Exelixis, Inc 10-Q for FY2020 Q1

Exelixis, Inc. (EXEL)

10-Q 2020-05-05 For: 2020-04-03

Added on April 09, 2026

About this 10-Q

Exelixis, Inc filed this 10-Q on May 5, 2020, covering the quarter ended April 3, 2020 (FY2020 Q1).

Headline figures

Quarter ended April 3, 2020, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $226.92M; up 5.3% from $215.49M a year earlier
Net income: $48.61M; down 35.8% from net income of $75.78M a year earlier
Diluted EPS: $0.15; down 37.5% from $0.24 a year earlier

Search and read filings like this one from Claude or ChatGPT with the SEC filings MCP server →



Delaware	04-3257395
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock $.001 Par Value per Share	EXEL	The Nasdaq Stock Market LLC



Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐



		Page
PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements	3
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Income	4
	Condensed Consolidated Statements of Comprehensive Income	5
	Condensed Consolidated Statements of Stockholders’ Equity	6
	Condensed Consolidated Statements of Cash Flows	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	32
Item 4.	Controls and Procedures	32
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	33
Item 1A.	Risk Factors	33
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	54
Item 3.	Defaults Upon Senior Securities	54
Item 4.	Mine Safety Disclosures	54
Item 5.	Other Information	55
Item 6.	Exhibits	55
SIGNATURES



	March 31, 2020			December 31, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	357,340		$	266,501
Short-term investments	597,028			585,742
Trade receivables, net	137,338			119,073
Inventory	15,417			12,886
Prepaid expenses and other current assets	29,773			26,988
Total current assets	1,136,896			1,011,190
Long-term investments	486,036			536,385
Property and equipment, net	48,489			48,892
Deferred tax assets, net	163,187			172,374
Goodwill	63,684			63,684
Other long-term assets	57,312			53,145
Total assets	$	1,955,604		$	1,885,670
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	15,321		$	11,581
Accrued compensation and benefits	26,687			37,364
Accrued clinical trial liabilities	34,969			38,777
Rebates and fees due to customers	23,006			18,719
Accrued collaboration liabilities	8,663			11,856
Other current liabilities	31,831			24,449
Total current liabilities	140,477			142,746
Long-term portion of deferred revenue	14,133			6,596
Long-term portion of operating lease liabilities	47,883			48,011
Other long-term liabilities	5,459			2,347
Total liabilities	207,952			199,700
Commitments
Stockholders’ equity:
Preferred stock, $0.001 par value, 10,000 shares authorized and no shares issued	—			—
Common stock, $0.001 par value; 400,000 shares authorized; issued and outstanding: 305,780 and 304,831 at March 31, 2020 and December 31, 2019, respectively	306			305
Additional paid-in capital	2,258,307			2,241,947
Accumulated other comprehensive income (loss)	(222		)	3,069
Accumulated deficit	(510,739		)	(559,351		)
Total stockholders’ equity	1,747,652			1,685,970
Total liabilities and stockholders’ equity	$	1,955,604		$	1,885,670



☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



	Three Months Ended March 31,
	2020		2019
Revenues:
Net product revenues	$	193,880	$	179,581
License revenues	20,879		25,564
Collaboration services revenues	12,156		10,342
Total revenues	226,915		215,487
Operating expenses:
Cost of goods sold	9,289		7,501
Research and development	101,877		63,289
Selling, general and administrative	62,940		60,138
Total operating expenses	174,106		130,928
Income from operations	52,809		84,559
Interest income	7,220		6,087
Other income, net	6		25
Income before income taxes	60,035		90,671
Provision for income taxes	11,423		14,896
Net income	$	48,612	$	75,775
Net income per share:
Basic	$	0.16	$	0.25
Diluted	$	0.15	$	0.24
Weighted-average common shares outstanding:
Basic	305,388		300,542
Diluted	315,839		314,644



	Three Months Ended March 31, 2020
	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)			Accumulated Deficit			Total Stockholders’ Equity
	Shares	Amount		Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)			Accumulated Deficit			Total Stockholders’ Equity
Balance at December 31, 2019	304,831	$	305	$	2,241,947	$	3,069		$	(559,351	)	$	1,685,970
Net income	—	—		—		—			48,612			48,612
Other comprehensive loss	—	—		—		(3,291		)	—			(3,291		)
Issuance of common stock under equity incentive plans, net of tax	949	1		2,378		—			—			2,379
Stock-based compensation	—	—		13,982		—			—			13,982
Balance at March 31, 2020	305,780	$	306	$	2,258,307	$	(222	)	$	(510,739	)	$	1,747,652



