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Why Exelixis Stock Soared 46% in November

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Stock performance

On November 30, Exelixis (EXEL) stock closed at $20.31, a ~3.31% increase from its prior close of $19.66 on November 29, 2018. Exelixis stock rose from $13.87 at the close of markets on October 31, 2018, to reach $20.31 at the close of market on November 30, 2018, a ~46% increase over the last month.

Exelixis stock has experienced solid growth over the last month after it hit its 52-week low of $13.42 on October 29, 2018. Exelixis stock experienced solid growth after the company released its third-quarter financial results on November 1, 2018. On November 1, Exelixis stock rose ~7.79% to reach $14.95 from its prior close of $13.87 on October 31, 2018. Also, on November 2, 2018, the company’s stock price grew 16.45% to reach $17.41 from its prior close of $14.95. On November 30, Exelixis stock closed at $20.31, which is ~37% below its 52-week high of $32.20 on January 4, 2018.

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Reasons for the stock price hike

Exelixis’s (EXEL) net revenues grew 48% in the third quarter of this year to reach $225.4 million. The company’s net revenues over the first nine months amounted to $625.2 million, representing ~88% year-over-year growth. Wall Street analysts anticipate that Exelixis will generate net revenues of $191.69, which represents ~59.65% YoY growth. Analysts anticipate net revenues of $817.00 over the first nine months of this year, which would be ~59.65% YoY growth. The growth in product sales primarily contributed to the revenue growth.

The revenue growth of Exelixis could boost the First Trust NYSE Arca Biotechnology Index Fund (FBT). Exelixis makes up about 4.17% of FBT’s total portfolio holding. Exelixis’s net income grew 56% to reach $126.6 million in the third quarter of the year. The company’s net income over the first nine months amounted to $329.98 million, reflecting ~185% YoY growth. The company’s diluted EPS for the first nine months of this year amounted to $1.05, reflecting ~184% YoY growth.

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Also, on November 15, the European Commission approved the label expansion of Cabometyx as a monotherapy for the treatment of individuals with hepatocellular carcinoma (or HCC). Exelixis’s partner Ipsen received approval from the European Commission. As per the agreement between Ipsen and Exelixis, Ipsen will commercialize Cabometyx in Europe, while Exelixis will receive $40.0 million as a milestone payment for approval of Cabometyx in the second-line setting for the treatment of this disease.

Exelixis has also filed a sNDA (supplemental new drug application) to the US FDA for approval of Cabometyx for the same indication. The FDA accepted Exelixis’s sNDA and gave a Prescription Drug User Fee Act date of January 14, 2018.

Analysts’ recommendations

Of the 11 analysts tracking Exelixis in December 2018, three of them recommended a “strong buy,” while five analysts recommended a “buy” rating. Two analysts recommended a “hold,” while one analyst recommended a “sell.”

On December 3, 2018, Exelixis had a consensus 12-month target price of $28.56, which implies a ~46.62% return on investment over the next 12 months.

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