Exelixis (NASDAQ: EXEL) fell 14.9% in February according to data provided by S&P Global Market Intelligence after releasing fourth quarter earnings that disappointed investors at the end of the month.
Cabometyx sales more than doubled year over year, which isn't too shabby, but sales were flat quarter over quarter, worrying investors about the trajectory of the launch.
Management noted that demand was actually up 5%, but there was a build of wholesaler inventory in the third quarter that resulted in flat sales despite the increased prescriptions. The company also had an increase in gross-to-net deduction due to rebates for Medicare and co-pay assistance programs during the quarter.
While the growth in sales of Cabometyx appears to be slowing down for its indication as a second-line treatment for kidney cancer, Cabometyx was approved as a first-line treatment for kidney cancer in the middle of December, suggesting that Exelixis should be able to reaccelerate growth with treatment of earlier-stage patients.
In fact, prescription data from the first six weeks of the year, compared to the first six weeks of the fourth quarter, show Cabometyx increased its share of the kidney cancer market from 20% to 24% with prescription volume increasing by 21%.
And about the time the launch into first-line kidney cancer starts losing steam, Exelixis should be able to get a boost from liver cancer. The biotech expects to submit a marketing application for that indication to the FDA this quarter after releasing positive phase 3 data in October.
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