Financial Data and Key Metrics Changes - For Q2 2025, total revenues were approximately $568 million, including net product revenues from the cabozantinib franchise of $520 million, which represents a 19% year-over-year growth from $438 million in Q2 2024 [6][11][14] - GAAP net income was approximately $184.8 million, or $0.68 per share basic and $0.65 per share diluted, while non-GAAP net income was approximately $212.6 million, or $0.78 per share basic and $0.75 per share diluted [14] - Gross to net for the cabozantinib franchise in Q2 2025 was 30.2%, higher than the previous quarter, primarily due to increased 340B volume, which now accounts for over 24% of total volume [12][13][68] Business Line Data and Key Metrics Changes - The cabozantinib U.S. business showed robust performance, with significant growth in demand and revenue, particularly from the recently approved neuroendocrine tumor (NET) indications, contributing approximately 4% to total net product revenue [5][6][21] - CABOMETYX maintained its position as the leading TKI for renal cell carcinoma (RCC), with TRx volume growing 18% year-over-year, outpacing the market growth rate by 10 percentage points [17][18] - The launch of CABOMETYX in NETs has rapidly established a 35% new patient market share for oral therapies, indicating strong early uptake [20][21] Market Data and Key Metrics Changes - The company anticipates further updates to its 2025 financial guidance as it builds momentum on the NET launch and explores additional revenue opportunities for the second half of 2025 [7][15] - The competitive landscape for cabozantinib remains strong, with the drug being viewed as the best-in-class oral therapy in the NET market shortly after its approval [22][23] Company Strategy and Development Direction - The company aims to solidify its leadership in oncology drug discovery, development, and commercialization through innovation and collaboration, focusing on expanding the number of cancer patients served [4][5] - Zanzalutinib is positioned as the next oncology franchise opportunity, with ongoing pivotal trials and a focus on high-potential indications [7][8][29] - The company is committed to rigorous capital allocation decisions based on clinical and competitive data, prioritizing existing and new indications for zanzalutinib [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth of CABOMETYX and the NET market, highlighting positive prescriber feedback and the drug's potential to become a new standard of care [19][22] - The management team emphasized the importance of continuous assessment of emerging data and the dynamic regulatory environment in guiding future development strategies [39][60] Other Important Information - The company reported a cash and marketable securities balance of approximately $1.4 billion as of June 30, 2025, and continued share repurchases under its authorized plan [15] - The One Big Beautiful Bill Act, signed into law on July 4, 2025, allows for the accelerated deduction of unamortized domestic R&D expenditures, providing a cash tax benefit estimated at $147 million [14] Q&A Session Summary Question: Insights from head and neck data for future studies - Management acknowledged the need for continuous assessments in drug development and indicated that further data will be shared in the future [39][40] Question: Longevity of market share gains for cabozantinib - Management expressed confidence in sustaining market share gains in both RCC and NET, citing strong franchise growth and positive prescriber feedback [42][45] Question: Importance of NLM subset in STELLAR-303 - Management highlighted the significance of overall survival as a gold standard and indicated that they will continue to follow the NLM patient population for further insights [56][57] Question: Pricing dynamics with cabozantinib and 340B volume - Management noted a shift towards the 340B segment, impacting gross to net, and projected gross to net to be closer to 30% [66][68] Question: Future studies for zanzalutinib in CRC - Management confirmed interest in exploring zanzalutinib in earlier lines of therapy, particularly in the adjuvant setting, and emphasized the potential for significant patient impact [84][90]

