Exelixis (EXEL -0.65%), a biotechnology company known for its focus on oncology treatments, delivered strong third-quarter results on Oct. 29, largely thanks to its flagship cabozantinib franchise. It reported total revenues of $539.5 million, up from $471.9 million in the same period in 2023, as U.S. net product revenues reached $478.1 million, outpacing the previous year's $426.5 million. Non-GAAP earnings per share (EPS) also improved remarkably to $0.47 compared to $0.10 in the previous year.
| Metric | Q3 2024 | Q3 2023 | % Change |
|---|---|---|---|
| Total revenue | $539.5 million | $471.9 million | 14.3% |
| Net product revenue | $478.1 million | $426.5 million | 12.1% |
| Non-GAAP EPS | $0.47 | $0.10 | 370% |
| GAAP net income | $118 million | $1 million | 11,700% |
| R&D expenses | $222.6 million | $332.6 million | (33.1%) |
An Overview of Exelixis
Exelixis develops and commercializes new molecular entities to treat cancer. Its flagship product, cabozantinib, is marketed under brands like Cabometyx and Cometriq. Cabozantinib is widely used in the treatment of renal cell carcinoma (RCC) and other cancers.
In recent years, Exelixis has focused on strategic partnerships and pipeline diversification to enhance its market position. Its collaborations with major pharmaceutical companies and the outcomes of ongoing trials to expand cabozantinib's indications will be key factors in its growth prospects.
Notable Quarter Developments
During the third quarter, the substantial revenue growth of the cabozantinib franchise -- with both increased sales volume and higher average net selling prices -- demonstrated Exelixis' continuing market leadership. Exelixis reported a GAAP net income of $118 million, substantially higher than the $1 million reported a year earlier. Non-GAAP EPS also increased dramatically, from $0.10 to $0.47.
Research and development expenses fell to $222.6 million from $332.6 million in the previous year, largely due to lower licensing and collaboration costs, even as the company invests in diversifying its treatment pipeline beyond cabozantinib.
The cabozantinib franchise continues to gain traction through strategic trials aimed at expanding its use in indications including neuroendocrine and prostate cancers. Recent legal victories have extended its patent protections until at least 2030.
Among the quarter's noteworthy strategic moves was its partnership deal with Merck to evaluate it's candidate treatment zanzalintinib in tandem with pembrolizumab and belzutifan. There are now six planned or active phase 3 trials for zanzalintinib.
Looking Ahead
Exelixis boosted its full-year revenue guidance to between $2.15 billion and $2.2 billion. This indicates management's confidence in the robust growth trajectory driven by the cabozantinib franchise's strong performance. Strategic investments in pipeline diversification highlight Exelixis' commitment to reducing its reliance solely on cabozantinib and ensuring sustainable long-term growth.
Investors should keep an eye on how Exelixis fares in its efforts to expand cabozantinib's label into new indications and with the execution of its strategic collaborations. The FDA is due to make its decision on cabozantinib as a treatment for neuroendocrine tumors by April -- that will be a critical catalyst for Exelixis.
