Exelixis shares hold Buy rating, price target after trial results

On Monday, Exelixis Inc . (NASDAQ:EXEL) maintained its Buy rating and a stock price target of $29.00, as reiterated by H.C. Wainwright. The endorsement follows the presentation of results from the Phase 3 CONTACT-02 trial at the European Society for Medical Oncology (ESMO) 2024.

This study assessed the combination of cabozantinib and Tecentriq (atezolizumab) against a second novel hormonal therapy (NHT) in patients with metastatic castration-resistant prostate cancer (mCRPC) who have measurable extra-pelvic soft tissue metastasis after progression on a first NHT.

The data revealed at ESMO 2024 demonstrated that the combination therapy (n=289) led to a statistically significant improvement in progression-free survival (PFS) compared to a second NHT. Specifically, the median PFS for patients treated with cabozantinib and Tecentriq was 6.3 months versus 4.2 months for those on a second NHT, with a hazard ratio (HR) of 0.65 and a 95% confidence interval (CI) ranging from 0.50 to 0.84 (p=0.0007). Notably, the observed PFS benefit was consistent across various patient subgroups.

The CONTACT-02 trial's findings are significant as they could influence treatment options for mCRPC patients, particularly those with measurable extra-pelvic soft tissue metastasis. The positive results from the trial support the analyst's decision to maintain a Buy rating and a $29.00 price target on Exelixis shares.

The pharmaceutical company's stock rating remains unchanged following these recent clinical trial outcomes. The continued endorsement from H.C. Wainwright underscores the potential of Exelixis' cabozantinib and Tecentriq combination in improving outcomes for mCRPC patients. The firm's analysis and subsequent reiteration of the stock's rating and price target reflect confidence in the therapy's clinical benefits and its future market performance.

In other recent news, Exelixis has been making significant strides in its development programs and financial performance. The biotechnology company reported robust second-quarter earnings, with revenues reaching $637.2 million, largely driven by its leading product, cabozantinib, which contributed $437.6 million. The company's diluted net income of $0.77 per share notably surpassed earlier projections.

Exelixis has also presented final overall survival data from its phase 3 CONTACT-02 study at the European Society of Medical Oncology (ESMO) Congress. The study evaluated cabozantinib in combination with atezolizumab for the treatment of metastatic castration-resistant prostate cancer (mCRPC). Despite the overall survival data not being statistically significant, it showed a positive trend, especially in patients with liver and bone metastasis.

Citi, BofA Securities, and Truist Securities have all reaffirmed their confidence in Exelixis, reflected in their increased price targets for the company. This confidence stems from the company's impressive financial performance and the potential for the cabozantinib franchise to expand with new indications and compounds.

Exelixis is also awaiting an imminent decision on a patent dispute over its drug Cabometyx. This decision will determine the market exclusivity period for Cabometyx, and is crucial for the company's financial outlook.

In addition, Exelixis's supplementary New Drug Application (NDA) for cabozantinib in the treatment of neuroendocrine tumors (NET) has been accepted by the FDA, with a PDUFA date set for April 2025. These are some of the recent developments revolving around Exelixis.

InvestingPro Insights

Following the positive clinical trial outcomes and the maintained Buy rating from H.C. Wainwright, Exelixis Inc. (NASDAQ:EXEL) exhibits several financial strengths that could be of interest to investors. According to InvestingPro data, Exelixis has a market capitalization of $7.55 billion and a healthy P/E ratio of 22.91, which adjusts to an even more attractive 20.02 when considering the last twelve months as of Q2 2024. This indicates that the company is reasonably valued in the context of its recent earnings.

InvestingPro Tips reveal that Exelixis management has been actively buying back shares, suggesting confidence in the company's value. Moreover, the company holds more cash than debt on its balance sheet, providing financial stability and flexibility.

These factors, coupled with a high shareholder yield and expectations of net income growth this year, position Exelixis favorably in the market. For investors seeking comprehensive analysis, InvestingPro offers additional tips, with a total of 14 listed, which delve deeper into Exelixis' financial health and market performance.

The company's stock has also been trading near its 52-week high, with a price 96.11% of the peak, reflecting strong investor sentiment. The robust return over the last three months, at 21.71%, further underscores the stock's positive momentum. For detailed insights and further investment guidance, interested parties can explore the full suite of InvestingPro Tips at: https://www.investing.com/pro/EXEL.

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