FORM
|
10-Q
|
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
EXELIXIS, INC.
|
(Exact name of registrant as specified in its charter)
|
Delaware
|
04-3257395
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification Number)
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common Stock $.001 Par Value per Share
|
EXEL
|
The Nasdaq Stock Market LLC
|
Large accelerated filer
|
☒
|
|
Accelerated filer
|
☐
|
|
Non-accelerated filer
|
☐
|
|
Smaller reporting company
|
☐
|
|
Emerging growth company
|
☐
|
|
|
|
|
|
|
Page
|
Item 1.
|
||
|
||
|
||
|
||
|
||
|
||
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
Item 5.
|
||
Item 6.
|
||
|
March 31, 2020
|
|
December 31, 2019
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
357,340
|
|
|
$
|
266,501
|
|
Short-term investments
|
597,028
|
|
|
585,742
|
|
||
Trade receivables, net
|
137,338
|
|
|
119,073
|
|
||
Inventory
|
15,417
|
|
|
12,886
|
|
||
Prepaid expenses and other current assets
|
29,773
|
|
|
26,988
|
|
||
Total current assets
|
1,136,896
|
|
|
1,011,190
|
|
||
Long-term investments
|
486,036
|
|
|
536,385
|
|
||
Property and equipment, net
|
48,489
|
|
|
48,892
|
|
||
Deferred tax assets, net
|
163,187
|
|
|
172,374
|
|
||
Goodwill
|
63,684
|
|
|
63,684
|
|
||
Other long-term assets
|
57,312
|
|
|
53,145
|
|
||
Total assets
|
$
|
1,955,604
|
|
|
$
|
1,885,670
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
15,321
|
|
|
$
|
11,581
|
|
Accrued compensation and benefits
|
26,687
|
|
|
37,364
|
|
||
Accrued clinical trial liabilities
|
34,969
|
|
|
38,777
|
|
||
Rebates and fees due to customers
|
23,006
|
|
|
18,719
|
|
||
Accrued collaboration liabilities
|
8,663
|
|
|
11,856
|
|
||
Other current liabilities
|
31,831
|
|
|
24,449
|
|
||
Total current liabilities
|
140,477
|
|
|
142,746
|
|
||
Long-term portion of deferred revenue
|
14,133
|
|
|
6,596
|
|
||
Long-term portion of operating lease liabilities
|
47,883
|
|
|
48,011
|
|
||
Other long-term liabilities
|
5,459
|
|
|
2,347
|
|
||
Total liabilities
|
207,952
|
|
|
199,700
|
|
||
Commitments
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, $0.001 par value, 10,000 shares authorized and no shares issued
|
—
|
|
|
—
|
|
||
Common stock, $0.001 par value; 400,000 shares authorized; issued and outstanding: 305,780 and 304,831 at March 31, 2020 and December 31, 2019, respectively
|
306
|
|
|
305
|
|
||
Additional paid-in capital
|
2,258,307
|
|
|
2,241,947
|
|
||
Accumulated other comprehensive income (loss)
|
(222
|
)
|
|
3,069
|
|
||
Accumulated deficit
|
(510,739
|
)
|
|
(559,351
|
)
|
||
Total stockholders’ equity
|
1,747,652
|
|
|
1,685,970
|
|
||
Total liabilities and stockholders’ equity
|
$
|
1,955,604
|
|
|
$
|
1,885,670
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Revenues:
|
|
|
|
||||
Net product revenues
|
$
|
193,880
|
|
|
$
|
179,581
|
|
License revenues
|
20,879
|
|
|
25,564
|
|
||
Collaboration services revenues
|
12,156
|
|
|
10,342
|
|
||
Total revenues
|
226,915
|
|
|
215,487
|
|
||
Operating expenses:
|
|
|
|
||||
Cost of goods sold
|
9,289
|
|
|
7,501
|
|
||
Research and development
|
101,877
|
|
|
63,289
|
|
||
Selling, general and administrative
|
62,940
|
|
|
60,138
|
|
||
Total operating expenses
|
174,106
|
|
|
130,928
|
|
||
Income from operations
|
52,809
|
|
|
84,559
|
|
||
Interest income
|
7,220
|
|
|
6,087
|
|
||
Other income, net
|
6
|
|
|
25
|
|
||
Income before income taxes
|
60,035
|
|
|
90,671
|
|
||
Provision for income taxes
|
11,423
|
|
|
14,896
|
|
||
Net income
|
$
|
48,612
|
|
|
$
|
75,775
|
|
Net income per share:
|
|
|
|
||||
Basic
|
$
|
0.16
|
|
|
$
|
0.25
|
|
Diluted
|
$
|
0.15
|
|
|
$
|
0.24
|
|
Weighted-average common shares outstanding:
|
|
|
|
||||
Basic
|
305,388
|
|
|
300,542
|
|
||
Diluted
|
315,839
|
|
|
314,644
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Net income
|
$
|
48,612
|
|
|
$
|
75,775
|
|
Other comprehensive (loss) income:
|
|
|
|
||||
Net unrealized (losses) gains on available-for-sale debt securities, net of tax impact of $941 and ($394), respectively
|
(3,291
|
)
|
|
1,429
|
|
||
Comprehensive income
|
$
|
45,321
|
|
|
$
|
77,204
|
|
|
Three Months Ended March 31, 2020
|
|||||||||||||||||||||
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Accumulated Deficit
|
|
Total Stockholders’ Equity
|
|||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||
Balance at December 31, 2019
|
304,831
|
|
|
$
|
305
|
|
|
$
|
2,241,947
|
|
|
$
|
3,069
|
|
|
$
|
(559,351