Core Insights - Exelixis reported Q2 2025 results with non-GAAP EPS of $0.75, exceeding analyst expectations of $0.66, while GAAP revenue of $568.3 million fell short of the $580.05 million estimate, reflecting a 10.8% year-over-year decline primarily due to the absence of a $150 million milestone payment from Q2 2024 [1][2][6] Financial Performance - Non-GAAP EPS was $0.75, down 10.7% from $0.84 in Q2 2024 [2] - GAAP EPS was $0.65, down 15.6% from $0.77 in Q2 2024 [2] - Total revenue was $568.3 million, a decrease of 10.8% from $637.2 million in Q2 2024 [2] - Net product revenue increased by 18.8% year-over-year to $520 million, driven by strong sales of CABOMETYX [2][5] - Collaboration revenue fell to $48.2 million from $199.6 million, a 75.8% decline due to the lack of milestone payments [2][6] Business Model and Strategy - Exelixis focuses on developing targeted small-molecule therapies for cancer, with CABOMETYX as its core product for various cancers [3] - The company aims to diversify its portfolio beyond cabozantinib through strategic partnerships and a robust development pipeline [4] Product Sales and Market Position - CABOMETYX sales accounted for the majority of net product revenue, with $517.9 million from CABOMETYX and $2.1 million from COMETRIQ [5] - The new indication for neuroendocrine tumors now represents about 4% of CABOMETYX's business, with rapid launch efforts following U.S. approval in March 2025 [5][11] Clinical Development and Pipeline - Zanzalintinib showed promising results in the Phase 3 STELLAR-303 trial for colorectal cancer, with a regulatory submission planned [9] - The company is focusing on high-potential projects, having discontinued weaker assets [9][10] Regulatory and Competitive Landscape - Recent approvals for CABOMETYX in neuroendocrine tumors expand market opportunities, although financial contributions will take time to materialize [11] - CABOMETYX remains a leading TKI in renal cell carcinoma, but faces competition from generics in neuroendocrine tumors [12] Future Guidance - Management maintains FY2025 revenue guidance of $2.25 billion to $2.35 billion, with net product revenue expected between $2.05 billion and $2.15 billion [14] - The company will continue to evaluate guidance based on the performance of the NET launch and other new indications [14][15]

[Exelixis Q2 2025 Financial Results and Corporate Update](index=1&type=section&id=Exelixis%20Announces%20Second%20Quarter%202025%20Financial%20Results%20and%20Provides%20Corporate%20Update) [Financial Performance](index=2&type=section&id=Financial%20Performance) Exelixis reported decreased total revenues in Q2 2025 due to lower collaboration revenues, despite strong net product revenue growth Q2 2025 vs. Q2 2024 Financial Results (in millions, except EPS) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | **Total Revenues** | **$568.3** | **$637.2** | **-10.8%** | | Net Product Revenues | $520.0 | $437.6 | +18.8% | | Collaboration Revenues | $48.2 | $199.6 | -75.8% | | **GAAP Net Income** | **$184.8** | **$226.1** | **-18.3%** | | GAAP Diluted EPS | $0.65 | $0.77 | -15.6% | | **Non-GAAP Net Income** | **$212.6** | **$245.6** | **-13.4%** | | Non-GAAP Diluted EPS | $0.75 | $0.84 | -10.7% | - The decrease in total revenues was primarily due to a **$150.0 million** commercial milestone from a collaboration partner recognized in Q2 2024, which did not recur in Q2 2025[5](index=5&type=chunk) - The increase in net product revenues was mainly driven by a rise in sales volume[4](index=4&type=chunk) Q2 2025 Operating Expenses (in millions) | Expense Category | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Research & Development (R&D) | $200.4 | $211.1 | -5.1% | | Selling, General & Administrative (SG&A) | $134.9 | $132.0 | +2.2% | [Corporate and Pipeline