Exelixis Stock Surges 28% YTD: Should You Buy Now or Sell?

Core Viewpoint - Exelixis (EXEL) has shown strong performance in 2023, with shares increasing by 28.1% year-to-date, outperforming the industry and the S&P 500 Index, which declined by 3.5% [1][2]. Group 1: Company Performance - The positive performance of Exelixis is attributed to strong quarterly results, raised guidance, label expansion of its lead drug Cabometyx, and efforts to enhance shareholder returns [4]. - The FDA expanded Cabometyx's label for patients with previously treated advanced neuroendocrine tumors (NET), which is expected to further drive sales [6][7]. Group 2: Product Strengths - Cabometyx remains the leading tyrosine kinase inhibitor (TKI) for renal cell carcinoma (RCC) and is also approved for use in combination with Bristol Myers' Opdivo, contributing to strong sales [5][6]. - The recent label expansion for Cabometyx makes it the first and only systemic treatment FDA-approved for previously treated NET, regardless of tumor site or grade [7]. Group 3: Pipeline Development - Exelixis is advancing its oncology pipeline, focusing on zanzalintinib, a next-generation oral TKI, with promising results from studies in metastatic colorectal cancer [8][9]. - Collaboration with Merck to evaluate zanzalintinib in combination with Keytruda for head and neck squamous cell carcinoma is also underway [10]. Group 4: Shareholder Value Initiatives - The company has authorized stock repurchase programs totaling $1 billion to enhance shareholder value, with significant repurchases already completed [12]. - These efforts are expected to boost returns for shareholders [17]. Group 5: Valuation and Estimates - Exelixis shares are currently trading at a price/sales ratio of 4.75x forward sales, which is higher than the biotech industry's average of 1.69x [13]. - Earnings estimates for 2025 and 2026 have increased, indicating positive growth expectations [15][16].