- Total Revenues of $469.8 million,
Cabozantinib Franchise U.S. Net Product Revenues of $409.6 million
-
- GAAP Diluted EPS of $0.25, Non-GAAP
Diluted EPS of $0.31 -
- Conference Call and Webcast Today at 5:00
PM Eastern Time -
Exelixis, Inc. (Nasdaq: EXEL) today reported financial results
for the second quarter of 2023 and provided an update on progress
toward achieving key corporate objectives, as well as commercial,
clinical and pipeline development milestones.
“In the second quarter of 2023, the Exelixis team continued to
make steady progress both on our commercial business and our
rapidly advancing pipeline,” said Michael M. Morrissey, Ph.D.,
President and Chief Executive Officer, Exelixis. “It was another
strong quarter for CABOMETYX®, which maintained its status as the
leading tyrosine kinase inhibitor for the treatment of renal cell
carcinoma, again driven by its use in combination with nivolumab in
the first-line setting. Revenues from CABOMETYX and the broader
cabozantinib franchise directly support the build-out of our
differentiated pipeline, including zanzalintinib, our
next-generation tyrosine kinase inhibitor, and XB002, our most
advanced antibody-drug conjugate. During and after the quarter, we
completed enrollment in multiple expansion cohorts of the phase 1
STELLAR-001 study for zanzalintinib, progressed the ongoing phase 3
pivotal trials and furthered our plans for additional pivotal
trials of the compound. We also continued to advance the phase 1
JEWEL-101 study for XB002, selecting the single-agent dose from the
dose-escalation stage of the study and initiating the cohort
expansion stage, with the goal of moving the program into full
development before year end. Our clinical collaborations with
Cybrexa and Sairopa also advanced, including Cybrexa’s recent
clinical data update from the CBX-12 phase 1 program at the ASCO
Annual Meeting in June.”
Dr. Morrissey continued: “As we move through the second half of
this year, we have much to look forward to, including the readout
of the phase 3 CONTACT-02 study of cabozantinib and atezolizumab in
patients with prostate cancer, the next overall survival analysis
from the phase 3 COSMIC-313 study evaluating the triplet regimen of
cabozantinib in combination with nivolumab and ipilimumab in renal
cell carcinoma, and potential presentations of new data from our
pipeline compounds. We also look forward to providing additional
details around our discovery and development strategy and
activities at an R&D Day planned for Tuesday, December 12th in
New York City. As always, I want to thank the Exelixis team for
their commitment, hard work and contributions during the second
quarter as we advanced our mission to help cancer patients recover
stronger and live longer.”
Second Quarter 2023 Financial
Results
Total revenues for the quarter ended June 30, 2023 were
$469.8 million, as compared to $419.4 million for the comparable
period in 2022.
Total revenues for the quarter ended June 30, 2023 included net
product revenues of $409.6 million, as compared to $347.0 million
for the comparable period in 2022. The increase in net product
revenues was primarily due to an increase in sales volume and an
increase in average net selling price.
Collaboration revenues, composed of license revenues and
collaboration services revenues, were $60.2 million for the quarter
ended June 30, 2023, as compared to $72.4 million for the
comparable period in 2022. The decrease in collaboration revenues
was primarily related to decreases in the recognition of
milestone-related revenues and development cost reimbursements
earned, which were partially offset by higher royalty revenues for
the sales of cabozantinib outside of the U.S. generated by
Exelixis’ collaboration partners, Ipsen Pharma SAS and Takeda
Pharmaceutical Company Limited.
Research and development expenses for the quarter ended
June 30, 2023 were $232.6 million, as compared to $199.5 million
for the comparable period in 2022. The increase in research and
development expenses was primarily related to increases in
manufacturing costs to support Exelixis’ development candidates,
personnel expenses, clinical trial costs and consulting and outside
services, which were partially offset by lower license and other
collaboration costs.
Selling, general and administrative expenses for the
quarter ended June 30, 2023 were $141.7 million, as compared to
$122.8 million for the comparable period in 2022. The increase in
selling, general and administrative expenses was primarily related
to increases in personnel expenses and legal and advisory fees
related to the recent proxy contest.
Provision for income taxes for the quarter ended June 30,
2023 was $19.2 million, as compared to $17.8 million for the
comparable period in 2022, primarily due to an increase in pre-tax
income.
GAAP net income for the quarter ended June 30, 2023 was
$81.2 million, or $0.25 per share, basic and diluted, as compared
to GAAP net income of $70.7 million, or $0.22 per share, basic and
diluted, for the comparable period in 2022.
Non-GAAP net income for the quarter ended June 30, 2023
was $100.3 million, or $0.31 per share, basic and diluted, as
compared to non-GAAP net income of $89.7 million, or $0.28 per
share, basic and diluted, for the comparable period in 2022.
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.