Update](index=1&type=section&id=Corporate%20and%20Pipeline%20Update) Exelixis reported successful CABOMETYX® launch in NET, positive zanzalintinib STELLAR-303 results, and advancements in its early-stage pipeline [Cabozantinib Franchise Highlights](index=1&type=section&id=Cabozantinib%20Franchise%20Highlights) - The U.S. launch of CABOMETYX® in advanced neuroendocrine tumors (NET) was well-received, capturing a leading share of new patient starts in second-line and later settings and accounting for about **4%** of the overall CABOMETYX business in Q2[3](index=3&type=chunk) Q2 2025 Cabozantinib Franchise Revenues (in millions) | Revenue Source | Amount | | :--- | :--- | | U.S. Net Product Revenues (CABOMETYX & COMETRIQ) | $520.0 | | Royalty Revenues from Partners | $43.4 | - In July, partner Ipsen received approval from the European Commission for CABOMETYX for patients with previously treated advanced NET, following the U.S. FDA approval in March, allowing marketing in all 27 EU member states, Norway, Liechtenstein, and Iceland[17](index=17&type=chunk) [Zanzalintinib and Early-Stage Pipeline](index=4&type=section&id=Zanzalintinib%20and%20Early-Stage%20Pipeline) - Positive top-line results from the phase 3 STELLAR-303 trial showed that zanzalintinib with atezolizumab significantly improved overall survival versus regorafenib in patients with metastatic colorectal cancer (CRC), with Exelixis planning to discuss these results with regulators for potential approval[19](index=19&type=chunk) - Key updates on the zanzalintinib pivotal program include: - **STELLAR-304 (nccRCC):** Enrollment completed in May 2025, with top-line results expected in H1 2026 - **STELLAR-305 (SCCHN):** The company decided not to proceed to the phase 3 portion due to emerging data, competition, and other opportunities - **STELLAR-311 (NET):** Initiated a phase 3 pivotal trial evaluating zanzalintinib versus everolimus[22](index=22&type=chunk) - The early-stage pipeline is advancing, with three ongoing phase 1 trials for XL309, XB010, and XB628, and the IND for XB371 (a TF-targeting ADC) was cleared by the FDA, with a phase 1 study planned to start soon[24](index=24&type=chunk) - Based on early clinical data, Exelixis has discontinued further development of the XL495 program[23](index=23&type=chunk) [2025 Financial Guidance](index=3&type=section&id=2025%20Financial%20Guidance) Exelixis has maintained its previously provided financial guidance for the full fiscal year 2025, projecting total revenues between $2.25 billion and $2.35 billion and net product revenues between $2.05 billion and $2.15 billion - Exelixis is maintaining its previously provided financial guidance for fiscal year 2025[15](index=15&type=chunk) Full Year 2025 Financial Guidance | Metric | Guidance Range | | :--- | :--- | | Total revenues | $2.25 billion - $2.35 billion | | Net product revenues | $2.05 billion - $2.15 billion | | Cost of goods sold | 4% - 5% of net product revenues | | Research and development expenses | $925 million - $975 million | | Selling, general and administrative expenses | $475 million - $525 million | | Effective tax rate | 21% - 23% | [Other Corporate Developments](index=6&type=section&id=Other%20Corporate%20Developments) The company highlighted a $147 million federal cash tax benefit from the repeal of R&E capitalization requirements, announced positive developments in its cabozantinib patent defense, and continued its stock repurchase program - Due to the One Big Beautiful Bill Act, which repeals the requirement to capitalize domestic R&E expenditures, Exelixis estimates a federal cash tax benefit of **$147 million**[25](index=25&type=chunk) - Exelixis settled patent litigation with Biocon Pharma, granting Biocon a license to market a generic version of CABOMETYX in the U.S. beginning January 1, 2031, subject to FDA approval and other conditions[26](index=26&type=chunk) - As of June 30, 2025, Exelixis has repurchased **$796.3 million** of its common stock at an average price of **$36.69** per share under