Leerink analyst Michael Schmidt weighs in on cancer drug maker Exelixis, Inc. (NASDAQ:EXEL) after hosting a luncheon this week with CEO Michael Morrissey, CFO Christopher Senner, and institutional investors. After discussing new strategies for the development of EXEL’s pipeline and its commercialization, Schmidt has left singing the praises of the firm’s management.

With confidence in the firm’s leadership as it navigates a successful transition into “one of only few commercial stage Biotech oncology plays,” Schmidt reiterates an Outperform rating on EXEL with a $12 price target, which represents an 8% increase from where the stock is currently trading.

Following the FDA approval for Cabometyx as a kinase inhibitor designed to treat patients with advanced kidney cancer (RCC), the analyst deems EXEL in a stellar position to capture significant market share in RCC treatment.

Schmidt explains, “Our takeaways are: (1) mgmt. continues to see Cabometyx (“Cabo”) well positioned in the US RCC market, (2) EU partner Ipsen is nearing launch-readiness, with EU approval expected near-term, (3) Japanese market could be accessed with addl. partnership mid-term, (4) Cabo label extension opportunities in 1L RCC, HCC represent addl. near-term sources of upside, (5) measured investment into the pipeline could drive long-term growth while the commercial transition remains the key priority (6), “clean-up” of cap structure is underway. We’re updating our estimates to reflect lower cash-burn driven by the recent exchange of the company’s convertible notes.”

According to TipRanks, five-star analyst Michael Schmidt is ranked #146 out of 4,124 analyts. Schmidt has a 63% success rate and gains 14.7% in his annual returns. When recommending EXEL, Schmidt earns 84.2% in average profits on the stock.

TipRanks analytics demonstrate EXEL as a Strong Buy. Based on 4 analysts polled in the last 3 months, 3 rate a Buy on EXEL, while 1 maintains a Hold. The consensus price target stands at $10.37, marking a 3% downside from where the shares last closed.

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