Exelixis' (EXEL 0.16%) Cabometyx continues to take market share as the biotech captures more kidney cancer (renal cell carcinoma) patients and launches into liver cancer (hepatocellular carcinoma) following the Food and Drug Administration approval in January for the additional disease.

Exelixis results: The raw numbers


Q1 2019

Q1 2018

Year-Over-Year Change


$215.5 million

$179.6 million


Income from operations

$84.6 million

$116.3 million


Earnings per share




Data source: Exelixis.

What happened with Exelixis this quarter?

  • Sales of Cabometyx were up 2.5% quarter over quarter, a slowdown from the 8% sequential growth from the third to the fourth quarter of last year, but the first quarter had a drawdown of inventory and higher discounts and allowances for patients covered by government programs.
  • Demand for Cabometyx, as tracked by new prescriptions, increased 17% compared to the fourth quarter. The increased demand was split fairly equally between kidney cancer and liver cancer.
  • Cabometyx is now the top-selling tyrosine kinase inhibitor for kidney cancer, surpassing Novartis' (NVS -0.33%) Votrient.
  • Collaboration revenue of $35.9 million was less than half of the year-ago quarter, due to one-time milestone payments in the year-ago quarter. On the plus side, royalties from Exelexis' partner Ipsen for sales of Cabometyx in its territories were up year over year.
  • Income from operations and earnings dropped year over year as the biotech spent more on research and development in the recently completed quarter, an investment that will hopefully produce revenue growth in the future.
Female doctor showing a report to a male patient in a hospital bed

Image source: Getty Images.

What management had to say

P.J. Haley, Exelixis' senior vice president of commercial, pointed out how Cabometyx continues to capture patients who failed other kidney cancer combinations: "The number of second-line patients who have progressed on the combination of nivo/ipi increased again in Q1 and we expect this gradual trend to continue in the coming quarters as there are many frontline nivo/ipi patients that have yet to progress. Cabometyx is well positioned to be the treatment of choice for these patients as well as patients who progress on pembro/axi."

For readers playing acronym bingo at home: Nivo/ipi is Bristol-Myers Squibb's (BMY 1.23%) Opdivo (nivolumab) and Yervoy (ipilimumab) combination. Pembro/axi is the newly approved combination of Merck's (MRK -2.29%) Keytruda (pembrolizumab) and Pfizer's (PFE -2.93%) Inlyta (axitinib).

Exelixis is generating cash, but president and CEO Michael Morrissey noted that it's not burning a hole in the company's pocket:

I don't feel any pressure to do a deal, just to do a deal to spend that money. It's the contrary. We want to make sure that we maximize the value of those -- that hard earned cash that we've got and then we can then catalyze that to grow the business going forward.

Looking forward

Management didn't give revenue guidance for the year, which is understandable given it's hard to know how much market share Cabometyx can actually take.

The next big acceleration in revenue could come from using Cabometyx in combination with Bristol-Myers Squibb's Opdivo; data from a phase 3 study called CheckMate 9ER testing the combination compared to Pfizer's Sutent should be available early next year. Exelixis is also testing Cabometyx in combination with both Opdivo and Yervoy, but that clinical trial, Cosmic-313, just started, so data is a ways away.

Further back in the clinic, Exelixis is testing its next-generation tyrosine kinase inhibitor, XL092. The phase 1 data will dictate which cancers and combination treatments Exelixis pursues in later-stage clinical trials.

Finally, there's Cotellic, the often-forgot drug developed by Exelixis and Roche's Genentech unit. Sales have been fairly light -- revenue from the profit share with Genentech and royalties where Roche sells it by itself was just $2.5 million in the quarter -- but the drug could get a boost from a pair of late-stage studies testing Cotellic with Roche's cancer drugs Tecentriq and Zelboraf.