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Exelixis Needs To Move Away From Its Overdependence On Cabozantinib

Aug. 03, 2022 6:46 AM ETExelixis, Inc. (EXEL)7 Comments


  • Cabo is a blockbuster drug, but there are potential headwinds.
  • EXEL needs to find other assets and move them to late stages.
  • With XL092, Exelixis is starting to do just that.
  • Looking for more investing ideas like this one? Get them exclusively at The Total Pharma Tracker. Learn More »

Doctor Talking with a Cancer Patient

FatCamera/E+ via Getty Images

The trouble with Exelixis (NASDAQ:EXEL) is that while it is spending $650mn annually running various trials with cabozantinib, cabo's composition of matter patent is set to expire in 2026; and MSN has already filed an ANDA for a

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This article was written by

Avisol Capital Partners profile picture

Avisol Capital Partners is made up of a team of medical experts, finance professionals and techies, all of whom invest their own money in the picks they share. They aim to help readers find the middle ground between value and growth investing, as they demystify the biopharma industry.

They lead the investing group Total Pharma Tracker where they offer a monthly updated catalyst database, an investability scoring system for quick reference ideas, and direct access in chat for dialogue and questions. Learn more.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of EXEL either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (7)

@avisGreat arti@Avisol Capital Partners

Patent issue is big. MSN is smart to file ANDA now so they are ready to launch 2026 if possible.

EXEL seems like a frustrating company to me ... seems they should have soldout long ago or focused on buying rather than building new drugs at high costs.

If ever a midvap pharma needed an activist this is that company.

@ $21 you said "However, despite all these, EXEL has done quite well for me in the past few months. I intend to keep holding for a few more quarters."

NOW AT $16...

AS ALWAYS sell the rips it seems... trade around biopharma positions.
User 123456 profile picture
"the attorney's attention should be focused solely on the client under the duties of loyalty and candor." - U.S. District Judge James Donato decision in Zachary Silbersher v. Valeant Pharmaceuticals, et al, (dated May 11, 2020, page 17)

More details: zacharysilbersher.com
Time is not on their side. no way that 092 or 888 gets approval before the patent runs out on cabo. Mgmt will continue to bleed the treasury dry thru options until the golden goose is dead. by the time MMM and co realises this it will be to late to get anything if they decide to sell the company on the open market. They do have a poison pill in the case of a hostile takeover, so a buyout will never happen.
toptrader99 profile picture
@wired4sales What are the details of the poison pill and when does a friendly takeover, rather than hostile matter?
Philipp Stuelcken profile picture
I continue to be a bit confused why EXEL should run so many trials of Cabo in early stages when the patent will expire in a few years and there is no chance that these products become aproved before. Either they have a great plan or they are just wasting so much money.
Avisol Capital Partners profile picture
@Philipp Stuelcken They are wasting money. They should focus on creating new assets while they have time.
@Philipp Stuelcken EXEL has publicly stated for at least a year, that they are no longer initiating new Cabo trials. The trials that you mention are ongoing and simply take time.
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