Exelixis Inc (EXEL)

[Mitshu35]

William Blair analyst John Sonnier (9/17/16)

William Blair analyst John Sonnier is out with a research report on Exelixis, Inc. (NASDAQ:EXEL) as the biotech company’s shares have been shooting up 131% year-to-date, which Sonnier deems “a bright spot” amid “an extremely volatile sector.”

Investors have continued to call the analyst throughout the past two weeks, with a real spotlight of interest honing in on the almost release of positive Phase II CABOSUN full data. The trial evaluates EXEL’s pipeline drug Cabometyx, and where its safety and efficacy in intermediate or poor-risk front-line rental cell carcinoma (RCC) patients, 80% of the whole market, square up against competitor Sutent, Pfizer’s leading front-line prescription.

Sonnier forecasts this could prove to be an over $1 billion global market opportunity. The analyst increased both Cabometyx and Cometriq sales estimates from $109 million to $156 million in 2016, from $199 million to $308 million in 2017, and from $307 million to $405 million in 2018. Additionally, the analyst introduces a 2019 projection for $471 million.

Sonnier notes back on May 23rd, positive top-line data was released, and the analyst anticipates that come next month at the European Society of Medical Oncology (ESMO) conference on October 7th through 11th, detailed data will be on its way.

“In our view, Exelixis is a fundamentally improved and transformed company compared with just one year ago, with an investment profile that holds broader appeal. At current price levels, we believe that EXEL shares are undervalued with significant upside potential and numerous catalysts in the coming months,” Sonnier concludes.

Ahead of the full data, the analyst reiterates an Outperform rating on EXEL without listing a price target.