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Exelixis Announces First Quarter 2013 Financial Results



  Exelixis Announces First Quarter 2013 Financial Results

Business Wire

SOUTH SAN FRANCISCO, Calif. -- May 07, 2013

Exelixis, Inc. (Nasdaq: EXEL) today reported financial results for the quarter
ended March 31, 2013.

Q1 2013 Highlights and Recent Events

  * Commercial launch of COMETRIQ™ (cabozantinib) in the United States on
    January 24, 2013 for the treatment of progressive, metastatic medullary
    thyroid cancer (MTC).
  * Reported net product revenue for COMETRIQ of $1.9 million in the first
    quarter of 2013.
  * Announced in February 2013 a three-year agreement with Swedish Orphan
    Biovitrum (Sobi) to support the distribution and commercialization of
    COMETRIQ for metastatic MTC primarily in the European Union and
    potentially other countries, initially under a Named Patient Use Program
    and then more broadly only if approved by the European Medicines Agency.
  * Presentation of data at the American Association for Cancer Research
    Annual Meeting 2013 detailing the mechanism of action of cabozantinib in a
    preclinical castration-resistant prostate cancer (CRPC) bone metastasis
    model. Treatment of animals with cabozantinib resulted in substantial
    inhibition of tumor growth, induction of tumor cell death, and blockade of
    cancer-induced bone remodeling as determined by bioluminescence imaging,
    MRI, micro-CT, and histological analyses. In addition, imaging studies
    showed that early reductions in the uptake of the bone scan tracer
    ^99Tc-MDP were associated with the anti-tumor activity of cabozantinib in
    mice.
  * Announced that nine abstracts have been accepted for presentation at the
    2013 Annual Meeting of the American Society of Clinical Oncology (ASCO)
    this June in Chicago, Illinois. At the meeting, investigators will present
    updates from clinical trials of cabozantinib in MTC, CRPC, uveal melanoma,
    and bladder cancer, among other tumor types.
  * Received notice from Genentech, Exelixis' collaborator in the development
    of cobimetinib (GDC-0973/XL518) and a member of the Roche Group, in
    January 2013 that the first patient was dosed in a phase 3 pivotal trial
    evaluating the BRAF inhibitor Zelboraf (vemurafenib) alone or in
    combination with cobimetinib (GDC-0973/XL518) in previously untreated
    patients with malignant melanoma harboring the BRAF V600 mutation.

“The first quarter of 2013 began on a significant note with the successful
U.S. launch of COMETRIQ for the treatment of progressive, metastatic MTC. We
are gratified to provide an important new treatment option for patients with
this disease,” said Michael M. Morrissey, Ph.D., president and chief executive
officer of Exelixis. “While we continue to execute on the commercial launch,
we remain focused on advancing the cabozantinib clinical development program.
The majority of sites for the COMET program, consisting of two pivotal trials
in CRPC, are now open, and we continue to expect top-line data in 2014. Beyond
prostate cancer, we expect to start additional pivotal trials in metastatic
renal cell carcinoma (RCC) and metastatic hepatocellular carcinoma (HCC) in
the third quarter 2013. In addition, we have a broad and expanding program of
earlier stage trials, and updates on some of these trials will be provided at
the ASCO Annual Meeting in June.”

Net revenues for the quarter ended March 31, 2013 were $9.7 million, compared
to $18.5 million for the comparable period in 2012. Net revenues for the
quarter included $1.9 million resulting from the sale of COMETRIQ, which
became commercially available on January 24, 2013. The quarterly decrease in
non-product revenues, when compared to the same period in 2012, is primarily
due to $10.7 million in revenue recognized in 2012 resulting from the
completion of the technology transfer under Exelixis' December 2011 license
agreement with Merck for Exelixis' PI3K-delta program.

Research and development expenses for the quarter ended March 31, 2013 were
$32.7 million, compared to $33.1 million for the comparable period in 2012.
The decrease was primarily due to lower personnel expenses, lower allocations
of general corporate costs to research and development and lower depreciation
and amortization expenses. These decreases were largely offset by increased
clinical trial costs as well as increased expenses for consulting and outside
services. The increase in clinical trial costs was primarily related to
clinical trial activities for COMET-1 and COMET-2, Exelixis' phase 3 pivotal
trials in CRPC, as well as costs incurred in preparation for phase 3 trials
for metastatic HCC and metastatic RCC. These increases are largely offset by
lower costs related to the continued wind down of Exelixis' phase 2 randomized
discontinuation trial, EXAM, Exelixis' phase 3 pivotal trial for cabozantinib
in progressive, metastatic MTC, as well as a decrease in chemistry,
manufacturing and control expenses.

