July 21, 2015
By Mark Terry, BioSpace.com Breaking News Staff
After South San Francisco, Calif.-based Exelixis, Inc. ’s positive clinical trial news yesterday, some analysts speculate the company may now be an acquisition target.
Exelixis announced positive topline results from its Phase III clinical METEOR trial comparing Cometriq (cabozantinib) to everolimus in metastatic renal cell carcinoma. Everolimus is marketed by Novartis AG as Afinitor. Cometriq showed a statistically significant increase in progression-free survival (PFS) in the first 375 patients of the full study population of 658. It also reduced the risk of death or disease progression by 42 percent.
Although Cometriq was approved for use in medullary thyroid cancer, that disease is fairly rare and in 2014 the drug only brought in $25 million. The same drug failed to show that it extended survival in a previous clinical trial for advanced prostate cancer that had metastasized to the bone. That failure caused the company stock to drop by 48 percent.
Renal cell carcinoma (RCC), or kidney cancer, is among the top 10 most commonly diagnosed forms of cancer in the U.S., according to the American Cancer Society. Although there are treatments, they aren’t considered to be very effective. The current trend is more targeted therapies. Any effective therapies against RCC is likely to find a market waiting with open arms.
In 2014, Stifel Financial Corp. recommended Exelixis as a buyout target when it was teaming with Roche to study the MEK inhibitor cobimetinib and BRAF inhibitor Zelboraf. Stephen Simpson, with The Motley Fool, also suggested at the time that Roche might consider acquiring Exelixis. Although the upside would be great for Exelixis, the positives for Roche were more modest.
Exelixis stock has been on the upswing for the last year and took a big hop after yesterday’s announcement. Shares traded for $1.45 on Oct. 10, 2014, rose to $3.11 on Mar. 5, 2015, and were trading for $3.68 on May 12, 2015. On July 14, 2015 shares traded for $3.78 and are currently trading at $5.88. Company shares are up 171 percent in the year to date compared to the S&P 500 gaining 3.3 percent.
According to Exelixis, there are about 17,000 eligible second-line patients for RCC in the U.S., and another 37,000 worldwide. Analysts believe Novartis’ Afinitor salres are at about $400 million.
Exelixis is also conducting clinical trials of Cometriq in first-line kidney cancer and liver cancer. On Feb. 19, 2015, the company announced that the U.S. Food and Drug Administration (FDA) had accepted Genentech’s New Drug Application (NDA) for cobimetinib in combination with vemurafenib for patients with metastatic melanoma. Cobimetinib is a specific MEK inhibitor developed by Exelixis and is part of a co-development deal with Genentech , a member of the Roche Group.
The NDA, which has been granted Priority Review, has been assigned a Prescription Drug User Fee Act (PDUFA) action date of August 11, 2015.
In short, now that the company appears to be back on track with promising clinical trials and investors have made money from the stock rebound, larger companies may consider Exelixis an interesting target.
Somewhat tempering Exelixis’ good news is that Bristol-Myers Squibb Company announced yesterday that its Phase III trial of Opdivo (nivolumab) compared to everolimus in patients with advanced or metastatic RCC was also halted early because it met its endpoint—superior overall survival in patients. Unless Bristol-Myers Squibb considered Exelixis an acquisition target, they have the potential to be a major competitor for Exelixis in the renal cancer market.
