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What happened

Exelixis (NASDAQ:EXEL) is up 13% at 1:27 p.m. EDT after announcing third-quarter earnings after the bell yesterday.

So what

During its first full quarter on the market, Exelixis' kidney cancer drug Cabometyx registered $31.2 million in sales. The biotech's older version of the drug, Cometriq, which treats thyroid cancer, added an additional $11.5 million.

The combined $42.7 million in product sales was 35% higher than the second quarter, which only included nine weeks of sales for Cabometyx after it was approved, but also included initial stocking of $6.5 million to $7 million.

The sales, combined with some other revenue, weren't enough to make Exelixis profitable, but it's headed in the right direction with a net loss of $11.3 million compared to $45.5 million in the year-ago quarter. The biotech has $380 million in the bank and expects at least $85 million in milestone payments from its partners in the fourth quarter, putting it in a healthy cash position where it can continue to develop Cabometyx for other types of cancer even if it causes the biotech to lose money for a while.

Now what

Part of today's jump probably comes from the fact that Exelixis had fallen about 35% from the 52-week high set between the second-quarter and third-quarter earnings releases as investors worried that Exelixis couldn't keep the sales growth going. With today's move, it's trading higher than it closed after its second-quarter earnings, which seems about right.

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