Selling, general and administrative expenses for the quarter ended March 31,
2013 were $10.5 million, compared to $7.9 million for the comparable period in
2012. The increase was primarily due to an increase in expenses for consulting
and outside services related to both the sale of COMETRIQ in the United States
and the preparation for making COMETRIQ available to patients primarily in the
European Union and potentially other countries, as well as an increase in
marketing expense and lower allocations of general corporate costs to research
and development.

Other income (expense), net for the quarter ended March 31, 2013 was a net
expense of ($10.7) million compared to ($3.8) million in the quarter ended
March 31, 2012. The increase in expense in 2013 compared to 2012 was primarily
due to interest expense in connection with the $287.5 million aggregate
principal amount of 4.25% convertible senior subordinated notes due 2019
issued in August 2012. Included in interest expense for the quarter ended
March 31, 2012 was ($6.3) million of non-cash expense related to the accretion
of the discount on both the 4.25% convertible senior subordinated notes due
2019 and the company's financing arrangement with Deerfield Management
Company, L.P.

Net loss for the quarter ended March 31, 2013 was ($44.7) million, or ($0.24)
per share, compared to ($26.2) million, or ($0.18) per share, basic, for the
comparable period in 2012. The net loss was primarily due to decreases in
revenues, increases in selling, general and administrative expenses and
increased interest expenses as described above.

Cash and cash equivalents, short- and long-term investments and short- and
long-term restricted cash and investments totaled $566.8 million at March 31,
2013, compared to $634.0 million at December 31, 2012.

Conference Call and Webcast

Exelixis' management will discuss the company's financial results for the
quarter ended March 31, 2013, financial outlook and development program and
plans for cabozantinib, and also provide a general business update, during a
conference call beginning at 5:00 p.m. EDT/2:00 p.m. PDT today, Tuesday, May
7, 2013. To listen to a live webcast of the conference call, visit the Event
Calendar page under Investors & Media at www.exelixis.com.

An archived replay of the webcast will be available on the Event Calendar page
under Investors & Media at www.exelixis.com and via phone until 11:59 p.m. PDT
on June 7, 2013. Access numbers for the phone replay are: 888-286-8010
(domestic) and 617-801-6888 (international); the passcode is 84660665.

About Exelixis

Exelixis, Inc. is a biotechnology company committed to developing small
molecule therapies for the treatment of cancer. Exelixis is focusing its
proprietary resources and development efforts exclusively on its lead product,
COMETRIQ™. Exelixis has also established a portfolio of other novel compounds
that it believes have the potential to address serious unmet medical needs,
many of which are being advanced by partners as part of collaborations. For
more information, please visit the company's web site at www.exelixis.com.

Basis of Presentation

Exelixis adopted a 52- or 53-week fiscal year that generally ends on the
Friday closest to December 31^st. For convenience, references in this press
release as of and for the fiscal quarters ended March 30, 2012 and March 29,
2013, and as of the fiscal year ended December 28, 2012, are indicated as
ended March 31, 2012 and 2013, and as ended December 31, 2012, respectively.