	Three Months Ended March 31, 2019
	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)			Accumulated Deficit			Total Stockholders’ Equity
	Shares	Amount		Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)			Accumulated Deficit			Total Stockholders’ Equity
Balance at December 31, 2018	299,876	$	300	$	2,168,217	$	(701	)	$	(880,363	)	$	1,287,453
Net income	—	—		—		—			75,775			75,775
Other comprehensive income	—	—		—		1,429			—			1,429
Issuance of common stock under equity incentive plans, net of tax	1,644	2		7,832		—			—			7,834
Stock-based compensation	—	—		12,529		—			—			12,529
Balance at March 31, 2019	301,520	$	302	$	2,188,578	$	728		$	(804,588	)	$	1,385,020



	Chargebacks and Discounts for Prompt Payment			Other Customer Credits/Fees and Co-pay Assistance			Rebates			Total
Balance at December 31, 2019	$	7,514		$	3,497		$	15,222		$	26,233
Provision related to sales made in:
Current period	37,686			4,586			15,821			58,093
Prior periods	41			(167		)	719			593
Payments and customer credits issued	(32,584		)	(4,842		)	(11,830		)	(49,256		)
Balance at March 31, 2020	$	12,657		$	3,074		$	19,932		$	35,663



	March 31, 2020
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Debt securities available-for-sale:
Commercial paper	$	202,452	$	—	$	—		$	202,452
Corporate bonds	741,315		2,404		(3,448		)	740,271
U.S. Treasury and government-sponsored enterprises	152,922		788		—			153,710
Municipal bonds	15,148		140		—			15,288
Total debt securities available-for-sale	1,111,837		3,332		(3,448		)	1,111,721
Cash	8,905		—		—			8,905
Money market funds	273,497		—		—			273,497
Certificates of deposit	46,279		2		—			46,281
Total cash and investments	$	1,440,518	$	3,334	$	(3,448	)	$	1,440,404



	March 31, 2020		December 31, 2019
Maturing in one year or less	$	641,070	$	789,913
Maturing after one year through five years	470,651		522,551
Total debt securities available-for-sale	$	1,111,721	$	1,312,464


•	Level 1 - quoted prices (unadjusted) in active markets for identical assets and liabilities;


•	Level 2 - inputs other than level 1 that are observable either directly or indirectly, such as quoted prices in active markets for similar instruments or on industry models using data inputs, such as interest rates and prices that can be directly observed or corroborated in active markets;



FORM	10-Q



	Three Months Ended March 31,
	2020			2019
Net income	$	48,612		$	75,775
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	2,175			1,962
Stock-based compensation	13,982			12,529
Non-cash lease expense	1,174			440
Deferred taxes	10,128			—
Other, net	(888		)	1,054
Changes in operating assets and liabilities:
Trade receivables, net	(18,270		)	55,101
Inventory	(4,695		)	(305		)
Prepaid expenses and other assets	(2,863		)	(11,165		)
Deferred revenue	8,850			(1,313		)
Accounts payable and other liabilities	(2,131		)	27,515
Net cash provided by operating activities	56,074			161,593
Cash flows from investing activities:
Purchases of property, equipment and other	(2,961		)	(2,307		)
Purchases of investments	(251,505		)	(239,869		)
Proceeds from maturities and sales of investments	287,086			134,519
Net cash provided by (used in) investing activities	32,620			(107,657		)
Cash flows from financing activities:
Proceeds from issuance of common stock under equity incentive plans	3,938			6,817
Taxes paid related to net share settlement of equity awards	(1,793		)	(1,580		)
Other, net	—			(11		)
Net cash provided by financing activities	2,145			5,226
Net increase in cash, cash equivalents and restricted cash	90,839			59,162
Cash, cash equivalents and restricted cash at beginning of period	268,137			315,875
Cash, cash equivalents and restricted cash at end of period	$	358,976		$	375,037
Supplemental cash flow disclosures:
Right-of-use assets obtained in exchange for lease obligations	$	576		$	8,170
Unpaid liabilities incurred for purchases of property and equipment	$	481		$	141



