- Cabozantinib Franchise Net Product Revenues of $68.9 Million,
Total Revenues of $80.9 Million -
- Achieves Profitability with Net Income of $16.7 Million, Diluted
EPS of $0.05 per Share -
- Conference Call and Webcast Today at 5:00 PM Eastern Time -
SOUTH SAN FRANCISCO, Calif.--(BUSINESS WIRE)--May 1, 2017--
Exelixis, Inc. (Nasdaq:EXEL) today reported financial results for the
first quarter of 2017 and provided an update on progress toward
fulfilling its key corporate objectives, as well as commercial and
clinical development milestones.
In 2017, Exelixis is focused on maximizing the opportunity for its two
internally-discovered compounds, cabozantinib and cobimetinib, to
improve care and outcomes for people with cancer around the world. The
company’s foremost priority is the ongoing U.S. launch of CABOMETYX™
(cabozantinib) tablets as a treatment for patients with advanced renal
cell carcinoma (RCC) who have received prior anti-angiogenic therapy.
During the first quarter of 2017, CABOMETYX generated $62.4 million in
net product revenue, while COMETRIQ® (cabozantinib) capsules
for the treatment of patients with progressive, metastatic medullary
thyroid cancer generated an additional $6.5 million in net product
revenue, for a combined $68.9 million in net product revenue for the
cabozantinib franchise. In addition, Exelixis progressed its
preparations to submit a supplemental New Drug Application (sNDA) for
cabozantinib as a treatment for previously untreated patients with
advanced RCC based on the positive data from the CABOSUN randomized
phase 2 trial. Finally, Exelixis and its partner Genentech, a member of
the Roche Group, are continuing to co-promote COTELLIC®
(cobimetinib) in combination with vemurafenib for the treatment of
patients with unresectable or metastatic melanoma with a BRAF V600E
mutation in the United States. Genentech continues to advance the
cobimetinib clinical development program, and recently announced that
IMblaze370, the phase 3 pivotal trial evaluating the combination of
cobimetinib and atezolizumab in third-line advanced or metastatic
colorectal cancer, achieved full enrollment in the first quarter of
2017. Two other phase 3 pivotal trials of combination regimens including
cobimetinib are planned or underway in forms of advanced melanoma.
“The Exelixis team’s progress this quarter is a launching point from
which to build throughout 2017 as we work diligently to position the
company as a sustainable business focused on improving the treatment of
cancer for patients on a global basis,” said Michael M. Morrissey,
Ph.D., President and Chief Executive Officer of Exelixis. “During the
first quarter of 2017, we reached the important milestone for our
shareholders of achieving profitability based on operations. In
addition, we further advanced cabozantinib’s commercialization and
clinical development through our ongoing strong execution on the
CABOMETYX U.S. launch, made additional progress in our preparations to
submit a sNDA for previously untreated patients with advanced RCC,
entered into important clinical development collaborations that will
evaluate cabozantinib in combination with leading immunotherapies, and
granted Japanese rights to a new cabozantinib partner, Takeda.”
Dr. Morrissey continued: “Our partner Genentech moved cobimetinib, the
second Exelixis-discovered compound, forward during the quarter as well,
with the completion of enrollment in IMblaze370 in patients with
advanced colorectal cancer. At Exelixis, we are focused on continuing to
lay the groundwork for the future, including repaying our remaining debt
this summer, planning to fund the company’s growth from its operations,
and assessing in-licensing opportunities and resuming internal drug
discovery. We are committed to a plan that involves measured and
judicious growth to put the company in the best position to help
patients and build long-term value.”
Cabozantinib Highlights
Strong Growth in Cabozantinib Franchise Net Revenues. Cabozantinib
generated $68.9 million in net product revenue during the first quarter
of 2017, an increase of 33 percent from the fourth quarter of 2016 and
an increase of 657 percent year-over-year. The year-over-year increase
was driven primarily by the U.S. introduction of CABOMETYX following FDA
approval in April 2016 as a treatment for patients with advanced RCC who
have received prior anti-angiogenic therapy.
