Exelixis Gains 20.7% in Three Months: Is This the Right Time to Buy?

Core Viewpoint - Exelixis, Inc. (EXEL) has shown strong stock performance, rising 20.7% over the past three months, significantly outperforming the industry and the S&P 500 Index, driven by the success of its lead drug Cabometyx and advancements in its pipeline [1][12]. Group 1: Drug Performance - Cabometyx remains the leading tyrosine kinase inhibitor (TKI) for renal cell carcinoma (RCC) in 2023, primarily due to its combination use with Bristol Myers' Opdivo [2][4]. - The drug has also seen growth in the hepatocellular carcinoma indication, indicating its strong market position [2]. Group 2: Pipeline Developments - Exelixis is focused on expanding Cabometyx's label, with the FDA accepting a supplemental new drug application (sNDA) for advanced pancreatic neuroendocrine tumors (pNET) and extra-pancreatic NET (epNET), with a target action date of April 3, 2025 [4][5]. - The company plans to submit another sNDA for cabozantinib in combination with Tecentriq for metastatic castration-resistant prostate cancer later this year [5]. - Exelixis is advancing its pipeline with promising candidates like zanzalintinib and XL309, with plans to initiate a phase III study for zanzalintinib in 2025 [6][7]. Group 3: Shareholder Value Initiatives - Exelixis has been actively repurchasing shares, completing a $450 million repurchase program and returning $1 billion to shareholders since March 2023 [9][10]. - The board has authorized an additional $500 million for share repurchases through the end of 2025, indicating a commitment to enhancing shareholder value [10]. Group 4: Valuation and Earnings Estimates - EXEL shares currently trade at a price/sales ratio of 3.64x forward sales, higher than its historical mean of 3.34x and the biotech industry's average of 1.79x [11]. - The Zacks Consensus Estimate for 2024 earnings per share (EPS) has increased to $1.83 from $1.79 over the past month, reflecting positive market sentiment [12].