Exelixis' Lead Cancer Treatment Delivers Another Surprise, Though Analyst Finds Commercial Opportunity In Pancreatic Neuroendocrine Modest

Thursday, Exelixis Inc EXEL announced that the Alliance for Clinical Trials in Oncology independent Data and Safety Monitoring Board (DSMB) unanimously recommended to unblind and stop the phase 3 CABINET pivotal trial early due to a dramatic improvement in efficacy that was observed at an interim analysis. 

CABINET is evaluating Cabometyx (cabozantinib) compared with placebo in patients with advanced pancreatic neuroendocrine tumors (pNET) or advanced extra-pancreatic neuroendocrine tumors who experienced progression after prior systemic therapy. 

Cabozantinib substantially prolonged the time without disease progression or death in both of the trial's cohorts.

William Blair analysts Andy Hsieh and Alexandra Ramsey write that they are pleasantly surprised by Cabometyx's Phase 3 win.

The analysts acknowledge that the epidemiology is difficult to pinpoint given the late-line nature of the study population, coupled with uncertainties associated with treatment duration, Novartis AG's NVS Lutathera, a lutetium-177 radiolabeled SSTR analog can be a good proxy.

Notably, Lutathera targets a slightly earlier line than the CABINET study population, although CABINET encompasses a broader subset of NETs.

William Bliar awaits more guidance from management regarding the regulatory submission strategy. It reiterates the Outperform rating for the stock.

Cabozantinib is Exelixis's flagship product that is marketed for four distinct cancer indications.

In an industry where standout, differentiated blockbuster drugs are rare, William Blair regards the cabozantinib line as exceptionally valuable, hence its prominent role in the valuation approach. Yet, with ongoing ambiguities surrounding cabozantinib's market exclusivity (currently projected until 2030) and a second bench trial set for October, the analysts anticipate a shift in investor attention towards the company's other pipeline offerings beyond cabozantinib.

Price Action: EXEL shares are up 0.18% at $21.79 on the last check Thursday.