2023 Financial Guidance
Exelixis is maintaining the previously provided financial
guidance for fiscal year 2023:
Total revenues
$1.775 billion - $1.875
billion
Net product revenues
$1.575 billion - $1.675
billion
Cost of goods sold
4.0% - 5.0% of net product
revenues
Research and development expenses (1)
$1,000 million - $1,050
million
Selling, general and administrative
expenses (2)
$475 million - $525 million
Effective tax rate
20% - 22%
____________________
(1)
Includes $45 million of non-cash
stock-based compensation expense.
(2)
Includes $55 million of non-cash
stock-based compensation expense.
Cabozantinib and Pipeline
Highlights
Cabozantinib Franchise Net Product Revenues and
Royalties. Net product revenues generated by the cabozantinib
franchise in the U.S. were $409.6 million during the second quarter
of 2023, with net product revenues of $403.3 million from
CABOMETYX® (cabozantinib) and $6.4 million from COMETRIQ®
(cabozantinib). Based upon cabozantinib-related net product
revenues generated by Exelixis’ collaboration partners during the
quarter ended June 30, 2023, Exelixis earned $37.4 million in
royalty revenues.
Cabozantinib and Pipeline Presentations at the 2023 American
Society of Clinical Oncology (ASCO) Annual Meeting. In June,
cabozantinib was the subject of 22 presentations at this year’s
ASCO Annual Meeting, which was held from June 2-6 in Chicago.
Notable presentations included three-year quality-of-life follow-up
data from CheckMate -9ER and detailed results from the CONTACT-03
phase 3 trial evaluating the combination of cabozantinib and
atezolizumab vs. cabozantinib alone in metastatic RCC patients who
have progressed following treatment with an immune checkpoint
inhibitor therapy. Presentations featuring Exelixis pipeline
compounds included updated phase 1 clinical data from the CBX-12
program in collaboration with Cybrexa, as well as an overview of
the phase 3 STELLAR-303 study design evaluating zanzalintinib in
combination with atezolizumab in patients with previously treated
metastatic colorectal cancer.
Corporate Highlights
Settlement of CABOMETYX Patent Litigation with Teva
Pharmaceuticals. In July, Exelixis announced that it entered
into a Settlement and License Agreement (Agreement) with Teva
Pharmaceuticals Development, Inc. and Teva Pharmaceuticals USA,
Inc. (collectively “Teva”). This settlement resolves patent
litigation brought by Exelixis in response to Teva’s Abbreviated
New Drug Application seeking approval to market a generic version
of CABOMETYX prior to the expiration of the applicable patents.
Pursuant to the terms of the Agreement, Exelixis will grant Teva a
license to market its generic version of CABOMETYX in the U.S.
beginning on January 1, 2031, if approved by the U.S. Food and Drug
Administration and subject to conditions and exceptions common to
agreements of this type. Additionally, in accordance with the
Agreement, the parties will terminate all ongoing Hatch-Waxman
litigation between Exelixis and Teva regarding CABOMETYX patents
pending in the U.S. District Court for the District of
Delaware.
Share Repurchase Program. As of June 30, Exelixis has
repurchased $127.0 million of the company’s common stock, at an
average price of $19.22 per share. In March, Exelixis announced
that the company’s Board of Directors authorized the repurchase of
up to $550 million of the company’s common stock before the end of
2023. Share repurchases under the program may be made from time to
time through a variety of methods, which may include open market
purchases, in block trades, accelerated share repurchase
transactions, exchange transactions, or any combination of such
methods. The timing and amount of any share repurchases under the
share repurchase program will be based on a variety of factors,
including ongoing assessments of the capital needs of the business,
alternative investment opportunities, the market price of Exelixis’
common stock and general market conditions.
Exelixis Board of Directors Refreshment Plan. In May,
upon the conclusion of its 2023 Annual Meeting of Stockholders,
Exelixis announced the election of three new members to its Board
of Directors, Mr. Thomas Heyman, Mr. Robert Oliver, Jr. and Mr.
David Johnson, following the departure of prior board members Mr.
Carl Feldbaum, Dr. Vincent Marchesi and Dr. Lance Willsey. Exelixis
thanks Mr. Feldbaum and Drs. Marchesi and Willsey for their
commitment and contributions to Exelixis during their tenure, and
looks forward to working collaboratively with Messrs. Heyman,
Oliver and Johnson to advance the company’s mission to help
patients recover stronger and live longer, and generate
sustainable, long-term value for shareholders.
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 July 1, 2022 are indicated as being as of and for the periods
ended June 30, 2022.
Conference Call and
Webcast
Exelixis management will discuss the company’s financial results
for the second quarter of 2023 and provide a general business
update during a conference call beginning at 5:00 p.m. ET / 2:00
p.m. PT today, Tuesday, August 1, 2023.
To access the conference call, please register using this link.
Upon registration, a dial-in number and unique PIN will be provided
to join the call. To access the live webcast link, log onto
www.exelixis.com and proceed to the Event Calendar page under the
Investors & News 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. A webcast replay of the conference call will
also be archived on www.exelixis.com for one year.
