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Exelixis Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 3, 2012 04:42PM

Exelixis Inc. (EXEL) filed Quarterly Report for the period ended 2012-03-30. Exelixis Inc has a market cap of $713.9 million; its shares were traded at around $4.58 with a P/E ratio of 8 and P/S ratio of 2.5.



Highlight of Business Operations:

Since the inception of the 2010 and 2011 restructurings, we have recorded aggregate restructuring charges of $42.7 million, of which $20.2 million related to termination benefits and $22.5 million related to facility charges and the impairment of various assets. We had a restructuring credit of $0.2 million for the three months ended March 31, 2012. The credit was primarily due to asset auctions and direct sales of previously impaired assets, partially offset by facility-related charges due to the exit of all or portions of three of our South San Francisco buildings. The total outstanding restructuring liability is included in Current portion of restructuring and Long-term portion of restructuring on our Condensed Consolidated Balance Sheet and is based upon restructuring charges recognized as of March 31, 2012 in connection with the 2010 and 2011 restructurings. As of March 31, 2012, the components of these liabilities are summarized in the following table (in thousands):

Since the inception of the 2010 and 2011 restructurings, we have recorded aggregate restructuring charges of $42.7 million, of which $20.2 million related to termination benefits and $22.5 million related to facility charges and the impairment of various assets. We had a restructuring credit of $0.2 million for the three months ended March 31, 2012. The credit was primarily due to asset auctions and direct sales of previously impaired assets, partially offset by facility-related charges due to the exit of all or portions of three of our South San Francisco buildings. The total outstanding restructuring liability is included in Current portion of restructuring and Long-term portion of restructuring on our Condensed Consolidated Balance Sheet and is based upon restructuring charges recognized as of March 31, 2012 in connection with the 2010 and 2011 restructurings. With respect to our restructurings, we expect to incur additional restructuring charges of $1.7 million relating to the previously mentioned exit and sublease of our South San Francisco facilities. These charges will be recorded through the end of 2017, or the end of the building lease terms.

We had a restructuring credit of $0.2 million for the three months ended March 31, 2012. The credit was primarily due to asset auctions and direct sales of previously impaired assets, partially offset by facility-related charges due to the exit of all or portions of three of our South San Francisco buildings. For the comparable period in 2011 the restructuring charge related primarily to facility charges associated with the exit and sublease of portions of one of our South San Francisco buildings. As a result of our 2010 and 2011 restructurings, we expect to incur additional restructuring charges of approximately $1.7 million, primarily related to facility costs, through the end of 2017, or the end of the building lease terms.

Our operating activities used cash of $15.0 million for the three months ended March 31, 2012, compared to cash used of $43.3 million for the prior year period. Cash used by operating activities for the 2012 period related primarily to our net loss of $26.2 million, which was largely due to the development of cabozantinib, and to an $18.5 million reduction in deferred revenue, primarily due to the timing of revenue recognition of an up-front payment under our P13K-d license agreement with Merck entered into in December 2011. In addition, we paid $1.9 million of our restructuring liability and decreased our accounts payable and other accrued expenses by $2.7 million. Uses of cash were partially offset by the receipt of $27.3 million in cash relating to the termination of our 2009 discovery collaboration with Sanofi in December 2011 and the up-front payment from Merck under our P13K-d license agreement. In addition, we had non-cash charges totaling $5.8 million relating to stock-based compensation, depreciation and amortization and accretion of implied interest under our 2010 note purchase agreement with Deerfield.

We have incurred net losses since inception through 2010. We had a net loss of $26.2 million for the three months ended March 31, 2012. While we were in a net income position of $75.7 million for the year ended December 31, 2011, primarily as a result of the acceleration of revenue recognized under our 2008 collaboration agreement with Bristol-Myers Squibb that terminated in October 2011 and under our 2009 discovery collaboration agreement with Sanofi that terminated in December 2011, we anticipate further net losses and negative operating cash flow for the foreseeable future. As of March 31, 2012, we had $332.1 million in cash and cash equivalents, marketable securities and long-term investments, which included restricted cash and investments of $4.2 million and approximately $84.5 million of cash and cash equivalents and marketable securities that we are required to maintain on deposit with Silicon Valley Bank or one of its affiliates pursuant to covenants in our loan and security agreement with Silicon Valley Bank. In February 2012, we raised approximately $65 million in net proceeds from a public offering of our common stock. We anticipate that our current cash and cash equivalents, marketable securities, long-term investments and funding that we expect to receive from existing collaborators will enable us to maintain our operations for a period of at least 12 months following the filing date of this report. However, our future capital requirements will be substantial, and we will need to raise additional capital in the future. Our capital requirements will depend on many factors, and we may need to use available capital resources and raise additional capital significantly earlier than we currently anticipate. These factors include:

Read the The complete Report



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