What's happening: Shares of Exelixis (NASDAQ:EXEL) shot up by nearly 50% today on heavy volume after the company announced that its flagship cancer drug Cometriq (cabozantinib) met its primary endpoint of improving progression-free survival for renal cell carcinoma, or kidney cancer, in a pivotal late-stage trial, as compared to patients receiving Novartis' Afinitor (everolimus). Specifically, Cometriq reduced the risk of disease progression by 42% in the second-line setting relative to the active comparator arm, which Exelixis said was highly statistically significant (hazard ratio = 0.58, p<0.0001).

Cometriq is also showing a favorable trend in regards to increasing overall survival (a secondary endpoint in the study), but these data weren't ready for a full statistical analysis at the pre-specified cut-off point, according to the company. Another key takeaway is that Cometriq's safety profile looks acceptable for this later-line indication, with it being broadly similar to Afinitor's in this study. 

Why it's happening: Cometriq is presently approved as a treatment for metastatic medullary thyroid cancer, but sales for this indication have been meager so far -- a mere $25 million in 2014. If Cometriq can gain a regulatory approval as a second-line treatment for kidney cancer, though, it should see a major upswing in sales, especially since Afinitor reportedly generated around $400 million in revenue last year, per Exelixis' own internal estimates. 

Looking ahead, Exelixis plans on filing for regulatory approvals for Cometriq as treatment for advanced kidney cancer in the U.S. and EU in early 2016. So, if all goes according to plan, this drug could gain a second regulatory approval by the third quarter of next year. Unfortunately, Exelixis' cash runway only extends until about the first quarter of 2016, meaning that management will need to raise funds soon, or alternatively, license Cometriq out to bigger partner for an upfront cash payment. That's why it might be best to remain somewhat cautious with this small-cap biopharma following this massive surge upwards, at least until management has resolved the company's long-term finances. 

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