BOSTON (TheStreet) -- David Sobek, political scientist, amateur biotech investor and widely followed Twitter commentator (@dsobek) writes that Exelixis (EXEL) is an under-appreciated and under-valued biotech stock, particularly given some updates on the prostate cancer drug cabozantinib expected at the American Society of Clinical Oncology (ASCO) annual meeting in June.
"[Exelixis] represents both a long-term value play and has a good chance to surprise investors with their data presentations at ASCO," writes Sobek at Seeking Alpha.
I appreciate Sobek's perspective on Exelixis but told him (via Twitter) that he's fighting against Wall Street biotech investors and their generally dim view of cabozantinib's potential. That makes it tough for Exelixis bulls like Sobek to win.
Exelixis shares were trading around $12 in the run up to last year's ASCO meeting but have since slumped to less than $5. To help explain why Exelixis has fallen and isn't getting up anytime soon (say the bears), I've asked a veteran Wall Street biotech investor -- and a longtime source -- to lay out his negative thesis for cabozantinib in this week's Biotech Stock Mailbag. His job prevents him from going on the record, so let's just call him Bio-investor X. And while he's not short Exelixis, you can assume that he's in the short-selling camp on this stock.Remember, every stock -- biotechs included -- has a bull and bear thesis. You can't make an informed investing decision without knowing what the other side thinks. As background, Exelixis is conducting two phase III studies of cabozantinib ("cabo" for short) in advanced prostate cancer. The company's plan is to use data from both studies to seek regulatory approval. Study 306 is designed to assess durable pain reduction, currently enrolling prostate cancer patients with progressive disease (bone pain) after treatment with Taxotere and either Johnson & Johnson's (JNJ) Zytiga or Medivation's (MDVN) MDV3100 . The study's targeted enrollment is 236 patients who are randomized 1:1 to receive either cabo or mitoxantrone/prednisone. Study 307 is the survival trial and will enroll the same type of prostate cancer patient (post Taxotere and either Zytiga or MDV3100), randomized 2:1 to receive either cabo or prednisone. Target enrollment is 960 patients. An interim analysis of survival will be conducted after 387 deaths, a final analysis at 578 deaths.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
24/7 market commentary from Jim Cramer and 20+ veteran Wall Street gurus. Get access to the latest trading ideas on stocks, options, and ETFs as well as a real-time forum to see the pros exchanging their investment ideas.
- Jim Cramer + 20 Wall Street pros
- Intraday commentary & news
- Real-time trading forum
- Actionable trade ideas
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV