EXEL - Exelixis initiated Outperform at BMO; says concerns over generics are overblown

BMO Capital Markets has initiated the coverage of oncology-focused biotech Exelixis (NASDAQ:EXEL) with an Outperform recommendation arguing that the company shares are trading below a worst-case scenario implied for a potential entry of generics. The price target of $28 per share implies a premium of ~31% to the last close. The ongoing legal case over the company’s leading revenue generator, Cabometyx and the likely entry of generics in 2026 with the expiry of a key patent for the drug are biggest threats to the company, the analyst Etzer Darout points out. After a discussion with a generic litigation expert, the analyst apportions an equal probability to a win, a loss, or settlement of the case. “….a settlement or outright win are as likely (as a loss) and represent upside to current levels,” Darout wrote, cautioning that the outcome of patent litigation cases are hard to predict. Citing expert views, the

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Exelixis initiated Outperform at BMO; says concerns over generics are overblown