|
)
|
|
$
|
1,685,970
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
48,612
|
|
|
48,612
|
|
|||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,291
|
)
|
|
—
|
|
|
(3,291
|
)
|
|||||
Issuance of common stock under equity incentive plans, net of tax
|
949
|
|
|
1
|
|
|
2,378
|
|
|
—
|
|
|
—
|
|
|
2,379
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
13,982
|
|
|
—
|
|
|
—
|
|
|
13,982
|
|
|||||
Balance at March 31, 2020
|
305,780
|
|
|
$
|
306
|
|
|
$
|
2,258,307
|
|
|
$
|
(222
|
)
|
|
$
|
(510,739
|
)
|
|
$
|
1,747,652
|
|
|
Three Months Ended March 31, 2019
|
|||||||||||||||||||||
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Accumulated Deficit
|
|
Total Stockholders’ Equity
|
|||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||
Balance at December 31, 2018
|
299,876
|
|
|
$
|
300
|
|
|
$
|
2,168,217
|
|
|
$
|
(701
|
)
|
|
$
|
(880,363
|
)
|
|
$
|
1,287,453
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
75,775
|
|
|
75,775
|
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
1,429
|
|
|
—
|
|
|
1,429
|
|
|||||
Issuance of common stock under equity incentive plans, net of tax
|
1,644
|
|
|
2
|
|
|
7,832
|
|
|
—
|
|
|
—
|
|
|
7,834
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
12,529
|
|
|
—
|
|
|
—
|
|
|
12,529
|
|
|||||
Balance at March 31, 2019
|
301,520
|
|
|
$
|
302
|
|
|
$
|
2,188,578
|
|
|
$
|
728
|
|
|
$
|
(804,588
|
)
|
|
$
|
1,385,020
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Net income
|
$
|
48,612
|
|
|
$
|
75,775
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation
|
2,175
|
|
|
1,962
|
|
||
Stock-based compensation
|
13,982
|
|
|
12,529
|
|
||
Non-cash lease expense
|
1,174
|
|
|
440
|
|
||
Deferred taxes
|
10,128
|
|
|
—
|
|
||
Other, net
|
(888
|
)
|
|
1,054
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Trade receivables, net
|
(18,270
|
)
|
|
55,101
|
|
||
Inventory
|
(4,695
|
)
|
|
(305
|
)
|
||
Prepaid expenses and other assets
|
(2,863
|
)
|
|
(11,165
|
)
|
||
Deferred revenue
|
8,850
|
|
|
(1,313
|
)
|
||
Accounts payable and other liabilities
|
(2,131
|
)
|
|
27,515
|
|
||
Net cash provided by operating activities
|
56,074
|
|
|
161,593
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Purchases of property, equipment and other
|
(2,961
|
)
|
|
(2,307
|
)
|
||
Purchases of investments
|
(251,505
|
)
|
|
(239,869
|
)
|
||
Proceeds from maturities and sales of investments
|
287,086
|
|
|
134,519
|
|
||
Net cash provided by (used in) investing activities
|
32,620
|
|
|
(107,657
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from issuance of common stock under equity incentive plans
|
3,938
|
|
|
6,817
|
|
||
Taxes paid related to net share settlement of equity awards
|
(1,793
|
)
|
|
(1,580
|
)
|
||
Other, net
|
—
|
|
|
(11
|
)
|
||
Net cash provided by financing activities
|
2,145
|
|
|
5,226
|
|
||
Net increase in cash, cash equivalents and restricted cash
|
90,839
|
|
|
59,162
|
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
268,137
|
|
|
315,875
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
$
|
358,976
|
|
|
$
|
375,037
|
|
Supplemental cash flow disclosures:
|
|
|
|
||||
Right-of-use assets obtained in exchange for lease obligations
|
$
|
576
|
|
|
$
|
8,170
|
|
Unpaid liabilities incurred for purchases of property and equipment
|
$
|
481
|
|
|
$
|
141
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Product revenues:
|
|
|
|
||||
Gross product revenues
|
$
|
252,566
|
|
|
$
|
223,750
|
|
Discounts and allowances
|
(58,686
|
)
|
|
(44,169
|
)
|
||
Net product revenues
|
193,880
|
|
|
179,581
|
|
||
Collaboration revenues:
|
|
|
|
||||
License revenues
|
20,879
|
|
|
25,564
|
|
||
Collaboration services revenues
|
12,156
|
|
|
10,342
|
|
||
Total collaboration revenues
|
33,035
|
|
|
35,906
|
|
||
Total revenues
|
$
|
226,915
|
|
|
$
|
215,487
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
CABOMETYX
|
$
|
189,216
|
|
|
$
|
175,890
|
|
COMETRIQ
|
4,664
|
|
|
3,691
|
|
||
Net product revenues
|
$
|
193,880
|
|
|
$
|
179,581
|
|
|
Three Months Ended March 31,
|
||||
|
2020
|
|
2019
|
||
Affiliates of CVS Health Corporation
|
18
|
%
|
|
15
|
%
|
Affiliates of McKesson Corporation
|
15
|
%
|
|
12
|
%
|
Ipsen
|
13
|
%
|
|
10
|
%
|
Affiliates of AmerisourceBergen Corporation
|
11
|
%
|
|
10
|
%
|
Affiliates of Optum Specialty Pharmacy
|
12
|
%
|
|
8
|
%
|
Accredo Health, Incorporated
|
8
|
%
|
|
10
|
%
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
U.S.
