Sales of Exelixis' (NASDAQ:EXEL) cabozantinib franchise, which includes Cabometyx for kidney and liver cancers and Cometriq for thyroid cancer, broke $250 million globally in the second quarter, making the drug a blockbuster, typically defined as $1 billion in annual sales.

Exelixis results: The raw numbers


Q2 2019

Q2 2018



$240.3 million

$186.1 million


Income from operations

$92.0 million

$85.8 million


Earnings per share




Data source: Exelixis.

What happened with Exelixis this quarter

  • Revenue from cabozantinib came in at $194 million, compared to $146 million in the year-ago quarter as Exelixis continues its move into renal cell carcinoma (RCC), the most common form of kidney cancer, and launch into hepatocellular carcinoma (HCC), also known as liver cancer.
  • To get over $250 million, you need to add the $66.5 million in sales of cabozantinib by Exelixis' partners, Ipsen and Takeda, which generated $14.9 million in royalties for Exelixis.
  • The rest of the revenue came from its partners reimbursing Exelixis for their share of clinical trial costs and a $20 million milestone payment from Daiichi-Sankyo for the launch of Minnebro as a treatment for patients with hypertension in Japan.
  • Increased spending on research and development ate up much of the increased revenue, although that can be seen as an investment in future growth beyond cabozantinib.
  • Earnings per share decreased year over year due to the tax rate jumping from 1% in the year-ago quarter to 20.8% in the most recent quarter.
  • On Wednesday, Exelixis announced a discovery deal with Aurigene that gives it options to license three existing programs for a $10 million option fee and three additional programs for new targets at $2.5 million per program. Exelixis will contribute to the research costs and will have to make a decision about whether to license the drugs -- for an undisclosed option fee -- before the drugs enter clinical trials. At that point, Exelixis would take over development as well as sales if the drugs are eventually approved.
A female doctor sitting at a table talking to a male patient

Image source: Getty Images.

What management had to say

P.J. Haley, Exelixis' senior vice president of commercial, broke down the demand for Cabometyx:

Both RCC and HCC demand grew in Q2 with the majority of the growth coming from RCC. Additionally, the prescriber base grew by 45% year-over-year for Q2 and by 8% in Q2 relative to Q1. This growth was driven by new community prescribers for both RCC and HCC as well as new academic prescribers within HCC. We are pleased that Cabometyx continues to be the number one prescribed [tyrosine kinase inhibitor] in the RCC market.

Exelixis' president and CEO, Mike Morrissey, talked about the Aurigene deal and previously announced discovery deals to add to the pipeline with hints of more advanced products on the horizon:

I think the total right now in terms of shots on goal is what 15 or so if you look at the four collaborations combined plus what we've got internally so -- so that's a good start there and obviously they're all not going to make it. And we expect some attrition and normal kinds of things there. But certainly, we've got a strong stable of really interesting targets and pathways and modalities now to be able to pursue early stage.

As we've said consistently over the last six to nine months is that we're looking for mid to late stage to even potentially commercial assets and that search continues with the goal to be able to again diversify our late-stage product portfolio as well. So those are more involved obviously certainly a much more diligence is involved and certainly much more expensive, but we're looking to again do the right deal at the right time for the right value across those lead stage components.

Looking forward

The next growth driver for Cabometyx could come from first-line treatment of RCC in combination with Bristol-Myers Squibb's (NYSE:BMY) Opdivo. Data from a late-stage trial called CheckMate 9ER is expected in early 2020.

Further back, Exelixis and Roche are testing Cabometyx in combination with Roche's Tecentriq in a study called Cosmic-021. It's still early, but the data has been promising enough that the companies have expanded the study with additional patients.

And, of course, there's potential for Exelixis' early-stage pipeline, but it'll be many years before one makes it to market.

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