Exelixis, Inc 10-Q for FY2020 Q2

Exelixis, Inc. (EXEL)

10-Q 2020-08-06 For: 2020-07-03

Added on April 09, 2026

About this 10-Q

Exelixis, Inc filed this 10-Q on August 6, 2020, covering the quarter ended July 3, 2020 (FY2020 Q2).

Headline figures

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

Revenue: $259.48M; up 8.0% from $240.28M a year earlier
Net income: $66.82M; down 15.5% from net income of $79.04M a year earlier
Diluted EPS: $0.21; down 16.0% from $0.25 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	4
	Condensed Consolidated Statements of Stockholders’ Equity	5
	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	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34
Item 4.	Controls and Procedures	34
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	35
Item 1A.	Risk Factors	35
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	57
Item 3.	Defaults Upon Senior Securities	57
Item 4.	Mine Safety Disclosures	57
Item 5.	Other Information	57
Item 6.	Exhibits	57
SIGNATURES



	June 30, 2020			December 31, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	527,143		$	266,501
Short-term investments	685,895			585,742
Trade receivables, net	121,080			119,073
Inventory	16,608			12,886
Prepaid expenses and other current assets	43,937			26,988
Total current assets	1,394,663			1,011,190
Long-term investments	327,141			536,385
Property and equipment, net	52,323			48,892
Deferred tax assets, net	148,235			172,374
Goodwill	63,684			63,684
Other long-term assets	60,502			53,145
Total assets	$	2,046,548		$	1,885,670
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	9,103		$	11,581
Accrued compensation and benefits	33,156			37,364
Accrued clinical trial liabilities	39,940			38,777
Rebates and fees due to customers	16,957			18,719
Accrued collaboration liabilities	10,695			11,856
Other current liabilities	32,830			24,449
Total current liabilities	142,681			142,746
Long-term portion of deferred revenues	15,003			6,596
Long-term portion of operating lease liabilities	48,334			48,011
Other long-term liabilities	7,206			2,347
Total liabilities	213,224			199,700
Commitments and contingencies
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: 308,886 and 304,831 at June 30, 2020 and December 31, 2019, respectively	309			305
Additional paid-in capital	2,269,093			2,241,947
Accumulated other comprehensive income	7,840			3,069
Accumulated deficit	(443,918		)	(559,351		)
Total stockholders’ equity	1,833,324			1,685,970
Total liabilities and stockholders’ equity	$	2,046,548		$	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 June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Revenues:
Net product revenues	$	178,730	$	193,675	$	372,610	$	373,256
License revenues	59,234		37,742		80,113		63,306
Collaboration services revenues	21,515		8,858		33,671		19,200
Total revenues	259,479		240,275		486,394		455,762
Operating expenses:
Cost of goods sold	9,221		7,539		18,510		15,040
Research and development	114,933		81,932		216,810		145,221
Selling, general and administrative	59,791		58,815		122,731		118,953
Total operating expenses	183,945		148,286		358,051		279,214
Income from operations	75,534		91,989		128,343		176,548
Interest income	5,162		6,975		12,382		13,062
Other income, net	—		803		6		828
Income before income taxes	80,696		99,767		140,731		190,438
Provision for income taxes	13,875		20,725		25,298		35,621
Net income	$	66,821	$	79,042	$	115,433	$	154,817
Net income per share:
Basic	$	0.22	$	0.26	$	0.38	$	0.51
Diluted	$	0.21	$	0.25	$	0.36	$	0.49
Weighted-average common shares outstanding:
Basic	307,807		302,188		306,598		301,365
Diluted	318,144		314,911		316,992		314,786



	Three Months Ended June 30, 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 March 31, 2020	305,780	$	306	$	2,258,307		$	(222	)	$	(510,739	)	$	1,747,652
Net income	—	—		—			—			66,821			66,821
Other comprehensive income	—	—		—			8,062			—			8,062
Issuance of common stock under equity incentive and stock purchase plans	3,106	3		13,780			—			—			13,783
Stock transactions associated with taxes withheld on equity awards	—	—		(19,148		)	—			—			(19,148		)
Stock-based compensation	—	—		16,154			—			—			16,154
Balance at June 30, 2020	308,886	$	309	$	2,269,093		$	7,840		$	(443,918	)	$	1,833,324