|
$
|
196,596
|
|
|
$
|
182,126
|
|
Europe
|
29,036
|
|
|
21,868
|
|
||
Japan
|
1,283
|
|
|
11,493
|
|
||
Total revenues
|
$
|
226,915
|
|
|
$
|
215,487
|
|
|
Chargebacks and Discounts for Prompt Payment
|
|
Other Customer Credits/Fees and Co-pay Assistance
|
|
Rebates
|
|
Total
|
||||||||
Balance at December 31, 2019
|
$
|
7,514
|
|
|
$
|
3,497
|
|
|
$
|
15,222
|
|
|
$
|
26,233
|
|
Provision related to sales made in:
|
|
|
|
|
|
|
|
||||||||
Current period
|
37,686
|
|
|
4,586
|
|
|
15,821
|
|
|
58,093
|
|
||||
Prior periods
|
41
|
|
|
(167
|
)
|
|
719
|
|
|
593
|
|
||||
Payments and customer credits issued
|
(32,584
|
)
|
|
(4,842
|
)
|
|
(11,830
|
)
|
|
(49,256
|
)
|
||||
Balance at March 31, 2020
|
$
|
12,657
|
|
|
$
|
3,074
|
|
|
$
|
19,932
|
|
|
$
|
35,663
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
License revenues
|
$
|
17,949
|
|
|
$
|
13,963
|
|
Collaboration services revenues
|
11,087
|
|
|
7,905
|
|
||
Total
|
$
|
29,036
|
|
|
$
|
21,868
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
License revenues
|
$
|
—
|
|
|
$
|
9,056
|
|
Collaboration services revenues
|
1,069
|
|
|
2,437
|
|
||
Total
|
$
|
1,069
|
|
|
$
|
11,493
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Profits on U.S. commercialization
|
$
|
1,407
|
|
|
$
|
1,055
|
|
Royalty revenues on ex-U.S. sales
|
$
|
1,309
|
|
|
$
|
1,490
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Cash and cash equivalents
|
$
|
357,340
|
|
|
$
|
266,501
|
|
Restricted cash equivalents included in long-term investments
|
1,636
|
|
|
1,636
|
|
||
Cash, cash equivalents, and restricted cash equivalents as reported within the accompanying Condensed Consolidated Statements of Cash Flows
|
$
|
358,976
|
|
|
$
|
268,137
|
|
|
March 31, 2020
|
||||||||||||||
|
Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
||||||||
Debt securities available-for-sale:
|
|
|
|
|
|
|
|
||||||||
Commercial paper
|
$
|
202,452
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
202,452
|
|
Corporate bonds
|
741,315
|
|
|
2,404
|
|
|
(3,448
|
)
|
|
740,271
|
|
||||
U.S. Treasury and government-sponsored enterprises
|
152,922
|
|
|
788
|
|
|
—
|
|
|
153,710
|
|
||||
Municipal bonds
|
15,148
|
|
|
140
|
|
|
—
|
|
|
15,288
|
|
||||
Total debt securities available-for-sale
|
1,111,837
|
|
|
3,332
|
|
|
(3,448
|
)
|
|
1,111,721
|
|
||||
Cash
|
8,905
|
|
|
—
|
|
|
—
|
|
|
8,905
|
|
||||
Money market funds
|
273,497
|
|
|
—
|
|
|
—
|
|
|
273,497
|
|
||||
Certificates of deposit
|
46,279
|
|
|
2
|
|
|
—
|
|
|
46,281
|
|
||||
Total cash and investments
|
$
|
1,440,518
|
|
|
$
|
3,334
|
|
|
$
|
(3,448
|
)
|
|
$
|
1,440,404
|
|
|
December 31, 2019
|
||||||||||||||
|
Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
||||||||
Debt securities available-for-sale:
|
|
|
|
|
|
|
|
||||||||
Commercial paper
|
$
|
389,573
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
389,573
|
|
Corporate bonds
|
752,295
|
|
|
3,934
|
|
|
(3
|
)
|
|
756,226
|
|
||||
U.S. Treasury and government-sponsored enterprises
|
166,483
|
|
|
187
|
|
|
(5
|
)
|
|
166,665
|
|
||||
Total debt securities available-for-sale
|
1,308,351
|
|
|
4,121
|
|
|
(8
|
)
|
|
1,312,464
|
|
||||
Cash
|
40,964
|
|
|
—
|
|
|
—
|
|
|
40,964
|
|
||||
Money market funds
|
2,467
|
|
|
—
|
|
|
—
|
|
|
2,467
|
|
||||
Certificates of deposit
|
32,728
|
|
|
5
|
|
|
—
|
|
|
32,733
|
|
||||
Total cash and investments
|
$
|
1,384,510
|
|
|
$
|
4,126
|
|
|
$
|
(8
|
)
|
|
$
|
1,388,628
|
|
|
March 31, 2020
|
||||||
|
Fair Value
|
|
Gross Unrealized Losses
|
||||
Corporate bonds
|
$
|
351,135
|
|
|
$
|
(3,448
|
)
|
Total
|
$
|
351,135
|
|
|
$
|
(3,448
|
)
|
|
December 31, 2019
|
||||||
|
Fair Value
|
|
Gross Unrealized Losses
|
||||
