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Why Exelixis, Inc. Got Hammered Today

By Brian Orelli, PhD – Sep 28, 2016 at 4:48PM

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Data from a competitor drives the stock down.

Image source: Getty Images. 

What happened

Exelixis (EXEL -2.16%) fell 14% today after abstracts from the European Society for Medical Oncology (ESMO) meeting were released today.

So what

Data from Exelixis's most important clinical trial, the CABOSUN trial testing Cabometyx against Pfizer's (PFE -0.61%) Sutent in first-line kidney cancer patients, won't be released until October 10, during the meeting. While ESMO saves the most interesting data for the meeting, there was a pair of abstracts that report data from some other Cabometyx clinical trials released today.

In a trial testing Cabometyx with Bristol-Myers Squibb's Opdivo in genitourinary tumors, the combination appears to be more toxic than the individual drugs, which shouldn't come as much of a surprise. The researchers recommended dosing Cabometyx at 40 mg when given with Opdivo rather than the 60 mg starting dose when used by itself. There's nothing inherently wrong with that if the lower dose combination works better than the monotherapy. So far, the combination looks promising, with six of 18 patients responding to the combination, including one complete response in a patient with bladder squamous cell carcinoma.

Data was also disclosed for a phase 2 trial of Cabometyx in relapsed/refractory metastatic urothelial carcinoma (mUC). The largest cohort had an overall response rate of 19.5%, which isn't great, but these are patients with few options, and the authors conclude that Cabometyx "has clinical activity in relapsed/refractory pts with mUC."

Finally -- and this may be what's sending shares lower -- an abstract reported data from a phase 1b trial testing Pfizer's Inlyta and Merck's Keytruda, which showed a 67% response rate in kidney cancer patients who hadn't been previously treated. Since CABOSUN is testing previously untreated kidney cancer patients, investors may be a little worried that the data won't live up to the fairly high standard of the Inlyta-Kyetruda combination.

Now what

While Exelixis fell quite a bit today, it's still up more than 21% over the last month. With high expectations for CABOSUN, it's not surprising that investors are a little jittery. Fortunately, they won't have to wait too much longer for the CABOSUN data.

Brian Orelli has no position in any stocks mentioned. 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.

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Stocks Mentioned

Exelixis, Inc. Stock Quote
Exelixis, Inc.
$15.84 (-2.16%) $0.35
Pfizer Inc. Stock Quote
Pfizer Inc.
$44.16 (-0.61%) $0.27

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