Release Date: October 29, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Exelixis Inc (EXEL, Financial) reported strong financial performance in Q3 2024, with total revenues of approximately $539.5 million, driven by the cabozantinib franchise.
- The company has increased its 2024 full-year net product revenue and total revenue guidance based on robust results.
- Exelixis Inc (EXEL) secured a favorable ANDA ruling, extending cabozantinib's revenue potential into early 2030.
- The collaboration with Merck for zanza in kidney and head and neck cancers provides significant validation and momentum.
- Exelixis Inc (EXEL) is well-positioned to capture a significant portion of the neuroendocrine tumor market, pending regulatory approval, with Cabometyx.
Negative Points
- Exelixis Inc (EXEL) faces intense competition in the first-line RCC market, which remains extremely competitive.
- The company recorded a noncash impairment charge of approximately $52 million related to unoccupied lease facilities.
- There is uncertainty regarding the appeal process of the ANDA ruling, which could impact future revenue projections.
- Exelixis Inc (EXEL) has a challenging time getting analysts to include zanza in their revenue models, with only half doing so.
- The company is cautious about the potential for regulatory traction in prostate cancer, which is heavily discounted until clarity is achieved.
Q & A Highlights
Q: Can you provide some insight into the diligence process for the Merck collaboration, especially given Merck's existing drug lenvatinib?
A: Michael Morrissey, President and CEO, explained that while they can't speak for Merck, the collaboration process was extensive and took many months. Exelixis is excited to work with Merck, a major competitor in the RCC space, and is optimistic about the potential of zanza in the trials Merck will be conducting.
Q: Regarding business development, do you have a preference for modality or deal size in the GI space?
A: Michael Morrissey stated that Exelixis is agnostic to modality and deal size. The focus is on active molecules that can generate differentiating clinical data and drive commercial success, particularly in the GU/GI space.
Q: What are your thoughts on the competitive landscape for your synthetic lethality assets, and when can we expect data?
A: Dana Aftab, Chief Scientific Officer, noted that Exelixis has two compounds in the clinic, XL-309 and XL-495, which are differentiated from competitors. They believe they are leading in the clinic with XL-309 and have advantages with XL-495 in terms of PK and selectivity.
Q: What has driven the recent reacceleration of cabo sales growth?
A: P.J. Haley, Executive Vice President of Commercial, attributed the growth to strong demand and new patient starts, particularly in first-line RCC. The team has maintained market leadership and continues to see patient stacking and demand growth.
Q: Can you elaborate on the assumptions behind the $5 billion peak US sales potential for zanza?
A: Michael Morrissey emphasized that Exelixis has a sophisticated commercial organization for modeling. He encouraged analysts to conduct their own modeling and engage with Exelixis as more data becomes available. The focus is on building a multiproduct, multi-franchise business.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