Corporate bonds
|
$
|
14,529
|
|
|
$
|
(3
|
)
|
U.S. Treasury and government-sponsored enterprises
|
2,848
|
|
|
(5
|
)
|
||
Total
|
$
|
17,377
|
|
|
$
|
(8
|
)
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Maturing in one year or less
|
$
|
641,070
|
|
|
$
|
789,913
|
|
Maturing after one year through five years
|
470,651
|
|
|
522,551
|
|
||
Total debt securities available-for-sale
|
$
|
1,111,721
|
|
|
$
|
1,312,464
|
|
•
|
Level 1 - quoted prices (unadjusted) in active markets for identical assets and liabilities;
|
•
|
Level 2 - inputs other than level 1 that are observable either directly or indirectly, such as quoted prices in active markets for similar instruments or on industry models using data inputs, such as interest rates and prices that can be directly observed or corroborated in active markets;
|
•
|
Level 3 - unobservable inputs that are supported by little or no market activity that are significant to the fair value measurement
|
|
March 31, 2020
|
||||||||||
|
Level 1
|
|
Level 2
|
|
Total
|
||||||
Commercial paper
|
$
|
—
|
|
|
$
|
202,452
|
|
|
$
|
202,452
|
|
Corporate bonds
|
—
|
|
|
740,271
|
|
|
740,271
|
|
|||
U.S. Treasury and government-sponsored enterprises
|
—
|
|
|
153,710
|
|
|
153,710
|
|
|||
Municipal bonds
|
—
|
|
|
15,288
|
|
|
15,288
|
|
|||
Total debt securities available-for-sale
|
—
|
|
|
1,111,721
|
|
|
1,111,721
|
|
|||
Money market funds
|
273,497
|
|
|
—
|
|
|
273,497
|
|
|||
Certificates of deposit
|
—
|
|
|
46,281
|
|
|
46,281
|
|
|||
Total financial assets carried at fair value
|
$
|
273,497
|
|
|
$
|
1,158,002
|
|
|
$
|
1,431,499
|
|
|
December 31, 2019
|
||||||||||
|
Level 1
|
|
Level 2
|
|
Total
|
||||||
Commercial paper
|
$
|
—
|
|
|
$
|
389,573
|
|
|
$
|
389,573
|
|
Corporate bonds
|
—
|
|
|
756,226
|
|
|
756,226
|
|
|||
U.S. Treasury and government-sponsored enterprises
|
—
|
|
|
166,665
|
|
|
166,665
|
|
|||
Total debt securities available-for-sale
|
—
|
|
|
1,312,464
|
|
|
1,312,464
|
|
|||
Money market funds
|
2,467
|
|
|
—
|
|
|
2,467
|
|
|||
Certificates of deposit
|
—
|
|
|
32,733
|
|
|
32,733
|
|
|||
Total financial assets carried at fair value
|
$
|
2,467
|
|
|
$
|
1,345,197
|
|
|
$
|
1,347,664
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Raw materials
|
$
|
2,215
|
|
|
$
|
2,709
|
|
Work in process
|
14,278
|
|
|
9,447
|
|
||
Finished goods
|
4,865
|
|
|
4,367
|
|
||
Total
|
$
|
21,358
|
|
|
$
|
16,523
|
|
Balance Sheet classification:
|
|
|
|
||||
Current portion included in inventory
|
$
|
15,417
|
|
|
$
|
12,886
|
|
Long-term portion included in other long-term assets
|
5,941
|
|
|
3,637
|
|
||
Total
|
$
|
21,358
|
|
|
$
|
16,523
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Research and development
|
$
|
5,086
|
|
|
$
|
4,306
|
|
Selling, general and administrative
|
8,896
|
|
|
8,223
|
|
||
Total stock-based compensation
|
$
|
13,982
|
|
|
$
|
12,529
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Numerator:
|
|
|
|
||||
Net income
|
$
|
48,612
|
|
|
$
|
75,775
|
|
Denominator:
|
|
|
|
||||
Weighted-average common shares outstanding - basic
|
305,388
|
|
|
300,542
|
|
||
Dilutive effect of employee stock plans
|
10,451
|
|
|
14,102
|
|
||
Weighted-average common shares outstanding - diluted
|
315,839
|
|
|
314,644
|
|
||
Net income per share - basic
|
$
|
0.16
|
|
|
$
|
0.25
|
|
Net income per share - diluted
|
$
|
0.15
|
|
|
$
|
0.24
|
|
|
Three Months Ended March 31,
|
||||
|
2020
|
|
2019
|
||
Anti-dilutive securities and contingently issuable shares excluded
|
12,014
|
|
|
5,089
|
|
•
|
In January 2020, we announced an amendment to the protocol for COSMIC-021 to further expand patient enrollment in an existing mCRPC cohort to up to 130 patients.
