– Total Revenue of $215.5 Million, Cabozantinib Franchise Revenue
of $179.6 Million –
– GAAP Diluted EPS of $0.24, Non-GAAP Diluted EPS of $0.27 –
– Conference Call and Webcast Today at 5:00 PM Eastern Time –
ALAMEDA, Calif.–(BUSINESS WIRE)–Exelixis, Inc. (Nasdaq: EXEL) today reported financial results for the
first quarter of 2019 and provided an update on progress toward
fulfilling its key corporate objectives, as well as commercial and
clinical development milestones.
“The first quarter of 2019 was a very productive start to the year, with
strong execution across all aspects of our business,” said Michael M.
Morrissey, Ph.D., President and Chief Executive Officer of Exelixis. “We
continued our efforts to maximize the commercial and clinical potential
of cabozantinib through the U.S. launch in advanced hepatocellular
cancer in January, as well as the initiation of the COSMIC-313 study
announced today.”
Dr. Morrissey continued: “The financial stability provided by our
growing revenue base across product and collaboration revenue provides
Exelixis with an effective foundation upon which to pursue long-term
growth. We have ambitious plans for the rest of 2019: we intend to start
additional cabozantinib pivotal trials, bring new assets into our
development organization through internal drug discovery and external
business development, and advance our early-stage pipeline, including
XL092. As we move through our 25th anniversary year, not only
is our commitment to helping patients with cancer stronger than ever,
but our ability to do so is notably stronger as well.”
First Quarter 2019 Financial Results
Total revenues for the quarter ended March 31, 2019 were $215.5
million, compared to $213.7 million for the comparable period in 2018.
Total revenues included net product revenues of $179.6 million for the
quarter ended March 31, 2019, compared to $134.3 million for the
comparable period in 2018. The increase in net product revenues
reflected the continued growth of CABOMETYX® (cabozantinib)
in the U.S. for the treatment of patients with advanced renal cell
carcinoma (RCC), as well as the U.S. launch of CABOMETYX for the
treatment of patients with hepatocellular carcinoma (HCC) who have been
previously treated with sorafenib, following its approval by the U.S.
Food and Drug Administration (FDA) in January 2019.
CABOMETYX net product revenues for the quarter ended March 31, 2019 were
$175.9 million, compared to $171.6 million for the quarter ended
December 31, 2018. CABOMETYX net product revenues, as compared to the
preceding quarter, were impacted by higher discounts and allowances of
$7.2 million, driven by increased uptake in the government payor
channel. In addition, as of March 31, 2019, the quantity of CABOMETYX
inventory in the U.S. wholesaler distribution channel was approximately
$2.3 million lower than it was as of December 31, 2018.
Total revenues for the quarter ended March 31, 2019 also include
collaboration revenues of $35.9 million, compared to $79.4 million for
the comparable period in 2018. The decrease in collaboration revenues
was primarily the result of a decrease in revenues from milestones
recognized from Exelixis’ collaboration agreements, which was partially
offset by increases in royalty revenues on net sales of cabozantinib by
Ipsen Pharma SAS (Ipsen) outside of the U.S. and Japan, and development
cost reimbursements by Ipsen and Takeda Pharmaceutical Company Ltd.
(Takeda).
Research and development expenses for the quarter ended March 31,
2019 were $63.3 million, compared to $37.8 million for the comparable
period in 2018. The increase in research and development expenses was
primarily related to increases in clinical trial costs, personnel
expenses and stock-based compensation. The increase in clinical trial
costs was primarily due to costs associated with the expanding clinical
trial program for cabozantinib that now includes four phase 3 pivotal
studies (CheckMate 9ER, COSMIC-311, COSMIC-312 and COSMIC-313), as well
as the multi-cohort phase 1b study, COSMIC-021. The increases in
personnel expenses and stock-based compensation were primarily due to
increases in headcount to support Exelixis’ expanded discovery and
development efforts.