	Three Months Ended June 30, 2019
	Common Stock			Additional Paid-in Capital			Accumulated Other Comprehensive Income		Accumulated Deficit			Total Stockholders’ Equity
	Shares	Amount		Additional Paid-in Capital			Accumulated Other Comprehensive Income		Accumulated Deficit			Total Stockholders’ Equity
Balance at March 31, 2019	301,520	$	302	$	2,188,578		$	728	$	(804,588	)	$	1,385,020
Net income	—	—		—			—		79,042			79,042
Other comprehensive income	—	—		—			1,479		—			1,479
Issuance of common stock under equity incentive and stock purchase plans	1,265	1		8,865			—		—			8,866
Stock transactions associated with taxes withheld on equity awards	—	—		(854		)	—		—			(854		)
Stock-based compensation	—	—		15,079			—		—			15,079
Balance at June 30, 2019	302,785	$	303	$	2,211,668		$	2,207	$	(725,546	)	$	1,488,632



	Six Months Ended June 30, 2020
	Common Stock			Additional Paid-in Capital			Accumulated Other Comprehensive Income		Accumulated Deficit			Total Stockholders’ Equity
	Shares	Amount		Additional Paid-in Capital			Accumulated Other Comprehensive Income		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	—	—		—			—		115,433			115,433
Other comprehensive income	—	—		—			4,771		—			4,771
Issuance of common stock under equity incentive and stock purchase plans	4,055	4		17,951			—		—			17,955
Stock transactions associated with taxes withheld on equity awards	—	—		(20,941		)	—		—			(20,941		)
Stock-based compensation	—	—		30,136			—		—			30,136
Balance at June 30, 2020	308,886	$	309	$	2,269,093		$	7,840	$	(443,918	)	$	1,833,324



	Six Months Ended June 30, 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	—	—		—			—			154,817			154,817
Other comprehensive income	—	—		—			2,908			—			2,908
Issuance of common stock under equity incentive and stock purchase plans	2,909	3		18,277			—			—			18,280
Stock transactions associated with taxes withheld on equity awards	—	—		(2,434		)	—			—			(2,434		)
Stock-based compensation	—	—		27,608			—			—			27,608
Balance at June 30, 2019	302,785	$	303	$	2,211,668		$	2,207		$	(725,546	)	$	1,488,632



	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	72,874			8,339			28,226			109,439
Prior periods	39			(364		)	740			415
Payments and customer credits issued	(72,169		)	(9,111		)	(29,592		)	(110,872		)
Balance at June 30, 2020	$	8,258		$	2,361		$	14,596		$	25,215



	June 30, 2020
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Debt securities available-for-sale:
Commercial paper	$	239,685	$	245	$	—		$	239,930
Corporate bonds	663,491		9,527		(150		)	672,868
U.S. Treasury and government-sponsored enterprises	89,890		462		—			90,352
Municipal bonds	28,229		152		(1		)	28,380
Total debt securities available-for-sale	1,021,295		10,386		(151		)	1,031,530
Cash	52,053		—		—			52,053
Money market funds	404,313		—		—			404,313
Certificates of deposit	52,283		—		—			52,283
Total cash and investments	$	1,529,944	$	10,386	$	(151	)	$	1,540,179



	June 30, 2020		December 31, 2019
Maturing in one year or less	$	720,089	$	789,913
Maturing after one year through five years	311,441		522,551
Total debt securities available-for-sale	$	1,031,530	$	1,312,464



