Exelixis: Positive Pancreatic Cancer Data Provides Two Big Catalysts (NASDAQ:EXEL)

exelixis (NASDAQ:EXEL) has made great strides in advancing its drug known as CABOMETYX for the treatment of various types of cancer. You have already been able to get this drug approved for treating patients with kidney cancer, liver cancer and thyroid cancer. However, I think it’s a good time to investigate this biotechnology is because it made remarkable progress when it moved forward with this drug for the treatment of patients with advanced pancreatic cancer. In fact, a pivotal Phase 3 trial known as CABINET was stopped early due to a dramatic improvement in efficacy seen in an interim analysis in two sets of cohorts targeting patients with advanced pancreatic cancer and extrapancreatic neuroendocrine tumors. This finding is important because there is no standard of care. [SOC] that helps these patient populations who have already failed about previous therapies.

The reason I think this finding may provide value for investors to look at is because it sets up two important catalysts that will happen in the second half of 2023. The first catalyst is that the unblinded data will be presented at an upcoming meeting. medical conference. I believe that the release of these substantial results could send the stock higher. The second catalyst that will come from discontinuing this pivotal Phase 3 study at an interim analysis would be that these data will be discussed with the FDA. The significance of this is that the FDA may possibly allow Exelixis to file a New Drug Application. [NDA] of CABOMETYX for the treatment of both patient populations thereafter. With the interim analysis causing the pivotal Phase 3 study to be halted early due to its overwhelming effectiveness, plus the ability to capitalize on two upcoming catalysts in the coming months, I think investors could capitalize on any potential gains made.

Early discontinuation of the study due to its overwhelming efficacy sets important catalysts

As I noted earlier, Exelixis announced that the pivotal Phase 3 CABINET trial was stopped early due to its overwhelming efficacy. The trial was stopped early, after an interim analysis by the independent Data and Safety Monitoring Board of the Alliance for Clinical Trials in Oncology. [DSMB], determined that there was a massive improvement in efficacy. I think this is a good finding, because a board would normally not unanimously agree to stop a trial early unless there was substantial improvement for these patients. This late-stage study enrolled a total of 290 patients in two separate cohorts. Approximately 93 patients with advanced pancreatic cancer were in one cohort, followed by 197 advanced pancreatic neuroendocrine tumors. [pNET] the patients were in another cohort. The reason is that one cohort dealt specifically with patients with advanced pancreatic cancer and then the other cohort dealt with advanced neuroendocrine tumors.

One important thing to note is that these two different populations of pancreatic cancer patients recruited are those who had already tried and failed prior therapy. This is an important finding for this phase 3 CABINET study, because there is no SOC for these patients in whom prior treatment has already failed. Patients in this trial were randomized 2:1 to receive cabozantinib or placebo if each of these respective cohorts was indicated above. The primary endpoint of this study was progression-free survival. [PFS]. Patients in both cabozantinib cohorts were found to be able to prolong the time without disease progression or death compared to placebo.

Without the SOC of patients who progress on prior systemic therapy, there is a great need to give these patients a drug such as cabozantinib. The market opportunity is huge, especially if you only look at the pancreatic cancer market. Even taking into account only a specific population of patients who have failed previous systemic therapies. The global pancreatic cancer market is expected to reach $7.91 billion by 2032. Well, Exelixis only targets the specific patient population mentioned above. Let us consider that the majority of patients who receive first-line treatment eventually progress, with the 1-year failure rate being between 60% and 80%. Therefore, once these patients fail first-line treatment, there is no SOC to help them. If cabozantinib is finally approved for these patients with advanced pancreatic cancer, they will finally have a choice.

Finance

According to the SEC 10-Q filing, Exelixis had $2.1 billion in cash, cash equivalents, and investments as of June 30, 2023. The thing about this biotech is that it has already received FDA approval for its drug CABOMETYX and it is selling well in the market. In the most recently reported earnings for the second quarter of 2023, it noted that its total revenue was $469.85 million, up 12% year-over-year. Not only that, but this number also exceeded expectations for total revenue by $25.02 million for the quarter. The company should be fine for now, because it believes it will have enough to finance its operations for at least 12 months. It should probably start looking at raising cash in early 2024, but it’s in good shape for now.

Risks for companies

There are several risks that investors should be aware of before investing in Exelixis. The first risk to consider would be the phase 3 CABINET study, which was stopped prematurely due to its overwhelming efficacy. This is because the company wants to meet with the FDA to discuss these positive findings with the agency. There is no certainty that the FDA will allow the NDA submission of CABOMETYX for the two pancreatic cancer indications, or that it will ultimately prevail in obtaining FDA approval. A second risk to consider would be another reading of data from the phase 3 COSMIC-313 study, which is expected before the end of 2023.

This will be with respect to the triple regimen of cabozantinib in combination with Opdivo. [nivolumab] and ipilimumab for the treatment of patients with kidney cancer [renal cell carcinoma]. Specifically, the goal is to publish the next overall survival analysis from this late-stage study. There is no guarantee that the results that will be published from this study will end up being positive, or that such data will cause the stock price to rise. The third and final risk to consider would be the financial position this company is in. Even though you think you have enough cash on hand to fund your operations for at least the next 12 months, you probably need to start looking at raising cash in at least early 2024, in my opinion.

Conclusion

Exelixis is already generating net sales in the United States with its drug CABOMETYX, which has already been approved to treat several types of cancer. Net product revenue generated for the second quarter of 2023 was $409.6 million, compared to the same period a year ago, thus generating only $347 million. The reason to investigate this biotechnology is because of the positive data it was able to generate from the Phase 3 CABINET study, which used CABOMETYX for the treatment of patients with advanced pancreatic cancers. Again, this was achieved with respect to two different patient populations, which are advanced pancreatic cancer and advanced pancreatic neuroendocrine tumors. [pNET] respectively. This recent development created two catalytic opportunities that investors are looking forward to. The first of which involves the publication of the Phase 3 CABINET study results at an upcoming medical meeting in 2023. The second catalyst would be a meeting with the FDA to discuss possible plans for regulatory pathways to advance the use of this drug for treatment of both patient populations.