- Total Revenues of $471.9 million,
Cabozantinib Franchise U.S. Net Product Revenues of $426.5 million
-
- Conference Call and Webcast Today at 5:00
PM Eastern Time -
Exelixis, Inc. (Nasdaq: EXEL) today reported financial results
for the third quarter of 2023 and provided an update on progress
toward achieving key corporate objectives, as well as commercial,
clinical and pipeline development milestones.
“The third quarter of 2023 was another strong one for the
CABOMETYX® commercial franchise, which continues to fuel the
buildout of our differentiated pipeline of small molecules and
biotherapeutics,” said Michael M. Morrissey, Ph.D., President and
Chief Executive Officer, Exelixis. “CABOMETYX maintained its status
as the leading tyrosine kinase inhibitor for the treatment of renal
cell carcinoma, driven by its use in combination with nivolumab in
the first-line setting. On the cabozantinib development front, we
reported positive results from the phase 3 CONTACT-02 and CABINET
studies in prostate and neuroendocrine tumors, respectively.”
Dr. Morrissey continued: “We welcomed Dr. Amy Peterson as our
new Chief Medical Officer in August with a focus on accelerating
our clinical pipeline programs, including zanzalintinib, our
next-generation tyrosine kinase inhibitor, and XB002, our most
advanced antibody-drug conjugate. We’re making progress enrolling
key trials for both programs, and we’re excited for the
presentation of the clear cell renal cell carcinoma cohort of
zanzalintinib’s STELLAR-001 study at the 2023 International Kidney
Cancer Symposium later this month. On the business development
front, we signed a new agreement with Insilico Medicine to
in-license XL309, formerly ISM3091, a potentially best-in-class
small molecule inhibitor of USP1, and we are continuing to evaluate
external opportunities for potential best-in-class or
first-in-class late-stage and commercial assets. We’ll discuss all
these updates and more at our R&D Day on Tuesday, December 12th
in New York City. I’d like to thank the entire Exelixis team for
all their hard work and contributions during the third quarter as
we advanced our mission to help cancer patients recover stronger
and live longer.”
Third Quarter 2023 Financial
Results
Total revenues for the quarter ended September 30, 2023
were $471.9 million, as compared to $411.7 million for the
comparable period in 2022.
Total revenues for the quarter ended September 30, 2023 included
net product revenues of $426.5 million, as compared to $366.5
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 $45.4 million for the quarter
ended September 30, 2023, as compared to $45.3 million for the
comparable period in 2022. Collaboration revenues primarily
consisted of 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
September 30, 2023 were $332.6 million, as compared to $198.8
million for the comparable period in 2022. The increase in research
and development expenses was primarily related to increases in
license and other collaboration costs, personnel expenses and
manufacturing costs to support Exelixis’ development candidates,
partially offset by lower stock-based compensation expense.
Selling, general and administrative expenses for the
quarter ended September 30, 2023 were $138.1 million, as compared
to $115.0 million for the comparable period in 2022. The increase
in selling, general and administrative expenses was primarily
related to increases in personnel expenses, stock-based
compensation expense and legal and advisory fees.
Provision for income taxes for the quarter ended
September 30, 2023 was $4.8 million, as compared to $18.8 million
for the comparable period in 2022, primarily due to a decrease in
pre-tax income.
GAAP net income for the quarter ended September 30, 2023
was $1.0 million, or $0.00 per share, basic and diluted, as
compared to GAAP net income of $73.2 million, or $0.23 per share,
basic and diluted, for the comparable period in 2022.
Non-GAAP net income for the quarter ended September 30,
2023 was $32.1 million, or $0.10 per share, basic and diluted, as
compared to non-GAAP net income of $102.0 million, or $0.32 per
share, basic and $0.31 per share, 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 providing the following updated financial guidance
for fiscal year 2023:
Total revenues
$1.825 billion - $1.850
billion
Net product revenues
$1.625 billion - $1.650
billion
Cost of goods sold
4.0% - 5.0% of net product
revenues
Research and development expenses (1)
$1.050 billion - $1.075
billion
Selling, general and administrative
expenses (2)
$525 million - $550 million
Effective tax rate
20% - 22%
____________________
(1)
Includes $35 million of non-cash
stock-based compensation expense.
(2)
Includes $70 million of non-cash
stock-based compensation expense.
Cabozantinib Highlights
Cabozantinib Franchise Net Product Revenues and
Royalties. Net product revenues generated by the cabozantinib
franchise in the U.S. were $426.5 million during the third quarter
of 2023, with net product revenues of $422.2 million from
CABOMETYX® (cabozantinib) and $4.3 million from COMETRIQ®
(cabozantinib). Based upon cabozantinib-related net product
revenues generated by Exelixis’ collaboration partners during the
quarter ended September 30, 2023, Exelixis earned $37.8 million in
royalty revenues.
