## Recent

% | \$
 Quotes you view appear here for quick access.

# Exelixis, Inc. Message Board

erniewerner 192 posts  |  Last Activity: Jul 15, 2016 11:37 AM Member since: Jan 18, 2000
SortNewest  |  Oldest  |  Highest Rated Expand all messages

#### convertable Bonds

by serious7 Jul 3, 2016 10:34 AM
erniewerner erniewerner Jul 4, 2016 4:25 PM Flag

"Seeing how these bonds are callable, if cash is the redemption method, I believe that converts are called at principal & outstanding interest, not at the conversion ratio."

Initially they are called t par, but then the holders can opt for conversion. The company can then convert with stock or cash or a combination. The cash portion is based on a moving average of the actual share price. There is no cheap way out for the company.

#### you see

by serious7 Jul 3, 2016 5:58 PM
erniewerner erniewerner Jul 3, 2016 8:41 PM Flag

"my mistake to discuss convertible bonds with shorts because they will keep talking about it and recalculate the calculation - no it is going to be more and more ."

The converts have been a legitimate subject of conversation here for a very long period. You made a mistake, 39 million vs 54 million isn't insignificant. There are different ways to handle making an error. Ignoring it entirely and moving on is well within the bounds of normal behavior. Or you could show a higher degree of enlightenment and acknowledge the correction. Or you can get all defensive, pretend it isn't really important anyways and toss a slur in the general direction of me, the person who took the trouble to post actual facts about a subject you botched.

#### convertable Bonds

by serious7 Jul 3, 2016 10:34 AM
erniewerner erniewerner Jul 3, 2016 5:25 PM Flag

Let's look one more time at the arithmetic of the converts. There are 287.500 bonds outstanding each with a face value of \$1000 and the conversion rate is 188.2353 shares of Common Stock per \$1,000 bond. That equates to 54 million new shares of the conversion is all stock. If the conversion is all cash, at a share price of \$8.17, that works out to about \$442 million.

I am not a fan of more dilution, but I would bet 2:1 odds that the conversion will be all stock. Future Cabo phase 3 trials will be expensive and I suspect MMM is looking forward to having cash on hand to go on a minor spending spree of his own.

#### XL-550

by dcaf7 Jul 2, 2016 3:19 PM
erniewerner erniewerner Jul 3, 2016 1:26 PM Flag

"We are eligible to receive additional development, regulatory and commercialization milestone payments of up to \$145.0 million. In addition, we are also entitled to receive royalties on any sales of certain products commercialized under the collaboration."

In the unlikely event EXEL collected on every available milestone, the maximum impact is a one time 50 cents per share. The royalty rate is left unspecified. In such cases it is best to assume a low single digit rate, my guess would be 3%. 3150 is a metabolic drug and the target population is patients with high blood pressure. Four studies on the .gov site are listed as ph 3 studies, but only one of them is enrolling more than n=50. We are used to oncology indications in which a single trial of several hundred patients is the norm to serve as the basis for approval. A drug for treating hypertension will require a much larger data base and will need to be proven safe for extended multi-year treatment. 3150 is an interesting development, but the potential impact is several years ahead, and of a lesser magnitude than expansion opportunities with Cabo and Cobi.

#### One down, Nineteen to go

by erniewerner Jul 2, 2016 3:47 PM
erniewerner erniewerner Jul 2, 2016 4:02 PM Flag

That did not take long, FDA essentially did the legwork already. The hazard ratio was slightly worse by independent review going from ..37 to .43. My hypothesis is that this is the same process that will be applied to the CaboSun results. There needs to be some buffer in the data to withstand a more thorough independent review that may reduce the margin of superiority of Cabo over Sunitinib.

"The hazard ratio for the comparison of investigator-assessed PFS between lenvatinib plus everolimus and everolimus was 0.37 (95% CI: 0.22, 0.62). The median PFS was 14.6 (95% CI: 5.9, 20.1) months for the lenvatinib plus everolimus arm versus 5.5 (95% CI: 3.5, 7.1) months for patients on the everolimus arm. This treatment effect was supported by a retrospective independent review of radiographs in these two arms with an observed hazard ratio of0.43 (95% CI: 0.24, 0.75). The hazard ratio for a post-hoc, updated comparison of overall survival between the lenvatinib plus everolimus and everolimus arms was 0.67 (95% CI: 0.42, 1.08).

Comparison of investigator-assessed PFS between lenvatinib monotherapy and everolimus monotherapy supported the activity of lenvatinib in renal cell cancer. The combination of lenvatinib plus everolimus demonstrated numerically superior PFS, objective response rate, and overall survival, compared to lenvatinib monotherapy. There was no pre-specified plan for multiple comparisons"

• #### 12 users liked this posts users disliked this posts 4 Reply One down, Nineteen to go

erniewerner by erniewerner Jul 2, 2016 3:47 PM Flag

I don't want to be CNN calling the Florida vote a Gore win, but one day into the 30 trading day window, it certainly looks like the converts will be called. \$6.91 appears to be firmly in the rear view mirror.