Selling, general and administrative expenses for the quarter
ended March 31, 2019 were $60.1 million, compared to $54.0 million for
the comparable period in 2018. The increase in selling, general and
administrative expenses was primarily related to increases in consulting
and outside services, personnel expenses, marketing costs and
stock-based compensation. The increases in personnel expenses and
stock-based compensation were primarily due to increases in general and
administrative headcount to support the company’s commercial and
research and development organizations. The increase in consulting and
outside services and marketing expenses was primarily due to increases
in marketing activities in support of the CABOMETYX launch in HCC and
continued support of the product in an increasingly competitive RCC
market.
Provision for income taxes for the quarter ended March 31, 2019
was $14.9 million and Exelixis’ effective tax rate was 16.4%, compared
to $2.5 million and 2.1%, respectively, for the comparable period in
2018. The provision for income taxes relating to Exelixis’ pre-tax
income for the three months ended March 31, 2018 was largely offset by a
valuation allowance against its net operating loss carryforwards and
other deferred tax assets. At December 31, 2018, Exelixis released
substantially all of the remaining valuation allowance against Exelixis’
deferred tax assets, after Exelixis determined that it was more likely
than not that these deferred tax assets would be realized.
GAAP net income for the quarter ended March 31, 2019 was $75.8
million, or $0.25 per share, basic and $0.24 per share, diluted,
compared to GAAP net income of $115.9 million, or $0.39 per share, basic
and $0.37 per share, diluted, for the comparable period in 2018. The
decrease in net income was primarily related to the decrease in
milestone-related revenues and the increases in research and development
expenses, selling, general and administrative expenses and the provision
for income taxes; those changes were partially offset by the increases
in net product revenues and royalty revenues recognized from Exelixis’
collaboration agreements.
Non-GAAP net income for the quarter ended March 31, 2019 was
$85.5 million, or $0.28 per share, basic and $0.27 per share, diluted,
compared to non-GAAP net income of $125.0 million, or $0.42 per share,
basic and $0.40 per share, diluted, for the comparable period in 2018.
Non-GAAP net income excludes stock-based compensation and adjusts for
the related income tax effect.
Cash and cash equivalents, short- and long-term investments and
long-term restricted cash and investments totaled $1,019.4 million
at March 31, 2019, compared to $851.6 million at December 31, 2018.
Non-GAAP Financial Measures
To supplement Exelixis’ financial results presented in accordance with
GAAP, Exelixis uses certain non-GAAP financial measures in this press
release. In particular, Exelixis presents non-GAAP net income (and the
related per share measures), which exclude from GAAP net income (and the
related per share measures) stock-based compensation expense and adjust
for the related income tax effect of this non-GAAP adjustment.
Exelixis believes that the presentation of these non-GAAP financial
measures provides useful supplementary information to, and facilitates
additional analysis by, investors. In particular, Exelixis believes that
each of these non-GAAP financial measures, when considered together with
its financial information prepared in accordance with GAAP, can enhance
investors’ and analysts’ ability to meaningfully compare Exelixis’
results from period to period, and to identify operating trends in
Exelixis’ business. Exelixis has excluded stock-based compensation
expense because it is a non-cash expense that may vary significantly
from period to period as a result of changes not directly or immediately
related to the operational performance for the periods presented.
Exelixis also regularly uses these non-GAAP financial measures
internally to understand, manage and evaluate its business and to make
operating decisions.
These non-GAAP financial measures are in addition to, not a substitute
for, or superior to, measures of financial performance prepared in
accordance with GAAP. Exelixis encourages investors to carefully
consider its results under GAAP, as well as its supplemental non-GAAP
financial information and the reconciliation between these
presentations, to more fully understand Exelixis’ business.
Reconciliations between GAAP and non-GAAP results are presented in the
tables of this release.
2019 Financial Guidance
Exelixis is maintaining the following financial guidance for 2019. Cost
of goods sold is expected to be between 4% and 5% of net product
revenues. Research and development expenses are expected to be between
$285 million and $315 million and include non-cash expenses related to
stock-based compensation of $20 million. Selling, general and
administrative expenses are expected to be between $220 million and $240
million and include non-cash expenses related to stock-based
compensation of $35 million. Guidance for the effective tax rate in 2019
is between 21% and 23%.
Cabozantinib Highlights
Strong Growth in Cabozantinib Franchise Net Revenues and Royalties.