|
•
|
In January 2020, clinically meaningful data from CheckMate 040, the phase 1/2 trial evaluating cabozantinib in combination with nivolumab and in combination with both nivolumab and ipilimumab in patients with previously treated or previously untreated advanced HCC, were presented at ASCO’s Gastrointestinal Cancers Symposium.
|
•
|
In January 2020, Takeda applied to the Japanese MHLW for approval to manufacture and market CABOMETYX as a treatment for patients with unresectable HCC who progressed after prior systemic therapy in Japan.
|
•
|
In February 2020, we presented clinically meaningful results from the mCRPC cohort of COSMIC-021 at ASCO’s Genitourinary Cancers Symposium.
|
•
|
In February 2020, we announced the enrollment of the first 100 patients in COSMIC-311, the phase 3 pivotal trial of cabozantinib versus placebo in patients with RAI-refractory DTC who have progressed after up to two prior VEGF receptor-targeted therapies.
|
•
|
In March 2020, Takeda received regulatory approval from the Japanese MHLW to manufacture and market CABOMETYX as a treatment for patients with curatively unresectable or metastatic RCC in Japan.
|
•
|
In April 2020, we announced that CheckMate -9ER, BMS’ phase 3 pivotal trial evaluating the combination of cabozantinib and nivolumab in previously untreated advanced or metastatic RCC, met its primary endpoint of significantly improving PFS, as well as the secondary endpoints of OS and ORR, versus sunitinib. More detailed results of CheckMate -9ER will be submitted for presentation at an upcoming medical conference.
|
•
|
In May 2020, we announced that cabozantinib will be the subject of 12 presentations at the 2020 ASCO Annual Meeting. Data presentations will include results from NSCLC, mCRPC and urothelial carcinoma cohorts of COSMIC-021, as well as updates from other externally sponsored studies.
|
•
|
In May 2020, we received notice from MSN Pharmaceuticals, Inc. (MSN) that it had amended its Abbreviated New Drug Application (ANDA), originally filed with the FDA in September 2019, to assert additional Paragraph IV certifications. The ANDA now requests approval to market a generic version of CABOMETYX tablets prior to expiration of two previously-unasserted CABOMETYX patents listed in the Approved Drug Products with Therapeutic Equivalence Evaluations, also referred to as the Orange Book: U.S. Patent No. 7,579,473, the composition of matter patent, and U.S. Patent No. 8,497,284, a method of use patent. We are well prepared to respond and will vigorously defend our cabozantinib intellectual property estate.
|
•
|
Net product revenues for the first quarter of 2020 was $193.9 million, compared to $179.6 million for the first quarter of 2019.
|
•
|
Total revenues for the first quarter of 2020 was $226.9 million, compared to $215.5 million for the first quarter of 2019.
|
•
|
Research and development expenses for the first quarter of 2020 was $101.9 million, compared to $63.3 million for the first quarter of 2019.
|
•
|
Selling, general and administrative expenses for the first quarter of 2020 was $62.9 million, compared to $60.1 million for the first quarter of 2019.
|
•
|
Provision for income taxes for the first quarter of 2020 was $11.4 million, compared to $14.9 million for the first quarter of 2019.
|
•
|
Net income for the first quarter of 2020 was $48.6 million, or $0.16 per share, basic and $0.15 per share, diluted, compared to $75.8 million, or $0.25 per share, basic and $0.24 per share diluted, for the first quarter of 2019.
|
•
|
Cash and investments were $1.4 billion at both March 31, 2020 and December 31, 2019.
|
|
Three Months Ended March 31,
|
|
Percentage Change
|
|||||||
|
2020
|
|
2019
|
|
||||||
Net product revenues
|
$
|
193,880
|
|
|
$
|
179,581
|
|
|
8
|
%
|
License revenues
|
20,879
|
|
|
25,564
|
|
|
(18
|
)%
|
||
Collaboration services revenues
|
12,156
|
|
|
10,342
|
|
|
18
|
%
|
||
Total revenues
|
$
|
226,915
|
|
|
$
|
215,487
|
|
|
5
|
%
|
|
Three Months Ended March 31,
|
|
Percentage Change
|
|||||||
|
2020
|
|
2019
|
|
||||||
Gross product revenues
|
$
|
252,566
|
|
|
$
|
223,750
|
|
|
13
|
%
|
Discounts and allowances
|
(58,686
|
)
|
|
(44,169
|
)
|
|
33
|
%
|
||
Net product revenues
|
$
|
193,880
|
|
|
$
|
179,581
|
|
|
8
|
%
|
|
Three Months Ended March 31,
|
|
Percentage Change
|
|||||||
|
2020
|
|
2019
|
|
||||||
CABOMETYX
|
$
|
189,216
|
|
|
$
|
175,890
|
|
|
8
|
%
|
COMETRIQ
|
4,664
|
|
|
3,691
|
|
|
26
|
%
|
||
Net product revenues
|
$
|
193,880
|
|
|
$
|
179,581
|
|
|
8
|
%
|
|
Three Months Ended March 31,
|
|
Percentage Change
|
|||||||
|
2020
|
|
2019
|
|
||||||
Cost of goods sold
|
$
|
9,289
|
|
|
$
|
7,501
|
|
|
24
|
%
|
Gross margin
|
95
|
%
|
|
96
|
%
|
|
|
|
Three Months Ended March 31,
|
|
Percentage Change
|
|||||||
|
2020
|
|
2019
|
|
||||||
Research and development expenses
|
$
|
101,877
|
|
|
$
|
63,289
|
|
|
61
|
%
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Research and development expenses:
|
|
|
|
||||
Development:
|
|
|
|
||||
Clinical trial costs
|
$
|
53,344
|
|
|
$
|
28,187
|
|
Personnel expenses
|
20,288
|
|
|
13,587
|
|
||
Consulting and outside services
|
3,244
|
|
|
2,712
|
|
||
Other development costs
|
4,741
|
|
|
4,134
|
|
||
Total development
|
81,617
|
|
|
48,620
|
|
||
Drug discovery:
|
|
|
|
||||
License and other collaboration costs
|
5,013
|
|
|
2,506
|
|
||
Other drug discovery (1)
|
6,734
|
|
|
4,534
|
|
||
Total drug discovery
|
11,747
|
|
|
7,040
|
|
||
Other (2)
|
8,513
|
|
|
7,629
|
|
||
Total research and development expenses
|
$
|
101,877
|
|
|
$
|
63,289
|
|
(1)
|
Primarily includes personnel expenses, consulting and outside services and laboratory supplies.
