Exelixis, Inc. (NASDAQ: EXEL) investors are cheering this morning as the stock is headed for the top. The gains are ultimately the result of an announcement that the company’s partner has received European Commission approval for a partnered product. Of course, this news is exciting investors who are pushing the stock up. Today, we’ll talk about the approval, what we’re seeing from EXEL as a result, and what we’ll be watching for with regard to the stock ahead.
EXEL Gains On EU Approval
As mentioned above, Exelixis is having an incredibly strong start to the trading session this morning after announcing a European approval. In a press release issued early this morning, the company said that the approval was received by Ipsen, the company’s European partner. The approval surrounds CABOMETYX tablets as a monotherapy for hepatocellular carcinoma in adults who have previously been treated with sorafenib. As a result of the approval. Ipsen and EXEL will have the ability to market the treatment to all 28 members of the European Union as well as Norway and Iceland.
For EXEL and its investors, the announcement comes with an immediate monetary benefit. The agreement with Ipsen stipulates that upon EU approval for the treatment as a second-line option for HCC, Ipsen will make a $40 million milestone payment. The company said that it expects that the milestone payment will be made within the next 70 calendar days.
In a statement, Michael M. Morrissey, Ph.D., President and CEO at EXEL, had the following to offer:
The approval of CABOMETYX in the Europe Union is a very important milestone for our partner Ipsen and marks significant progress for people living with liver cancer, which is the second-leading cause of cancer death worldwide… This patient community is in dire need of new options to treat this aggressive disease, and we are excited to work with Ipsen to make this treatment available to patients in the European Union and other countries worldwide.
What We’re Seeing From The Stock
As investors, one of the first lessons that we learn when we start to work in the market is that the news leads to moves. In the case of Exelixis, the news proved to be overwhelmingly positive. With the EU approval, Ipsen will be able to start marketing CABOMETYX to patients in the EU, generating revenue for both companies. Not to mention the fact that Exelixis will receive a substantial milestone payment. So, it’s not surprising to see that excited investors are pushing the stock on a run for the top. Currently (8:51), EXEL is trading at $17.50 per share after a gain of $0.74 per share or 4.42% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on EXEL. In particular, we’re interested in following the story surrounding the company’s revenue generated from CABOMETYX royalties under the Ipsen agreement as well as the company’s continued work to commercialize CABOMETYX in the United States and the continued development of the company’s impressive pipeline. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!