Net product revenues generated by the cabozantinib franchise were $179.6
million during the quarter ended March 31, 2019, an increase of 34%
year-over-year. During the first quarter of 2019, CABOMETYX
generated $175.9 million in net product revenues and COMETRIQ®
(cabozantinib) capsules for the treatment of patients with progressive,
metastatic medullary thyroid cancer generated an additional $3.7
million in net product revenues. Based upon our partner Ipsen’s
cabozantinib-related revenues in the first quarter of 2019 of
approximately $63 million, Exelixis earned $14.0 million in royalty
revenues at the 22% royalty rate. CABOMETYX continues to expand its
global footprint, where it is currently approved and commercially
available in 41 and 28 countries, respectively.
FDA Approval of CABOMETYX Tablets for Previously Treated HCC. In January, Exelixis announced
the FDA approval of CABOMETYX for the treatment of patients with HCC who
have been previously treated with sorafenib. The FDA’s approval of
CABOMETYX was based on results from the CELESTIAL phase 3 pivotal trial.
Cabozantinib Data at the 2019 American Society for Clinical Oncology
Gastrointestinal Cancers Symposium (ASCO-GI). In January, data
from clinical trials of cabozantinib were featured in five presentations
at ASCO-GI in San Francisco, including further analyses from the
CELESTIAL trial.
Takeda’s Application to the Japanese Ministry of Health, Labour and
Welfare (MHLW) for CABOMETYX as a Treatment for Advanced RCC. In
April, Takeda, Exelixis’ partner in cabozantinib’s development and
commercialization in Japan, announced that it applied to the Japanese
MHLW for approval to manufacture and sell CABOMETYX as a treatment for
unresectable and metastatic RCC in Japan. Per the terms of the exclusive
licensing agreement the two companies entered into in 2017, Exelixis
will receive a $10.0 million milestone payment as a result of this
regulatory filing. Exelixis is eligible for additional development,
regulatory and first-sales milestone payments, as well as royalties on
sales of cabozantinib in Japan.
Completion of Enrollment in CheckMate 9ER. In April, CheckMate
9ER, the phase 3 pivotal trial evaluating the combination of
cabozantinib and nivolumab versus sunitinib in patients with previously
untreated advanced or metastatic RCC completed enrollment, including in
Japan where the last few patients are in the process of being
randomized. CheckMate 9ER is sponsored by Bristol-Myers Squibb Company
(BMS) and co-funded by Exelixis, and Exelixis’ partners Ipsen and Takeda.
Initiation of COSMIC-313, Phase 3 Pivotal Trial Evaluating the
Triplet Combination of Cabozantinib, Nivolumab and Ipilimumab Versus the
Combination of Nivolumab and Ipilimumab in Patients with Previously
Untreated Advanced Intermediate- or Poor-Risk RCC. Today, Exelixis
announced the initiation of COSMIC-313, a multicenter, randomized,
double-blinded, controlled phase 3 pivotal trial that aims to enroll
approximately 676 patients at 150 sites globally. The primary endpoint
of the trial is progression-free survival, and the secondary endpoints
are overall survival and objective response rate. COSMIC-313 will be
conducted in collaboration with BMS, which is providing nivolumab and
ipilimumab for use in this trial.
Corporate Highlights
MINNEBRO™ Receives Regulatory Approval for
the Treatment of Hypertension in Japan. In January, Exelixis’
partner Daiichi Sankyo Company, Limited (Daiichi Sankyo) announced that
MINNEBRO™ (esaxerenone) tablets had received approval from
the Japanese MHLW as a treatment for patients with hypertension.
MINNEBRO is a compound identified during the prior research
collaboration between Exelixis and Daiichi Sankyo, which the companies
entered into in March 2006, and has been subsequently developed
by Daiichi Sankyo. Per the collaboration agreement, Exelixis will
receive a $20.0 million milestone payment upon the first commercial sale
of MINNEBRO in Japan. Exelixis is eligible for additional
commercialization milestone payments, as well as low double-digit
royalties on sales of MINNEBRO.
