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Exelixis, Inc. Message Board

  • kblumb kblumb Apr 22, 2010 1:32 PM Flag

    Risk Reward and ASCO

    With twelve abstracts accepted at ASCO and four which have been deemed important enough to be oral. It seems to me that the stock is reflecting exactly no posabilty of any important data diclosures. For that reason I think a surprise on the up side is a better than 50% bet. Just my contrarin analyis .

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    • Its true what you and Oncdoc are saying, but even having initial synthesis and screening will not give you tractable leads, let alone drugs. It is a complex infrastructure to do competent lead optimization. If the screen and dose paradigm would be working, loads of CRO's would be more successful than they are in this space. There were so many "platform" companies who tried to be the library generators and did not succeed. With the skeleton crew remaining (consensus builders in my estimate who blindly follow the leadership and therefore kept their jobs with promotions) not much progress will be made, let alone 1 IND/yr. Look at the senior scientific staff who are left behind... marginal at best (look at ASCO authors and make assessments for yourself).

    • I agree that the synthesis program can be eliinated but don't discount the infrastructure and follow up requirements. Discovery, per se, is not just new synthesis, but following up on hits in screens, looking at promising hits and assessing the biology, structure activity relationships, etc. If you have a library of 6 million compounds, it takes some labor just to know which vial to pull out to follow up on. My understanding is that entire functions like Lead Optimization have been essentially shut down. If there is hope to build it back up, it will take some time, but the layoffs were necessary to assure the possibility of success with the clinical trials (if you don't finish them, you can't be successful). Tough choices to be sure and while many on this board have been trashing senior management, I don't envy the choices they faced (though I do envy the salaries which appear to be above industry standard).
      Just my opinion and do your own diligence in deciding what the stock will do.
      Good luck to all.

      The "Wiz"

    • In regards to the cutbacks in the discovery program. EXEL had a very large combintorial chemistry program. This is a known method of producing thousands of different "small molecules" Several years ago they already had a library of 2.5 million compounds. Once you get to 5 or 6 million cpds. you just need to screen them, so the synthesis program can be mostly eliminated.

    • well, the cure for that is to buy more and average down. Now's your chance... or maybe tomorrow..... or maybe the next day.

      Joe

    • BMY and SNY probably learnt their lessons by now. I highly doubt but hope there will be another deal soon. My 3k share is under water.

    • Weren't they supposed to be partnered LAST year? (from what Scagnos has been barking about for months now)??

    • No, XL228, 888, the two compounds wholly owned by EXEL, according to last conference call, they already had term sheet from potential partners. My guess is they are going to be partnered relatively soon.

    • Thanks.

      Is XL228 dead?

    • I see the only near term catalyst being XL-184's effect in lung cancer. Other results are too early for any significant impact on share price. It probably will move down to $5 level before ASCO.

    • Ernie,

      you make several good points and I'll add the following:
      I agree that the company has been radically transformed. On the discovery side, the comments are that enough people have been retained to meet partner commitments, and I would suspect not much else. The talk within the industry is that large groups were eliminated and that a lot of the scientific "critical mass" has been shed. All for the reasons you cite: clinical development is very expensive.
      As far as the XL647 program, I suspect one reason it was terminated is that it was part of the Symphony deal. As such, XL would have needed to repay the Symphony money + interest to advance the program plus fund the trials necessary for approval. My recollection of the data presented was that it was much less impressive than the MTC data for XL184, so between those two programs, I'd agree with going with XL184.

      It is safe to say that XL184 is an active drug. The real question for XL184 is if it will get approved for more than MTC. There is a large multiple indication randomized discontinuation trail, the design of which will be presented at ASCO, which looks like it's more signal searching and single agent. There are the GBM trials (at present it isn't clear to me that the agent will beat Avastin, but I'm happy to see new data). Then there is lung cancer. For me, the real question is how the agent will combine with other cancer therapy. For example, ARQ197 appears to have a positive combination trial with erlotinib in NSCLC, foretinib (the old XL880) has a similar trial ongoing (and one in hepatocellular carcinoma) and there should be some XL184 data with a similar design. It will be interesting to see the actual data in NSCLC.

      I'd agree with the assessment about cash, but would note:
      - there are many trials underway and XL needs to pay part of the cost for not just XL184, but also the other BMS partnered programs. Some of these are getting larger (see XL139 for example).
      - XL needs to keep the cash balance above a certain point or the XL184 deal could revert into a royalty type deal.
      - XL needs to continue to pay back GSK in cash or stock.

      With regard to the MTC trial, all I've read states that the trial has the potential to lead to the first NDA before the end of 2011. This could happen, but could also be at risk. I imagine the trial has been set up with an interim analysis looking for a very strong effect. If the control group did reasonably well or if there is some noise in the data (it is a global, mutinational trial, there can be logistical challenges with timing of imaging or other protocol elements) and of so, it may be that the trial data need to mature longer. That could push out an NDA. There is also likely to be a gap between initial approval and actual generation of sales. The good news is that BMS is very good at selling cancer drugs.
      The bottom line here is that it is likely still a long haul before the company could turn profitable. From what's left in the pipeline to partner, I don't see too much that would buy more than a little time so we are probably looking at goig back to the markets in 2011 or BMS deciding to take over all the programs it has partnered.

      I agree there are a lot of partenred programs percolating along out there, I'm just not anticipating any major news out of ASCO, hopefully all programs continue on track and the competition hasn't leapfrogged. It will be interesting to see actual data rather than cheers and jeers based on nothing.

      Good luck all,

      The "Wiz"

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EXEL
1.29-0.01(-0.77%)Dec 24 1:00 PMEST

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