Exelixis' (NASDAQ:EXEL) kidney cancer drug Cabometyx is quickly winning market share, and that's fueling a rapid run-up in its revenue. The company has a big opportunity in its sights to expand Cabometyx's addressable market, and it's got other promising drugs in clinical trials. Can this be the year that Exelixis turns a profit?

In this clip from The Motley Fool's Industry Focus: Healthcare podcast, the team discusses the reasons behind Exelixis' market-beating performance this year, and what could be on tap for it in the future.

A transcript follows the video.

This podcast was recorded on March 6, 2017.

Todd Campbell: No. 5 on the list today is up 55%. That's mind-blowing to me. The company is Exelixis. Exelixis is white-hot because it's playing in the cancer space. We've seen a lot of different merger and acquisition activity -- a lot of different deals got done over the course of the last year in cancer. And I think that is one reason why investors are getting so excited about this stock. They have a kidney cancer drug on the market that is growing very quickly.

Kristine Harjes: Yes, indeed. They actually have a couple of different drugs going on. As you mentioned, their kidney cancer drug is the most exciting of them. Todd, do you want to tell us more about this one?

Campbell: That's the needle-mover, right, Kristine? Cabometyx. That's the needle-mover. They launched that drug last year for use in second-line advanced kidney cancer. That's a market that Afinitor, which is a billion-dollar drug, has long dominated. They're winning market share. I think their market share now is up to 27% in that second-line setting. That's translating into a $200 million run rate in sales that could grow even more because they released a study last year that showed they may be able to move this drug up and have it be used in the first line of treatment for these cases. If so, it's going to fight against Sutent, which is another billion-dollar drug. So, you have a couple different reasons why this Cabometyx could become a $500 million or more drug.

Harjes: And another vote of confidence that this company has, other than simply being in a fairly lucrative space, is that other companies seem to agree. They have partnership agreements on almost all of their drugs. Not only is that a vote of confidence, but it also gives them funding. For example, in January, they announced a licensing agreement in Japan with Takeda Pharmaceuticals that gave them $50 million up front, almost another $100 million more in potential milestones, royalties on top of that. This is a fairly well-funded company because of these partnerships.

Campbell: It's still losing money, Kristine. We have to make sure that everybody knows that. This is not a profitable company yet.

Harjes: Although I think technically, this last quarter was the first time they did turn a profit.

Campbell: Yeah, but ...

Harjes: But there's an asterisk.

Campbell: There are asterisks there: one-time events and money coming in that you can't expect going forward. I think this year's estimates from industry watchers are about $0.05 in earnings per share -- next year getting more meaningful.

Harjes: Phew, don't spend that all in one place.

Campbell: Yeah, exactly. This is an expensive stock. But, again, there are not a lot of cancer companies out there that are emerging that have fast-growing cancer drugs on the market that are independent. And as a result, you have companies out there like Pfizer and these other guys that want to buy these companies, and that's bidding them up to pretty high valuations. This stock, for example, now has a $6.5 billion market cap, which is pretty big for a company that did, including milestone payments and everything else, less than $300 million in sales last year.

Harjes: Exactly.

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