Exelixis Seeks to Climb From the Penalty Box, Prove its Lead Drug Still Has Legs
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a lot of different strategic options for XL184, Morrissey says. One of those options is to find a new partner to help push the drug through the costly final stages of development.
The catch is that since Bristol walked away, the perception of XL184 is that it is a “distressed asset,” Morrissey says. So if Exelixis is going to get top dollar from another partner, it will need to hold onto the drug for a while longer to prove its doubters wrong.
That’s what makes the upcoming meeting in Germany so important. Exelixis plans to present data from a study known the randomized discontinuation trial (RDT) with nine different tumor types, Morrissey says. The trial is designed to give researchers an early read on the specific tumor types that appear more susceptible to the drug, so the trial can narrow in on the best possible uses, and move quickly ahead, Morrissey says. The trial enrolled patients with ovarian cancer, pancreatic cancer, non-small cell lung cancer, small cell lung cancer, gastric cancer, breast cancer, liver cancer (hepatocellular carcinoma), prostate cancer, and melanoma.
It has definitely not been the easiest sell for Morrissey. He held small meetings, big group meetings, and all-staff company meetings over the summer to try to boost morale around the company after the string of setbacks.
“My focus was to re-energize, re-stabilize the employee base, and get them all focused on the good stuff we are doing,” Morrissey says. “I wanted to be open, transparent, and say ‘We can control this stuff, and we can’t control this other stuff, so let’s engage and get cranking.’”
All this kind of bullish talk could be seen as just that, talk, but Morrissey has gone a bit further than that. He put his money where his mouth is, buying 30,000 shares of Exelixis stock at prices of between $2.92 and $2.98, during one of the company’s low points on August 13. He bought the shares on the open market, instead of waiting for the next round of employee stock options. For people who like to follow insider stock buying and selling as a barometer of a company’s progress, this one looks like a head-slapper in hindsight. The Exelixis CEO has seen his latest batches shares climb to $4.81 at yesterday’s close.
If Exelixis can lay out a compelling case for the future of XL184 at next month’s medical meeting, then maybe Morrissey will be able to truly spin the story forward about the future of this drug and the markets it might someday address. For now, Exelixis is working behind the scenes, with a “swat team” to make sure it has really timely, high impact results to show cancer researchers next month.
“Bristol-Myers is a high-quality group, so it was fair for people to ask questions about why they gave (XL184) back, and what it means,” Morrissey says. “I can’t really convince investors or anybody else unless I have new data, and I say ‘here it is,’ you can decide for yourselves.”