nivolumab, with a low frequency of treatment discontinuations
due to adverse events. Detailed results will be submitted for
presentation at an upcoming medical conference.
Cabozantinib Data Presentations at the 2020 ASCO Annual
Meeting. Cabozantinib will be the subject of 12 presentations
at this year’s meeting, which has adopted a virtual format as a
result of the COVID-19 pandemic. Data presentations will include
results from non-small cell lung cancer (NSCLC), mCRPC and
urothelial carcinoma cohorts of COSMIC-021, as well as updates from
other externally sponsored studies.
Corporate Updates
COVID-19 Update. To date, the COVID-19 pandemic has had a
relatively modest impact on Exelixis’ business operations, in
particular on Exelixis’ clinical trial and drug discovery
activities, and the company is undertaking considerable efforts to
mitigate the various problems presented by this crisis. For further
details and descriptions of the COVID-19 pandemic’s actual impact,
Exelixis’ mitigation efforts and the risks facing Exelixis if the
COVID-19 pandemic continues and grows in severity, please see
“Management’s Discussion and Analysis of Financial Condition and
Results of Operations—COVID-19 Update” in Part I, Item 2 and “Risk
Factors” in Part II, Item 1A of Exelixis’ Quarterly Report on Form
10-Q expected to be filed with the Securities and Exchange
Commission on May 5, 2020.
Exelixis Outlines Key Priorities and Anticipated Milestones
for 2020-21. In January 2020, Exelixis announced its key
priorities and anticipated milestones for 2020-21, including
generating top-line data from ongoing trials with label-enabling
potential, initiating new pivotal trials, and progressing its
mid-stage and early pipeline, with up to three new investigational
new drug filings in 2020. Subject to the challenges and risks of
the Exelixis business, including a modest actual and potential
additional impact from the ongoing COVID-19 pandemic, Exelixis is
maintaining its guidance for clinical trial enrollment and top-line
data timelines for COSMIC-311, COSMIC-312, COSMIC-313, COSMIC-021,
EXAMINER and XL092, as well as for the initiation of three phase 3
pivotal trials evaluating cabozantinib in combination with
atezolizumab in advanced NSCLC, mCRPC and RCC. Exelixis intends to
make appropriate investments to maximize the clinical development
opportunities for CABOMETYX, while concurrently working to advance
a pipeline of potential new Exelixis medicines through internal
drug discovery and business development.
George A. Scangos, Ph.D. Retires from Exelixis Board of
Directors. In March 2020, Exelixis announced that George A.
Scangos, Ph.D. notified the company of his decision to retire from
the Exelixis Board of Directors. Dr. Scangos will not stand for
re-election to the Board of Directors at the company’s 2020 Annual
Meeting of Stockholders on May 20, 2020; his resignation from the
Board will take effect that same day. Dr. Scangos cited his
multiple professional and philanthropic commitments as principal
reasons for his decision to retire from the Exelixis Board of
Directors.
Exelixis Receives Notice of Additional Paragraph IV
Certifications. Today, May 5, 2020, Exelixis received notice
from MSN Pharmaceuticals, Inc. that it had amended its Abbreviated
New Drug Application (ANDA), originally filed with the FDA in
September 2019, to add two previously-unasserted CABOMETYX Orange
Book-listed patents: U.S. Patent No. 7,579,473, the composition of
matter patent, and U.S. Patent No. 8,497,284, a method of use
patent. Exelixis is well prepared to respond and will vigorously
defend its cabozantinib intellectual property estate.
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 April 3, 2020, January 3, 2020 and March 29, 2019 are
indicated as being as of and for the periods ended March 31, 2020,
December 31, 2019 and March 31, 2019, respectively.
Conference Call and
Webcast
Exelixis management will discuss the company’s financial results
for the first quarter of 2020 and provide a general business update
during a conference call beginning at 5:00 p.m. EDT / 2:00 p.m. PDT
today, Tuesday, May 5, 2020.
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 8465574 to join by phone.