Partnership with Takeda for Japanese Commercialization and
Development. In January 2017, Exelixis and Takeda jointly announced
an exclusive licensing agreement for the commercialization and further
development of cabozantinib in Japan, including rights to CABOMETYX and
COMETRIQ. Under the terms of the agreement, Exelixis received a $50.0
million non-refundable upfront payment. Exelixis is eligible to receive
development, regulatory, and first-sales milestones of $95.0 million for
the first three planned indications. In addition, Exelixis will be
eligible to receive royalties on sales by Takeda. Takeda will be
responsible for 20 percent of the costs associated with the global
cabozantinib development plan’s current and future trials, provided
Takeda opts in to participate in such future trials, and 100 percent of
costs associated with the cabozantinib development activities that are
exclusively for the benefit of Japan.
Phase 1 Trial Results in Combination with Nivolumab and Ipilimumab in
Advanced Genitourinary Tumors. At the ASCO Genitourinary Cancers
Symposium in February 2017, investigators presented data from the phase
1 trial of cabozantinib in combination with nivolumab, with and without
ipilimumab, in patients with previously treated genitourinary tumors
including metastatic urothelial carcinoma and RCC. Data from this
NCI-CTEP-sponsored study have informed the design of Exelixis and
Bristol-Myers Squibb Company’s (BMS) planned phase 3 pivotal trial of
cabozantinib in combination with these therapies in first-line RCC,
which is expected to start later this year.
Collaborations for Late-Stage Development in Combination with
Immunotherapies. In February 2017, Exelixis announced agreements
with BMS and Roche to collaborate on the development of cabozantinib in
combination with immunotherapy agents. Exelixis and BMS announced their
intent to collaborate on the evaluation of cabozantinib in combination
with Opdivo® (nivolumab) alone or in combination with Yervoy®
(ipilimumab) in a phase 3 trial in first-line RCC, and potentially in
other tumor types including hepatocellular carcinoma (HCC) and bladder
cancer. These studies are anticipated to begin in 2017. The
collaborations build upon previously published preclinical and clinical
data that underscore the scientific rationale for combining cabozantinib
with immunotherapies, and provide the resources and collaborative
framework to evaluate the potential for cabozantinib combination
regimens to benefit patients with a variety of cancers. Separately,
Exelixis and Roche will collaborate to initiate the evaluation of
cabozantinib in combination with Tecentriq® (atezolizumab), an
anti-PD-L1 antibody, in patients with advanced RCC or bladder cancer.
Ipsen has opted in to participate in the phase 3 pivotal trial in
first-line advanced RCC with BMS and to participate in the study with
Roche, and will have access to the results to support potential future
regulatory submissions and for potential future development in its
territories.
Continued Progress on Filing in Previously Untreated Advanced RCC. During
the first quarter, Exelixis continued to make progress on its
sNDA for cabozantinib as a treatment for previously untreated advanced
RCC, and the company remains on track to complete the filing in the
third quarter of 2017.
Orphan Drug Designation for HCC; Update on CELESTIAL Timelines. In
March, the U.S. Food & Drug Administration (FDA) granted cabozantinib
orphan drug designation for the treatment of HCC. A phase 3 pivotal
trial (CELESTIAL) of cabozantinib is ongoing in patients with advanced
HCC, and Exelixis is tracking events closely and now anticipates the
second interim analysis at 75 percent of the events required will be
completed in the second half of 2017.
Cobimetinib Highlights
IMblaze370 in Advanced Colorectal Cancer Completes Enrollment. Roche
and Genentech recently announced that IMblaze370, the phase 3 pivotal
trial evaluating the combination of cobimetinib and atezolizumab in
third-line advanced or metastatic colorectal cancer, achieved full
enrollment in the first quarter of 2017.
