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ALAMEDA, Calif. - Exelixis, Inc. (NASDAQ:EXEL), a biopharmaceutical company with robust financials including $2.17 billion in revenue and an impressive 96.5% gross margin, has received approval from the U.S. Food and Drug Administration (FDA) for CABOMETYX® (cabozantinib) to treat certain advanced neuroendocrine tumors (NET), the company announced today. According to InvestingPro analysis, the company appears undervalued based on its Fair Value estimate. This marks the drug as the first systemic treatment approved by the FDA for previously treated NET regardless of the primary tumor site, grade, and other factors.
The approval is based on the phase 3 CABINET trial, which showed a statistically significant improvement in progression-free survival compared to placebo. The trial included adult and pediatric patients 12 years and older with unresectable, locally advanced, or metastatic well-differentiated pancreatic NET (pNET) and extra-pancreatic NET (epNET).
Jennifer Chan, M.D., M.P.H., the study chair for the CABINET trial, highlighted the significance of the approval, noting the drug’s ability to delay disease progression across a diverse patient population. Amy Peterson, M.D., Executive Vice President at Exelixis, expressed gratitude to all involved in the trial and emphasized the company’s commitment to supporting these new indications.
The safety profile of CABOMETYX in the CABINET trial was consistent with its known safety profile, with no new safety signals identified. However, the incidence of hypertension was higher in NET patients compared to other approved tumor types, necessitating dose modifications or reductions for some patients. The company’s strong financial position, with a perfect Piotroski Score of 9 and more cash than debt on its balance sheet according to InvestingPro, suggests it’s well-equipped to support this expanded indication.
CABOMETYX is already approved for several other cancer indications, and its new approval for NET is expected to provide a valuable treatment option for patients with advanced disease, a group that has seen few targeted therapy approvals in recent years.
Exelixis has also announced plans to initiate the STELLAR-311 pivotal trial, examining zanzalintinib versus everolimus, in the first half of 2025, further demonstrating the company’s dedication to advancing cancer treatment. This information is based on a press release statement from Exelixis, Inc.
In other recent news, Exelixis has been the focus of several analyst updates and strategic developments. Truist Securities raised its price target for Exelixis shares to $43, citing optimism from positive Phase 1 study data for the drug Zanza, particularly in colorectal cancer patients without liver metastases. This move reflects increased confidence in the ongoing Phase 3 STELLAR-303 study, which could lead to initial approval for this specific patient group. Meanwhile, JMP Securities maintained a Market Outperform rating with a $41 target, noting that Exelixis’s fourth-quarter 2024 revenue met market expectations and highlighting the potential $5 billion opportunity for zanzalintinib.
Stifel also adjusted its stance by raising the price target for Exelixis to $36 from $30, while maintaining a Hold rating. This revision considers the anticipated completion of a share repurchase program and moderated operational expenditure growth. The firm remains cautious, reflecting on the lowered probability of success estimates for zanzalintinib in certain cancer treatments. Additionally, Stifel’s earlier analysis maintained a $30 target, focusing on the STELLAR-001 trial results and their implications for future trials.
These updates underscore the varied perspectives of analysts on Exelixis’s potential, with a strong emphasis on the company’s drug development pipeline and strategic financial maneuvers.
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