Positive Results from Phase 3 CONTACT-02 Pivotal Trial
Evaluating Cabozantinib in Combination with Atezolizumab in
Metastatic Castration-Resistant Prostate Cancer (mCRPC). In
August, Exelixis and partner Ipsen announced that the global phase
3 CONTACT-02 pivotal trial met one of two primary endpoints,
demonstrating a statistically significant improvement in
progression-free survival (PFS) at the primary analysis. CONTACT-02
is evaluating cabozantinib in combination with atezolizumab
compared with a second novel hormonal therapy (NHT) in patients
with mCRPC and measurable soft-tissue disease who have been
previously treated with one NHT. At a prespecified interim analysis
for the primary endpoint of overall survival (OS), a trend toward
improvement of OS was observed; however, the data were immature and
did not meet the threshold for statistical significance. Therefore,
the trial will continue to the next analysis of OS as planned. The
safety profile of the combination of cabozantinib and atezolizumab
was consistent with the known safety profiles for each single
medicine, and no new safety signals were identified with the
combination. Based on feedback from the U.S. Food and Drug
Administration (FDA), Exelixis will discuss a potential regulatory
submission when the results of the next OS analysis are available.
Detailed findings will be presented at a future medical
meeting.
Detailed Results from Phase 3 CABINET Pivotal Trial
Evaluating Cabozantinib in Advanced Pancreatic and Extra-Pancreatic
Neuroendocrine Tumors Presented at the 2023 European Society for
Medical Oncology (ESMO) Congress. In October, detailed results
were presented from the phase 3 CABINET pivotal trial at the 2023
ESMO Congress. Results of interim analyses in both cohorts
demonstrate statistically significant and clinically meaningful
improvement in PFS in those patients treated with cabozantinib.
Adverse events were consistent with the known safety profile of
cabozantinib. CABINET is sponsored by the National Cancer Institute
and is led by The Alliance for Clinical Trials in Oncology.
Previously, in August, Exelixis announced The Alliance for Clinical
Trials in Oncology’s independent Data and Safety Monitoring Board
unanimously recommended to unblind and stop the trial early due to
a dramatic improvement in efficacy observed at an interim analysis.
These findings will be discussed with the FDA.
COSMIC-313 Second Interim Analysis of OS Secondary
Endpoint. During the third quarter, a second prespecified
interim analysis for the OS secondary endpoint of the phase 3
COSMIC-313 pivotal trial was completed. The data did not meet the
threshold for statistical significance. Therefore, the trial will
continue to the next planned analysis of OS, anticipated in 2024.
The COSMIC-313 study is evaluating the triplet combination of
cabozantinib, nivolumab and ipilimumab versus the combination of
nivolumab and ipilimumab in previously untreated advanced
intermediate- or poor-risk renal cell carcinoma. In July 2022,
Exelixis announced that the trial met its primary endpoint,
demonstrating significant improvement in blinded independent
radiology committee-assessed PFS at the primary analysis.
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 FDA and subject to
conditions and exceptions common to agreements of this type. The
U.S. District Court for the District of Delaware dismissed the case
without prejudice in September 2023 per the parties’ joint request,
effectively terminating all ongoing Hatch-Waxman litigation between
Exelixis and Teva regarding CABOMETYX patents.
Appointment of Amy Peterson, M.D., as Executive Vice
President, Product Development & Medical Affairs and Chief
Medical Officer. In August, Exelixis announced the appointment
of Amy Peterson, M.D., as Executive Vice President, Product
Development & Medical Affairs and Chief Medical Officer. Dr.
Peterson is a veteran oncology drug development leader whose
experience includes senior clinical development and operational
roles at Genentech, Medivation, BeiGene and CytomX. She received
her M.D. from Thomas Jefferson University, completed a residency in
internal medicine at Northwestern Memorial Hospital and undertook a
hematology/oncology fellowship at the University of Chicago. Dr.
Peterson joined Exelixis as the company accelerates development of
its product pipeline and builds on the success of its global
cabozantinib oncology franchise.