Two Pivotal Trials in Melanoma to Be Underway in 2017. In
addition to the progress with IMblaze370, Roche has made it public that
IMspire150 TRILOGY, which evaluates the combination of cobimetinib,
atezolizumab, and vemurafenib in first-line BRAF V600 mutation-positive
metastatic or unresectable locally advanced melanoma, enrolled its first
patient in January 2017. IMspire170, a planned pivotal trial of
cobimetinib and atezolizumab vs. pembrolizumab in first-line BRAF
wild-type metastatic or unresectable locally advanced melanoma, is
expected to enroll its first patient in the second quarter of this year.
Update on Dispute between Exelixis and Genentech. In January
2017, Exelixis announced that Genentech, a member of the Roche Group,
had withdrawn its counterclaim against Exelixis in the ongoing JAMS
arbitration concerning alleged breaches of the parties’ collaboration
agreement. Genentech had asserted a counterclaim for breach of contract,
which sought monetary damages and interest related to cost allocations
under the collaboration agreement. When notifying the arbitral panel,
and Exelixis, of this unilateral action, Genentech further stated that
it is changing the manner in which it allocates promotional expenses of
the COTELLICplus Zelboraf® (vemurafenib)
combination therapy. Genentech’s revised allocation applies
retrospectively and prospectively and substantially reduces Exelixis’
exposure to costs associated with promotion of the COTELLICplus
Zelboraf combination in the United States. Notwithstanding Genentech’s
change of approach, other significant issues remain in dispute between
the parties. As a result, we will continue to press our position before
the arbitral panel to obtain a just resolution of these claims. The
ultimate outcome and timing of the arbitration is difficult to predict.
Corporate Highlights
Reduced Indebtedness Through Repayment of Silicon Valley Bank Loan. In
late March 2017, Exelixis repaid all amounts outstanding under its term
loan with Silicon Valley Bank initiated in 2010 and which was due for
repayment on May 31, 2017. The payment included $80.0 million in
principal plus $0.1 million in accrued and unpaid interest. The company
also plans to repay the Deerfield Notes, a series of Convertible Secured
Notes issued to entities associated with Deerfield Management Company,
L.P. due July 1, 2018. Exelixis has designated the Deerfield Notes a
Current Liability given its ability and intent to retire them on or
about July 1, 2017, one year ahead of their maturity date. As of March
31, 2017, the carrying balance on the Deerfield Notes was $113.9 million
with the total of $124.9 million due at maturity. Retiring the Deerfield
Notes one year ahead of their maturity date will provide the company a
savings of approximately $12 million in interest expense, net of the
termination fee.
Cabozantinib and Cobimetinib Data Presentations at the 2017 ASCO
Annual Meeting. Exelixis-discovered compounds will be the subject of
13 presentations, including further analysis of the METEOR study in
advanced RCC as well as updated results from the phase 1b combination
trial of cabozantinib plus immunotherapy in genitourinary tumors.
Additional cabozantinib data presentations will include results from
trials in endometrial cancer and uterine carcinosarcoma. Cobimetinib
data will include updates from the early stage combination trials of
cobimetinib plus atezolizumab, and plus atezolizumab and vemurafenib,
which have informed the design of several of Roche’s ongoing or planned
phase 3 pivotal trials.
2017 Financial Guidance
The company is reiterating its previously provided guidance that total
costs and operating expenses for the full year will be between $290
million and $310 million. This guidance includes approximately $25
million of non-cash costs and expenses related primarily to stock-based
compensation expense.
First Quarter 2017 Financial Results
Total revenues for the quarter ended March 31, 2017 were $80.9
million, compared to $15.4 million for the comparable period in 2016.