Start of Phase 1 Development for XL092. In February,
Exelixis announced it had submitted an investigational new drug (IND)
application to the FDA for XL092, a next-generation small molecule
tyrosine kinase inhibitor targeting VEGF receptors, MET and other
kinases implicated in cancer’s growth and spread. Following the FDA’s
acceptance of the IND filing, Exelixis initiated a phase 1 dose
escalation trial evaluating the pharmacokinetics, safety and
tolerability of XL092 in patients with advanced solid tumors, with the
primary objective of determining a dose for daily oral administration of
XL092 suitable for further evaluation. Assuming positive data from the
initial phase of the trial, the expansion phase is designed to further
explore the selected dose of XL092 in individual tumor cohorts, where
safety, tolerability and initial clinical activity would be evaluated.
XL092 is the first clinical candidate to emerge from Exelixis’ in-house
laboratories since Exelixis resumed drug discovery activities.
Basis of Presentation
Exelixis has 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 29, 2019, December 28, 2018 and March 30, 2018 are indicated as
being as of and for the periods ended March 31, 2019, December 31, 2018
and March 31, 2018, respectively.
Conference Call and Webcast
Exelixis management will discuss the company’s financial results for the
first quarter of 2019 and provide a general business update during a
conference call beginning at 5:00 p.m. EDT / 2:00 p.m. PDT today,
Wednesday, May 1, 2019.
To access the webcast link, log onto www.exelixis.com
and proceed to the News & Events / Event Calendar page under the
Investors & Media heading. 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 4774486 to join
by phone.
A telephone replay will be available until 8:00 p.m. EDT on May 3, 2019.
Access numbers for the telephone replay are: 855-859-2056 (domestic) and
404-537-3406 (international); the passcode is 4774486. A webcast replay
will also be archived on www.exelixis.com
for one year.
About Exelixis
Founded in 1994, Exelixis, Inc. (Nasdaq: EXEL) is a commercially
successful, oncology-focused biotechnology company that strives to
accelerate the discovery, development and commercialization of new
medicines for difficult-to-treat cancers. Following early work in model
genetic systems, we established a broad drug discovery and development
platform that has served as the foundation for our continued efforts to
bring new cancer therapies to patients in need. Our discovery efforts
have resulted in four approved products, CABOMETYX®
(cabozantinib), COMETRIQ® (cabozantinib), COTELLIC®
(cobimetinib) and MINNEBRO™ (esaxerenone), and we have
entered into partnerships with leading pharmaceutical companies to bring
these important medicines to patients worldwide. Supported by revenues
from our marketed products and collaborations, we are committed to
prudently reinvesting in our business to maximize the potential of our
pipeline. We are supplementing our existing therapeutic assets with
targeted business development activities and internal drug discovery –
all to deliver the next generation of Exelixis medicines and help
patients recover stronger and live longer. Exelixis is a member of
Standard & Poor’s (S&P) MidCap 400 index, which measures the performance
of profitable mid-sized companies. For more information about Exelixis,
please visit www.exelixis.com,
follow @ExelixisInc on Twitter or like Exelixis, Inc. on Facebook.
