Exelixis Inc

Exelixis is preparing for a potential late-year launch of zanzalintinib, or zanza, in third-line colorectal cancer while working to deepen CABOMETYX penetration in renal cell carcinoma and neuroendocrine tumors. Speaking at a Wells biotech session, Chief Financial Officer Chris Senner said the company still views a $3 billion CABOMETYX franchise as achievable, with RCC and NET contributing to growth through 2027, 2028 and 2029, though reduced guidance and second-quarter revenue reflected a slower-than-expected NET ramp tied to the indolent nature of the disease. Andrew Peters, senior vice president of strategy, said CABOMETYX was capturing approximately 47% of new-patient market share in NET and described the gap as a temporal dynamic rather than a change in the underlying opportunity. Exelixis estimates the third-line-and-beyond colorectal cancer market for zanza at approximately $1.5 billion and said launch expenses are included in company guidance, with the regulatory filing based on the intent-to-treat population from the STELLAR-303 study. For planning purposes, the company assumes CABOMETYX generics will enter on Jan. 1, 2031 under settlements with Teva, Cipla and others, and does not view 505(b)(2) products as a meaningful near-term commercial risk. Capital allocation remains centered on annual research and development spending of $1 billion or less, business development primarily in gastrointestinal and genitourinary areas, and share repurchases, with approximately $600 million remaining under its buyback authorization after repurchasing about $2.9 billion of stock since the second quarter of 2023.

Exelixis reported second-quarter adjusted earnings per share of 91 cents, beating the Zacks Consensus Estimate of 86 cents, while revenue rose 10.6% year over year to $628.7 million, missing the estimate of $635 million. The company lowered its 2026 total revenue guidance to $2.50-$2.55 billion from $2.525-$2.625 billion, primarily due to a slower-than-expected ramp-up for the neuroendocrine tumor indication of Cabometyx. Exelixis completed a $750 million share repurchase program and began a new one of the same size, having repurchased $2.9 billion of stock since March 2023. The FDA is reviewing zanzalintinib for previously treated metastatic colorectal cancer with a target action date of December 3, 2026, and the company plans to initiate a phase III study with Merck evaluating zanzalintinib in resected stage II/III colorectal cancer.

Exelixis announced that the U.S. Court of Appeals for the Federal Circuit affirmed a key portion of the 2024 Delaware district court judgment in its favor in the patent litigation against MSN Laboratories. The appellate court upheld the validity of three patents covering the crystalline malate salt of cabozantinib, marketed as CABOMETYX, while dismissing as moot the appeal over a low-impurity formulation patent. As a result, the earliest MSN could launch its generic product in the U.S. is January 15, 2030, subject to further appeals and regulatory exclusivity, and pending the outcome of litigation over another formulation patent expiring in February 2032, with trial set for November 2026. Exelixis said it will continue to defend its intellectual property portfolio.

Exelixis is expected to post quarterly earnings of $0.86 per share, a 14.7% year-over-year increase, on revenues of $635 million, up 11.7%, for the quarter ended June 2026. The Zacks Earnings ESP model indicates a positive surprise of +6.31%, as the Most Accurate Estimate is higher than the consensus, and the stock carries a Zacks Rank #2. Over the last four quarters, the company has beaten consensus EPS estimates each time. In the same industry, NovoCure is expected to report a loss of $0.30 per share on revenues of $174.11 million, with an Earnings ESP of +0.83% but a Zacks Rank #4, making a beat less predictable.

The biotech sector is quietly emerging as a new market leader while the AI-driven semiconductor rally shows signs of exhaustion, according to Zacks Investment Research. The Health Care Sector ETF XLV hit record highs this month, and the Biotech ETF XBI is approaching levels not seen since 2021, fueled by a stronger drug development cycle and defensive rotation. Among standout names, Eli Lilly remains the clear leader, while mid-cap players like Exelixis, PTC Therapeutics, Fortrea Holdings, and Illumina are gaining traction. PTC Therapeutics surged roughly 75% since its drug Sephience was approved in July 2025, with first-quarter revenue reaching $273 million, and was upgraded to a Zacks Rank #1 (Strong Buy) on July 8. Fortrea Holdings, a contract research organization, rebounded from around $4 to the mid-teens on backlog growth and cost cuts, and was added to the Zacks Rank #1 list on July 7. Exelixis offers a blend of profitability and growth at roughly 16x forward earnings, while Illumina, the genomics leader, has recovered about 46% year to date after an 80% tumble.

Exelixis shares have surged 26.8% over the past three months, outperforming the industry's 4.5% gain and the broader market. The rally reflects investor optimism about the company's pipeline momentum, particularly its lead candidate zanzalintinib, despite a recent setback in the STELLAR-303 study where the combination with Roche's Tecentriq showed a non-statistically significant overall survival trend in a subset of metastatic colorectal cancer patients without liver metastases. The U.S. FDA has set a target action date of December 3, 2026, for zanzalintinib's new drug application in combination with Tecentriq for previously treated metastatic colorectal cancer, which would mark the drug's first approval and establish a new growth platform beyond flagship therapy Cabometyx. Exelixis is also expanding zanzalintinib's development through collaborations with Merck on multiple phase III trials in colorectal and renal cell carcinoma, and with Natera on molecular residual disease testing. Meanwhile, Cabometyx maintains momentum as the leading prescribed TKI in renal cell carcinoma following a label expansion in March 2025 for certain neuroendocrine tumors.

Exelixis reported final Phase 3 STELLAR 303 data showing zanzalintinib plus atezolizumab produced a non-statistically significant overall survival trend in favor of the combination among metastatic colorectal cancer patients without active liver metastases. The median overall survival was 15.9 months for the combination versus 12.7 months for regorafenib, with a hazard ratio of 0.83 and P = 0.1185, and no new safety signals emerged. The trial previously met its other dual primary endpoint with a statistically significant survival benefit in the intention-to-treat population. Detailed findings were presented at the 2025 European Society for Medical Oncology Congress and published in The Lancet. The FDA accepted the New Drug Application for the combination in February 2026 with a target action date of December 3, 2026.

A new report on the renal cancer pipeline for 2026 provides comprehensive insights into over 75 companies and more than 80 pipeline drugs. The analysis covers drug profiles across clinical and nonclinical stages, including assessments by product type, stage, route of administration, and molecule type. Key emerging drugs include Exelixis' zanzalintinib in phase III for non-clear cell renal cell carcinoma, Merck's quavonlimab combined with pembrolizumab in phase III, and Corvus Pharmaceuticals' ciforadenant in phase II. The report also details collaborations, acquisitions, and licensing activities, and highlights unmet needs and future perspectives in renal cancer therapeutics.