Exelixis, Inc. (NASDAQ:EXEL) shares are rising 18%, having shot past a new high just under $30, on back of a late-stage pivotal liver cancer trial that hit statistically significant prolonging survival results out of the park. When measured up against a median overall survival (OS) for a placebo in patients who had before failed past sorafenib treatment, Exelixis’ drug cabozantinib revealed an impressive stride in clinical improvement.
With positive data under its belt, the drug maker’s pivotal CELESTIAL trial read-out in refractory advanced hepatocellular carcinoma (HCC) has everyone on the Street excited today, including top analyst Eric Schmidt at Cowen- one of Wall Street’s best performing analysts.
Additionally, Exelixis’s cabozantinib earned the drug priority review from the FDA on back of impressive CABOSUN data in first line intermediate- and high-risk renal cell carcinoma (RCC), assigning a PDUFA date with destiny for February 15, 2018.
In reaction to a day full of excitement for the drug maker, the analyst maintains an Outperform rating on EXEL stock without listing a price target.
Anticipating full data to be showcased at the American Society of Clinical Oncology Gastrointestinal Cancer Symposium in January with a supplemental new drug application (sNDA) to be filed for cabometyx in the first quarter of next year, the analyst sees tremendous opportunity ahead for Exelixis’ lead asset: “HCC is a large, under-served indication that could add several hundred million dollars’ worth of sales to what we view as Cabo’s $1B potential in RCC.”
Schmidt notes, “The outcome of CELESTIAL was widely viewed as a coin toss. Hence although detailed data are lacking, we expect EXEL shares to trade up substantially today as investors gain confidence in HCC as a second opportunity for Cabometyx and analysts look to include the indication in their models.”
Looking ahead at a market that before now has yet to be a “particularly lucrative market for pharmaceuticals,” the analyst concludes offering some context: “Factors that have limited the HCC opportunity include the rapid progressive nature of the disease, the lack of good treatment options, and tolerability issues in a patient population with compromised liver function. We are optimistic that new treatment options like Cabometyx and Opdivo will meaningfully expand the HCC market.”
Even if Exelixis’ cabometyx captures 20% share of the domestic refractory HCC market with an average of 3 months treatment duration, the analyst sees sales potential in HCC circling $275 million.
Eric Schmidt has a very good TipRanks score with a 67% success rate and a high ranking of #22 out of 4,697 analysts. Schmidt garners 44.7% in his annual returns. When recommending EXEL, Schmidt yields 200.9% in average profits on the stock.
Wall Street is predominantly backing this biotech player, as TipRanks analytics demonstrate EXEL as a Buy. Based on 9 analysts polled by TipRanks in the last 3 months, 6 rate a Buy on Exelixis stock while 3 maintain a Hold. The 12-month average price target stands at $30.43, marking a 2% downside from where the stock is currently trading.