Exelixis Up on Swiss Approval of Advanced Melanoma Drug

Zacks Equity Research
Updated

Exelixis, Inc. EXEL announced that Cotellic (cobimetinib) gained approval in Switzerland for use in combination with Roche Holding’s RHHBY Zelboraf for the treatment of advanced melanoma. With this approval, Exelixis now has two approved products in its portfolio. The company’s shares climbed almost 8% on the news.

Cotellic was developed under a collaboration agreement between Exelixis and Roche. Roche is currently seeking FDA approval for Cotellic with a response expected by Nov 11. The drug is also under review in the EU with a decision expected by year end.

Exelixis is entitled to royalties on sales of the drug in ex-U.S. markets. Upon FDA approval, the company will be initially entitled to an equal share of profits and losses in the U.S., which will decline as product sales increase. Exelixis will also share marketing and commercialization costs in the U.S. The company is prepared to provide up to 25% of the U.S. sales force.

Meanwhile, Cotellic is being evaluated in combination with multiple agents for the treatment of various types of tumors including non-small cell lung cancer and KRAS-mutant metastatic colorectal cancer.

Additionally, Exelixis is working on expanding Cometriq’s label. The drug is being evaluated for multiple indications, including advanced renal cell carcinoma and advanced hepatocellular carcinoma. Cometriq is already approved for the treatment of progressive, metastatic medullary thyroid cancer (MTC) in the U.S. and progressive, unresectable locally advanced or metastatic MTC in the EU.

Exelixis carries a Zacks Rank #3 (Hold). Some better-ranked stock in the health care sector are Gilead Sciences Inc. GILD and Regeneron Pharmaceuticals, Inc. REGN. Both carry a Zacks Rank #1 (Strong Buy).

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