Why Exelixis Inc. Stock Soared

Exelixis shares shoot to the moon after the company delivers positive phase 3 data on its advanced melanoma combination therapy. See what this news means for investors.

Jul 14, 2014 at 2:16PM

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Exelixis (NASDAQ:EXEL), a biopharmaceutical company developing small molecule drugs to treat cancer, shot higher by as much as 21% after announcing positive top-line results from a phase 3 study involving the combination of cobimetinib and Zelboraf in patients with BRAF V600 mutation-positive advanced melanoma.

So what: According to this morning's press release from Roche (NASDAQOTH:RHHBY) – Exelixis discovered cobimetinib but has since collaborated with Genentech, which is a division of Roche – the combination met the primary endpoint of a statistically significant increase in progression-free survival compared to patients who took Zelboraf alone. Furthermore, adverse events were consistent across both treatment groups. The duo will look to present full data from its study later this year and, if approved, Exelixis and Roche will help co-promote the drug.

Now what: Today's data is a good reminder to Exelixis investors, like myself, that there is indeed a pipeline beyond Cometriq. As a shareholder I admit that I've been so focused on the end results from its multiple Cometriq sutdies that I had lost sight of what became a successful phase 3 study. I personally believe this only further solidifies Exelixis as an opportunistic investment as I anticipate the company will report positive final results from its phase 3 COMET-1 trial in metastatic castration-resistant prostate cancer. In addition, Cometriq is being tested in two additional indications (metastatic renal cell carcinoma and hepatocellular carcinoma) to which we'll soon have the results from those phase 3 studies as well. Even if the company simply succeeds in COMET-1 and gets cobimetinib approved I could foresee $400 million to $500 million in annual peak sales when combined with Cometriq's current indication to treat metastatic medullary thyroid cancer. I suspect Mr. Market will wake up to Exelixis' potential soon enough and I'm sticking by the shares held in my portfolio.

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Sean Williams owns shares of Exelixis, but has no material interest in any other companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

The Motley Fool recommends Exelixis. The Motley Fool owns shares of, and recommends Exelixis. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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