uploads///human skeleton _

How Exelixis Is Positioned ahead of Its Q2 2018 Earnings Release

By

Updated

Revenue trends

Exelixis (EXEL) is scheduled to report its second-quarter earnings results on August 1. In the first quarter, the company reported revenue of $212.3 million compared to $80.9 million in the first quarter of 2017. Exelixis generated revenue of $134.2 million from product sales in the first quarter compared to $68.9 million in the first quarter of 2017.

Exelixis generated collaboration revenue of $78.1 million in the first quarter compared to $12.01 in the first quarter of 2017.

Article continues below advertisement

Reason for sales growth

In the first quarter, Exelixis’s sales rose primarily due to the growth of its advanced renal cell carcinoma business. The FDA’s approval of the label expansion of Cabometyx also drove its revenue growth.

Milestone payments from Ipsen Pharma Biotech and Daiichi Sankyo primarily contributed to the increase in the company’s collaboration revenue. After the approval of Cabometyx in the European Union, Exelixis received part of a milestone payment from Ipsen Pharma.

Exelixis granted exclusive rights to Ipsen Pharma for the further development and commercialization of cabozantinib outside the US and Japanese markets. Takeda Pharmaceutical has the exclusive rights for the further clinical development and commercialization of cabozantinib in Japan.

Due to one-time milestone payments, Exelixis’s first-quarter revenue witnessed solid growth. In the second quarter, Exelixis’s revenue from product sales is expected to witness steady growth, but its collaboration revenue could witness a fall compared to the first quarter.

Wall Street analysts estimate that Exelixis will report revenue of $155.07 million in the second quarter, representing a rise of ~56.62% year-over-year.

Earnings trends

In the first quarter, Exelixis reported net income of $115.9 million compared to $16.7 million in the first quarter of 2017. Exelixis reported diluted EPS of $0.37 in the first quarter compared to $0.05 in the first quarter of 2017.

Analysts expect Exelixis to generate net income and EPS of $49.45 million and $0.16, respectively, in the second quarter.

Exelixis reported a cost of goods sold, R&D (research and development) expenses, and SG&A (selling, general, and administrative) expenses of $5.6 million, $37.8 million, and $52.6 million, respectively, in the first quarter compared to $3.2 million, $23.2 million, and $34.3 million, respectively, in the first quarter of 2017.

Analysts expect Exelixis to report a cost of goods sold, R&D expenses, and SG&A expenses of $5.99 million, $56.04 million, and $44.16 million, respectively, in the second quarter.

In the first quarter, Exelixis’s peers Regeneron Pharmaceuticals (REGN), Sarepta Therapeutics (SRPT), and Vertex Pharmaceuticals (VRTX) reported revenues of $1.6 billion, $64.6 million, and $638.9 million, respectively.

Advertisement

More From Market Realist