Exelixis and Insilico Medicine (Insilico) Enter into
Exclusive Global License Agreement for XL309 (formerly ISM3091), a
Potentially Best-in-Class USP1 Inhibitor. In September,
Exelixis and Insilico announced that the companies entered into an
exclusive license agreement granting Exelixis global rights to
develop and commercialize XL309, a potentially best-in-class small
molecule inhibitor of USP1, which has emerged as a synthetic lethal
target in the context of BRCA-mutated tumors. Under the terms of
the agreement, Insilico granted Exelixis an exclusive, worldwide
license to develop and commercialize XL309 and other USP1-targeting
compounds in exchange for an upfront payment of $80 million and
potential future development and commercial milestone payments, as
well as tiered royalties on net sales.
Share Repurchase Program. As of September 30, 2023,
Exelixis has repurchased 16.943 million shares of the company’s
common stock for a total of $344.8 million. 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.
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 period
ended September 29, 2023 is indicated as being as of and for the
period ended September 30, 2023.
Conference Call and
Webcast
Exelixis management will discuss the company’s financial results
for the third 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, Wednesday, November 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 X (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’
plans to present data from the clear cell renal cell carcinoma
cohort of STELLAR-001 at the 2023 International Kidney Cancer
Symposium in November 2023, as well as discuss various updates
relating to the company’s discovery and development strategy at its
R&D Day in December 2023; the potential for XL309 to be a
best-in-class small molecule inhibitor of USP1; Exelixis’ updated
2023 financial guidance; Exelixis’ plans to discuss a potential
regulatory submission for the combination of cabozantinib and
atezolizumab in mCRPC with the FDA when the results of the next OS
analysis from CONTACT-02 are available, as well as present detailed
findings from CONTACT-02 at a future medical meeting; Exelixis’
plans to discuss findings from CABINET with the FDA; Exelixis’
anticipated timing of 2024 for the next planned OS analysis from
COSMIC-313; Exelixis’ future obligations under the Agreement
settling the company’s patent litigation with Teva; Exelixis’
immediate and future financial and other obligations under its
exclusive license agreement with Insilico; Exelixis’ plans to
repurchase up to $550 million of its common stock before the end of
2023; 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 detailed from time to time under the caption “Risk Factors”
in Exelixis’ most recent Annual Report on Form 10-K and subsequent
Quarterly Reports on Form 10-Q, and in Exelixis’ other future
filings with the Securities and Exchange Commission. 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 September
30,
Nine Months Ended September
30,
2023
2022
2023
2022
Revenues:
Net product revenues
$
426,497
$
366,482
$
1,199,543
$
1,023,824
License revenues
42,367
34,384
133,406
123,977
Collaboration services revenues
3,056
10,872
17,607
39,344
Total revenues
471,920
411,738
1,350,556
1,187,145
Operating expenses:
Cost of goods sold
18,774
15,305
50,794
41,989
Research and development
332,585
198,837
799,401
554,989
Selling, general and administrative
138,144
114,983
411,264
340,605
Total operating expenses
489,503
329,125
1,261,459
937,583
Income (loss) from operations
(17,583
)
82,613
89,097
249,562
Interest income
23,112
9,498
65,155
16,077
Other income (expense), net
289
(69
)
230
140
Income before income taxes
5,818
92,042
154,482
265,779
Provision for income taxes
4,777
18,832
32,235
53,324
Net income
$
1,041
$
73,210
$
122,247
$
212,455
Net income per share:
Basic
$
0.00
$
0.23
$
0.38
$
0.66
Diluted
$
0.00
$
0.23
$
0.38
$
0.65
Weighted-average common shares
outstanding:
Basic
315,496
322,148
321,373
320,949
Diluted
319,247
325,066
324,277
324,420
EXELIXIS, INC.
RECONCILIATION OF GAAP NET
INCOME TO NON-GAAP NET INCOME
(in thousands, except per share
amounts)
(unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2023
2022
2023
2022
GAAP net income
$
1,041
$
73,210
$
122,247
$
212,455
Adjustments:
Stock-based compensation - research and
development expenses (1)
12,438
16,438
25,279
34,886
Stock-based compensation - selling,
general and administrative expenses (1)
28,040
20,899
56,760
46,832
Income tax effect of the above
adjustments
(9,420
)
(8,506
)
(19,062
)
(18,514
)
Non-GAAP net income
$
32,099
$
102,041
$
185,224
$
275,659
GAAP net income per share:
Basic
$
0.00
$
0.23
$
0.38
$
0.66
Diluted
$
0.00
$
0.23
$
0.38
$
0.65
Non-GAAP net income per share:
Basic
$
0.10
$
0.32
$
0.58
$
0.86
Diluted
$
0.10
$
0.31
$
0.57
$
0.85
Weighted-average common shares
outstanding:
Basic
315,496
322,148
321,373
320,949
Diluted
319,247
325,066
324,277
324,420
____________________
(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/20231101406976/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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