Forward-Looking Statements

This press release contains forward-looking statements, including, without
limitation, statements related to: the referenced distribution and
commercialization of COMETRIQ in the European Union and potentially other
countries, initially under a Named Patient Use Program and then more broadly
only if approved by the European Medicines Agency; expected data presentations
from clinical trials of cabozantinib in MTC, CRPC, uveal melanoma and bladder
cancer at the 2013 ASCO Annual Meeting; Exelixis' continued execution on the
commercial launch of COMETRIQ; Exelixis' focus on advancing the cabozantinib
clinical development program; Exelixis' continued expectation for top-line
data for the COMET program in 2014; Exelixis' plans to initiate phase 3
pivotal trials of cabozantinib in metastatic RCC and metastatic HCC in the
third quarter 2013; Exelixis' expanding cabozantinib development program of
earlier stage trials and updated data presentations on such trials at the 2013
ASCO Annual Meeting; and the continued development and clinical, therapeutic
and commercial potential of, and opportunities for, cabozantinib. Words such
as “support,” “potentially,” “will,” “continue,” “remain,” “focused,”
“expect,” “expanding,” “believes,” “potential” and similar expressions are
intended to identify forward-looking statements. These forward-looking
statements are based upon Exelixis' current plans, assumptions, beliefs and
expectations. Forward-looking statements involve risks and uncertainties.
Exelixis' actual results and the timing of events could differ materially from
those anticipated in such forward-looking statements as a result of these
risks and uncertainties, which include, without limitation: the uncertainty of
the regulatory approval processes; the availability of data at the expected
times; risks related to the potential failure of cabozantinib to demonstrate
safety and efficacy in clinical testing; the uncertain timing and level of
expenses associated with the development of cabozantinib; Exelixis' ability to
conduct clinical trials of cabozantinib sufficient to achieve a positive
completion; the risk that unanticipated developments could adversely affect
the launch, commercialization, manufacturing, distribution and availability of
COMETRIQ; the degree of market acceptance of COMETRIQ; the extent to which
coverage and reimbursement for COMETRIQ will be available from third-party
payors; risks and uncertainties related to Exelixis' compliance with
applicable regulatory requirements, including healthcare fraud and abuse laws
and post-marketing requirements; Exelixis' dependence on third-party vendors;
timely receipt of potential reimbursements, milestones, royalties and profits
under Exelixis' collaborative agreements; the sufficiency of Exelixis' capital
and other resources; market competition; and changes in economic and business
conditions. These and other risk factors are discussed under “Risk Factors”
and elsewhere in Exelixis' quarterly report on Form 10-Q for the three months
ended March 29, 2013, filed with the Securities and Exchange Commission (SEC)
on May 7, 2013, and Exelixis' other filings with the SEC. Exelixis expressly
disclaims any duty, obligation or undertaking to release publicly any updates
or revisions to any forward-looking statements contained herein to reflect any
change in Exelixis' expectations with regard thereto or any change in events,
conditions or circumstances on which any such statements are based.

Exelixis and the Exelixis logo are registered U.S. trademarks.

 
EXELIXIS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
                                                 
                                                  Three Months Ended March 31,
                                                  2013             2012       
Revenues:
License and contract revenues                     $  7,813         $ 18,510
Net product revenues                              1,856            —          
Total revenues                                    9,669            18,510     
                                                                    
Operating expenses:
Cost of goods sold                                280              —
Research and development                          32,735           33,096
Selling, general and administrative               10,545           7,905
Restructuring charge (credit)                     119              (195      )
Total operating expenses                          43,679           40,806     
                                                                    
Loss from operations                              (34,010     )    (22,296   )
                                                                    
Other income (expense), net:
Interest income and other, net                    338              160
Interest expense                                  (11,057     )    (4,004    )
Total other income (expense), net                 (10,719     )    (3,844    )
                                                                    
Loss before income taxes                          (44,729     )    (26,140   )
Income tax provision                              —                11         
                                                                    
Net loss                                          $  (44,729  )    $ (26,151 )
                                                                    
Net loss per share, basic and diluted             $  (0.24    )    $ (0.18   )
                                                                    
Shares used in computing basic and diluted net    183,742          141,940    
loss per share
                                                                              

 
EXELIXIS, INC.
CONDENSED CONSOLIDATED BALANCE SHEET DATA
(in thousands)
                                          
                             March 31,     December 31,
                             2013          2012 (1)
                             (unaudited)
Cash and investments (2)     $  566,757    $   633,961
                                            
Working capital              $  316,146    $   350,837
                                            
Total assets                 $  659,527    $   721,097
                                            
Total stockholders' equity   $  254,852    $   296,434

(1) Derived from the audited consolidated financial statements.

(2) Cash and investments include cash and cash equivalents, short- and
long-term investments and short- and long-term restricted cash and
investments. Short- and long-term restricted cash and investments consist of
$34.1 million and $40.2 million as of March 31, 2013 and December 31, 2012,
respectively.

Contact:

Exelixis, Inc.
Frank Karbe, 650-837-7565
Chief Financial Officer
fkarbe@exelixis.com
Charles Butler, 650-837-7277
Vice President
Investor Relations & Corporate Communications
cbutler@exelixis.com
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