In the stock market, you don’t need to bet everything on expensive stocks to invest in quality companies. There are still solid options available at reasonable prices, like $Exelixis(EXEL)$ , which is currently trading below $40.
Major Wins for Exelixis
Exelixis is a biotechnology company focused on oncology, with its most important product being Cabometyx, used to treat renal cell carcinoma (a type of kidney cancer) and hepatocellular carcinoma (liver cancer).
Cabometyx has been the cornerstone of Exelixis’s revenue for some time. In Q2, its revenue grew 35.6% year-over-year, reaching $637.2 million. Cabometyx alone accounted for $437.6 million in the U.S., making up nearly 69% of the company's total revenue.
While relying heavily on one product carries risks, Exelixis has carved out a niche in one of the most competitive areas of the pharmaceutical industry, typically dominated by the biggest players.
Legal Victory
Fortunately, Exelixis recently eliminated a major risk by winning a lawsuit against private pharmaceutical company MSN Laboratories, which was seeking to launch a generic version of Cabometyx that could severely impact Exelixis's financial performance.
Thanks to this legal win, MSN can’t introduce a generic version until at least early 2030 (pending appeals). This news has understandably boosted Exelixis's stock price.
Future Outlook
Looking ahead, Cabometyx’s revenue has been on the rise partly due to new indications. Exelixis is currently awaiting approval to use Cabometyx for treating previously treated pancreatic neuroendocrine tumors, and further trials are in progress.
Despite the threat from MSN Laboratories, Exelixis's financial performance remains robust, and the company’s future looks much brighter. Moreover, Exelixis is developing other promising candidates targeting unmet needs in oncology.
One of its late-stage candidates, zanzalintinib, is in Phase 3 trials for metastatic colorectal cancer, the second leading cause of cancer deaths globally. Early detection leads to a five-year survival rate of about 90% for colorectal cancers.
Exelixis also has several other products in early-stage trials, which should show significant progress in the coming years. With its stock priced just below $30 and multiple positive developments on the horizon, investing in Exelixis presents an attractive opportunity.
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