Exelixis (NASDAQ:EXEL) In Turbulent Waters
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Pharmacy and biotech companies are unlucky when it comes to sustaining a healthy price as far as stocks are concerned. Investors are always wary when it comes to investing in such stock because of their vulnerability and fluctuations. But some companies are lucrative enough to attract investors; not only that, these companies can cough up strong paybacks. On such company is Exelixis (NASDAQ:EXEL) that is currently facing harsh times and has had an awful year. The company’s trial for the prostate cancer called COMET-1 has plummeted by almost 72 percent and there’s a chance that it won’t get approval from the Food and Drug administration department.
On the outlook, Exelixis (NASDAQ:EXEL) looks quite promising; or at least good enough to attract investors for the ride. The company’s melanoma drug called cobimetinib resulted in a large surge during the third quarter. This drug is being pushed as a clinical candidate and should gain approval all around. But the question is: Will that be enough to improve Exelixis (NASDAQ:EXEL)’s situation? Will that be enough to cover the losses of 2014? Having said that, at least it will give the investors some hope regarding the company’s capability to make money.
The company’s market cap is 335 million and that isn’t quite enough to make the shareholders happy or make attract new investors. Biotech stocks aren’t exactly known for their sustainability and keeping that in mind investors largely bank upon the company’s reputation and capability to make revenue. So on the flip side, Exelixis (NASDAQ:EXEL)’s stock doesn’t have much to brag about.
The company was relying upon COMET-1 but the sudden dwindling situation of the drug is giving second thoughts to Exelixis (NASDAQ:EXEL). The drug is a sensitive drug for a sensitive disease and for it to gain approval now in these circumstances, it’s almost impossible unless it goes through another trial where the drug performs extra ordinarily well. Exelixis (NASDAQ:EXEL) is walking on the razor’s edge. One negative turn out can send panic through the shareholders. Ultimately they will start dumping the stock for pennies. Nobody wants to be a part of a sinking ship. Exilixis comes with a risk that nobody is willing to take and quite frankly it is an unhealthy risk which usually people avoid. At least Wall Street won’t look at Exilixis’ stock.
When it comes to revenue, forecast shows that Exelixis, (NASDAQ:EXEL) won’t be making much revenue for at least 12 months. Perhaps in 2016 if the METEOR data comes out positive and Exelixis, (NASDAQ:EXEL) is successful in executing a secondary at more reasonable levels, perhaps there is a chance that the company might regain some investor’s faith but as of now, the stock is just too risky for investors to come aboard. Let it amass some revenue, gain sustainability, perhaps then it can be looked into. Until then, our suggestion is to avoid the stock until it becomes capable of extracting a return for the investors.