About Exelixis
Exelixis is a globally ambitious oncology company innovating
next-generation medicines and regimens at the forefront of cancer
care. Powered by bi-coastal centers of discovery and development
excellence, we are rapidly evolving our product portfolio to target
an expanding range of tumor types and indications with our
clinically differentiated pipeline of small molecules,
antibody-drug conjugates and other biotherapeutics. This
comprehensive approach harnesses decades of robust investment in
our science and partnerships to advance our investigational
programs and extend the impact of our flagship commercial product,
CABOMETYX® (cabozantinib). Exelixis is driven by a bold scientific
pursuit to create transformational treatments that give more
patients hope for the future. For information about the company and
its mission to help cancer patients recover stronger and live
longer, visit www.exelixis.com, follow @ExelixisInc on Twitter,
like Exelixis, Inc. on Facebook and follow Exelixis on
LinkedIn.
Forward-Looking
Statements
This press release contains forward-looking statements,
including, without limitation, statements related to: Exelixis’
research and development expectations for 2023, including
initiating additional pivotal trials for zanzalintinib, moving the
XB002 program into full development before year end, readouts from
the phase 3 CONTACT-02 and COSMIC-313 studies, and potential
presentations of new data from its pipeline compounds; Exelixis’
plans to provide additional details around its discovery and
development strategy at an R&D Day in December 2023; Exelixis’
2023 financial guidance; Exelixis’ and Teva’s obligations under the
Agreement and Exelixis’ expectation that in accordance with the
Agreement, Exelixis and Teva will terminate all ongoing
Hatch-Waxman litigation regarding CABOMETYX patents; Exelixis’ plan
to repurchase up to $550 million of its common stock before the end
of 2023; Exelixis’ Board of Directors refreshment plan as part of
its mission to help patients recover stronger and live longer, and
generate sustainable, long-term value for shareholders; and
Exelixis’ scientific pursuit to create transformational treatments
that give more patients hope for the future. 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 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, zanzalintinib 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 and other Exelixis product
candidates; Exelixis’ dependence on third-party vendors for the
development, manufacture and supply of its products and product
candidates; 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’
Quarterly Report on Form 10-Q filed with the Securities and
Exchange Commission (SEC) on May 9, 2023 and Annual Report on Form
10-K filed with the SEC on February 7, 2023, 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 August 1, 2023. 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 and
COMETRIQ are registered trademarks of Exelixis, Inc.
EXELIXIS, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF INCOME
(in thousands, except per share
amounts)
(unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Revenues:
Net product revenues
$
409,646
$
347,044
$
773,046
$
657,342
License revenues
52,747
57,526
91,039
89,593
Collaboration services revenues
7,455
14,857
14,551
28,472
Total revenues
469,848
419,427
878,636
775,407
Operating expenses:
Cost of goods sold
17,705
13,481
32,020
26,684
Research and development
232,570
199,481
466,816
356,152
Selling, general and administrative
141,723
122,759
273,120
225,622
Total operating expenses
391,998
335,721
771,956
608,458
Income from operations
77,850
83,706
106,680
166,949
Interest income
22,541
4,757
42,043
6,579
Other income (expense), net
(5
)
45
(59
)
209
Income before income taxes
100,386
88,508
148,664
173,737
Provision for income taxes
19,208
17,836
27,458
34,492
Net income
$
81,178
$
70,672
$
121,206
$
139,245
Net income per share:
Basic
$
0.25
$
0.22
$
0.37
$
0.43
Diluted
$
0.25
$
0.22
$
0.37
$
0.43
Weighted-average common shares
outstanding:
Basic
324,205
321,117
324,312
320,349
Diluted
327,305
324,904
326,792
324,096
EXELIXIS, INC.
RECONCILIATION OF GAAP NET
INCOME TO NON-GAAP NET INCOME
(in thousands, except per share
amounts)
(unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
GAAP net income
$
81,178
$
70,672
$
121,206
$
139,245
Adjustments:
Stock-based compensation - research and
development expenses (1)
9,589
9,549
12,841
18,448
Stock-based compensation - selling,
general and administrative expenses (1)
15,311
15,073
28,720
25,933
Income tax effect of the above
adjustments
(5,781
)
(5,569
)
(9,642
)
(10,008
)
Non-GAAP net income
$
100,297
$
89,725
$
153,125
$
173,618
GAAP net income per share:
Basic
$
0.25
$
0.22
$
0.37
$
0.43
Diluted
$
0.25
$
0.22
$
0.37
$
0.43
Non-GAAP net income per share:
Basic
$
0.31
$
0.28
$
0.47
$
0.54
Diluted
$
0.31
$
0.28
$
0.47
$
0.54
Weighted-average common shares
outstanding:
Basic
324,205
321,117
324,312
320,349
Diluted
327,305
324,904
326,792
324,096
____________________
(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/20230801307436/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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