Rad.onco it only works when Henriette says it.

Enabler, I've been through many M&A events. Rarely are they sniffed out, but they are occasionally leaked. Way back in 2011 EXEL actually leaked and then confirmed that they had retained Goldman Sachs. We never did find out if it was real or just a ploy to jack up the share price for another secondary. Regardless, it can happen when you least expect it, but my premise is still that the management and BoD are going to wait for Celestial, but will accept an earlier offer if the price is right.

Cap'n, those turtles have about as much chance at success as a cancer vaccine company.

Nice rally. I think its just a confluence of multiple events all falling the right direction. EXEL is attracting attention from an investment class with a different set of priorities. There will be revenue, the balance sheet is getting cleaned up, and the clinical trial results have been at the upper end of expectations. CaboSun and Cotezo especially surprised to the upside and I don't think they are fully appreciated yet. My next project is to look at the Len/Ever phase two results and see how independent review of the PFS data compared to the initially reported result.

by enabeler Jun 28, 2016 12:49 PM
erniewerner erniewerner Jun 29, 2016 2:52 AM Flag

"What bothers me is the lack of sponsorship(recommendations) from the major players on Wall Street, although we've had upgrades from Leerink and Cowen, why haven't we seen any new recommendations from the likes of ML,GS,JPM,MS,etc"

"I am actually somewhat alarmed by the increase of short interest..."

You're both looking to an outside source for some confirmation that you've made a good investment. When the mainstream analysts climb on board, that's probably a god signal that the rally is near the end. The bigger the short position, the larger the eventual pressure to cover.

The worrisome thing should be the climbing share price. Eventually we reach something approaching fair value. Psychologically though the rising share price usually inspires more confidence that the rally can only continue to higher and higher levels. Despite the overall market, I see continued positive news flow fundamentally pushing the stock higher through ESMO. That might be a good time to reassess where we go next.

#### Brexit Open

by morgiefl00 Jun 23, 2016 11:36 PM
erniewerner erniewerner Jun 24, 2016 2:53 PM Flag

"Congrats to anyone who bought the 275,000 shares \$7.30 each, they all just made \$110,000 in 15 minutes..

How about my 90 shares at \$7.20? I got a partial fill in the pre-market. That should be at least 7 or 8 more BIG Mac meals. I guess the next question is what do the Germans do? You have to wonder about the future of an organization with France as one of its two pillars of stability.

#### Brexit Open

by morgiefl00 Jun 23, 2016 11:36 PM
erniewerner erniewerner Jun 24, 2016 7:31 AM Flag

"The fear is that they are the first domino which will trigger other countries to follow suit and eventually lead to the collapse of the entire EU."

I'm having a tough time trying to figure out exactly how this will impact EXEL's business prospects. Perhaps a chain of events leading to governmental reimbursement agencies seeking lower drug prices due to a generally poor economic environment. That's the best I can come up with. I can make a direct connection to how this effects EXEL share price. It's still a supply/demand market with margin calls and all that entails. Drug companies may be somewhat recession proof, but their shares are not. Tried to pick some up in the pre-market, but there wasn't enough volume to support my bid.

#### Volume

by michael-poggi Jun 23, 2016 1:56 PM
erniewerner erniewerner Jun 23, 2016 4:41 PM Flag

"tight trading range also...no more room for big macs :)..."

Getting tougher and riskier to scalp a few hundred. Earlier this week I did make a buy at 7.65. I was getting ready to take a profit and decided to fold them into the core position instead. I'm pretty sure I see how ESMO is going to play out, but past that it gets a bit foggy. Starting on Jul 1 we can start counting down the days it closes above \$6.91. Rather remarkable that they got a sustained rally to carry the share price above the 130% threshold at just the right time to convert the debt. It does nag at me just a bit that things aren't usually this easy. We'll see.

#### hostile takeover?

by godhairyballs Jun 22, 2016 2:58 PM
erniewerner erniewerner Jun 23, 2016 11:02 AM Flag

"I suppose it might be the suitor that goes public with their offer amount if the buyer thought the price more than fair - but what if the board were holding out for a grand slam when majority investors would be happy with a 2-run homer? How would we know about any offers?"

I'm sure someone will argue about fiduciary responsibility and withholding material information. Set those arguments aside, here is what happens in the real world. Company A makes an offer for company B. Company B rejects the offer as inadequate. If Company A thinks they can go around the board and management of B, they will make the offer public. They can do a public tender to try to gain control or approach the shareholders to exert pressure on the reluctant management. Sometimes it works and sometimes it doesn't. Sometimes company B will seek a White Knight with a better offer. Once the whole thing goes public, there is a good chance something will happen. If an offer is made and rejected, and the suitor does not go public, we the shareholders will never find out anything happened.