its authorized programs[27](index=27&type=chunk) [Financial Statements](index=10&type=section&id=Financial%20Statements) This section provides the detailed, unaudited financial tables for the three and six months ended June 30, 2025, compared to the same periods in 2024, including the Condensed Consolidated Statements of Income and a reconciliation of GAAP to Non-GAAP net income [Condensed Consolidated Statements of Income](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Condensed Consolidated Statements of Income (in thousands) | | Three Months Ended June 30, | Six Months Ended June 30, | | :--- | :--- | :--- | | | **2025** | **2024** | **2025** | **2024** | | **Total revenues** | **$568,261** | **$637,178** | **$1,123,708** | **$1,062,404** | | Net product revenues | $520,014 | $437,581 | $1,033,297 | $816,104 | | Collaboration revenues | $48,247 | $199,597 | $90,411 | $246,300 | | **Total operating expenses** | **$354,685** | **$361,304** | **$723,273** | **$757,068** | | Income from operations | $213,576 | $275,874 | $400,435 | $305,336 | | **Net income** | **$184,848** | **$226,116** | **$344,464** | **$263,433** | | **Diluted Net income per share** | **$0.65** | **$0.77** | **$1.20** | **$0.88** | [Reconciliation of GAAP to Non-GAAP Net Income](index=11&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Net%20Income) Reconciliation of GAAP to Non-GAAP Net Income (in thousands) | | Three Months Ended June 30, | Six Months Ended June 30, | | :--- | :--- | :--- | | | **2025** | **2024** | **2025** | **2024** | | **GAAP net income** | **$184,848** | **$226,116** | **$344,464** | **$263,433** | | Stock-based compensation (R&D) | $14,143 | $9,178 | $23,665 | $13,070 | | Stock-based compensation (SG&A) | $21,928 | $16,176 | $38,336 | $31,397 | | Income tax effect of adjustments | ($8,355) | ($5,841) | ($14,348) | ($10,289) | | **Non-GAAP net income** | **$212,564** | **$245,629** | **$392,117** | **$297,611** | | **Non-GAAP diluted EPS** | **$0.75** | **$0.84** | **$1.37** | **$0.99** |

Core Insights - Investors are focused on the performance of the lead drug Cabometyx as Exelixis prepares to report its second-quarter 2025 results on July 28, with sales and earnings estimates at $527 million and 63 cents per share respectively [1][6] Group 1: Earnings Performance - Exelixis has consistently beaten earnings estimates in the past four quarters, with an average surprise of 48.6%, including a 47.62% beat in the last reported quarter [2] - The company's earnings ESP is +2.52%, with the consensus estimate at 63 cents per share and the most accurate estimate at 65 cents [12] Group 2: Revenue Drivers - Revenue generation comes from net product sales, license revenues, and collaboration and service revenues, with net product revenues likely increasing due to higher Cabometyx sales volumes and average net selling prices [3] - The label expansion of Cabometyx for treating pancreatic neuroendocrine tumors (pNET) and extra-pancreatic NET (epNET) is expected to contribute to incremental sales [5][6] Group 3: Drug Performance and Market Position - Cabometyx remains the leading TKI for advanced renal cell carcinoma (RCC) in both front-line and second-line treatment settings, with this trend expected to continue [4] - The FDA's recent approvals for Cabometyx are anticipated to drive additional revenue growth in Q2 [9] Group 4: Share Repurchase and Financial Strategy - The board has authorized a $500 million stock repurchase program, which is expected to enhance the bottom line as the ongoing repurchase program is completed [7] Group 5: Pipeline Developments - Positive results from the late-stage STELLAR-303 study for zanzalintinib, a third-generation oral TKI, are expected to add momentum to the pipeline ahead of earnings [8][9]