Total revenues include $68.9 million of net product revenues compared to
$9.1 million for the comparable period in 2016. The increase in net
product revenues primarily reflects the impact of the commercial launch
of CABOMETYX in late April 2016. Total revenues also include $12.0
million of collaboration revenues compared to $6.3 million for the
comparable period in 2016. Collaboration revenues for the quarter ended
March 31, 2017 include $4.5 million, $2.7 million and $2.3 million
earned under our collaboration agreements with Ipsen, Takeda and
Genentech, respectively, and $2.5 million in contract revenues from a
milestone payment received from BMS related to its ROR gamma program. In
comparison, during the three months ended March 31, 2016, collaboration
revenues include $1.2 million and $0.1 million in collaboration revenue
under our collaboration agreements with Ipsen and Genentech,
respectively, and $5.0 million in contract revenues from a milestone
payment received from Merck related to its worldwide license of our
PI3K-delta program.
Research and development expenses for the quarter ended March 31,
2017 were $23.2 million, compared to $28.9 million for the comparable
period in 2016. The decrease in research and development expenses were
primarily a result of decreases in clinical trial costs for METEOR, the
company’s phase 3 trial in advanced RCC and share-based compensation;
those decreases were partially offset by an increase in personnel
related expenses resulting from an increase in headcount predominantly
associated with the build-out of the Exelixis medical affairs
organization.
Selling, general and administrative expenses for the quarter
ended March 31, 2017 were $34.3 million, compared to $34.9 million for
the comparable period in 2016. The decrease in selling, general and
administrative expenses was primarily a result of decreases in marketing
costs due to a decrease in losses under the collaboration agreement with
Genentech and stock-based compensation; those decreases were almost
entirely offset by increases in personnel expenses resulting from an
increase in headcount connected with the build-out of the Exelixis U.S.
commercial organization and an increase in legal costs.
Other expense, net for the quarter ended March 31, 2017 was a net
expense of $3.4 million compared to $10.1 million for the comparable
period in 2016. The decrease in other expense, net, was primarily due to
a decrease in interest expenses as a result of the 2016 conversions and
redemption of the 4.25 percent Convertible Subordinated Notes due 2019.
Net income for the quarter ended March 31, 2017 was $16.7
million, or $0.06 per share, basic, and $0.05 per share, diluted,
compared to a net loss of $(59.2) million, or $(0.26) per share, basic
and diluted, for the comparable period in 2016. The decrease in net loss
for the quarter ended March 31, 2017 was primarily due to the increase
in net product and collaboration revenues and the decrease in operating
and interest expenses.
Cash and cash equivalents, short- and long-term investments and
long-term restricted cash and investments totaled $475.8 million at
March 31, 2017, as compared to $479.6 million at December 31, 2016.
Basis of Presentation
Exelixis 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 March 31,
2017, December 30, 2016 and April 1, 2016 are indicated as being as of
and for the periods ended March 31, 2017, December 31, 2016 and March
31, 2016, respectively.
Conference Call and Webcast
Exelixis management will discuss the company’s financial results for
first quarter of 2017 and provide a general business update during a
conference call beginning at 5:00 p.m. EDT/2:00 p.m. PDT today, Monday,
May 1, 2017.
To access the webcast link, log onto www.exelixis.com
and proceed to the Event Calendar page under Investors & Media. 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 3901622 to join by phone.
A telephone replay will be available until 11:59 p.m. EDT on Wednesday,
May 3, 2017. Access numbers for the telephone replay are: (855) 859-2056
(domestic) and (404) 537-3406 (international); the passcode is 3901622.
A webcast replay will also be archived on www.exelixis.com
for one year.
About Exelixis
Exelixis, Inc. (Nasdaq: EXEL) is a biopharmaceutical company committed
to the discovery, development and commercialization of new medicines to
improve care and outcomes for people with cancer. Since its founding in
1994, three products discovered at Exelixis have progressed through
clinical development, received regulatory approval, and entered the
marketplace. Two are derived from cabozantinib, an inhibitor of multiple
tyrosine kinases including MET, AXL and VEGF receptors: CABOMETYX™
tablets approved for previously treated advanced kidney cancer and
COMETRIQ® capsules approved for progressive, metastatic
medullary thyroid cancer. The third product, COTELLIC®, is a
formulation of cobimetinib, a selective inhibitor of MEK, is marketed
under a collaboration with Genentech (a member of the Roche Group), and
is approved as part of a combination regimen to treat advanced melanoma.
