Core Insights - Pomerantz LLP is investigating claims on behalf of investors of Exelixis, Inc. regarding potential securities fraud or unlawful business practices by the company and its officers [1] - Exelixis reported second-quarter financial results on July 28, 2025, revealing net product revenues for cabozantinib were approximately 2% below the consensus estimate of $531.3 million [2] - The company decided not to proceed to the phase 3 portion of the STELLAR-305 study in advanced squamous cell carcinoma due to emerging competition and assessment of other commercial opportunities [2] - Following the announcement, Exelixis's stock price fell by $7.45 per share, or 16.78%, closing at $36.94 per share on July 29, 2025 [2] Company Overview - Exelixis, Inc. is involved in the development and commercialization of innovative therapies for cancer treatment [2] - The company has faced scrutiny regarding its business practices and financial disclosures, leading to an investigation by Pomerantz LLP [1][2] Legal Context - Pomerantz LLP is recognized for its expertise in corporate, securities, and antitrust class litigation, having a long history of fighting for victims of securities fraud and corporate misconduct [3] - The firm has successfully recovered multimillion-dollar damages on behalf of class members in the past [3]

Group 1 - Exelixis is actively marketing cabozantinib (Cabometyx, Cometriq) for its current indications while also developing zanzalintinib, which has seen both successes and disappointments [1] - A buy rating was assigned to Exelixis in February, indicating a positive outlook on the company's stock performance [1] Group 2 - The article reflects the author's personal opinions on biotech stocks, focusing on trading around significant events such as trial results and NDA/BLA approvals [1]

Group 1: Celestica (CLS) - Celestica exceeded Q2 earnings expectations, with sales of $2.89 billion, a 21% increase from $2.39 billion a year ago, surpassing estimates by 8% [3] - Q2 earnings soared 53% year-over-year to $1.39 per share, exceeding expectations of $1.24 by 12% [3] - The stock hit an all-time high of $208, spiking 16% in a single trading session, driven by high demand for communications and enterprise hardware products [2][4] - Celestica's stock has increased over 115% in 2025 and more than 135% in the last three months, outperforming broader market indexes [4] Group 2: Exelixis (EXEL) - Exelixis reported Q2 EPS of $0.75, beating expectations of $0.65 by 15%, despite a decline from $0.84 in the previous year [5] - Sales were $568.26 million, missing estimates of $578.91 million and down from $637.18 million in Q2 2024 [5][6] - The stock fell nearly 17% post-earnings, presenting a potential buy-the-dip opportunity, despite reaffirming full-year revenue guidance of $2.25-$2.35 billion [5][7] - Exelixis' stock is down 5% in 2025 but has increased over 80% in the last two years, currently trading under $40 with a forward earnings multiple of 16.6 [9]

Group 1 - Exelixis (EXEL) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating an upward trend in earnings estimates which significantly impacts stock prices [1][3] - The Zacks rating system is based solely on a company's changing earnings picture, making it a useful tool for investors to gauge stock performance [2][4] - The upgrade reflects an improvement in Exelixis's underlying business, suggesting that investor sentiment may drive the stock price higher [5][10] Group 2 - The Zacks Rank stock-rating system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7][9] - For Exelixis, the Zacks Consensus Estimate for earnings per share is projected at $2.67 for the fiscal year ending December 2025, with a 17.2% increase in estimates over the past three months [8][10] - The upgrade positions Exelixis in the top 5% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [10]

Core Viewpoint - Exelixis, Inc. reported mixed results for Q2 2025, with adjusted earnings beating estimates but revenues missing expectations, leading to a decline in stock price in pre-market trading [2][3][25] Financial Performance - Adjusted earnings were 75 cents per share, exceeding the Zacks Consensus Estimate of 65 cents, but down from 84 cents in the same quarter last year [2][8] - Net revenues totaled $568.3 million, missing the Zacks Consensus Estimate of $579 million and reflecting a 10.8% year-over-year decline [3][8] - Net product revenues were $520 million, marking an 18.8% increase year-over-year, primarily driven by increased sales volume [5][8] Product Performance - Cabometyx generated revenues of $517.9 million, falling short of the Zacks Consensus Estimate of $527 million but surpassing the model estimate of $511.3 million [6][8] - The demand for Cabometyx's new indication for neuroendocrine tumors accounted for just over 4% of total demand in Q2, with expectations for growth [9][25] Collaboration and Revenue Sources - Collaboration revenues plummeted 70% to $48.2 million from $199.6 million in the prior year, largely due to a significant milestone payment recognized in the previous quarter [10][25] Expenses - Research and development expenses were $200.3 million, down 5.1% year-over-year, while selling, general, and administrative expenses rose 2.1% to $134.9 million [11][25] Stock Repurchase Program - Exelixis has repurchased $796.3 million of its common stock at an average price of $36.69 per share, with $204 million remaining under the current repurchase plan [12][13] Guidance - The company maintains its 2025 revenue guidance of $2.25 billion to $2.35 billion, with net product revenues expected between $2.05 billion and $2.15 billion [14][15] Pipeline Developments - Exelixis is advancing its pipeline with zanzalintinib, which has shown promising results in the STELLAR-303 study for metastatic colorectal cancer [16][18] - The company has three ongoing phase I studies and plans to initiate a phase I study for XB371 soon [23] Legal Settlement - In July 2025, Exelixis settled patent litigation with Biocon Pharma, allowing Biocon to market a generic version of Cabometyx in the U.S. starting January 1, 2031, if approved [24]

