Player Avatar zzlangerhans (99.78) Submitted: 9/2/2011 10:39:14 AM : Outperform Start Price: $6.91 EXEL Score: -42.38

There's not much time before topline data is announced from the EXAM phase III trial of cabozantinib in medullary thyroid cancer. That's a rare form of cancer, but I wouldn't underestimate the power of the first successful phase III trial in Exelixis' long history. It also would establish proof of concept for a drug that has also demonstrated significant positive phase II results in ovarian and prostate cancer, which are vastly larger markets.

Standing in the way of success are the high resistance of the cancer to chemotherapy and recent reports of fatal side effects of cabozantinib, which were the primary driving force in dragging the share price down from 12 to the current level. Given the impressive success of cabozantinib in recent phase II trials, I would give the phase III trial about a 60% chance of showing a significant benefit. The delay in completing the trial due to longer-than-expected times to progression is not predictive of success or failure - I've seen this go both ways too many times to count. The mortality and side effects, I believe, are similar in scope and frequency to those noted with other angiogenesis inhibitors.

I'm squeamish about phase III trials and FDA decisions so I may dump out if I get 10-20 points prior to the data release. Otherwise, I'll be taking the plunge (in CAPS only, of course).

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Member Avatar EthixUSAF (< 20) Submitted: 10/24/2011 10:10:35 AM
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Good call.

Member Avatar Troy2008 (96.45) Submitted: 11/10/2011 7:09:32 PM
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What a clown. In CAPS only, of course.

Member Avatar pugnaciously (28.85) Submitted: 11/16/2011 7:36:34 AM
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ZZ, thank you for the pitch. I'm starting to learn a bit of biopharma as a result of your excellent information.

Member Avatar pugnaciously (28.85) Submitted: 11/19/2011 12:26:08 AM
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You mention that if things go well, you might take the plunge, "In CAPS only of course." Doe that mean you do not make any real-life trades that are suggested by your CAPS picks? I prefer to see players with at least some skin in the game, meaning that they would purchase at least some of their CAP's picks and not utilize CAPS merely as a game - not that I am suggesting you are. Thanks for your answer.

Member Avatar dcsilver (59.74) Submitted: 11/30/2011 11:14:13 AM
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ZZ would love to know your thoughts on the R&D slides Exel just posted on their website for tomorrow's R & D day... The slides are under event calender.

Member Avatar zzlangerhans (99.78) Submitted: 12/1/2011 7:05:28 PM
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That's a lot of slides, and I don't have the time to analyze them. I prefer to take a more macro (superficial) look at more companies. This allows me to identify more opportunities, but also increases the risk of error. In 2010 the strategy worked, in 2011 it hasn't. For a good macro overview of Exelixis I recommend this article:

This is one of the few authors who provides balanced biotech analysis on Seeking Alpha rather than turgid pumps, and I agree with the gist of his argument. On the other hand, I don't like the idea of buying into a stock where the major catalysts are now two years away in a generally unstable broad market environment. Exelixis might be a good buy for me if it gets closer to 3 in a broad decline of speculative small cap stocks. Die, Greece, die.

Regarding my real-life trades, search "zzlangerhans" and "GBMB" and you will find the information you need.

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