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Exelixis, Inc. Message Board

duckduffer 106 posts  |  Last Activity: Aug 23, 2016 11:26 AM Member since: May 29, 2003
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  • Reply to

    Exchange of $71MM of converts done

    by urabt2 Aug 22, 2016 10:03 AM
    duckduffer duckduffer Aug 23, 2016 11:26 AM Flag

    Here's a thought. If the market (PAR) for Xtandi is $5.6B, which is what some of the news story's are quoting, and MDVN shares Xtandi with Astellas (50%), then max revenue to MDVN is $2.8B. So now look at the valuation. $14B /$2.8B = 5 times revenue. EXEL at 5X PAR for Cabo??? Depends on what happens with 1st line RCC, HCC, etc, but at this point it wouldn't be crazy to suggest over $1B. Sprinkle on a little Cotellic valuation....takeout value should be north of $5B.
    GLTA

    Sentiment: Strong Buy

  • Reply to

    New NCI trial

    by wilderguide Aug 16, 2016 4:29 PM
    duckduffer duckduffer Aug 16, 2016 7:00 PM Flag

    Interesting that it is a Phase 2, with 110 patient target and a relatively short completion date of 1 year. But the start date is listed as next year (July 2017). Be"wilder"ing.

    Sentiment: Strong Buy

  • duckduffer duckduffer Aug 5, 2016 2:10 PM Flag

    Hey Two Dogs,
    Don't fret. Dilution wouldn't necessarily be that damaging. Depending on how much they convert (Deerfield notes seem more like a cash payout, much cheaper than your example of 33.9M shares, cash would be roughly 125M) it would eliminate roughly $44M per year in interest expense. If EXEL's current sales trajectory, very impressive for 9 weeks of sales, implies Cabo to eventually be a $1B drug in RCC, what will they make? Let's see...expenses at the high of $270M (probably less considering fully diluted there is no $44M interest expense). COG's for manufacturing the drug at 10%/$100M. Gross sales of $1B less $270M less $100M = net profits of $630M. The EPS even at a fully diluted 327M shares....$1.93 per share. Growth company multiple of at least 15X....EXEL PPS of $29.
    GLTA

    Sentiment: Strong Buy

  • Reply to

    Positive opinion by ema

    by mkrjinvestment Jul 22, 2016 7:15 AM
    duckduffer duckduffer Jul 22, 2016 1:24 PM Flag

    I stand corrected.

  • Reply to

    Positive opinion by ema

    by mkrjinvestment Jul 22, 2016 7:15 AM
    duckduffer duckduffer Jul 22, 2016 11:21 AM Flag

    Positive opinion by CHMPs not going to get a press release. Final approval by European Commission will. That should occur 67 days from yesterday's positive CHMP's opinion. Wilder touched on the important points from the opinion.
    GLTA

    Sentiment: Strong Buy

  • Reply to

    Sales Forecast...

    by duckduffer Jul 14, 2016 1:27 PM
    duckduffer duckduffer Jul 14, 2016 2:09 PM Flag

    Just realized after reading captain's post, the analysts estimates average I posted was for next quarter. FYI
    GLTA

    Sentiment: Strong Buy

  • duckduffer by duckduffer Jul 14, 2016 1:27 PM Flag

    Going to be really tough to nail an earnings estimate this quarter due to the FDA approval of Cabo in RCC, which will likely have non cash compensation implications all over the place with incentives having been in place for staff. Having said that, wouldn't pay much attention to the EPS number. Sales is definitely the number to watch, as this may provide a short window on what to expect from a clinical adoption perspective. Essentially, they had 2 months to get the sales engine moving with FDA approval in RCC. What should that amount too? My SWAG-
    17,000 eligible patients x 25% share / 12 months= 354 per month. If Cabo gets 700 scrips in May and June, that would have to be considered best case scenario. If those scrips averaged $10k per month, we should see roughly $10.6M in Cabo RCC sales. Since the company has yet to disclose "by indication" sales numbers for Cabo, could we assume $7M in MTC, $1M in off label, and $10.6M in RCC? A total sales number of $18.6M for Cabo, perhaps a very positive number and one we should be excited to see? Analysts are averaging $23.5M for their quarterly sales outlook, but that includes Cotellic as well. Analysts must be very optimistic about the launch (and why wouldn't they be with the new Gold Standard). Any thoughts?