|
(2)
|
Includes stock-based compensation, the allocation of general corporate costs to research and development, and development cost reimbursement received in connection with our December 2019 collaboration arrangement with Roche.
|
|
Three Months Ended March 31,
|
|
Percentage Change
|
|||||||
|
2020
|
|
2019
|
|
||||||
Selling, general and administrative expenses
|
$
|
62,940
|
|
|
$
|
60,138
|
|
|
5
|
%
|
|
Three Months Ended March 31,
|
|
Percentage Change
|
|||||||
|
2020
|
|
2019
|
|
||||||
Interest income
|
$
|
7,220
|
|
|
$
|
6,087
|
|
|
19
|
%
|
Other income, net
|
$
|
6
|
|
|
$
|
25
|
|
|
(76
|
)%
|
|
Three Months Ended March 31,
|
|
Percentage Change
|
|||||||
|
2020
|
|
2019
|
|
||||||
Provision for income taxes
|
$
|
11,423
|
|
|
$
|
14,896
|
|
|
(23
|
)%
|
Effective income tax rate
|
19.0
|
%
|
|
16.4
|
%
|
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Net cash provided by operating activities
|
$
|
56,074
|
|
|
$
|
161,593
|
|
Net cash provided by (used in) investing activities
|
$
|
32,620
|
|
|
$
|
(107,657
|
)
|
Net cash provided by financing activities
|
$
|
2,145
|
|
|
$
|
5,226
|
|
•
|
the federal Anti-Kickback Statute, which governs our business activities, including our marketing practices, medical educational programs, pricing policies, and relationships with healthcare providers or other entities;
|
•
|
the federal Food, Drug, and Cosmetic Act (FDCA) and its implementing regulations, which prohibit, among other things, the introduction or delivery for introduction into interstate commerce of any drug that is adulterated or misbranded;
|
•
|
federal civil and criminal false claims laws, including the civil False Claims Act, and civil monetary penalty laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid, or other third-party payers that are false or fraudulent, or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government;
|
•
|
federal criminal laws that prohibit executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters;
|
•
|
the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and its implementing regulations, which impose certain requirements relating to the privacy, security and transmission of individually identifiable health information on covered entities and business associates that access such information on behalf of a covered entity;
|
•
|
state law equivalents of each of the above federal laws;
|
•
|
the Open Payments program of the Patient Protection and Affordable Care Act, as amended by the Healthcare and Education Reconciliation Act (PPACA), which was created under the Physician Payments Sunshine Act and its implementing regulations and requires certain manufacturers of drugs, devices, biologics and medical supplies that are reimbursable under Medicare, Medicaid, or the Children’s Health Insurance Program, with specific exceptions, to report annually to the government information related to certain payments and other transfers of value to physicians (as defined by such law) and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members;
|
•
|
state and local laws and regulations that require drug manufacturers to file reports relating to marketing activities, payments and other remuneration and items of value provided to healthcare professionals and entities, as well as state and local laws requiring the registration of pharmaceutical sales representatives; and
|
•
|
state pharmaceutical price and price reporting laws and regulations that require us to provide notice of price increases or the introduction of new high-cost products, and/or file complex ancillary reports concerning prices and pricing and discount practices.
|
•
|
lack of acceptable efficacy or a tolerable safety profile;
|
•
|
negative or inconclusive clinical trial results that require us to conduct further testing or to abandon projects;
|
•
|
discovery or commercialization by our competitors of other compounds or therapies that show significantly improved safety or efficacy compared to cabozantinib or our other product candidates;
|
•
|
our inability to identify and maintain a sufficient number of trial sites;
|
•
|
lower-than-anticipated patient registration or enrollment in our clinical testing;
|
•
|
failure by our collaboration partners to provide us with an adequate and timely supply of product that complies with the applicable quality and regulatory requirements for a combination trial;
|
•
|
failure of our third-party contract research organizations or investigators to satisfy their contractual obligations, including deviating from any trial protocols; and
|
•
|
withholding of authorization from regulators or institutional review boards to commence or conduct clinical trials or delays, suspensions or terminations of clinical research for various reasons, including noncompliance with regulatory requirements or a determination by these regulators and institutional review boards that participating patients are being exposed to unacceptable health risks.
