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Exelixis Sees Success in Melanoma Treatment With Drug Combination


Partnered with Roche-Genentech, Exelixis should be able to charge more than GlaxoSmithKline for its Melanoma treatment.

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Melanaoma patients with a specific mutant form of melanoma got some good news this morning when Exelixis (NASDAQ:EXEL) and partner Roche-Genentech (OTCMKTS:RHHBY) announced positive data on the combination of cobimetinib and vemurafenib (Zelboraf) for BRAF-mutant melanoma tumors. There are few details so far, but the companies announced that the data were positive.

GlaxoSmithKline (NYSE:GSK) already has a similar combo on the market, but its Phase III data presented at ASCO in June were underwhelming -- not statistically or clinically significant. So, I expect the cobimetinib and vemurafenib combination to do significantly better in the marketplace for these patients.

There has been much excitement in melanoma recently with immuno-oncology drugs like ipilimumab and others. These so-called checkpoint inhibitors are important, but for these patients with the BRAF mutation, the cobimetinib and vemurafenib combination will be used as a first line treatment given its high response rates (as seen in the earlier stage trials). Then, patients will go on the checkpoint inhibitors at failure. This will especially b true in the community oncology setting -- where the big majority of patients are treated -- since the side effects for checkpoint inhibitors can be very nasty.

Exelixis has a high short interest, so it should be an interesting morning in the stock. Exelixis has a fifty-fifty co-promote/co-marketing deal with Roche-Genentech in the US, and Roche pays Exelixis low-teen royalties for overseas sales, so the economics for Exelixis are attractive.

GlaxoSmithKline charges $16,000 per month for its combination. I would expect Roche and Exelixis to charge a little higher since their data should be meaningfully better.

Twitter: @AlpineBV_Miller

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