分组1 - Exelixis reported quarterly earnings of $0.75 per share, exceeding the Zacks Consensus Estimate of $0.65 per share, but down from $0.84 per share a year ago, resulting in an earnings surprise of +15.38% [1] - The company posted revenues of $568.26 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 1.84% and down from $637.18 million year-over-year [2] - Exelixis has surpassed consensus EPS estimates in all four of the last quarters and has topped consensus revenue estimates three times during the same period [2] 分组2 - The stock has gained approximately 36.9% since the beginning of the year, significantly outperforming the S&P 500's gain of 8.6% [3] - The company's earnings outlook, including current consensus earnings expectations for upcoming quarters, will be crucial for future stock performance [4] - The current consensus EPS estimate for the upcoming quarter is $0.69 on revenues of $594.62 million, and for the current fiscal year, it is $2.65 on revenues of $2.35 billion [7] 分组3 - The Medical - Biomedical and Genetics industry, to which Exelixis belongs, is currently ranked in the top 37% of over 250 Zacks industries, indicating a favorable outlook for the sector [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked using tools like the Zacks Rank [5][6]

Financial Data and Key Metrics Changes - For Q2 2025, the company reported total revenues of 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 [7][13] - GAAP net income for Q2 2025 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 [15] - The gross to net for the cabozantinib franchise in Q2 2025 was 30.2%, an increase from the previous quarter, primarily due to higher 340B volume, which now accounts for over 24% of total volume, up four percentage points from 2024 [13][14][70] Business Line Data and Key Metrics Changes - The cabozantinib franchise 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 in Q2 2025 [6][7][23] - 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 [19][20] - The launch of CABOMETYX in NETs has been strong, achieving a 35% new patient share in the oral therapy segment shortly after approval [22][23] Market Data and Key Metrics Changes - The company anticipates that the contribution from NETs to total demand for CABOMETYX will increase over time, with early market research indicating CABOMETYX is viewed as the best-in-class oral therapy in this segment [24][25] - The competitive landscape for NETs includes generic therapies, which positions CABOMETYX advantageously due to its full commercial support [25] Company Strategy and Development Direction - The company aims to solidify its leadership in oncology drug discovery, development, and commercialization, focusing on improving the standard of care for cancer patients [5][6] - Zanzalutinib is being positioned as the next oncology franchise opportunity, with ongoing pivotal trials and a focus on high-potential indications [8][9] - The company is committed to rigorous capital allocation decisions based on clinical and competitive data, prioritizing the most promising development opportunities [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth of the CABOMETYX business, particularly in the NET segment, and emphasized the importance of continuous assessment of market dynamics and competitive positioning [5][6][49] - The company plans to update its financial guidance as it builds momentum on the NET launch and identifies additional revenue opportunities for the second half of 2025 [16] 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 [16] - 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 federal cash tax benefit estimated at $147 million [14][15] Q&A Session Summary Question: Insights on head and neck data extrapolation - Management acknowledged the dynamic nature of drug development and emphasized the importance of continuous assessment of emerging data [40][41] Question: Long-term market share sustainability for CABOMETYX - Management expressed confidence in sustaining market share gains in both RCC and NET segments, citing strong franchise growth and early success in the NET launch [44][46][49] Question: Positioning of Zanzalutinib in colorectal cancer landscape - Management highlighted the significance of overall survival benefits in colorectal cancer and the potential for Zanzalutinib to be a competitive option in the market [54][56] Question: Pricing dynamics and 340B volume impact - Management noted a shift towards the 340B segment, which is highly discounted, impacting gross to net ratios, but projected continued success for CABOMETYX as the standard of care [68][70] Question: Dual primary endpoints for STELLAR-304 - Management clarified that both progression-free survival (PFS) and overall response rate (ORR) are dual primary endpoints, and success in either would constitute a positive study [72][74] Question: Balancing Zanzalutinib's potential across indications - Management emphasized the strategy to maximize Zanzalutinib's impact by exploring new indications and combinations while reinforcing the existing TKI franchise [88][90]

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** |