EXEL (EXELISIS INC)
- P/E: 800
- GAAP DILUTED YEAR-OVER-YEAR EPS GROWTH LAST QUARTER: $.31
- SECTOR: HEALTH TECHNOLOGY
- ASSETS-LIABILITIES: 1.24
- DIVIDEND: none
Exilixis is a
pharmaceutical company specializing in cancer drugs. The company is
up already over 60% YTD. It is heavily owned by the major
institutions.
In each of the last 4
quarters, EXEL has beat Wall Street expectations, according to
Estimize. The last two quarters have been profitable, and the
company has set its expectations for profitable quarters in the
future. Previously, the company posted consistent losses. Revenue
increased approximately 550% on a year-over-year basis, while
collaborative revenue doubled. EXEL has partnerships with Roche and
GlaxoSmithKline. Cabometyx, a rectal cancer drug, is its largest
revenue source in the latest quarter and most recent drug launch for
the company. Exelixis announced that their R&D budget decreased
due to decreased costs in one of their drug studies, although the
company does have several drugs in its pipeline. Administrative
costs were also decreased marginally. Exelixis also has four times
as much cash and cash equivalents as it does debt, despite posting
losses consistently in the past.
The exorbitant P/E of 800
is calculated based on significant losses realized in FY 2016.
Should EXEL hold true to its own estimates or exceed them, it would
trade at 133 P/E at the current price. This is still a high P/E
multiple comparable to the S&P average, but considering that many
biotech companies are not profitable, it is a cheap stock in context.
Michael Morrissey, the CEO,
has been in place since 7/2010. He has been with Exelixis since 2000
after working in pharmaceuticals since 1986. He is also an inventor
on 68 US patents. Exelixis' largest competitors for cabometyx are
produced by Pfizer and Novartis. While Pfizer's market share in the
space dropped recently, Exilixis' market share rose. Exelixis is
partnering with Pfizer and Novartis competitors Bristol Myers Squibb
and Genentech to expand the utilization of cabometyx, thereby taking
further market share for the drug.
Exelixis has a recently
launched drug for which it is leveraging market competition to gain
market share. The company has posted profitable quarters of late,
has a clean balance sheet, and has more drugs in the pipeline. It
has high institutional ownership, but only 6 analysts have submitted
forecasts, according to CNN money. The company took a huge stride up
in share price 6/21/17, along with the entire biotech space.
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