4:09 PM
May 10, 2019
 |  BioCentury  |  Product Development

Exelixis to fuel pipeline growth with Cabometyx cash flows

How Exelixis plans to parlay Cabometyx sales into internal R&D and late-stage deals to expand its pipeline

On the back of the successful launch of Cabometyx cabozantinib, Exelixis is not only using the increased free cash flow to expand the drug’s label, it also thinks it has the firepower to build out its pipeline through internal discovery and late-stage business development.

The success of Cabometyx, which was approved to treat renal cell carcinoma (RCC) in 2016 and hepatocellular carcinoma (HCC) earlier this year, has vaulted Exelixis Inc. from a small cap development-stage company to a commercially profitable biotech valued at more than $6 billion and with over $1 billion in cash.

President and CEO Michael Morrissey told BioCentury that, for the foreseeable future, the company’s primary focus will be to expand the drug’s label as broadly as possible.

According to clinicaltrials.gov, Cabometyx is being tested either as monotherapy or in combination regimens in 39 active, industry-sponsored trials, across at least 19 tumor types.

But Exelixis has little else in the cupboard, and it intends to change that.

Morrissey said the company’s slim pipeline is largely due to a 2010 decision to shutter discovery activities in order to save cash.

“It was a time where we had to ask some fundamental questions about what it was going to take to really convert the company from an R&D type company to a products-based company that could generate revenues and use those revenues to build a sustainable business,” said Morrissey.

Exelixis restarted its internal research programs in 2017 after the company was confident Cabometyx revenues would generate a sustainable flow of cash to fund them.

Cabometyx sales grew from $96 million in 2016 to $600 million in 2018 with only RCC indications on the label.

Now, the company is ready to look externally for late-stage clinical or commercial cancer assets that it views as undervalued....

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