Image source: Getty Images.

What happened

Shares of Exelixis (NASDAQ:EXEL), a midcap biotech company focused on the development of cancer therapeutics, surged 21% in August, based on data from S&P Global Market Intelligence. The clear reason for the strong upside reaction in the company's share price can be traced to its second-quarter earnings release after the closing bell on Aug. 3.

So what

Heading into its second-quarter earnings report, Wall Street had been looking for Exelixis to generate about $18 million in sales and lose $0.27 per share. Even though the company has a handful of approved therapies, both Cotellic and Cabometyx were recently launched, so expectations were decidedly tame.

For the quarter, Exelixis actually wound up delivering $36.3 million in sales, including $17.6 million since the April launch of Cabometyx as a treatment for second-line advanced renal cell carcinoma (RCC), and $14 million for Cometriq, a treatment for advanced medullary thyroid cancer. Comparatively, Exelixis had only reported $8 million in sales during Q2 2015. Furthermore, the company wound up losing just $0.16 per share, $0.11 less than expected. Since this report, Exelixis' breakeven expectations have been thrust forward, with the company now expected to be profitable by as early as 2018. 

Now what

Image source: Exelixis.

As a little extra fuel for the fire, Exelixis reported on Tuesday that its first planned interim analysis of Cabometyx as a treatment for advanced hepatocellular carcinoma in the CELESTIAL trial ended in what can be considered a success. The trial's independent data monitoring committee recommended that the study continue without modification. What this implies is that Cabometyx has an opportunity to hit its primary endpoint of a statistically significant improvement in overall survival, and that it has a generally favorable safety profile relative to the placebo. A secondary interim analysis is to be conducted once 75% of events have been observed. 

As a shareholder of Exelixis I can certainly say that things are finally starting to fall into place. The approval in second-line RCC is big, but it's the company's midstage CABOSUN data that suggested a possible label expansion to treatment-naïve RCC patients that really holds a lot of hope.

Additionally, the phase 3 combination study known as COTEZO involving Exelixis' Cotellic in combination with Roche's cancer immunotherapy Tecentriq for the treatment of advanced colorectal cancer (CRC) could be a game-changer. If Exelixis can latch its cancer drug onto an approved immunotherapy, it could become a backbone treatment for CRC.

With profitability looming and Cabometyx's outlook seeming to improve by the day, the future continues to look bright for Exelixis.