	Three Months Ended March 31,
	2020		2019
Affiliates of CVS Health Corporation	18	%	15	%
Affiliates of McKesson Corporation	15	%	12	%
Ipsen	13	%	10	%
Affiliates of AmerisourceBergen Corporation	11	%	10	%
Affiliates of Optum Specialty Pharmacy	12	%	8	%
Accredo Health, Incorporated	8	%	10	%



	March 31, 2020		December 31, 2019
Raw materials	$	2,215	$	2,709
Work in process	14,278		9,447
Finished goods	4,865		4,367
Total	$	21,358	$	16,523
Balance Sheet classification:
Current portion included in inventory	$	15,417	$	12,886
Long-term portion included in other long-term assets	5,941		3,637
Total	$	21,358	$	16,523


•	Level 3 - unobservable inputs that are supported by little or no market activity that are significant to the fair value measurement



	March 31, 2020
	Level 1		Level 2		Total
Commercial paper	$	—	$	202,452	$	202,452
Corporate bonds	—		740,271		740,271
U.S. Treasury and government-sponsored enterprises	—		153,710		153,710
Municipal bonds	—		15,288		15,288
Total debt securities available-for-sale	—		1,111,721		1,111,721
Money market funds	273,497		—		273,497
Certificates of deposit	—		46,281		46,281
Total financial assets carried at fair value	$	273,497	$	1,158,002	$	1,431,499


•	In January 2020, we announced an amendment to the protocol for COSMIC-021 to further expand patient enrollment in an existing mCRPC cohort to up to 130 patients.


•	In January 2020, clinically meaningful data from CheckMate 040, the phase 1/2 trial evaluating cabozantinib in combination with nivolumab and in combination with both nivolumab and ipilimumab in patients with previously treated or previously untreated advanced HCC, were presented at ASCO’s Gastrointestinal Cancers Symposium.


•	In January 2020, Takeda applied to the Japanese MHLW for approval to manufacture and market CABOMETYX as a treatment for patients with unresectable HCC who progressed after prior systemic therapy in Japan.


•	In February 2020, we presented clinically meaningful results from the mCRPC cohort of COSMIC-021 at ASCO’s Genitourinary Cancers Symposium.


•	In February 2020, we announced the enrollment of the first 100 patients in COSMIC-311, the phase 3 pivotal trial of cabozantinib versus placebo in patients with RAI-refractory DTC who have progressed after up to two prior VEGF receptor-targeted therapies.


•	In March 2020, Takeda received regulatory approval from the Japanese MHLW to manufacture and market CABOMETYX as a treatment for patients with curatively unresectable or metastatic RCC in Japan.


•	In May 2020, we announced that cabozantinib will be the subject of 12 presentations at the 2020 ASCO Annual Meeting. Data presentations will include results from NSCLC, mCRPC and urothelial carcinoma cohorts of COSMIC-021, as well as updates from other externally sponsored studies.


•	Net product revenues for the first quarter of 2020 was $193.9 million, compared to $179.6 million for the first quarter of 2019.


•	Total revenues for the first quarter of 2020 was $226.9 million, compared to $215.5 million for the first quarter of 2019.


•	Research and development expenses for the first quarter of 2020 was $101.9 million, compared to $63.3 million for the first quarter of 2019.


•	Selling, general and administrative expenses for the first quarter of 2020 was $62.9 million, compared to $60.1 million for the first quarter of 2019.


•	Provision for income taxes for the first quarter of 2020 was $11.4 million, compared to $14.9 million for the first quarter of 2019.


•	Net income for the first quarter of 2020 was $48.6 million, or $0.16 per share, basic and $0.15 per share, diluted, compared to $75.8 million, or $0.25 per share, basic and $0.24 per share diluted, for the first quarter of 2019.


•	Cash and investments were $1.4 billion at both March 31, 2020 and December 31, 2019.



	Three Months Ended March 31,				Percentage Change
	2020		2019		Percentage Change
Net product revenues	$	193,880	$	179,581	8	%
License revenues	20,879		25,564		(18	)%
Collaboration services revenues	12,156		10,342		18	%
Total revenues	$	226,915	$	215,487	5	%


(1)	Primarily includes personnel expenses, consulting and outside services and laboratory supplies.


(2)	Includes stock-based compensation, the allocation of general corporate costs to research and development, and development cost reimbursement received in connection with our December 2019 collaboration arrangement with Roche.


•	the federal Anti-Kickback Statute, which governs our business activities, including our marketing practices, medical educational programs, pricing policies, and relationships with healthcare providers or other entities;