Exelixis, Inc. (NASDAQ:EXEL) is a biopharmaceutical firm that has been around nearly two decades, but Exelixis stock has just come into its own in the past year or two.
EXEL’s current focus, and success, is in the oncology sector, particularly with renal cell carcinoma (RCC) and melanoma.
With partners like Switzerland-based Roche Holdings AG Basel ADR (OTCMKTS:RHHBY), it has built quite a reputation in this new and dynamic space.
The Backbone of Exelixis Stock
Right now, its key money-making drugs are Cotellic and Cabometyx. The former is used in combination with Roche’s Zelboraf as a treatment for advanced melanoma. Cabometyx currently used as a second-line treatment for RCC, but is in the process of getting Food and Drug Administration approval as a first-line treatment.
Bascially, the difference between and first-line and second-line treatment is, a first-line treatment can be used once RCC — for example — is diagnosed. Right now, Cabometyx is used after another treatment regimen is completed. In this instance, Cabometyx is used after a treatment to disrupt blood supply to tumors is finished.
Approval could come for first-line use as early as February next year. Also, EXEL stock holders are looking at first-line approval for Cabometyx for hepatocellular carcinoma (a type of liver cancer) as potential for significant upside.
EXEL retains marketing rights for Cabometyx in the U.S. and it has licensed marketing rights to Takeda Pharmaceutical Co Ltd (ADR) (OTCMKTS:TKPYY) in Japan and France-based Ipsen S A/S ADR (OTCMKTS:IPSEY) outside the U.S. and Japan.
As for Cotellic, after tussling for better terms from Roche, which it got, Roche is also evaluating Cotellic with its Tecentriq in 4 late-stage studies for melanoma and colorectal cancer.
This means EXEL has more control over its partnership with Roche and could become a core partner if the new studies work out, which would be big for Exelixis stock.
EXEL is also working with Genentech to explore new potential uses for Cotellic.
All these opportunities are indicative of the kind of potential EXEL stock’s pair of current drugs are demonstrating.
Bottom Line on EXEL Stock
Exelixis stock is up nearly 80% year-to-date, even after a plunge in September on news that Bristol-Myers Squibb Co (NYSE:BMY) saw positive results in a phase 3 trial for a combination RCC treatment.
However, while the headline story was jarring, the reality was less concerning for Exelixis stock. BMY’s results were strong, but the study wasn’t statistically significant. That means BMY will be further delayed coming to market, which gives EXEL stock plenty of time to expand its market share unimpeded for now.
In the bigger picture, with aging populations across Asia, the U.S. and Europe, oncology drugs are going to be a major first line of attack as the new year rolls on, especially as countries try to balance healthcare and insurance costs versus treatments.
Ultimately, EXEL stock is a prime example of the new generation of biotechs that are extremely well focused and positioned to take full advantage of the massive societal changes.
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