Both cabozantinib and cobimetinib have shown potential in a variety of
forms of cancer and are the subjects of broad clinical development
programs. For more information on Exelixis, please visit www.exelixis.com
or follow @ExelixisInc on Twitter.
Forward-Looking Statements
This press release contains forward-looking statements, including,
without limitation, statements related to: Exelixis’ focus on maximizing
the opportunity for cabozantinib and cobimetinib to help patients with
cancer around the world; continued progress towards submission of a sNDA
in the third quarter for cabozantinib as a treatment for previously
untreated patients with advanced RCC based on the CABOSUN trial;
continued co-promotion, with Genentech, of cobimetinib in combination
with vemurafenib for melanoma in the U.S.; Genentech’s continued
expansion and advancement of its development program for cobimetinib and
the planned initiation of its phase 3 pivotal trial of cobimetinib and
atezolizumab vs. pembrolizumab in first-line BRAF wild-type advanced
melanoma; Exelixis’ efforts to build the company as a sustainable
business, including repaying remaining debt this summer and assessing
in-license opportunities and resuming drug discovery, in order to
achieve growth and best in position to help patients and build long-term
value; Exelixis’ partnership with Takeda for Japanese commercialization
and development of cabozantinib; Exelixis’ collaborations with BMS and
Roche for development of cabozantinib in combination with those
companies’ respective immunotherapy agents; Exelixis’ expectation that
the second interim analysis of the CELESTIAL trial in advanced HCC will
be completed in the second half of 2017; Exelixis’ intention to continue
pressing its position in the arbitration against Genentech to obtain a
just resolution; the likelihood that Exelixis-discovered compounds will
be the subject of 13 presentations at the 2017 ASCO Annual Meeting; and
Exelixis’ guidance for 2017 total costs and operating expenses,
including non-cash costs and expenses. Words such as “focused,”
“opportunity,” “priority,” “continue,” “sustain,” “potential,”
“planned,” “intent,” “anticipated,” “will,” “eligible,” “guidance,”
“committed,” or other similar expressions identify forward-looking
statements, but the absence of these words does not necessarily mean
that a statement is not forward-looking. In addition, any statements
that refer to expectations, projections or other characterizations of
future events or circumstances are forward-looking statements. These
forward-looking statements 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, and COTELLIC and the
availability of coverage and reimbursement for these products; the risk
that unanticipated developments could adversely affect the
commercialization of CABOMETYX, COMETRIQ, and COTELLIC; Exelixis’
dependence on its relationship with its collaboration partners,
including, the level of their investment in the resources necessary to
successfully commercialize cabozantinib and cobimetinib in the
territories where they are approved; risks and uncertainties related to
regulatory review and approval processes and Exelixis’ compliance with
applicable legal and regulatory requirements; Exelixis’ ability and the
ability of its collaborators to conduct clinical trials of cabozantinib
and cobimetinib both alone and in combination with other therapies
sufficient to achieve a positive completion; risks related to the
potential failure of cabozantinib and cobimetinib, both alone and in
combination with other therapies, to demonstrate safety and efficacy in
clinical testing; the level of costs associated with Exelixis’
commercialization, research and development and other activities;
Exelixis’ dependence on its relationship with Genentech/Roche with
respect to cobimetinib and Exelixis’ ability to maintain its rights
under the collaboration; Exelixis’ dependence on third-party vendors;
Exelixis’ ability to protect the company’s intellectual property rights;
market competition; changes in economic and business conditions, and
other factors discussed under the caption “Risk Factors” in Exelixis’
annual report on Form 10-K filed with the Securities and Exchange
Commission (SEC) on February 27, 2017, 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 May 1, 2017. The
forward-looking statements made in this press release speak only as of
the date of this press release. Exelixis expressly disclaims any duty,
obligation or undertaking to release publicly any updates or revisions
to any forward-looking statements contained herein to reflect any change
in Exelixis’ expectations with regard thereto or any change in events,
conditions or circumstances on which any such statements are based.
