Exelixis drops quickly on day four of Cabometyx patent trial (update)

Update 1:08pm Updates shares, adds Suntrust analyst comment.

Exelixis (NASDAQ:EXEL) plunged 11% during day four of the Cabometyx patent trial.

The judge in the case appeared to telegraph that he will find that the 776 patent, which goes to October 2030, won't be infringed so MSN wins on this count, traders said, citing comments at the court hearing.

On the 473 patent, the judge appeared to indicate he will find it valid, with EXEL winning with that patent going until August 2026, according to traders.

Truist analyst Asthika Goonewardene said EXEL investors should "buy in this dip" and that the firm's expert call anticipated that the EXEL would lose the '776 patent, though will likely win in their second wave of IP defense on the '439 and '440 patents.

"This should preserve Cabometyx IP to 2030," Goonewardene, who has a buy rating and $35 price target on EXEL, wrote in a note on Thursday. "We encourage investors to buy in this dip."

Jefferies analyst Akash Tewari in a Tuesday note after day two of the trial wrote that he was leaning slightly in favor of MSN prevailing on the '776 patent, with EXEL likely winning on the '473 patent.

"The trial is highly important to EXEL, given US Cabo sales account for est. 80% of company (current) profits," BofA analyst Jason Gerberry, who has a buy rating and $29 price target on EXEL, wrote in a note on Monday.

Recall from February, Judged rejects MSN motion to add more patents to Exelixis Cabometyx patent suit.

Comments

[whitehead1]

chatter on message board that this company may get bid soon, any truth to this?
I guess best thing can happen is EXEL gets bought and find a better management who can do something

[Philipp Stuelcken]

It remains to be the best strategy to buy this stock between 15-17 and sell it between 21-23...

[valtr]

@Philipp Stuelcken Agree . I did that twice. Will see if it works further :)

[Philipp Stuelcken]

@valtr Yeah me too :)

[Mainelefty]

Judges don't telegraph results. They do comment favorably for both sides sometimes, this is a form of "dynamite charge" to motivate settlement.

[kinslayer233]

I bought this company hold it for 1 year and sold for the exact same price. Such a dissapointing management.

[RCI23]

Why don’t use that nearly 2 Billions to do something with the dropping share price !!!

[DomL]

@RCI23 In all honesty...MMM is sitting on a full house now, literally watching the whole markets collapse and they have cash. Lots of it on hand. Well done..