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What to Expect from Exelixis in 1Q18

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Aug. 18 2020, Updated 10:27 a.m. ET

Exelixis’s revenue trends

In 4Q17, Exelixis (EXEL) generated revenue of $115.9 million compared to $75.7 million in 4Q16, which reflected a ~55% rise on a year-over-year (or YoY) basis and a ~19% fall on a quarter-over-quarter basis. In 4Q17, Exelixis generated revenue of $95.7 million from net product sales and $24.4 million from collaborations. In 4Q17, Cabometyx primarily pushed this revenue growth.

In 2017, Exelixis reported net revenue of $452.5 million compared to $191.5 million in 2016. In 2017, Exelixis generated revenue of $349 million from product sales and $103.5 million from collaborations.

Analysts estimate that in 1Q18, Exelixis will generate revenue of $141.0 million compared to $120.1 million in 4Q17. Analysts also expect Exelixis’s 2018 revenue to be ~$618.6 million.

The recent label expansion approval of Cabometyx for use as a first-line treatment for individuals with advanced renal cell carcinoma (or RCC) is expected to boost the drug’s revenue growth in 1Q18 and 2018. Cabometyx is expected to propel Exelixis’s revenue growth in 1Q18.

Exelixis’s regulatory submission for the label expansion of Cabometyx to the FDA and the EMA (European Medicines Agency) for the treatment of advanced hepatocellular carcinoma is expected to boost Cabometyx’s long-term growth if it’s approved by both regulatory authorities.

In 4Q17, Exelixis reported net income of $38.5 million compared to $35.1 million in 4Q16, which reflected a ~10% YoY rise. In 2017, Exelixis reported net income of $154.2 million compared to its net income of -$70.2 million in 2016.

In 4Q17, Exelixis reported diluted net income per share of $0.12. Its diluted net income per share remained flat. In 2017, Exelixis reported diluted net income per share of $0.49 compared to its net income per share of -$0.28 in 2016.

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Expense trends

In 2017, Exelixis reported a cost of goods sold, SG&A (selling, general, and administrative) expenses, and R&D (research and development) expenses of $15.1 million, $112.2 million, and $159.4 million, respectively, compared to $6.6 million, $96.0 million, and $116.1 million, respectively, in 2016.

In 4Q17, Exelixis reported a cost of goods sold, SG&A expenses, and R&D expenses of $4.2 million, $46.2 million, and $32.2 million, respectively, compared to $1.9 billion, $13.0 million, and $23.8 million, respectively, in 4Q16.

An increase in the company’s personal expenses, charitable contributions, consulting, and outside expenses can primarily be attributed to its higher SG&A expenses in 4Q17 compared to 3Q17.

Also, the company’s increased personal and clinical trial expenses can be primarily attributed to its higher R&D expenses in 4Q17 compared to 3Q17.

Expense guidance for 2018

Exelixis expects its net costs and operating expenses for 2018 to be in the range of $430 million–$460 million.

In 4Q17, Exelixis’s biopharmaceutical peers Celgene (CELG), Bristol-Myers Squibb (BMY), and Amgen (AMGN) reported revenues of $3.5 billion, $5.4 billion, and $5.8 billion, respectively.

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