    Sentiment: Strong Buy

  • duckduffer duckduffer Jul 8, 2016 11:31 AM Flag

    "You can ding him for giving a shallow answer to a complex question, but he got the basic facts correct."
    Indeed. The ding should be for a completely un AF type response. No speculation, no "unnamed industry source or hedge fund manager" feedback that he is famous for quoting. Just a vanilla response with nothing to say. I would have liked to hear his take on a first line filing and his thoughts on Meteor OS since he was so quick to be critical of OS data being limited to "met endpoints" in the first PR. But alas...nothing.
    GLTA

    Sentiment: Strong Buy

  • duckduffer by duckduffer Jul 6, 2016 12:19 PM Flag

    That was the buyout number being tossed around this morning on CNBC to acquire MDVN. Currently MDVN owns 50% of Xtandi in the US and double digit royalties for exUS sales. They share in the commercialization and development costs with Astellas. Their trailing twelve months of revenue is $996M.
    Discuss amongst yourselves. :)
    GLTA

    Sentiment: Strong Buy

  • Reply to

    One down, Nineteen to go

    by erniewerner Jul 2, 2016 3:47 PM
    duckduffer duckduffer Jul 2, 2016 5:13 PM Flag

    Pfizer paid a 55% premium to the current PPS for Anacor. Since it's been clearly communicated and confirmed on this MB that Dr. Papadopoulos, Chairman of EXEL's BOD will not accept less than $4B for the company and it's assets, the PPS will need to continue its path upward until reaching a PPS of roughly $10. At that level an offer that includes a 55% premium (15+PPS) will yield a gross value (after adjusting for options and assuming current cash nearly offsets the converts) that meets this $4B minimum criteria. This process should happen quickly as the acquirer wishes to close the deal before any new huge catalysts hit the tape...(RCC frontline filing based on Cabosun, Celestial interim, etc., etc.)
    These are the facts. :)
    GLTA

    Sentiment: Strong Buy

  • Reply to

    next 8K

    by retsoz Jul 1, 2016 11:05 AM
    duckduffer duckduffer Jul 1, 2016 1:03 PM Flag

    Snow,
    If the convert bondholders suspect a conversion is pending, it would seem that covering their short arbs now and driving the PPS of the common up substantially in the next several weeks....would be highly in their favor...no? Is that basically what you have been suggesting? If so, should make for a very very nice July for longs.
    GLTA

    Sentiment: Strong Buy

  • Reply to

    A new catalyst!

    by enabeler Jun 23, 2016 9:57 AM
    duckduffer duckduffer Jun 23, 2016 11:49 AM Flag

    It's fun to look at that list as it's quite possible that all of the above is the box to check.
    Euro approval- very soon
    Japanese partner- will happen, timing unknown
    Cabosun- we need to see the data, but Choueiri says"cabozantinib may have the potential to become a new gold standard", pretty telling statement
    Combination therapy- two shots on goal here with both Cotellic and Cabo showing promise in Phase 1 trials
    Roche Cotellic arbitration- seems likely they would get something out of this process or why bother?
    Cabometyx sales success- the range of estimates is all over the board but one must assume adoption will be good with "gold standard" label
    GLTA

    Sentiment: Strong Buy

  • Reply to

    Upgraded!!

    by enabeler Jun 21, 2016 8:30 AM
    duckduffer duckduffer Jun 21, 2016 4:31 PM Flag

    I saw it on StreetInsider.com, posted at 7:16 am this morning.
    HEADLINE- Exelixis (EXEL) PT Raised to $10 at Leerink on CRC Opportunity for Cotellic
    "Leerink Partners analyst Michael Schmidt reiterated an Outperform rating and boosted his price target on Exelixis to $10.00 (from $8.00), saying the CRC opportunity for Cotellic is attractive."
    GLTA

    Sentiment: Strong Buy

  • Reply to

    Upgraded!!

    by enabeler Jun 21, 2016 8:30 AM
    duckduffer duckduffer Jun 21, 2016 1:53 PM Flag

    Schmidt commented, "Reiterating our OP rating on EXEL as we see upside generated by Cotellic based on recent initiation of Phase III trials in colorectal cancer with addl. ongoing Phase I/II studies providing optionality. Our OP rating on EXEL is based on our thesis that recently FDA approved Cabometyx is well positioned to capture significant market share in the treatment of RCC, while expectations for Cotellic are still modest."
    GLTA

    Sentiment: Strong Buy

  • duckduffer by duckduffer Jun 16, 2016 3:57 PM Flag

    We can debate revenues and trading patterns until the virtual cows come home, but one thing has to be true....EXEL's current $1.7B valuation is still low. We should expect the value to continue to climb, not straight up, but steadily as the market embraces that Cabo has been coined a potential "gold standard" in RCC by a top KOL. RCC..a growing indication headed for $4B in annual sales. This note is just a reminder for those who have waited patiently and impatiently for this day.... we recently discussed on our time.... and Ernie validated through emulated telephony..... Dr. Papadopoulus will take no less than $4B...why should you?
    GLTA

    Sentiment: Strong Buy

  • Reply to

    That 20 day countdown..

    by ulingt Jun 12, 2016 1:04 PM
    duckduffer duckduffer Jun 15, 2016 6:19 PM Flag

