Exel seems to be in the clearance bin these past few days. I don’t have a big yearning for medical companies due to the nature of the beast, but a few with demonstrated cures attract my coin. ABMD comes to mind.

The company has two anti-cancer drugs in the market and is pursuing new indications and combination therapy approvals in various stages with a number of partners. It is down about 45% from its January high, and is expecting significant news in the fourth quarter or early Jan 2019. It made a little more than $1 a stub last year. Sales of its leading pony (Cabometyx) are expected to as much as triple in the next three years based on superior efficacy in renal cell (Kidney) cancer and projected second line approval for advanced hepatocellular (liver) cancer. It has competitors but there are limits to first line cures in these maladies, meaning the majority of patients will progress to Cabo even if their first treatment modality is something else. The company has a related product approved for thyroid cancer, currently with much lower sales.

Cabo was recently approved for first line in Europe, the big upswing in sales this year (66%) was due to first line approval in the US. The PEG ratio is about .60.

Not a one trick pony, the company has a collection of combination therapies and other molecules under various stages of study, some with large biotech partners. Recently the company retired all debt.

Anyone with premium access will find Fool commentary back to 2005. The shares are running down in the last week or two, might be a good intermediate hold.

As with all biotechs, one or two successes with financial strength can make many of them believe they are the next Amgen or Gilead, if only they reinvest all available cash, earned or borrowed. I like the fact they quickly retired their debt, likely a lesson learned from previous retrenchment.

Since they get progress payments for partnerships, etc., revenues can be bumpy. The numbers are:

Revenues/Profits: (Source: Fidelity)

2013 13
2014 25 92%
2015 37 48%
2016 191 516%
2017 452 496%
2018 400 77% 2 Quarters


2013 (245)
2014 (269)
2015 (170)
2016 (70)
2017 154
2018 203 2 Quarters

This has been a sleepy corner of my portfolio for 12 years, the shares have behaved like most research stage, then early approval stage pharma companies, up and down, crisis over money, crisis over study results, ultimately breaking through with an approved therapy and now with plenty of money. They seem to be pressing their advantage with a decent runway based on Cabo and open questions on several other possible molecules. I see a break out based on Europe and liver cancer, there may be later stage upside in their pipeline and the many partnerships trying to enhance efficacy of existing drugs by creating combination therapies.

GLTAL and thanks to all at NPI and Saul’s


Exel seems to be in the clearance bin these past few days.

Nicely done ML.

Have been in and out of EXEL several times over the last 5 years or so. Got back in yesterday.

The current “clearance” price is most likely due to a physician preference survey that Stifel recently released that showed around 90% of docs would prefer Opdivo-Yervoy combination as first line in RCC. This is based on data from CM-214 trial, although data from Opdivo-Cabo (CM-9, I think) are not yet available. Sort of strange, but an opportunity that was hard for me to pass up.

Not crazy about the pipeline, but sort of a value play in biotech if such exists. Would be a nice bolt-on acquisition for a larger company so inclined.


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