Exelixis, the Exelixis logo, COMETRIQ and COTELLIC are registered
U.S. trademarks, and CABOMETYX is a U.S. trademark.
|
EXELIXIS, INC.
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
(in thousands, except per share data)
|
(unaudited)
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
2017
|
|
|
2016
|
Revenues:
|
|
|
|
|
|
|
Net product revenues
|
|
|
$
|
68,877
|
|
|
|
$
|
9,099
|
|
Collaboration revenues
|
|
|
|
12,010
|
|
|
|
|
6,328
|
|
Total revenues
|
|
|
|
80,887
|
|
|
|
|
15,427
|
|
Operating expenses:
|
|
|
|
|
|
|
Cost of goods sold
|
|
|
|
3,203
|
|
|
|
|
685
|
|
Research and development
|
|
|
|
23,210
|
|
|
|
|
28,926
|
|
Selling, general and administrative
|
|
|
|
34,260
|
|
|
|
|
34,857
|
|
Restructuring charge
|
|
|
|
28
|
|
|
|
|
94
|
|
Total operating expenses
|
|
|
|
60,701
|
|
|
|
|
64,562
|
|
Income (loss) from operations
|
|
|
|
20,186
|
|
|
|
|
(49,135
|
)
|
Other expense, net:
|
|
|
|
|
|
|
Interest income and other, net
|
|
|
|
1,068
|
|
|
|
|
202
|
|
Interest expense
|
|
|
|
(4,420
|
)
|
|
|
|
(10,290
|
)
|
Total other expense, net
|
|
|
|
(3,352
|
)
|
|
|
|
(10,088
|
)
|
Income (loss) before income taxes
|
|
|
|
16,834
|
|
|
|
|
(59,223
|
)
|
Income tax expense
|
|
|
|
134
|
|
|
|
|
—
|
|
Net income (loss)
|
|
|
$
|
16,700
|
|
|
|
$
|
(59,223
|
)
|
Net income (loss) per share, basic
|
|
|
$
|
0.06
|
|
|
|
$
|
(0.26
|
)
|
Net income (loss) per share, diluted
|
|
|
$
|
0.05
|
|
|
|
$
|
(0.26
|
)
|
Shares used in computing basic net income (loss) per share
|
|
|
|
290,870
|
|
|
|
|
228,304
|
|
Shares used in computing diluted net income (loss) per share
|
|
|
|
309,535
|
|
|
|
|
228,304
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXELIXIS, INC.
|
CONDENSED CONSOLIDATED BALANCE SHEET DATA
|
(in thousands)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
|
December 31,
|
|
|
|
2017
|
|
|
2016 (1)
|
Cash and investments (2) |
|
|
$
|
475,774
|
|
|
|
$
|
479,554
|
Working capital
|
|
|
$
|
265,663
|
|
|
|
$
|
200,215
|
Total assets
|
|
|
$
|
586,980
|
|
|
|
$
|
595,739
|
Total stockholders’ equity
|
|
|
$
|
119,750
|
|
|
|
$
|
89,318
|
_______________________________________
|
(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 $4.2 million as of
both March 31, 2017 and December 31, 2016.
|
|
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20170501006249/en/
Source: Exelixis, Inc.
Exelixis, Inc.
Chris Senner, 650-837-7240
Chief
Financial Officer
csenner@exelixis.com
or
Susan
Hubbard, 650-837-8194
Executive Vice President, Public
Affairs and Investor Relations
shubbard@exelixis.com