EXEL Q2 Earnings Top, Sales Miss on Lower Collaboration Revenues

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]