Here's My Top Value Stock To Buy Right Now

Exelixis, Inc. (EXEL - Get Rating) is a biopharmaceutical firm that discovers, develops, and commercializes cancer treatments. Its lead molecule cabozantinib is indicated for the treatment of patients with metastatic medullary thyroid cancer and advanced renal cell carcinoma. It is also approved for kidney cancer, hepatocellular carcinoma, and liver cancer. 

Cabozantinib has been a big money maker. For instance, the uptake of Cabometyx, a tablet formulation of cabozantinib, to treat patients with advanced renal cell carcinoma who have received prior anti-angiogenic therapy, has been very strong.

Laboratory Test Tubes

Image Source: Unsplash

The drug’s label was also expanded to treat previously-untreated, advanced renal cell carcinoma. This has significantly boosted demand for the drug. In fact, kidney cancer is one of the most commonly diagnosed forms of cancer in both men and women, and renal cell carcinoma is the most common form of kidney cancer in adults.

Since Cabometyx is now approved for first-line renal cell carcinoma, the company has a massive opportunity in the U.S. to target everyone suffering from the disease. The company’s European partner, Ipsen, also received approval for Cabometyx in Europe for first-line treatment of adults with intermediate or poor-risk advanced renal cell carcinoma.

This helps broaden the company’s geographic reach of the drug. It also increases its targeted patient population. Plus, the drug is also approved as a monotherapy for hepatocellular carcinoma in adults in Europe that have previously been treated with Nexavar. Cabometyx is also approved for hepatocellular carcinoma in the U.S by the FDA. Due to the market potential, sales have certainly gotten a boost.

Earlier this year, the FDA also approved Cabometyx in combination with the immuno-oncology drug, Opdivo for first-line treatment of patients with advanced renal cell carcinoma. This is also expected to drive additional revenue for EXEL.

EXEL is also working on further expanding cabozantinib’s label. It is currently evaluating the drug as a single agent and in combination with immune checkpoint inhibitors across various indications. If any of these become marketable, this would drive sales up even more.

The company also has a strong pipeline. The FDA has accepted the company’s investigational new drug application to evaluate the safety and tolerability of XB002 in patients with advanced solid tumors. A phase I trial was started in June.

In addition to partnering with Ipsen, the company has other collaborations that have borne fruit. It has collaborated with Bristol-Myers Squibb (BMY), Daiichi Sankyo (DSNKY), Merck (MRK) for various compounds. These allow EXEL to receive payments and royalties.

For example, DSNKY launched Minnebro tablets in Japan to treat patients with hypertension. Since DSNKY collaborated with EXEL on the research, the company received a $20-million milestone payment from DSNKY with the first commercial sale of the drug. EXEL also signed a collaboration agreement with BMY and Roche to evaluate cabozantinib with immunotherapy agents a few years back.

The company has an overall grade of A, translating into a Strong Buy rating in our POWR Ratings system. EXEL has a Growth Grade of B, which makes sense as Wall Street analysts expected earnings to soar 260% year over year in the third quarter.

The company has a Value Grade of A, which isn’t surprising as its price-to-sales ratio and price-to-book ratio are well below the industry averages. Plus, the stock is undervalued by as much as 66% based on an analyst price target.

We also provide Momentum, Stability, Sentiment, and Quality grades for EXEL, which you can find here. EXEL is ranked #4 in the Biotech industry. For more top stocks in this industry, click here. The company also looks strong compared to other companies in its industry.

For instance, BeiGene (BGNE) has an overall grade of D, translating into a Sell rating in our POWR Ratings system. It also has a Growth and Value Grade of C. This is quite underwhelming when compared to EXEL’s overall Strong Buy rating, Growth Grade of B, and Value Grade of A.

Another stock, Mirati Therapeutics (MRTX), fares even worse. The company has an overall grade of F, which translates to a Strong Sell rating in our POWR Rating system. MRTX also has a Growth Grade of B and a Value Grade of C, both well below EXEL’s grades.

EXEL is just one of the stocks in my POWR Value portfolio. That’s where I combine my many years of investing experience with the Top 10 Value Stocks strategy, which has +38.63% annual returns, to bring investors the best value stocks for today’s market. 

EXEL shares were unchanged in after-hours trading Friday. Year-to-date, EXEL has gained 7.17%, versus a 24.04% rise in the benchmark S&P 500 index during the same period.


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Mike Faragut 1 year ago Member's comment

$ORMP is has interesting value. They've just announced that they're starting Phase I trials for their oral covid vaccine. Keep an eye on it today,