Exelixis ((EXEL)) has held its Q4 earnings call. Read on for the main highlights of the call.
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During the recent Exelixis earnings call, a positive sentiment resonated throughout the discussion, highlighting robust growth in the cabozantinib franchise, significant advancements in regulatory and pipeline developments, and a strong financial foundation. Despite facing challenges such as increased operating expenses and gross to net deductions, Exelixis conveyed a sense of momentum and growth potential, leaving stakeholders optimistic about the company’s trajectory.
Strong Performance of Cabozantinib Franchise
The cabozantinib franchise emerged as a key driver of Exelixis’s performance, reporting an approximate 11% growth in demand, new starts, and revenue. Notably, the fourth quarter U.S. cabo franchise net product revenues surged by 20% year-over-year, reaching $515 million, while the full-year 2024 revenues expanded by 11% to $1.81 billion, underscoring the franchise’s strength and market position.
Regulatory Progress for Cabozantinib
Exelixis made significant strides in regulatory progress, with the FDA accepting the sNDA for cabozantinib in pNET and epNET indications, setting a PDUFA date for April 3, 2025. The final results from the CABINET Phase III pivotal trial were published in the New England Journal of Medicine, marking a critical milestone in the drug’s development.
Pipeline Growth and New Trials
Looking ahead, Exelixis plans to accelerate the Phase I development of XL309 and aims to file up to three new INDs for XB628, XB064, and XB371 in 2025. The company is poised to present significant data at major scientific meetings, reflecting its commitment to strengthening and expanding its pipeline.
Strong Financial Position
Exelixis reported a GAAP net income of approximately $139.9 million for the fourth quarter and executed a share repurchase program, acquiring approximately $656 million worth of shares in 2024. These actions highlight the company’s solid financial standing and shareholder value enhancement initiatives.
Increased Operating Expenses
The fourth quarter of 2024 saw total operating expenses rise to approximately $403 million. This increase was attributed to higher manufacturing costs for drug development candidates, alongside elevated clinical trial, licensing, and general administrative expenses, presenting challenges that the company is navigating.
Higher Gross to Net Deductions
The cabozantinib franchise experienced higher gross to net deductions of 26.8% in the fourth quarter of 2024 due to increased co-pay assistance and Medicare Part D expenses, indicating a need for strategic adjustments in managing deductions.
Speculation and Misguided Comparisons
The earnings call addressed market speculation comparing zanza to cabo, which Exelixis deemed misguided and a distraction from their zanza development activities, emphasizing the company’s focus on its strategic objectives.
Forward-Looking Guidance
Looking ahead, Exelixis outlined ambitious financial targets and strategic directions for 2025. The company aims for cabozantinib revenues to hit $3 billion by 2030 and zanzalintinib to reach $5 billion by 2033. With a PDUFA date for cabozantinib NET indication set for April 3, 2025, and pivotal trial readouts expected in the second half of 2025, Exelixis is positioning zanzalintinib as a major oncology franchise opportunity. Additionally, with cash and marketable securities totaling approximately $1.75 billion, the company remains committed to capital allocation through share repurchases and strategic business development.
In conclusion, Exelixis’s earnings call conveyed a positive narrative of growth and strategic progress. The strong performance of the cabozantinib franchise, regulatory advances, and pipeline expansion efforts reflect a company poised for future success. While increased expenses and deductions present challenges, Exelixis’s robust financial position and forward-looking guidance underscore its commitment to delivering value and achieving its ambitious goals.
