Truist - EXEL: Expert Takeaway: EXEL "Ought to" Win on Protecting Cabo To 2030, But The Path Has Nua | EXEL Message Board Posts


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Msg  28862 of 29067  at  5/13/2022 11:51:26 AM  by

JBWIN


Truist - EXEL: Expert Takeaway: EXEL "Ought to" Win on Protecting Cabo To 2030, But The Path Has Nuances (Buy PT 35)

 

THE VERDICT: Based on feedback from experts on our call earlier today, we believe EXEL has favorable odds of extending Cabometyx's exclusivity to 2030, which is upside to what we think is currently baked into the share price. However, the road to get there may extend the MSN litigation overhang into mid-2023, potentially tempering upswings from positive readouts of Cabometyx's extensive clinical & regulatory catalysts over the next 12 months. Still, we remain positive on this name, and believe patient investors will ultimately be rewarded.

Exhibit 1 - EXEL Main Patents in Dispute + KOL Feedback 


 

Highlights from our call

Our experts unanimously agreed that the '473 patent will hold.

  • Although our KOLs believed that Exelixis may have a hard time proving infringement on the ‘776 polymorph patent, we note that this was due to uncertainty around whether Exelixis would be able to prove that MSN’s Form S of gCabo turns into Exelixis’ patented Form N-2 at or around room temperature. The very narrow claims in the ’776 patent gave our KOLs the impression that Exelixis may be having trouble on this front, and the fact that Form S is not publicly available was a limiting factor for our KOLs as well.

  • HOWEVER, they were in agreement that Exelixis "ought to" win the ‘439 and ‘440 patents case.
    These patents are broader and DO NOT claim a specific polymorph, BUT RATHER

    cabozantinib in its crystal form.
    MSN’s proposed generic Cabo is also a crystalline cabozantinib compound (as the company itself admits in legal filings), and will therefore likely infringe on Cabometyx. While the burden of proof is somewhat high, our experts were in agreement that EXEL should win in this case, which would extend Cabometyx's IP out to 2030.

 
  1. What may be baked into the stock at current levels?

    Modeling a scenario where MSN enters in 2026, and aggressively claws away volumes (40% Gx erosion for FY26, 80% yearly for FY27-30) takes us to $19/sh. Coincidentally, this is around where the stock is trading today, which we think reflects the bearish sentiment that Cabo loses IP in 2026. As a result, we think the risk/reward is skewed positive — while a November verdict where EXEL wins on the '776 patent has just 25% probability, a win on '439/'440 in 3Q23 could lift the overhang and (finally) unshackle the stock, in our estimation.

 
 


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Msg # Subject Author Recs Date Posted
28864 Re: Truist - EXEL: Expert Takeaway: EXEL "Ought to" Win on Protecting Cabo To 2030, But The Path Has Nuances (Buy PT 35) TaiTienMuyBien 1 5/13/2022 4:43:17 PM
28865 Re: Truist - EXEL: Expert Takeaway: EXEL "Ought to" Win on Protecting Cabo To 2030, But The Path Has Nuances (Buy PT 35) duckduffer 3 5/13/2022 6:58:57 PM




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