- Total Revenue of $271.7 Million,
Cabozantinib Franchise Revenue of $191.8 Million - - GAAP
Diluted EPS of $0.31, Non-GAAP Diluted EPS of $0.34 - -
Conference Call and Webcast Today at 5:00 PM Eastern Time -
Exelixis, Inc. (Nasdaq: EXEL) today reported financial results
for the third quarter of 2019 and provided an update on progress
toward fulfilling its key corporate objectives, as well as
commercial and clinical development milestones.
“In the third quarter of 2019, we made strong progress across
all components of our business, highlighted in particular by our
clinical and business development activities. Importantly, for the
first time, global cabozantinib franchise net revenue exceeded $1
billion over four consecutive quarters,” said Michael M. Morrissey,
Ph.D., President and Chief Executive Officer of Exelixis. “Based on
encouraging early clinical data, we expanded the COSMIC-021 study,
our phase 1b trial of cabozantinib and atezolizumab across multiple
tumor types, and we entered into a collaboration with Aurigene, our
second in-licensing agreement of 2019, to develop novel therapies
for cancer.”
Dr. Morrissey continued: “As we close out Exelixis’ 25th year,
our focus remains on continued execution across the organization,
all towards building momentum for key milestones anticipated in
2020, including clinical results early in the year from the phase 3
pivotal CheckMate 9ER study being conducted in collaboration with
Bristol-Myers Squibb, additional clinical data emerging from
COSMIC-021 and initiating new pivotal trials which aim to expand
the cabozantinib franchise opportunity. Furthermore, our continued
positive cash flow enables us to drive toward building sustainable
long-term growth through our internal discovery activities and
targeted business development opportunities with the potential to
expand the breadth and depth of our pipeline.”
Third Quarter 2019 Financial
Results
Total revenues for the quarter ended September 30, 2019
were $271.7 million, compared to $225.4 million for the comparable
period in 2018.
Total revenues included net product revenues of $191.8 million
for the quarter ended September 30, 2019, compared to $162.9
million for the comparable period in 2018. The increase in net
product revenues reflected the continued growth of CABOMETYX®
(cabozantinib) in the U.S. for the treatment of patients with
advanced renal cell carcinoma (RCC), as well as the U.S. launch of
CABOMETYX for the treatment of patients with hepatocellular
carcinoma (HCC) who have been previously treated with sorafenib,
following its approval by the U.S. Food and Drug Administration
(FDA) in January 2019.
Total revenues for the quarter ended September 30, 2019 also
include collaboration revenues of $79.9 million, compared to $62.5
million for the comparable period in 2018. The increase in
collaboration revenues was primarily the result of the recognition
of a $50.0 million milestone from Exelixis’ collaboration with
Ipsen Pharma SAS (Ipsen) for the achievement of $250.0 million of
net sales of cabozantinib in its territories over four consecutive
fiscal quarters. In the comparable period in 2018, Exelixis
recognized $42.6 million in milestone revenues from Ipsen.
Research and development expenses for the quarter ended
September 30, 2019 were $97.3 million, compared to $44.7 million
for the comparable period in 2018. The increase in research and
development expenses was primarily related to increases in clinical
trial costs, license and other collaboration costs and personnel
expenses. The increase in clinical trial costs was primarily due to
costs associated with the expanding clinical trial program for
cabozantinib that includes four phase 3 pivotal studies (CheckMate
9ER, COSMIC-311, COSMIC-312 and COSMIC-313), as well as a
multi-cohort phase 1b study (COSMIC-021). The increase in license
and other collaboration costs was primarily a result of the
collaboration, option and license agreement Exelixis entered into
with Aurigene Discovery Technologies Limited (Aurigene) in July
2019. The increase in personnel expenses was primarily due to
increases in headcount to support Exelixis’ expanded discovery and
development efforts.
Selling, general and administrative expenses for the
quarter ended September 30, 2019 were $51.3 million, compared to
$48.1 million for the comparable period in 2018. The increase in
selling, general and administrative expenses was primarily related
to increases in personnel expenses and stock-based compensation
partially offset by a decrease in corporate giving. The increase in
personnel expenses was primarily due to increases in administrative
headcount to support Exelixis’ commercial and research and
development organizations. The increase in stock-based compensation
was primarily due to increases in headcount, as well as the expense
recognition for restricted stock units that were granted in
September 2018 that either have vested or will vest upon the
achievement of specific performance targets.
