) recently announced that it has received a notice from its
), regarding the development of their oncology candidate,
GDC-0973 (XL518). The notice states that patient dosing has
commenced in a phase III study evaluating GDC-0973 in combination
with Roche's Zelboraf (vemurafenib).
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The multicenter, randomized, double-blind, placebo-controlled
phase III trial will evaluate the safety and efficacy of GDC-0973
in combination with Zelboraf versus Zelboraf alone in treatment
naïve BRAFV600 mutation positive patients with malignant melanoma
We note that Zelboraf is already approved for BRAFV600 mutation
positive patients with metastatic melanoma in the US (Aug 2011)
and the EU (Feb 2012).
Exelixis and Genentech, later acquired by Roche, entered into an
agreement to co-develop GDC-0973 in 2006.
As per the agreement, Exelixis will receive 50% of US
profits/losses of GDC-0973. However, Exelixis' share of
profits/losses will decrease as GDC-0973 sales will increase. The
company will bear the marketing and commercialization costs in
the US equally with Roche. Exelixis will also receive royalties
on net sales of GDC-0973 in ex-US territories.
We note that Exelixis has an option to co-promote GDC-0973 in the
US. The company can exercise this option within Jan 2014 (within
12 months from the receipt of aforementioned notice).
We currently have a Neutral recommendation on Exelixis. The stock
carries a Zacks Rank #3 (Hold) in the short run.
Pharma stocks, which currently look attractive, are
). Both the companies carry a Zacks Rank #1 (Strong Buy).