    The company/and us long shareholders would benefit from the use of cash to eliminate the converts prior to a buyout. The deal is 188 shares per $1000 bond, regardless of PPS. They average the PPS over 50 days, and payout in cash based upon 188 X the 50 day avg PPS. It's a benefit to everyone holding common (including the BOD and leadership) if they can figure out a way to convert with cash prior selling the company, as one must assume the sale would be at a premium higher than the current valuation. Thus preventing any part of the buyout premium winding up in convert holders hands. An acquirer, on the other hand, probably couldn't care less either way. They would offer what they consider to be fair value regardless of how many shares are outstanding. The converts mean nothing to them except only that retiring them will come out of the fair value.
    I'd like to see a cash redemption in 2017, asap after the company has a quarter in the black. Even if you have to take on another form of debt to get it done. Once in the black, getting money will be easier and cheaper. Then sell the company after Celestial topline for $4-5B. Or $6B. I'm easy.
    GLTA

    Sentiment: Strong Buy

  • Reply to

    That 20 day countdown..

    by ulingt Jun 12, 2016 1:04 PM
    duckduffer duckduffer Jun 15, 2016 4:41 PM Flag

    Agree. If the redemption after Aug. 15th, 2016 is initiated by EXEL, the holders don't have any option to defer or bypass. The interesting part will be EXEL's options regarding selection of which bonds to redeem and how they choose to apply the payout, whether they go 100% common, 100% cash, or a combination. I wonder if the market would prefer a less impactful dilution (say 50%) of common, with the balance in cash. If the clinical uptake of RCC moves quickly in the US, EXEL could be cash flow positive relatively soon. Barring any new clinical trials, the ongoing cash needs are roughly 60K per quarter. If they get EMA approval, that equates to 1 quarter of cash. End of March cash was $407M. If they finish Q2 with $350M in cash, I think a Japanese partnership worth say $100M up front swings this to an early redemption. That way they could throw $250M of cash at the converts, settle the rest in common, and still have $200M in the till with additional milestones and ramping sales at hand. It's a long shot at best, with timing of a Japanese partner being the key, but I think the market would absolutely love that move.
    GLTA

    Sentiment: Strong Buy

  • Reply to

    That 20 day countdown..

    by ulingt Jun 12, 2016 1:04 PM
    duckduffer duckduffer Jun 15, 2016 11:51 AM Flag

    They can use a combination of cash and stock at their discretion. But after they make the redemption announcement, they must stick with whatever offering they propose for that redemption period. If convert holders choose not to convert during the redemption window, then EXEL could change their offering the next time around. That is my interpretation. So the answer is they can make pretty much any offer that appears to work best. They could use cash and stock to rid themselves of the entire debt, without using all their cash or fully diluting the common.
    GLTA

    Sentiment: Strong Buy

  • duckduffer by duckduffer Jun 14, 2016 3:09 PM Flag

    While reviewing a PR from last years ASCO, I came across this paragraph. Interesting that MMM outlines their direction even back then, now over a year ago, prior to Meteor topline. Read carefully.

    "Commenting on the results, Michael M. Morrissey, Ph.D., Exelixis’ president and chief executive officer, said: “The results from Study E1512 demonstrate cabozantinib’s ability to extend progression-free survival and overall survival in a randomized phase 2 trial in comparison with erlotinib, an active comparator. The data also speak to cabozantinib’s potential as a component of combination therapy in non-small cell lung cancer. Exelixis is committed to working with our partners at ECOG-ACRIN and the National Cancer Institute to evaluate that potential, and we look forward to discussing possible next steps, including combination trials with immunotherapies, as well as potential pivotal studies in late-line disease.”

    Notice the immediate mention of "combination trials with immunotherapies", despite the subject being a positive outcome of a EGFR Wt NSCLC combo trial with erlotinib. Seems out of place...and yet not.
    GLTA

    Sentiment: Strong Buy

  • duckduffer by duckduffer Jun 13, 2016 7:59 PM Flag

    As we wait for EMA approval and a Japan deal, the best possible use of OUR time (if I'm here and you're here..) has to be speculating wildly on a prospective buyout.
    Another thought on timing. If...a buyer is interested today...the current cash plus near term milestones is a wash on all debt including the converts. That means we are really only dealing with the current float plus whatever outstanding options/warrants exist. Let's say 250M shares total. If we say Cabo will be a $1B PAR drug, including MTC, RCC, and HCC, and you plug in Ernie's 3.5 times PAR formula, the company is worth $3.5B for Cabo alone. Cotellic is much harder to value. PAR could be as little as $50M or as high as $300M. Throw it into the valuation at $150M PAR and your total EXEL valuation (not including intellectual property or any other assets) increases to just over $4B. Divide that by the above mentioned float....$16 PPS.
    That seems very possible to me. It assumes some big "ifs" on revenue and approvals (HCC), but there is plenty of upside for a buyer should either drug become part of significant PD1/PDL1 combinations.
    That is my lowest SWAG buyout number that Dr Papadapolous would support. If you don't believe me, I suggest you call him.
    GLTA

    Sentiment: Strong Buy

EXEL
10.98+0.02(+0.18%)Aug 29 4:00 PMEDT