A summer Friday is not complete without a Biotech Stock Mailbag.

Adam F. asks, "I laughed at your Heron Therapeutics (HRTX) watch on Twitter, but seriously, what do you think is going on at the FDA to delay Sustol decision for this length of time? What a strange story to this point. Any guesses?"

Hey, that name sounds familiar.

Almost three months (77 days to be exact) have passed since Heron told investors the Food and Drug Administration was engaging the company in negotiations to finalize the label for Sustol. Furthermore, the FDA has found "no substantive deficiencies" in the Sustol filing, Heron said.

Seventy-seven days (and counting) to nail down a label for a drug to reduce nausea and vomiting in cancer patients undergoing chemotherapy -- far from medically ground-breaking territory -- is an insanely long time. So, yes, I agree with the other Adam F. that the Heron story is strange.

Heron isn't talking about Sustol or offering an explanation for the long FDA delay but here's my best guess: FDA has already offered to approve Sustol but only with a limited label that would curtail sales significantly. Heron, and not the FDA, is responsible for the delay as it tries to convince the agency to allow a more expansive label.

Broadly speaking, the chemotherapy-induced nausea and vomiting (CINV) drug market is divided into four buckets of patients encompassing two types of chemotherapy (moderately and highly emetogenic) and two stages of CINV prevention (acute and delayed.)

Aloxi, the most-prescribed CINV drug sold by Eisai, is approved for three of the four CINV patient buckets. Aloxi sales totaled approximately $550 million (converted from yen) in Eisai's 2015 fiscal year ended on March 31. The patents on Aloxi have started to expire, however, which means generic versions of the drug are launching soon.

Sustol won't be able to compete against cheap, generic Aloxi (palonosetron) unless the FDA allows a prescribing label which includes a claim for the prevention of delayed-onset CINV in patients undergoing highly emetogenic chemotherapy. That's the magical, highly desirable fourth bucket in the CINV treatment market.

Heron submitted data to the FDA supporting the approval of Sustol for the prevention of delayed-onset CINV in patients undergoing highly emetogenic chemotherapy.

Again, my guess: FDA found something not to its liking in those data. I believe FDA has told Heron that Sustol is approvable for months now, just not with a commercially viable label. That's why Heron can tell investors truthfully that labeling discussions are ongoing and FDA has not identified "substantive deficiencies" with the filing.

Heron's stock price has dropped 33% this year as the Sustol delay drags on. Investors are already discounting the drug's commercial potential.

Yo @adamfeuerstein ! What's up with $EXEL

— Anthony Lopipero (@ALopipero) July 6, 2016

Up is a good way to describe Exelixis (EXEL - Get Report) of late. The stock has essentially doubled in price since early May to $8.14, as of Thursday's close.

Wall Street's outlook for the kidney cancer drug Cabometyx has brightened since the reporting in May of positive results from the phase II "CABOSUN" study in which Cabometyx demonstrated superiority over Sutent (progression-free survival) in first-line kidney cancer patients. In June at the ASCO annual meeting, Exelixis presented the positive overall survival data from the Cabometyx study in second-line kidney cancer. This study formed the basis of the drug's U.S. approval in April.

Exelixis started selling Cabometyx within days of the April approval, so the first opportunity to gauge the launch will come when the company reports second-quarter earnings. I don't have a clear view of a consensus sales estimate although Leerink analyst Michael Schmidt pegged it at $5-6 million in a recent research note.

The big question with Cabometyx has been, and remains, how the drug will perform against Opdivo, the Bristol-Myers Squibb (BMY - Get Report) checkpoint inhibitor. Opdivo was approved in kidney cancer last fall.

In the second-line kidney cancer setting (where both drugs are approved), Opdivo has the edge over Cabometyx on median overall survival benefit while Cabometyx looks better if you judge survival benefit on overall risk reduction. Patients seem to tolerate Opdivo better than Cabometyx.

Opdivo also has the advantage of being the shiny, new immunotherapy toy. Cabometyx is another tyrosine kinase inhibitor, similar to other, already approved kidney cancer drugs. [Note: I'm comparing the two drugs based on their own, individual clinical trials. The drugs have not been compared against each in a head-to-head study.]

The verdict will be decided based on sales. There's definitely more positive thinking about Cabometyx commercial potential today than when the drug was approved in April, and that has benefited Exelixis' stock price. But keep in mind that Exelixis' market value now tops $1.8 billion, so management is under greater pressure to deliver higher sales.

Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.