Provision for income taxes for the quarter ended
September 30, 2019 was $25.2 million and Exelixis’ effective tax
rate was 20.5%, compared to $2.3 million and 1.8%, respectively,
for the comparable period in 2018. The provision for income taxes
relating to Exelixis’ pre-tax income for the three months ended
September 30, 2018 was largely offset by a valuation allowance
against its net operating loss carryforwards and other deferred tax
assets. At December 31, 2018, Exelixis released substantially all
of the remaining valuation allowance against Exelixis’ deferred tax
assets, after Exelixis determined that it was more likely than not
that these deferred tax assets would be realized.
GAAP net income for the quarter ended September 30, 2019
was $97.5 million, or $0.32 per share, basic and $0.31 per share,
diluted, compared to GAAP net income of $126.6 million, or $0.42
per share, basic and $0.41 per share, diluted, for the comparable
period in 2018. The decrease in net income was primarily related to
the increases in research and development expenses and the
provision for income taxes; those changes were partially offset by
the increases in both net product revenues and collaboration
revenues recognized from Exelixis’ collaboration agreements.
Non-GAAP net income for the quarter ended September 30,
2019 was $107.6 million, or $0.35 per share, basic and $0.34 per
share, diluted, compared to non-GAAP net income of $136.2 million,
or $0.46 per share, basic and $0.44 per share, diluted, for the
comparable period in 2018. Non-GAAP net income excludes stock-based
compensation and adjusts for the related income tax effect.
Cash and investments totaled approximately $1.2 billion
at September 30, 2019, compared to approximately $852 million at
December 31, 2018.
Non-GAAP Financial
Measures
To supplement Exelixis’ financial results presented in
accordance with GAAP, Exelixis presents non-GAAP net income (and
the related per share measures), which exclude from GAAP net income
(and the related per share measures) stock-based compensation
expense and adjust for the related income tax effect of this
non-GAAP adjustment.
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 because it is a
non-cash expense 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.
2019 Financial Guidance
Exelixis is providing the following updated financial guidance
for the full year 2019. Cost of goods sold is expected to be
between 4% and 5% of net product revenues. Research and development
expenses are now expected to be approximately $350 million given
the impact of the recent business development activities and
include non-cash expenses related to stock-based compensation of
approximately $20 million. Selling, general and administrative
expenses are expected to be approximately $240 million and include
non-cash expenses related to stock-based compensation of
approximately $40 million. Guidance for the effective tax rate in
2019 is between 21% and 23%.
Cabozantinib Highlights
Continued Growth in Cabozantinib Franchise Net Revenues and
Royalties. Net product revenues generated by the cabozantinib
franchise in the U.S. were $191.8 million during the third quarter
of 2019, an increase of 17.7% year-over-year, with net product
revenues of $187.4 million for CABOMETYX and $4.4 million for
COMETRIQ® (cabozantinib). Based upon Exelixis’ partner Ipsen’s
cabozantinib-related revenues in the third quarter of 2019,
Exelixis earned $16.4 million in royalty revenues at the 22%
royalty rate. Cabozantinib continues to expand its global
footprint, where it is currently approved and commercially
available in 49 and 34 countries, respectively. For the first time,
global cabozantinib franchise net revenue exceeded $1 billion over
four consecutive quarters.
$50.0 Million Milestone Earned from Ipsen Triggered by Growth
of Cabozantinib Ex-U.S. Sales. In the third quarter of 2019,
Ipsen reported cabozantinib net sales of approximately $73 million
in its territories using the contractual exchange rate, resulting
in the achievement of $250.0 million of net sales of cabozantinib
cumulatively over four consecutive fiscal quarters, and triggering
a $50.0 million milestone to Exelixis. The milestone was earned and
recognized by Exelixis in the third quarter of 2019, with the
receipt of the cash payment anticipated in the fourth quarter of
2019.
Expansion to Clinical Research Protocol for Phase 1b
COSMIC-021 Trial. In July, Exelixis announced an amendment to
the protocol for COSMIC-021, the phase 1b trial of cabozantinib in
combination with TECENTRIQ® (atezolizumab), an anti-PDL1 antibody
discovered and developed by Genentech, Inc. (a member of the Roche
Group), in patients with locally advanced or metastatic solid
tumors. Based on preliminary encouraging activity and safety data,
the original immunotherapy-refractory non-small cell lung cancer
and metastatic castration-resistant prostate cancer (CRPC) cohorts
were expanded to 80 patients each. In addition, four new cohorts -
two expansion and two exploratory - in metastatic CRPC settings
were added to the trial. There are now 24 total cohorts, with 20
cohorts evaluating the combination of cabozantinib and atezolizumab
and four cohorts evaluating cabozantinib or atezolizumab as
single-agent therapies, and the trial now has a targeted enrollment
of up to 1,732 patients. The primary goal of COSMIC-021 remains to
determine the objective response rate in each cohort.
Health Canada Approves CABOMETYX for First-Line Treatment of
Adults with Advanced RCC. In October, Ipsen announced Health
Canada’s approval of CABOMETYX for the first-line treatment of
adults with advanced RCC. Under the collaboration agreement with
Ipsen, Exelixis is eligible to receive a $3.0 million milestone for
the Health Canada approval, which will be recognized as revenue in
the fourth quarter of 2019. CABOMETYX was originally approved in
Canada in September 2018 for the treatment of adults with advanced
RCC who have received prior vascular endothelial growth factor
targeted therapy.
Corporate Updates
Exelixis and Aurigene Enter into Exclusive Collaboration,
Option and License Agreement to Discover and Develop Novel
Therapies for Cancer. In July, Exelixis announced an exclusive
collaboration, option and license agreement with Aurigene, an
India-based biotechnology company focused on oncology and
inflammatory disorders, to in-license as many as six programs.
Under the terms of the agreement, Exelixis made an upfront payment
of $10.0 million for exclusive options to license three preexisting
programs from Aurigene. In addition, Exelixis and Aurigene selected
three additional Aurigene-led drug discovery programs on mutually
agreed upon targets, in exchange for additional option payments
totaling $7.5 million. Exelixis will also contribute research
funding to facilitate discovery and preclinical development work on
all six programs.
Exelixis and Invenra, Inc. (Invenra) Expand Collaboration
Focused on the Discovery and Development of Multispecific
Antibodies for the Treatment of Cancer. In October, Exelixis
expanded its collaboration with Invenra to include the development
of novel binders against six additional targets. Under the terms of
the expanded collaboration agreement, Exelixis will have the option
to use these binders to generate multispecific antibodies based on
Invenra’s B-Body™ technology platform, or with other platforms and
formats, at Exelixis’ option.
Exelixis Files Lawsuit to Enforce Its Intellectual Property
Rights for CABOMETYX against Abbreviated New Drug Application
(ANDA) Filer. In October, Exelixis filed a patent infringement
lawsuit against MSN Pharmaceuticals, Inc. (MSN), following receipt
of a Paragraph IV certification notice letter from MSN that it had
filed an ANDA with the FDA requesting approval to market a generic
version of CABOMETYX tablets, following expiration of the CABOMETYX
composition of matter patent, U.S. Patent No. 7,579,473, which
expires on August 14, 2026. Exelixis is seeking, among other
relief, an order that the effective date of any FDA approval of the
ANDA would be a date no earlier than the expiration of U.S. Patent
No. 8,877,776 on October 8, 2030 and equitable relief enjoining MSN
from infringing this patent.
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 September 27, 2019, December 28, 2018 and September 28, 2018
are indicated as being as of and for the periods ended September
30, 2019, December 31, 2018 and September 30, 2018,
respectively.
Conference Call and
Webcast
Exelixis management will discuss the company’s financial results
for the third quarter of 2019 and provide a general business update
during a conference call beginning at 5:00 p.m. EDT / 2:00 p.m. PDT
today, Wednesday, October 30, 2019.
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 5489464 to join by phone.