A telephone replay will be available until 8:00 p.m. EDT on May
7, 2020. Access numbers for the telephone replay are: 855-859-2056
(domestic) and 404-537-3406 (international); the passcode is
8465574. 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 system genetics, 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. Our discovery efforts have resulted in four approved
products, CABOMETYX® (cabozantinib), COMETRIQ® (cabozantinib),
COTELLIC® (cobimetinib) and MINNEBRO® (esaxerenone), and we have
entered into partnerships with leading pharmaceutical companies to
bring these important medicines to patients worldwide. Supported by
revenues from our marketed products and collaborations, we are
committed to prudently reinvesting in our business to maximize the
potential of our pipeline. We are supplementing 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 is a member of Standard & Poor’s (S&P)
MidCap 400 index, which measures the performance of profitable
mid-sized companies. 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: Exelixis’
plans with BMS to submit regulatory applications for the
combination of nivolumab and cabozantinib as a treatment for
first-line RCC; Exelixis’ 2020 financial guidance; Exelixis’ plans
to further expand Cohort 6 of COSMIC-021; Exelixis’ intention to
file with the FDA for accelerated approval of the combination of
cabozantinib and atezolizumab in an mCRPC indication, if supported
by the clinical data; Exelixis’ and BMS’ plans to submit detailed
results from the CheckMate -9ER trial for presentation at an
upcoming medical conference; Exelixis’ plans to present data from
NSCLC, mCRPC and urothelial carcinoma cohorts of COSMIC-021 at the
2020 ASCO Annual Meeting, as well as updates from other externally
sponsored studies; Exelixis’ key priorities and anticipated
milestones for 2020-21; Exelixis’ guidance for clinical trial
initiation, enrollment and top-line data; and 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. Any statements that refer
to expectations, projections or other characterizations of future
events or circumstances are forward-looking statements and 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 continuing
COVID-19 pandemic and its impact on Exelixis’ research and
development operations, including Exelixis’ ability to initiate new
clinical trials and clinical trial sites, enroll clinical trial
patients, conduct trials per protocol, and conduct drug research
and discovery operations and related activities; the degree of
market acceptance of CABOMETYX and other Exelixis products in the
indications for which they are approved and in the territories
where they are approved, and Exelixis’ and its partners’ ability to
obtain or maintain coverage and reimbursement for these products;
the effectiveness of CABOMETYX and other Exelixis products in
comparison to competing products; the level of costs associated
with Exelixis’ commercialization, research and development,
in-licensing or acquisition of product candidates, and other
activities; Exelixis’ ability to maintain and scale adequate sales,
marketing, market access and product distribution capabilities for
its products or to enter into and maintain agreements with third
parties to do so; the availability of data at the referenced times;
the potential failure of cabozantinib and other Exelixis product
candidates, both alone and in combination with other therapies, to
demonstrate safety and/or efficacy in clinical testing;
uncertainties inherent in the drug discovery and product
development process; Exelixis’ dependence on its relationships with
its collaboration partners, including their pursuit of regulatory
approvals for partnered compounds in new indications, their
adherence to their obligations under relevant collaboration
agreements and the level of their investment in the resources
necessary to complete clinical trials or successfully commercialize
partnered compounds in the territories where they are approved;
complexities and the unpredictability of the regulatory review and
approval processes in the U.S. and elsewhere; Exelixis’ continuing
compliance with applicable legal and regulatory requirements;
unexpected concerns that may arise as a result of the occurrence of
adverse safety events or additional data analyses of clinical
trials evaluating cabozantinib, cobimetinib or esaxerenone;
Exelixis’ dependence on third-party vendors for the development,
manufacture and supply of its products; 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 Securities and Exchange Commission (SEC) on February
25, 2020, 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 5, 2020. All
forward-looking statements in this press release are based on
information available to Exelixis as of the date of this press
release, and Exelixis undertakes no obligation to update or revise
any forward-looking statements contained herein, except as required
by law.
Exelixis, the Exelixis logo, CABOMETYX,
COMETRIQ and COTELLIC are registered U.S. trademarks.
MINNEBRO is a registered Japanese
trademark.
EXELIXIS, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF INCOME
(in thousands, except per share
amounts)
(unaudited)
Three Months Ended March
31,
2020
2019
Revenues:
Net product revenues
$
193,880
$
179,581
License revenues
20,879
25,564
Collaboration services revenues
12,156
10,342
Total revenues
226,915
215,487
Operating expenses:
Cost of goods sold
9,289
7,501
Research and development
101,877
63,289
Selling, general and administrative
62,940
60,138
Total operating expenses
174,106
130,928
Income from operations
52,809
84,559
Interest income
7,220
6,087
Other income, net
6
25
Income before income taxes
60,035
90,671
Provision for income taxes
11,423
14,896
Net income
$
48,612
$
75,775
Net income per share:
Basic
$
0.16
$
0.25
Diluted
$
0.15
$
0.24
Weighted-average common shares
outstanding:
Basic
305,388
300,542
Diluted
315,839
314,644
EXELIXIS, INC.
CONDENSED CONSOLIDATED BALANCE
SHEET DATA
(in thousands)
(unaudited)
March 31, 2020
December 31, 2019
Cash and investments
$
1,440,404
$
1,388,628
Working capital
$
996,419
$
868,444
Total assets
$
1,955,604
$
1,885,670
Total stockholders’ equity
$
1,747,652
$
1,685,970
EXELIXIS, INC.
RECONCILIATION OF GAAP NET
INCOME TO NON-GAAP NET INCOME
(in thousands, except per share
amounts)
(unaudited)
Three Months Ended March
31,
2020
2019
GAAP net income
$
48,612
$
75,775
Adjustments:
Stock-based compensation - research and
development expenses (1)
5,086
4,306
Stock-based compensation - selling,
general and administrative expenses (1)
8,896
8,223
Income tax effect of the above
adjustments
(3,180
)
(2,809
)
Non-GAAP net income
$
59,414
$
85,495
GAAP net income per share:
Basic
$
0.16
$
0.25
Diluted
$
0.15
$
0.24
Non-GAAP net income per share:
Basic
$
0.19
$
0.28
Diluted
$
0.19
$
0.27
Weighted-average common shares
outstanding:
Basic
305,388
300,542
Diluted
315,839
314,644
____________________
(1)
Non-cash stock-based compensation expense
used for GAAP reporting in accordance with Accounting Standards
Codification Topic 718, Compensation—Stock Compensation.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200505005994/en/
Chris Senner Chief Financial Officer Exelixis, Inc. 650-837-7240
csenner@exelixis.com
Susan Hubbard EVP, Public Affairs & Investor Relations
Exelixis, Inc. 650-837-8194 shubbard@exelixis.com
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