|
•
|
the commercial success of both CABOMETYX and COMETRIQ and the revenues we generate from those approved products;
|
•
|
costs associated with maintaining our expanded sales, marketing, market access, medical affairs and product distribution capabilities for CABOMETYX and COMETRIQ;
|
•
|
the achievement of stated regulatory and commercial milestones and royalties paid under our collaboration agreements with Ipsen and Takeda;
|
•
|
the commercial success of and revenues generated by products marketed under our collaboration and license agreements;
|
•
|
future clinical trial results;
|
•
|
the impact of the COVID-19 pandemic on our ability to conduct critical business operations, including internal drug discovery activities, clinical trials and commercial operations;
|
•
|
the level of our investments in the expansion of our pipeline through internal drug discovery and business development activities;
|
•
|
the number and size of clinical trials we conduct and the cost of drug supply for such clinical trials evaluating our products with other therapeutic agents;
|
•
|
trends and developments in the pricing of oncologic therapeutics in the U.S. and abroad, especially in the EU;
|
•
|
scientific developments in the market for oncologic therapeutics and the timing of regulatory approvals for competing oncologic therapies; and
|
•
|
the filing, maintenance, prosecution, defense and enforcement of patent claims and other intellectual property rights.
|
•
|
our inability to control the amount and timing of resources that our collaboration partners or potential future collaboration partners will devote to the development or commercialization of drug candidates or to their marketing and distribution;
|
•
|
the possibility that collaboration partners may delay clinical trials, fail to supply us on a timely basis with the product required for a combination trial (including as a result of the COVID-19 pandemic), deliver product that fails to meet appropriate quality and regulatory standards and results in a market recall or withdrawal, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a drug candidate, repeat or conduct new clinical trials or require a new formulation of a drug candidate for clinical testing;
|
•
|
disputes that may arise between us and our collaboration partners that result in the delay or termination of the research, development or commercialization of our drug candidates, or that diminish or delay receipt of the economic benefits we are entitled to receive under the collaboration, or that result in costly litigation or arbitration;
|
•
|
the possibility that our collaboration partners may experience financial difficulties, including, without limitation, difficulties arising from the impact of the COVID-19 pandemic;
|
•
|
our collaboration partners’ lack of success in their efforts to obtain regulatory approvals in a timely manner, or at all;
|
•
|
our collaboration partners’ failure to properly maintain or defend our intellectual property rights or their use of our intellectual property rights or proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property rights or expose us to potential litigation;
|
•
|
our collaboration partners’ failure to comply with the terms of our collaboration agreements and related ancillary agreements;
|
•
|
our collaboration partners’ failure to comply with applicable healthcare laws, as well as established guidelines, laws and regulations related to Good Manufacturing Practice, Good Clinical Practice, Good Distribution Practice and Good Pharmacovigilance Practice;
|
•
|
the possibility that our collaboration partners could independently move forward with competing drug candidates, developed either independently or in collaboration with others, including our competitors;
|
•
|
our inability to enter into additional collaboration arrangements with third parties in an area or field of exclusivity;
|
•
|
the possibility that future collaboration partners may require us to relinquish some important rights, such as marketing and distribution rights; and
|
•
|
the possibility that collaborations may be terminated or allowed to expire, which would delay, and may increase the cost of, development of our drug candidates.
|
•
|
the announcement of FDA approval or non-approval, or delays in the FDA review process with respect to cabozantinib, our collaboration partners’ product candidates being developed in combination with cabozantinib, or our competitors’ product candidates;
|
•
|
the commercial performance of both CABOMETYX and COMETRIQ and the revenues we generate from those approved products, including royalties paid under our collaboration and license agreements;
|
•
|
adverse or inconclusive results or announcements related to our or our collaboration partners’ clinical trials or delays in those clinical trials;
|
•
|
the timing of achievement of our clinical, regulatory, partnering, commercial and other milestones for cabozantinib or any of our other programs or product candidates;
|
•
|
our ability to make future investments in the expansion of our pipeline through internal drug discovery and business development activities;
|
•
|
our ability to obtain the materials and services, including an adequate product supply for any approved drug product, from our third-party vendors or do so at acceptable prices;
|
•
|
the timing and amount of expenses incurred for clinical development and manufacturing of cabozantinib;
|
•
|
actions taken by regulatory agencies, both in the U.S. and abroad, with respect to cabozantinib or our clinical trials for cabozantinib;
|
•
|
unanticipated regulatory actions taken by the FDA as a result of changing FDA standards and practices concerning the review of product candidates, including approvals at earlier stages of clinical development or with lesser developed data sets and expedited reviews;
|
•
|
the announcement of new products or clinical trial data by our competitors;
|
•
|
the announcement of regulatory applications, such as MSN’s ANDA, seeking approval of generic versions of our marketed products;
|
•
|
quarterly variations in our or our competitors’ results of operations;
|
•
|
changes in our relationships with our collaboration partners, including the termination or modification of our agreements, or other events or conflicts that may affect our collaboration partners’ timing and willingness to develop, or if approved, commercialize our products and product candidates out-licensed to them;
|
•
|
the announcement of an in-licensed product candidate or strategic acquisition;
|
•
|
litigation, including intellectual property infringement and product liability lawsuits, involving us;
|
•
|
the impairment of acquired goodwill and other assets;
|
•
|
changes in earnings estimates or recommendations by securities analysts, or financial guidance from our management team, and any failure to achieve the operating results projected by securities analysts or by our management team;
|
•
|
the entry into new financing arrangements;
|
•
|
developments in the biotechnology, biopharmaceutical or pharmaceutical industry;
|
•
|
sales of large blocks of our common stock or sales of our common stock by our executive officers, directors and significant stockholders;
|
•
|
additions and departures of key personnel or board members;
|
•
|
the disposition of any of our technologies or compounds;
|
•
|
significant fluctuations in interest rates or foreign currency exchange rates; and
|
•
|
general market, economic and political conditions and other factors, including factors unrelated to our operating performance or the operating performance of our competitors, such as the impact of the COVID-19 pandemic on financial markets.