A telephone replay will be available until 8:00 p.m. EDT on
November 1, 2019. Access numbers for the telephone replay are:
855-859-2056 (domestic) and
404-537-3406 (international); the
passcode is 5489464. 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: Key
milestones anticipated in 2020, including clinical results early in
the year from CheckMate 9ER, data from COSMIC-021 and initiating
new pivotal trials which aim to expand the cabozantinib franchise
opportunity; Exelixis’ belief that its continued positive cash flow
enables the company to drive toward sustainable long-term growth
through internal discovery activities and targeted business
development opportunities with the potential to expand the breadth
and depth of its pipeline; Exelixis’ updated guidance for 2019 cost
of goods sold, research and development expenses (including
non-cash expenses related to stock-based compensation), selling,
general and administrative expenses (including non-cash expenses
related to stock-based compensation), and effective tax rate; the
anticipated timing for receipt of milestone payments from Ipsen;
and Exelixis’ financial and other obligations under each of its
collaboration agreements with Aurigene and Invenra. 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, COMETRIQ, COTELLIC and MINNEBRO in
the territories where they are approved, and Exelixis’ ability to
obtain or maintain coverage and reimbursement for these products;
the effectiveness of CABOMETYX, COMETRIQ, COTELLIC and MINNEBRO 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; the potential failure of cabozantinib, cobimetinib,
esaxerenone 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; risks and uncertainties related to regulatory review and
approval processes, including that regulatory authorities may not
approve Exelixis’ products as treatments for the indications in
which approval has been sought; 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 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’ Quarterly Report on Form 10-Q filed with the Securities
and Exchange Commission (SEC) on July 31, 2019, 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 October 30, 2019. 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.
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 September
30,
Nine Months Ended September
30,
2019
2018
2019
2018
Revenues:
Net product revenues
$
191,768
$
162,946
$
565,024
$
443,054
Collaboration revenues
79,935
62,451
162,441
182,170
Total revenues
271,703
225,397
727,465
625,224
Operating expenses:
Cost of goods sold
7,537
7,360
22,577
18,996
Research and development
97,295
44,741
242,516
124,986
Selling, general and administrative
51,265
48,120
170,218
153,989
Total operating expenses
156,097
100,221
435,311
297,971
Income from operations
115,606
125,176
292,154
327,253
Other income (expense), net:
Interest income
7,191
3,507
20,253
8,099
Other, net
(140
)
271
688
368
Total other income (expense), net
7,051
3,778
20,941
8,467
Income before income taxes
122,657
128,954
313,095
335,720
Provision for income taxes
(25,205
)
(2,324
)
(60,826
)
(5,739
)
Net income
$
97,452
$
126,630
$
252,269
$
329,981
Net income per share, basic
$
0.32
$
0.42
$
0.84
$
1.11
Net income per share, diluted
$
0.31
$
0.41
$
0.80
$
1.05
Shares used in computing net income per
share, basic
303,268
298,416
301,999
297,700
Shares used in computing net income per
share, diluted
315,453
312,346
315,046
313,200
EXELIXIS, INC.
CONDENSED CONSOLIDATED BALANCE
SHEET DATA
(in thousands)
(unaudited)
September 30, 2019
December 31, 2018 (1)
Cash and investments (2)
$
1,248,430
$
851,621
Working capital
$
831,043
$
791,544
Total assets
$
1,784,865
$
1,422,286
Total stockholders’ equity
$
1,603,717
$
1,287,453
(1)
Derived from the audited consolidated
financial statements.
(2)
Cash and investments include cash and cash
equivalents, short- and long-term investments and long-term
restricted cash and investments. Long-term restricted cash and
investments totaled $1.0 million as of September 30, 2019 and $1.1
million as of December 31, 2018.
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,
2019
2018
2019
2018
GAAP net income
$
97,452
$
126,630
$
252,269
$
329,981
Adjustments:
Stock-based compensation - research and
development expenses
4,301
3,169
13,745
9,102
Stock-based compensation - selling,
general and administrative expenses
8,838
6,573
27,002
19,228
Income tax effect of the above
adjustments
(2,954
)
(187
)
(9,148
)
(567
)
Non-GAAP net income
$
107,637
$
136,185
$
283,868
$
357,744
GAAP net income per share, basic
$
0.32
$
0.42
$
0.84
$
1.11
GAAP net income per share, diluted
$
0.31
$
0.41
$
0.80
$
1.05
Non-GAAP net income per share, basic
$
0.35
$
0.46
$
0.94
$
1.20
Non-GAAP net income per share, diluted
$
0.34
$
0.44
$
0.90
$
1.14
Shares used in computing net income per
share, basic
303,268
298,416
301,999
297,700
Shares used in computing net income per
share, diluted
315,453
312,346
315,046
313,200
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191030005982/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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