Core Insights - Exelixis (EXEL) is expected to report quarterly earnings of $0.63 per share, reflecting a year-over-year decline of 25% [1] - Anticipated revenues are projected at $574.51 million, indicating a decrease of 9.8% compared to the same quarter last year [1] Earnings Projections - The consensus EPS estimate has been revised downward by 0.4% in the past 30 days, indicating a reassessment by analysts [2] - Changes in earnings projections are crucial for predicting investor reactions, with empirical studies showing a strong correlation between earnings estimate trends and short-term stock price movements [3] Revenue Estimates - Analysts expect 'Revenues- Net product' to be $522.61 million, representing a year-over-year increase of 19.4% [4] - The estimated 'Revenues- Collaboration services' is projected at $51.23 million, showing a significant year-over-year change of 1011% [5] - The consensus estimate for 'Revenues- Net product- COMETRIQ' is $3.58 million, reflecting a decline of 15.7% from the previous year [5] - 'Revenues- Net product- CABOMETYX' is expected to reach $527.01 million, indicating a year-over-year increase of 21.6% [5] Stock Performance - Exelixis shares have decreased by 2.7% over the past month, contrasting with the Zacks S&P 500 composite's increase of 5.9% [6] - With a Zacks Rank 2 (Buy), Exelixis is anticipated to outperform the overall market in the near term [6]

Core Viewpoint - The comparison between Exelixis (EXEL) and argenex SE (ARGX) indicates that EXEL currently presents a better value opportunity for investors based on various financial metrics and rankings [1]. Group 1: Zacks Rank and Earnings Estimates - Exelixis has a Zacks Rank of 2 (Buy), while argenex SE holds a Zacks Rank of 3 (Hold), suggesting that EXEL is likely experiencing a more favorable earnings outlook [3]. - The Zacks Rank system emphasizes companies with positive earnings estimate revisions, which supports the notion that EXEL is in a stronger position compared to ARGX [3]. Group 2: Valuation Metrics - EXEL has a forward P/E ratio of 16.86, significantly lower than ARGX's forward P/E of 44.10, indicating that EXEL may be undervalued relative to its earnings potential [5]. - The PEG ratio for EXEL is 0.80, while ARGX has a PEG ratio of 0.98, further suggesting that EXEL offers better value when considering expected earnings growth [5]. - EXEL's P/B ratio stands at 5.75, compared to ARGX's P/B of 6.24, reinforcing the view that EXEL is more attractively priced based on its book value [6]. Group 3: Overall Value Grades - EXEL has received a Value grade of B, while ARGX has a Value grade of C, indicating that EXEL is perceived as a better investment option by value investors [6].

Core Viewpoint - Exelixis (EXEL) is anticipated to report a year-over-year decline in earnings due to lower revenues, with the upcoming earnings report expected to significantly influence its stock price [1][2]. Financial Expectations - The consensus estimate for Exelixis' quarterly earnings is $0.63 per share, reflecting a 25% decrease year-over-year [3]. - Projected revenues for the quarter are $574.51 million, which is a 9.8% decline from the same quarter last year [3]. Estimate Revisions - Over the last 30 days, the consensus EPS estimate has been revised 2.72% higher, indicating a positive reassessment by analysts [4]. - The Most Accurate Estimate for Exelixis is higher than the Zacks Consensus Estimate, resulting in an Earnings ESP of +2.52%, suggesting a bullish outlook on earnings [12]. Earnings Surprise Prediction - A positive Earnings ESP is a strong indicator of a potential earnings beat, especially when combined with a Zacks Rank of 2 (Buy) [10]. - Exelixis has a Zacks Rank of 2, which enhances the likelihood of exceeding the consensus EPS estimate [12]. Historical Performance - In the last reported quarter, Exelixis was expected to earn $0.42 per share but delivered $0.62, resulting in a surprise of +47.62% [13]. - The company has successfully beaten consensus EPS estimates in all of the last four quarters [14]. Conclusion - Exelixis is positioned as a compelling candidate for an earnings beat, but investors should consider additional factors beyond earnings expectations before making investment decisions [17].

