Exelixis Inc. (NASDAQ: EXEL) is a biopharmaceutical company focused on developing small molecule therapies for the treatment of cancer. The company anticipates two major catalysts for two of their drug candidates. Exelixis is about 30% away from its 52 week high, and a run up towards the catalyst is possible.
Phase 3 Trial Data
Exelixis anticipates major phase 3 trial results from their drug, Cabozantinib, for the treatment of advanced Renal Cell Carcinoma. The company announced that, “topline results will be available at the end of the second quarter or early in the third quarter of this year.” The phase 3 trial, also called the METEOR Trial, has completed enrollment of 650 patients back in November 2014, with the primary end point to determine progression free survival rate (PFS).
Cabozantinib was previously approved for treatment Metastatic Medullary Thyroid Cancer, starting marketing early 2013. Cabozantinib is the subject of a broad, global clinical development program that includes about 45 ongoing or planned clinical trials, which includes the METEOR Trial. Cabozantinib is a targeted agent that inhibits the activity of receptor tyrosine kinases, which are involved in both normal cellular function. Recent technological advances have showed the role of tyrosine kinases in the pathophysiology of cancer. Exelixis has worldwide rights to Cabozantinib, and the company believes it has the potential to treat a wide variety of cancers.
PDUFA Priority Review
The FDA assigned a Prescription Drug User Fee Act (PDUFA) action date of August 11, 2015 for the drug Cobimetinib in combination with vemurafenib for patients with mutation-positive melanoma. Exelixis collaborates with Genentech (a subsidiary of the Roche Group). Under the agreement between the two companies Exelixis is responsible for development of Cobimetinib through the initial phase 1 study, and Genentech exercised its option to continue with the development of drug.
Cobimetinib is a highly selective inhibitor of MEK, which is a amino acid that is a component of the RAS/RAF/MEK/ERK pathway (a chain of proteins in the cell that communicates a signal from a receptor on the surface of the cell to the DNA in the nucleus of the cell). This pathway is activated in many tumors.
Exelixis has debt of $368 million that was partially raised first quarter this year. The company has $107 million cash, and burns a lot of cash due to costly management of several trials simultaneously. The biotech burned $52 million a quarter on operating activities over the last year, indicating that soon it may need to raise money again.