EXEL is not without it's skeptics Adam Feuerstein has been one of those. This duely noted from thestreet.com
"What's your take on Exelixis(EXEL_) and the impact of their recent stock offering?"
The $65 million stock offering, priced at $5.50 per share, probably doesn't do much to enhance Exelixis' credibility with investors. Remember, the company raised money almost a year ago at $11 per share. Deal pricing is going in the wrong direction.
Stepping back from the stock offering, Exelixis' experimental prostate cancer drug cabozantinib -- "cabo" for short -- suffers from an identity crisis. Existing cabo data suggest the drug is effective at reducing bone pain in late-stage prostate cancer patients, yet FDA won't allow the drug to be approved based solely on a pain-lowering benefit. Exelixis must show that cabo can prolong survival but where is the evidence the drug can do that?
Further clouding cabo's future are competing drugs -- Zytiga, MDV3100, Alpharadin, OGX-011-- that have demonstrated or may demonstrate a survival benefit in prostate cancer patients well before the two phase III studies of cabo are completed.
For Exelixis, cabo might be too little, too late.
So do we think that his skeptism is well founded and what is known that may counter this..
If Cabo/Exel can agree on a SPA for pain/bone mets would be one counter to the prevailing sentiment which also btw is hanging over the stock price. But as the data unfolds and they can demonstrate the benefit can these questions be answered
Ernie, Onchodoc others??
For the record AF was touting Cabo as the next big thing in biotech late last yr. Like so many so called analysts most of what they write is based on feelings, second and third hand inside opinion dribbles from those who want to influence news flow to impact stock price. Its very easy to be critical of most biotech drugs, esp before the final results are in, since most do end up missing the target. He was harshly critical of Yervoy and Provenge, two drugs that I happened to follow for a long time. He said they will never be approved. Cabo will be approved for MTC, and likely for multiple cancer indications as it targets the shared biochemical pathways critical for tumorigenesis of many tissues. Drugs for CRPC that most people are excited about blocks androgen receptor signaling. Most patients will not respond to these drugs long term, thats just the nature of cancer treatment these days, even the good ones like MDV3100. I'm sure AF has heard that the current strategy is to combine drugs that attack multiple pathways needed for tumor growth. To say that if CABO shows efficacy in survival and pain relief and bone scan improvements in the next two years is not enough and that it would be too late is testament to his purposeful ignorance and thoughtlessness. In the absence of the magic bullet for cancer, the multi pronged approach is the only way.
Cabo seems like it has a place in cancer therapy, but Exelixis itself is on still shaky footing relative to competition as it is small and independent.
In addition to the drugs mentioned we'd also do well to watch out for Arqule's Tivantinib, a c-met only inhibitor which may have a better safety profile (though maybe not some of the more dramtic effects of cabo); the company also has a major corporate backing and can afford to run expensive late stage trials in multiple indications.
AF does make a good point: it is somewhat strange for EXEL to its most recent offering when it did instead of after MTC approval or positive new data. I'm hoping they want the money to start something like 308 ASAP, and I can only imagine that this might be the first in a series of dilutions in the coming year with more to come when positive news comes in.
It appears that Cabo does something beneficial in patients with advanced prostate cancer. Designing the trials to show an effect that will also enable a broad label is a challenge. Add to that, new therapies are under development all the time and some of these will be successful. For prostate cancer, the last few years have been amazing in that multiple drugs have been shown to improve survival. So the challenge is to have a trials that will demonstrate a relevant benefit (positive trial with relevant control and a clinically menaingful improvement). I agree with AF that prostate is crowded, but I disagree that it is too late for Cabo. If Cabo is able to improve bony mets and has an associated improvement in survival, I would think the FDA would have a hard time demanding a second trial for approval. If you look at the Alpharadin study, both pain and survival were improved. I would expect that type of result would work for Cabo assuming the initial trial is large enough to detect an improvement in survival. My concern is that the pain trial has pain relief as the primary endpoint, and survival as a secondary and when results come in the pain endpoitn is met but the survival is not statistically significant. In that case, FDA would likely say wait for the larger randomized trial with a beeter powered survival as the primary endpoint.
We'll ahve to wait and see how this evolves.
About the author:
Before joining TheStreet in March 2001, Feuerstein covered business software for Upside.com. Prior to that he covered a variety of business beats, including technology and commercial real estate, at the San Francisco Business Times.
Before I read and believe, I always want to know the background of the source. It does not appear that his is a MD, nor do I know his track record with biotech stocks, therefore, very little weight is put on this article.
for the record, Zytiga is already in use and is a good drug prolonging life for 4 months on average and is based on further removal of male hormone. MDV3100 also works on a hormonal approach and is not clearly better than Zytiga. Alpharadin looks good but only works on bone with radiation. OGX11 is an interesting drug with a different target but is in very early development. If Cabo works the concept that it is too late is absurd
<<It does not appear that his is a MD, nor do I know his track record with biotech stocks, therefore, very little weight is put on this article.>>
He's actually pretty savvy, but I don't agree with him this time. Bought more today.