2024-05-02 12:28:33 ET
Summary
- EXEL continues to successfully implement Farallon's restructuring suggestions.
- A pivotal decision on cabo's current patent litigation is due by end of 1H'24. Multiple billions of potential revenue are at stake.
- I'm not holding shares through the judge's decision, but have acquired some calls for ~1% of portfolio to benefit from a positive outcome.
For years, Exelixis (EXEL) has been growing Cabometyx’s (cabozantinib or cabo) revenues, but the company’s burn rate has been accelerating as well until recently (see more below) causing angst among its shareholders. Worse, cabo’s main patent has been under fire with a judgement due soon that could dramatically impact the drug’s future revenues to the tune of $10B or more.
Farallon, an investor turned activist, stepped in publicly last May to help force the company to pivot. Over the past year, EXEL has now largely implemented Farallon’s suggestions and as a result, been able to increase its focus on cabo’s performance and profitability through R&D cost cuts as well as a stock repurchase program. In addition, the renewed R&D focus looks to have positioned EXEL’s strongest potential assets to the front and their pathways in the clinic are now much clearer. However, the patent resolution for cabo is currently the most important pivotal moment in the company’s history, with significant implications to the positive or negative....
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For further details see:
Exelixis: With Patent Litigation Decision Due Soon, There Are Options