Leerink Positive on Exelixis (EXEL) as Cabometyx Nabs European Approval
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Leerink affirms Exelixis (Nasdaq: EXEL) at Outperform with a price target of $12 after the company announced that the European Commission (EC) has approved CABOMETYX (cabozantinib) tablets for the treatment of advanced renal cell carcinoma (RCC) in adults following prior vascular endothelial growth factor (VEGF)-targeted therapy.
The firm said,
We are reiterating our OP rating based on our thesis that recently FDA approved Cabometyx is well positioned to capture significant market share in the treatment of RCC, while Street expectations for Cotellic (approved in BRAF+ melanoma) are still only modest and could drive significant value long-term. Potential label extension opportunities for Cabo -- e.g., in liver cancer (HCC) or in combination with PD1 inhibitors -- could drive further upside not yet reflected in the stock. Next updates at the European Society of Medical Oncology (ESMO) in early October center around presentation of the Phase II CABOSUN trial results in 1L RCC as a late breaker, which could potentially expand the utility of Cabo in RCC further. Ultimately we think EXEL is an acquisition target, given the potential to realize significant cost synergies.
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