Forward-Looking Statements
This press release contains forward-looking statements, including,
without limitation, statements related to: Exelixis’ ambitious plans for
the rest of 2019, including Exelixis’ intention to start additional
cabozantinib pivotal trials, bring new assets into Exelixis’ development
organization through internal drug discovery and external business
development, and advance Exelixis’ early-stage pipeline, including
XL092; Exelixis’ guidance for 2019 cost of goods sold, research and
development expenses (including non-cash expenses related to stock-based
compensation), selling, general and administrative expenses (including
non-cash expenses related to stock-based compensation), and effective
tax rate; Exelixis’ receipt of a $10.0 million milestone payment from
Takeda for Takeda’s submission of an application to the Japanese MHLW
for approval to manufacture and sell CABOMETYX as a treatment for
unresectable and metastatic RCC in Japan; Exelixis’ eligibility for
additional development, regulatory and first-sale milestone payments, as
well as royalties on sales under its collaboration with Takeda; the
anticipated timing for receipt of a $20.0 million milestone payment
from Daiichi Sankyo upon the first commercial sale of MINNEBRO in Japan;
Exelixis’ eligibility for additional commercialization milestone
payments, as well as low double-digit royalties on sales of MINNEBRO;
Exelixis’ plans for further explorations of XL092 in the expansion phase
of the phase 1 dose escalation trial should data from the initial phase
prove positive; and Exelixis’ plans to reinvest in its business to
maximize the potential of the company’s pipeline, including through
targeted business development activities and internal drug
discovery. Any statements that refer to expectations, projections or
other characterizations of future events or circumstances are
forward-looking statements and 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, COTELLIC and MINNEBRO in the
territories where they are approved, and Exelixis’ ability to obtain or
maintain coverage and reimbursement for these products; the
effectiveness of CABOMETYX, COMETRIQ, COTELLIC and MINNEBRO in
comparison to competing products; the level of costs associated with
Exelixis’ commercialization, research and development, in-licensing or
acquisition of product candidates, and other activities; the potential
failure of cabozantinib, cobimetinib, esaxerenone and
other Exelixis product candidates, both alone and in combination with
other therapies, to demonstrate safety and/or efficacy in clinical
testing; uncertainties inherent in the drug discovery and product
development process; Exelixis’ dependence on its relationships with its
collaboration partners, including their pursuit of regulatory approvals
for partnered compounds in new indications, their adherence to their
obligations under relevant collaboration agreements and the level of
their investment in the resources necessary to complete clinical trials
or successfully commercialize partnered compounds in the territories
where they are approved; risks and uncertainties related to regulatory
review and approval processes, including that regulatory authorities may
not approve Exelixis’ products as treatments for the indications in
which approval has been sought; Exelixis’ continuing compliance with
applicable legal and regulatory requirements; unexpected concerns that
may arise as a result of the occurrence of adverse safety events or
additional data analyses of clinical trials evaluating cabozantinib,
cobimetinib or esaxerenone; Exelixis’ dependence on third-party vendors
for the manufacture and supply of its products; Exelixis’ ability to
protect its intellectual property rights; market competition, including
the potential for competitors to obtain approval for generic versions of
Exelixis’ marketed products; 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 22, 2019, 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, 2019.
All forward-looking statements in this press release are based on
information available to Exelixis as of the date of this press
release, and Exelixis undertakes no obligation to update or revise any
forward-looking statements contained herein.
Exelixis, the Exelixis logo, CABOMETYX, COMETRIQ and COTELLIC are
registered U.S. trademarks.
MINNEBRO is a Japanese trademark.
|
EXELIXIS, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share amounts) (unaudited) |
||||||||
| Three Months Ended March 31, | ||||||||
| 2019 | 2018 | |||||||
| Revenues: | ||||||||
| Net product revenues | $ | 179,581 | $ | 134,272 | ||||
| Collaboration revenues | 35,906 | 79,447 | ||||||
| Total revenues | 215,487 | 213,719 | ||||||
| Operating expenses: | ||||||||
| Cost of goods sold | 7,501 | 5,639 | ||||||
| Research and development | 63,289 | 37,757 | ||||||
| Selling, general and administrative | 60,138 | 54,016 | ||||||
| Total operating expenses | 130,928 | 97,412 | ||||||
| Income from operations | 84,559 | 116,307 | ||||||
| Other income (expense), net: | ||||||||
| Interest income | 6,087 | 1,895 | ||||||
| Other, net | 25 | 169 | ||||||
| Total other income (expense), net | 6,112 | 2,064 | ||||||
| Income before income taxes | 90,671 | 118,371 | ||||||
| Provision for income taxes | (14,896 | ) | (2,514 | ) | ||||
| Net income | $ | 75,775 | $ | 115,857 | ||||
| Net income per share, basic | $ | 0.25 | $ | 0.39 | ||||
| Net income per share, diluted | $ | 0.24 | $ | 0.37 | ||||
| Shares used in computing net income per share, basic | 300,542 | 296,421 | ||||||
| Shares used in computing net income per share, diluted | 314,644 | 313,691 | ||||||
Contacts
Chris Senner
Chief Financial Officer
Exelixis,
Inc.
650-837-7240
csenner@exelixis.com
Susan Hubbard
EVP, Public Affairs & Investor Relations
Exelixis,
Inc.
650-837-8194
shubbard@exelixis.com