|
•
|
a prohibition on actions by our stockholders by written consent;
|
•
|
the ability of our Board of Directors to issue preferred stock without stockholder approval, which could be used to institute a “poison pill” that would work to dilute the stock ownership of a potential hostile acquirer, effectively preventing acquisitions that have not been approved by our Board of Directors; and
|
•
|
advance notice requirements for director nominations and stockholder proposals.
|
Exhibit
Number
|
|
Exhibit Description
|
|
Incorporation by Reference
|
|
Filed
Herewith
|
||||||
Form
|
|
File Number
|
|
Exhibit/
Appendix
Reference
|
|
Filing Date
|
|
|||||
3.1
|
|
|
10-K
|
|
000-30235
|
|
3.1
|
|
3/10/2010
|
|
|
|
3.2
|
|
|
10-K
|
|
000-30235
|
|
3.2
|
|
3/10/2010
|
|
|
|
3.3
|
|
|
8-K
|
|
000-30235
|
|
3.1
|
|
5/25/2012
|
|
|
|
3.4
|
|
|
8-K
|
|
000-30235
|
|
3.1
|
|
10/15/2014
|
|
|
|
3.5
|
|
|
8-K
|
|
000-30235
|
|
3.2
|
|
10/15/2014
|
|
|
|
3.6
|
|
|
8-K
|
|
000-30235
|
|
3.1
|
|
5/23/2019
|
|
|
|
3.7
|
|
|
8-K
|
|
000-30235
|
|
3.1
|
|
2/20/2020
|
|
|
|
4.1
|
|
|
S-1,
as amended
|
|
333-96335
|
|
4.1
|
|
4/7/2000
|
|
|
|
10.1
|
|
|
10-K
|
|
000-30235
|
|
10.37
|
|
2/25/2020
|
|
|
|
10.2
|
|
|
10-K
|
|
000-30235
|
|
10.39
|
|
2/25/2020
|
|
|
|
10.3
|
|
|
10-K
|
|
000-30235
|
|
10.29
|
|
2/25/2020
|
|
|
|
10.4
|
|
|
|
|
|
|
|
|
|
|
X
|
|
31.1
|
|
|
|
|
|
|
|
|
|
|
X
|
|
31.2
|
|
|
|
|
|
|
|
|
|
|
X
|
|
32.1‡
|
|
|
|
|
|
|
|
|
|
|
X
|
Exhibit
Number
|
|
Exhibit Description
|
|
Incorporation by Reference
|
|
Filed
Herewith
|
||||||
Form
|
|
File Number
|
|
Exhibit/
Appendix
Reference
|
|
Filing Date
|
|
|||||
101.INS
|
|
XBRL Instance Document
|
|
The XBRL instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
|
||||||||
101.SCH
|
|
Inline XBRL Taxonomy Extension Schema Document
|
|
|
|
|
|
|
|
|
|
X
|
101.CAL
|
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
101.DEF
|
|
Inline XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
101.LAB
|
|
Inline XBRL Taxonomy Extension Labels Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
101.PRE
|
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
104
|
|
Cover Page Interactive Data File
|
|
Formatted as Inline XBRL and contained in Exhibit 101.
|
‡
|
This certification accompanies this Quarterly Report on Form 10-Q, is not deemed filed with the SEC and is not to be incorporated by reference into any filing of Exelixis, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of this Quarterly Report on Form 10-Q), irrespective of any general incorporation language contained in such filing.
|
|
|
EXELIXIS, INC.
|
|
|
|
|
|
May 5, 2020
|
|
By:
|
/s/ CHRISTOPHER J. SENNER
|
Date
|
|
|
Christopher J. Senner
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
(Duly Authorized Officer and Principal Financial and Accounting Officer)
|
/s/ MICHAEL M. MORRISSEY
|
Michael M. Morrissey, Ph.D.
|
President and Chief Executive Officer
(Principal Executive Officer)
|
/s/ CHRISTOPHER J. SENNER
|
Christopher J. Senner
|
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
|
/s/ MICHAEL M. MORRISSEY
|
|
|
|
/s/ CHRISTOPHER J. SENNER
|
Michael M. Morrissey, Ph.D.
|
|
|
|
Christopher J. Senner
|
President and Chief Executive Officer
(Principal Executive Officer)
|
|
|
|
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
|