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Exelixis (EXEL) Outperforms Industry in 1H22: What Lies Ahead?

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Exelixis EXEL has had a good run so far this year. In fact, it is one of the few biotech stocks that has outperformed the industry in this time frame.

Shares have gained 18% in the year so far against the industry’s decline of 22.6%.

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Exelixis’ lead drug Cabometyx, approved for treating patients with advanced renal cell carcinoma (RCC) and patients with hepatocellular carcinoma (HCC) who have been previously treated with Nexavar, aids the company’s momentum amid stiff competition.

In particular, the approval of Cabometyx for patients with advanced RCC as a first-line treatment in combination with Bristol Myers’ BMY Opdivo (nivolumab) has fuelled sales of the drug.

Bristol-Myers’ Opdivo is one of the leading revenue generators of the company and is approved for various oncology indications.

Cabometyx is also approved for previously treated, radioactive iodine (RAI)-refractory differentiated thyroid cancer (DTC).

The pipeline progress has been impressive as far as the company strives to develop its portfolio beyond lead drug Cabometyx.

Other candidates in Exelixis’ pipeline include XL092, a next-generation oral tyrosine kinase inhibitor (TKI); XB002, an antibody drug conjugate (ADC) that targets tissue factor (TF); XL102, a potent, selective and orally bioavailable covalent inhibitor of cyclin-dependent kinase 7 (CDK7); and XL114, a novel anti-cancer compound that inhibits the CARD11-BCL10-MALT1 (CBM) complex.

The company recently initiated STELLAR-303, a phase III study evaluating XL092 in combination with Roche’s Tecentriq (atezolizumab) versus Stivarga (regorafenib) in patients with metastatic colorectal cancer (CRC) that is not microsatellite instability-high or mismatch repair-deficient, who have progressed after or are intolerant to the standard of care therapy. XL092 is a next-generation tyrosine kinase inhibitor (TKI) in development for multiple advanced tumor types.

Exelixis also entered into an option and license agreement with BioInvent International AB to develop novel antibody-based immuno-oncology therapies.
The company earlier initiated the dose-escalation stage of the first-in-human phase I study of investigational candidate XL114 as a monotherapy in patients with non-Hodgkin’s lymphoma (NHL) who have received prior standard therapies.

The successful development of these candidates will broaden its portfolio and reduce its dependence on Cabometyx.

Competition is stiff in the RCC space, and capturing additional market share might become tough for Exelixis.

Merck’s MRK Keytruda, in combination with Pfizer’s PFE Inlyta, is also indicated for the first-line treatment of patients with advanced RCC.

Merck’s Keytruda, an anti-PD-1 therapy, is approved for the adjuvant treatment of patients with RCC at intermediate-high or high risk of recurrence following nephrectomy or nephrectomy and resection of metastatic lesions.

Pfizer’s Inlyta has shown strong performance, driven by continued adoption in the United States and Europe. PFE’s older drug Sutent is also approved for advanced RCC.

Exelixis currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


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