Core Viewpoint - Exelixis has shown significant stock price growth over the past decade, with shares increasing from under $10 to approximately $45, indicating strong market performance and potential for further growth [1] Group 1: Company Performance - Exelixis is primarily recognized for its cancer drug, Cabometyx, which was first approved in the U.S. in 2016 for renal cell carcinoma (RCC) and has demonstrated significant improvements in overall survival, progression-free survival, and objective response rate [3] - The company's revenue for the first quarter increased by 30.6% year over year to $555.4 million, with adjusted earnings per share (EPS) more than tripling to $0.62 [4] - Cabometyx has become the most prescribed tyrosine kinase inhibitor among RCC patients and is expanding into other markets, including hepatocellular carcinoma [6] Group 2: Future Growth Potential - Exelixis is preparing for the anticipated generic competition for Cabometyx expected by 2030, indicating proactive strategic planning [7] - The company aims to replicate its past success by developing new cancer medicines that address high unmet needs, with zanzalintinib showing promising phase 3 results for metastatic colorectal cancer (CRC) [8][10] - Zanzalintinib is projected to generate approximately $5 billion in sales, significantly surpassing Cabometyx's current revenue, suggesting strong future growth potential [12] Group 3: Market Position and Strategy - Exelixis is reinforcing its leadership in oncology with several early-stage candidates in development, which could help mitigate the impact of generic competition for Cabometyx [13] - To reach a stock price of $200, Exelixis would need a compound annual growth rate (CAGR) of at least 16.1% over the next decade, a target that, while ambitious, aligns with the company's historical performance [14] - The company is well-positioned to deliver market-beating returns, even if it does not reach the $200 target, indicating a strong investment outlook [15]

Core Viewpoint - Growth stocks are appealing due to their potential for above-average financial growth, but identifying the right ones can be challenging due to associated risks and volatility [1] Group 1: Company Overview - Exelixis (EXEL) is highlighted as a promising growth stock, possessing a favorable Growth Score and a top Zacks Rank [2] - The company has a historical EPS growth rate of 28.3%, with projected EPS growth of 31.8% this year, surpassing the industry average of 19.8% [5] - Exelixis has achieved a year-over-year cash flow growth of 135.6%, significantly higher than the industry average of -4.5% [6] Group 2: Financial Metrics - Earnings growth is crucial for attracting investor attention, with double-digit growth being particularly favorable [4] - The annualized cash flow growth rate for Exelixis over the past 3-5 years is 10.8%, compared to the industry average of 3.7% [7] - There has been a positive trend in earnings estimate revisions for Exelixis, with a 1.3% increase in the current-year earnings estimates over the past month [9] Group 3: Investment Positioning - Exelixis has earned a Growth Score of A and a Zacks Rank 2 due to positive earnings estimate revisions, positioning it well for potential outperformance [11]

Core Viewpoint - Exelixis (EXEL) has demonstrated strong performance in the biotech sector, with a 35.2% increase in stock price over the past three months, significantly outperforming the industry growth of 11.8% [1][7]. Pipeline and Study Updates - The stock received a boost from positive results in the late-stage STELLAR-303 study for zanzalintinib, a promising pipeline candidate [2][3]. - The STELLAR-303 study involved 901 patients with previously non-microsatellite instability-high metastatic colorectal cancer, comparing zanzalintinib in combination with Tecentriq against the standard drug regorafenib [4][5]. - Zanzalintinib is a third-generation oral TKI that targets various receptor tyrosine kinases involved in cancer progression [5]. - The study met one of its primary endpoints, showing a statistically significant improvement in overall survival for the treatment group [5][6]. - Exelixis plans to continue the trial for further analysis of the second primary endpoint related to patients without liver metastases [6]. Product Performance and Revenue Guidance - Exelixis' lead drug, Cabometyx, remains a top TKI for renal cell carcinoma, with strong sales driven by label expansions and high demand [10][11]. - The company raised its 2024 revenue guidance by $100 million, supported by Cabometyx's momentum and pipeline advancements [8][11]. - Recent label expansions for Cabometyx are expected to further enhance sales, particularly in treating neuroendocrine tumors [12][13]. Collaborative Efforts - Exelixis is collaborating with Merck to evaluate zanzalintinib in combination with Keytruda for head and neck squamous cell carcinoma in a late-stage study [9]. Pipeline Expansion - The company is making significant progress in expanding its oncology portfolio beyond Cabometyx, with plans to submit an investigational new drug application for XB371 to the FDA in 2025 [14][15]. Valuation and Estimates - Exelixis shares are currently trading at a price/sales ratio of 5.03x forward sales, higher than the biotech industry's average of 1.57x [16]. - The bottom-line estimate for 2025 has increased to $2.64 per share, with a positive trend in earnings estimates over the past 60 days [18][19]. Investment Outlook - Exelixis is viewed as a strong investment opportunity due to its robust fundamentals, growth prospects, and efforts to enhance shareholder value [20].