When the FDA granted Cabometyx an unexpectedly early approval to treat a bigger group of kidney cancer patients Tuesday, Exelixis shares soared 5% to $28.06 in after-hours trading. And no wonder. The new first-line approval is expected to push Cabometyx past the $1 billion sales threshold.
With the new approval, Cabometyx can be marketed for previously untreated patients with renal cell carcinoma (RCC), a larger group than its current second-line target. The FDA nod came two months earlier than expected.
The news capped off a good year for Exelixis—and for a drug that once had limited prospects. Cabozantinib, the active ingredient in Cabometyx, was first approved in 2012 to treat a rare form of thyroid cancer, under the brand name Cometriq. The company was working to expand the market for the drug, but in 2014, it failed a phase 3 trial in prostate cancer.
Then, last April, Exelixis won approval to market Cabometyx to kidney cancer patients who had failed VEGF treatments. Sales of the drug reached $97.4 million in the third quarter.
But the new approval as a first-line treatment should drive the drug to blockbuster status, analysts predict. Leerink analysts predicted Tuesday that the drug would hit $1 billion in sales in 2025. Other analysts are even more optimistic, forecasting sales of up to $1.8 billion by 2022.
The new approval was based on a trial that enrolled kidney patients who had poor prognoses, because their cancer had spread to their bones or to other organs, according to Toni Choueiri, M.D., director of the Lank Center for Genitourinary Oncology at Dana-Farber Cancer Institute. The new approval “is a much-needed advance to also now have Cabometyx as an option for their patients with previously untreated advanced RCC,” Choueiri said in a statement.
That’s not to say Exelixis won’t be facing competition. Bristol-Myers Squibb last week filed its immuno-oncology powerhouses Yervoy and Opdivo for a tandem FDA approval in first-line kidney cancer. Results rolled out this fall had been mixed: Trial data released in August showed the combo produced a better response than Sutent but it didn’t do a better job preventing cancer growth. Then, in September, BMS presented results showing the pair could prolong the lives of the same group of patients as those in Cabometyx's test—those with poor prognoses.
Roche is also testing its immuno-oncology drug Tecentriq alongside its anti-VEGF stalwart Avastin as a first-line kidney cancer treatment. Earlier this month, the company announced the combo had produced "statistically significant and clinically meaningful" results when pitted against Sutent, but it didn’t provide any details.
Exelixis is waiting for approval of Cabometyx in the first-line setting in Europe, where Ipsen will market the drug. The Ipsen partnership could bring as much as $545 million in milestone payments plus royalties of up to 26% on sales of the drug. Exelixis has also partnered with Takeda for commercialization of Cabometyx in Japan.
There will likely be more market-expansion opportunities ahead for Cabometxy. In October, shares of Exelixis jumped 30% to a 17-year high of $29.02 after the company ended a trial of the drug in hepatocellular carcinoma early because of strong efficacy signals.
The drug produced a meaningful improvement in overall survival, the company said at the time. That same day, the FDA granted priority review for Cabometyx in treatment-naïve kidney cancer patients—likely cementing in investors’ minds the secure future for the product.