Exelixis Stock Buried By Failed Cancer Drug Study

EXEL stock is dangerously close to annual-low territory

Managing Editor
May 10, 2018 at 10:19 AM
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Exelixis, Inc. (NASDAQ:EXEL) stock is down 11.8% to trade at $19.13 this morning, after the biotech company's colorectal cancer drug that was tested in combination with Roche's Tecentriq failed late-stage study goals. Exelixis said it will continue to work with Roche in evaluating the treatment on other tumor types. In response to the failed study, RBC and Suntrust Robinson issued price-targets cut on EXEL stock, to $35 and $36, respectively.  

Exelixis stock is on track for its worst single-day loss since September 2017. The equity has now shed 36% in 2018, and is dangerously close to its annual low of $18.03 from May 30. Since mid-February, the shares' 20-day moving average has guided EXEL lower, and a brief rally earlier this month was stymied by their 50-day moving average. 

Analysts remain committed to the biotech stock. Of the seven brokerages covering EXEL, six rate it a "buy" or "strong buy," with not a single "sell" on the books. Furthermore, the security's average 12-month price target sits at $35.17, a 78% premium to the stock's current perch. Continued technical struggles could prompt more analysts to re-think their bullish positions.

In the option pits, traders have been betting bullishly in recent weeks. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), speculative players have bought to open 4,828 calls on EXEL stock in the last 10 days, compared to just 808 puts. This indicates calls have outnumbered puts by a nearly 6-to-1 ratio. An unwinding of these bullish bets could push EXEL lower.

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