#### OT--All you folks over 50 should consider this

by erniewerner Jun 20, 2016 7:36 PM
erniewerner erniewerner Jun 20, 2016 7:58 PM Flag

"ASCO 2016 Update: Checkpoint Immunotherapy Advances in Solid Cancers"

"This combination also improved 6-month overall survival, from 1% in patients treated with the standard of care, to 72%."

That looks like a typo to me. If I recall, regorafenib has about a 6 1/2 month mOS.

• #### 7 users liked this posts users disliked this posts 3 Reply OT--All you folks over 50 should consider this

erniewerner by erniewerner Jun 20, 2016 7:36 PM Flag

"USPSTF Issues New Colorectal Cancer Screening Guidelines"

Don't become a cancer statistic. I would prefer that everyone's only interest in the Atezo/Cobi CRC trial be only from an investment perspective.

#### EMEA/CHMP meeting next week

by slumdawg2011 Jun 17, 2016 12:11 AM
erniewerner erniewerner Jun 20, 2016 10:36 AM Flag

Surely he is NOT creating that expectation based on only preclinical work.

#### EMEA/CHMP meeting next week

by slumdawg2011 Jun 17, 2016 12:11 AM
erniewerner erniewerner Jun 20, 2016 10:36 AM Flag

"I think that might be a little redundant unless it interrupts a compensatory feedback loop that can over come the MET inhibition and that seems to lay in the pim protein kinase pathway from what I know."

There is some overlap with the PD1 MOA and its something I've been wondering about also. One positive though is that Cobi's effectiveness with Atezo is explained by Roche as being related to up-regulation of MHC1. Per Peter Lamb on the ASCO company presentation, Cabo has the same effect. So we'll see, perhaps as early as October. MMM has been talking about a Cabo/PD1 pivotal trial for some time. Surely he is creating that expectation based on only preclinical work. From a share price perspective it doesn't really matter all that much, the current rally is all about RCC, HCC and Cobi/Atezo.

#### EMEA/CHMP meeting next week

by slumdawg2011 Jun 17, 2016 12:11 AM
erniewerner erniewerner Jun 20, 2016 9:11 AM Flag

"From the French article just posted..."

Its on Les Echo. It is an interview with CEO Garidel.

"they ( Ipsen ) are looking to enter Cabo into combo trials asap."

The comment about combinations was the author's, not Mssr. Garidel's, although the author's comment may have been prompted by something Garidel did say, that was not quoted. I agree that the article seems to indicate a move into Cabo/PD1, it's hard to tell if it is speculation on the part of the author or a concrete statement by Ipsen.

#### EXEL dispute w Genentech over Cobi

by wilderguide Jun 19, 2016 10:48 AM
erniewerner erniewerner Jun 19, 2016 1:36 PM Flag

"This probably happens more than we realize."

See "Arbitration: Big Pharma, Big Player" The American Arbitration Association has a life sciences division that specializes in pharma and biotech dispute resolution.

#### EXEL dispute w Genentech over Cobi

by wilderguide Jun 19, 2016 10:48 AM
erniewerner erniewerner Jun 19, 2016 12:53 PM Flag

"Seems a likely catalyst for increased M&A activity across the sector, as value-perceived assets are sure to be disputed - as in the case of Cobi...Any experience with this?"

This probably happens more than we realize. It may go unreported or unnoticed. This is the first example I've ever seen, but partnerships are so common, that it must happen fairly frequently. I mentioned Imclone's drug Erbitux. It has a tree way split with BMS, Merck and Lilly. Surely there must have been disagreements on that profit share relationship. Arbitration makes the most sense, that way the profits get split instead of squandered on legal costs.

#### EXEL dispute w Genentech over Cobi

by wilderguide Jun 19, 2016 10:48 AM
erniewerner erniewerner Jun 19, 2016 12:01 PM Flag

"Is this an issue that might warrant a PR when resolved?
Or will we perhaps hear of it again at the next ER?"

I think the most you will hear is that it has been resolved or has gone to arbitration. I think they perceive it to be in their best interest to project at least a façade of good relations even if that is not the case.

From the 10K "This notice asserts claims against Genentech related to its clinical development, pricing and commercialization of COTELLIC, and cost and revenue allocations arising from COTELLIC’s commercialization in the United States. If the dispute is not resolved within thirty days of Genentech’s receipt of this notice, we intend to initiate an arbitration."

It seems to dispute every facet of the agreement including the pricing of Cotellic, the amount of the expense side that Genentech is attributing to Cotellic and the revenue split.