Personal Finance

Why Exelixis Fell 14.9% in February

EXEL Chart

What happened

Exelixis (NASDAQ: EXEL) fell 14.9% in February according to data provided by S&P Global Market Intelligence after releasing fourth quarter earnings that disappointed investors at the end of the month.

Data source: YCharts.

So what

Cabometyx sales more than doubled year over year, which isn't too shabby, but sales were flat quarter over quarter, worrying investors about the trajectory of the launch.

Metric Q1 2017 Q2 2017 Q3 2017 Q4 2017
Cabometyx sales $62.4 million $80.9 million $90.4 million $90.4 million
Quarter-over-quarter growth 39.6% 29.6% 11.7% 0%

Source: Exelixis and author calculations.

Management noted that demand was actually up 5%, but there was a build of wholesaler inventory in the third quarter that resulted in flat sales despite the increased prescriptions. The company also had an increase in gross-to-net deduction due to rebates for Medicare and co-pay assistance programs during the quarter.

Doctor showing a patient a report on a tablet in a hospital room.

Image source: Getty Images.

Now what

While the growth in sales of Cabometyx appears to be slowing down for its indication as a second-line treatment for kidney cancer, Cabometyx was approved as a first-line treatment for kidney cancer in the middle of December, suggesting that Exelixis should be able to reaccelerate growth with treatment of earlier-stage patients.

In fact, prescription data from the first six weeks of the year, compared to the first six weeks of the fourth quarter, show Cabometyx increased its share of the kidney cancer market from 20% to 24% with prescription volume increasing by 21%.

And about the time the launch into first-line kidney cancer starts losing steam, Exelixis should be able to get a boost from liver cancer. The biotech expects to submit a marketing application for that indication to the FDA this quarter after releasing positive phase 3 data in October.

10 stocks we like better than Exelixis

When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Exelixis wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of March 5, 2018

Brian Orelli has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Exelixis. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

EXEL

Other Topics

Stocks

The Motley Fool

Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Learn More