FORM	10-Q



	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Ipsen Pharma SAS (Ipsen)	20	%	9	%	17	%	10	%
Affiliates of CVS Health Corporation	13	%	15	%	15	%	15	%
Affiliates of McKesson Corporation	11	%	13	%	13	%	12	%
Affiliates of AmerisourceBergen Corporation	11	%	10	%	11	%	10	%
Affiliates of Optum Specialty Pharmacy	10	%	8	%	11	%	8	%
Takeda Pharmaceutical Company Limited (Takeda)	10	%	1	%	5	%	3	%
Accredo Health, Incorporated	10	%	8	%	9	%	9	%


•	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;


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



	June 30, 2020
	Level 1		Level 2		Total
Commercial paper	$	—	$	239,930	$	239,930
Corporate bonds	—		672,868		672,868
U.S. Treasury and government-sponsored enterprises	—		90,352		90,352
Municipal bonds	—		28,380		28,380
Total debt securities available-for-sale	—		1,031,530		1,031,530
Money market funds	404,313		—		404,313
Certificates of deposit	—		52,283		52,283
Total financial assets carried at fair value	$	404,313	$	1,083,813	$	1,488,126



	June 30, 2020		December 31, 2019
Raw materials	$	1,876	$	2,709
Work in process	15,275		9,447
Finished goods	5,086		4,367
Total	$	22,237	$	16,523
Balance Sheet classification:
Current portion included in inventory	$	16,608	$	12,886
Long-term portion included in other long-term assets	5,629		3,637
Total	$	22,237	$	16,523


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


•	In June 2020, we announced the initiation of CONTACT-01, a global phase 3 pivotal trial evaluating cabozantinib in combination with atezolizumab in patients with metastatic NSCLC who have been previously treated with an ICI and platinum-containing chemotherapy. The primary endpoint of the trial is OS, and the secondary endpoints include PFS, ORR and duration of response (DOR).


•	Net product revenues for the second quarter of 2020 were $178.7 million, compared to $193.7 million for the second quarter of 2019.


•	Total revenues for the second quarter of 2020 were $259.5 million, compared to $240.3 million for the second quarter of 2019.


•	Research and development expenses for the second quarter of 2020 were $114.9 million, compared to $81.9 million for the second quarter of 2019.


•	Selling, general and administrative expenses for the second quarter of 2020 were $59.8 million, compared to $58.8 million for the second quarter of 2019.


•	Provision for income taxes for the second quarter of 2020 was $13.9 million, compared to $20.7 million for the second quarter of 2019.


•	Net income for the second quarter of 2020 was $66.8 million, or $0.22 per share, basic and $0.21 per share, diluted, compared to $79.0 million, or $0.26 per share, basic and $0.25 per share diluted, for the second quarter of 2019.


•	Cash and investments were $1.5 billion as of June 30, 2020, compared to $1.4 billion as of December 31, 2019.



	Three Months Ended June 30,				Percent Change		Six Months Ended June 30,				Percent Change
	2020		2019		Percent Change		2020		2019		Percent Change
Net product revenues	$	178,730	$	193,675	(8	)%	$	372,610	$	373,256	0	%
License revenues	59,234		37,742		57	%	80,113		63,306		27	%
Collaboration services revenues	21,515		8,858		143	%	33,671		19,200		75	%
Total revenues	$	259,479	$	240,275	8	%	$	486,394	$	455,762	7	%


•	Milestone revenues for the three and six months ended June 30, 2019 included recognition of a $20.0 million milestone from Daiichi Sankyo for the launch of MINNEBRO tablets as a treatment for patients with hypertension in Japan.


•	Milestone revenues for the six months ended June 30, 2019 also included $9.5 million in revenues recognized in connection with a $16.0 million milestone from Takeda for the submission in April 2019 of a regulatory application for cabozantinib as a treatment for patients with advanced RCC to the Japanese MHLW.


(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 reimbursements 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;


•	the federal Food, Drug, and Cosmetic Act (FDCA) and its implementing regulations, which prohibit, among other things, the introduction or delivery for introduction into interstate commerce of any drug that is adulterated or misbranded;


•	federal criminal laws that prohibit executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters;