Exelixis is the IBD Stock Of The Day as EXEL stock adds onto a lengthy consolidation ahead of a key test for its headliner cancer treatment.
The biotech company is testing a combination using its biggest moneymaker, Cabometyx, in patients with a form of kidney cancer. RBC Capital Markets analyst Kennen MacKay expects Exelixis to post the results of that study in the first half of 2022.
This would provide "a meaningful catalyst to spark growth for the (Cabometyx) franchise," he said in a note to clients last month.
Exelixis stock climbed 1.9% to close at 22.84 on the stock market today.
EXEL Stock: Could Cabometyx Spark Shares?
Today, Cabometyx — and regimens that use it — is approved to treat patients with kidney, liver and thyroid cancers. But the company is testing a regimen that adds Cabometyx to Bristol Myers Squibb's immuno-oncology drugs Opdivo and Yervoy.
MacKay expects the triple regimen to be more effective than two-drug combos in kidney cancer. But Bank of America Securities analyst Jason Gerberry says the first data will likely be a "non-event."
First, Exelixis will look to show its regimen lengthens the amount of time before a patient's cancer worsens, a measure called progression-free survival. Then, the company will hope to show its combo improves overall survival. But it will likely be too early to have significant data for the latter point.
Both EXEL stock analysts have strong expectations for first-quarter Cabometyx sales.
"Given strong prescription trends, we raise our first-quarter U.S. Cabometyx forecast from $300 million to $312 million," Gerberry, the Bank of America Securities analyst, said in his note to clients.
Leading Biotech Stock
Cabometyx isn't Exelixis' only approved medicine. The biotech company also sells Cometriq, which uses a different dosage of the same medicine for thyroid cancer patients. It also has Cotellic, a drug for other solid tumors.
In the first quarter, EXEL stock analysts forecast $348 million in global sales of Cabometyx and $6 million from Cometriq. The FactSet forecast didn't include expectations for Cotellic. Overall, sales would pop 40%.
EXEL stock formed a three-weeks-tight pattern with a 23.50 buy point earlier this month, and shares haven't topped that entry. It could be viewed as the handle on a consolidation that began last May. Shares are also working to find support around the 10-week line, according to MarketSmith.com.
Bullishly, shares have an EPS Rating of 96 out of a best-possible 99. This puts EXEL stock among the leading 4% of all stocks in terms of recent profitability. During the first quarter, analysts expect the company to have earned 14 cents per share, minus some items. Exelixis had no earnings in the year-earlier period.
Shares also have strong Composite and Relative Strength ratings. EXEL stock is in the top 6% of all stocks in terms of fundamental and technical measures, according to IBD Digital. Its 12-month stock performance is in the leading 8% of all stocks regardless of industry group.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
