Key Takeaways Cabometyx is now FDA-approved for previously treated pancreatic and extra-pancreatic NET. Early demand is strong, with 35% new patient share for oral therapies in this indication. Shares of Exelixis are up 13.8% YTD, though valuation remains above industry averages. Exelixis’ ((EXEL) lead drug, Cabometyx, a tyrosine kinase inhibitor (TKI), is one of the leading drugs for the treatment of renal cell carcinoma (RCC).The FDA approval for the label expansion of Cabometyx for the treatment of adult ...

Core Insights - Exelixis (EXEL) has shown strong year-to-date performance with a 15.6% increase in share price, significantly outperforming the industry growth of 2.9% [1] - Despite reaching a 52-week high of $49.62 on June 23, 2025, shares dipped following mixed quarterly results reported on July 28 [1][4] - The company’s lead drug, Cabometyx, continues to perform well in the renal cell carcinoma (RCC) market, supported by strong demand and recent label expansions [5][6] Company Performance - Exelixis' stock has outperformed both the sector and the S&P 500 Index during the year [1] - The company reported a revenue miss in the second quarter, which has affected investor sentiment [8][20] - Cabometyx remains the leading tyrosine kinase inhibitor (TKI) for RCC, with strong sales driven by its combination with Bristol Myers' Opdivo [5][6] Drug Pipeline and Developments - Zanzalintinib, an investigational TKI, has shown positive results in the STELLAR-303 study, meeting a key endpoint for overall survival in metastatic colorectal cancer [10][12] - The company has decided not to proceed with the phase III portion of the STELLAR-305 trial for zanzalintinib due to emerging competition and a focus on larger commercial opportunities [14] - Exelixis is actively expanding its pipeline with three ongoing phase I studies and has received FDA clearance for a new IND application [15] Financial Outlook - Exelixis shares are currently trading at a price/sales ratio of 4.14x forward sales, higher than the biotech industry average of 1.59x [16] - The bottom-line estimate for 2025 has increased slightly from $2.64 to $2.68, while the estimate for 2026 has decreased from $3.13 to $3.09 [17] Competitive Landscape - Cabometyx faces significant competition in the RCC market, particularly from Merck's Keytruda and Pfizer's Inlyta [20][21] - Keytruda is a leading drug in the RCC space, accounting for approximately 50% of Merck's pharmaceutical sales [21]

Core Insights - Exelixis is developing zanzalintinib, a next-generation oral investigational tyrosine kinase inhibitor (TKI) targeting receptor tyrosine kinases involved in cancer growth, with recent studies showing positive data [1] Study Results - In June 2025, Exelixis announced positive top-line results from the STELLAR-303 study, a phase III trial involving 901 patients with metastatic colorectal cancer, comparing zanzalintinib plus Tecentriq against regorafenib [2] - The STELLAR-303 study met one of its dual primary endpoints, showing a statistically significant improvement in overall survival (OS) for the intent-to-treat population treated with zanzalintinib plus Tecentriq compared to regorafenib [3] - Enrollment for the STELLAR-304 study was completed in May 2025, evaluating zanzalintinib in combination with Opdivo versus sunitinib in advanced non-clear cell renal cell carcinoma [4] - Exelixis has opted not to proceed with the phase III portion of the STELLAR-305 trial based on emerging data and competition in advanced squamous cell carcinoma [5] - The company initiated the phase III STELLAR-311 study in advanced neuroendocrine tumors, comparing zanzalintinib to everolimus [6] Competitive Landscape - The competitive environment for renal cell carcinoma (RCC) is intensifying, with significant competition for Exelixis's lead drug, Cabometyx, from various immunotherapy-TKI combinations [7] - Keytruda, approved for advanced RCC, accounts for approximately 50% of Merck's pharmaceutical sales, highlighting the competitive pressure in the market [10] Financial Performance - Exelixis shares have increased by 14% year-to-date, contrasting with a 0.9% decline in the biotech industry [11] - The company's shares are currently trading at a price/sales ratio of 4.09x forward sales, above its historical mean of 3.64x and the biotech industry's average of 1.59x [13] - The bottom-line estimate for 2025 has risen from $2.64 to $2.68, while the estimate for 2026 has decreased from $3.13 to $3.09 over the past 30 days [14]

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]

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 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 - 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].

Group 1: Investment Strategy - A formula for generating strong returns involves investing small amounts in top stocks regularly over long periods, with fractional shares being one method to apply this strategy [1] - Attractive corporations can be found at affordable prices, particularly in the healthcare sector [2] Group 2: Pfizer - Pfizer's shares have significantly declined due to reduced revenue and earnings post-coronavirus success, with a notable patent cliff approaching for Eliquis [4] - The company has improved its pipeline and received major approvals, which are expected to positively impact revenue over time [5] - Pfizer is engaged in cost-cutting efforts, planning to reduce expenses further through 2027 [5] - The company offers a strong dividend program, having increased payouts by 19.45% over the past five years, with a forward yield of 7.1% [6] - Pfizer's forward price-to-earnings ratio is 8.3, significantly below the healthcare industry average of 16.1, indicating it is reasonably valued [6] - While recovery may take time, it is considered a worthwhile investment for patient, income-seeking investors [7] Group 3: Exelixis - Exelixis specializes in oncology, with its top-selling product, Cabometyx, approved for various cancers, contributing positively to revenue and earnings [9] - The company won a patent litigation case, ensuring Cabometyx's generic version will not enter the market until early 2030, which is crucial for financial stability [10] - Cabometyx received a label expansion for treating pancreatic neuroendocrine tumors, maintaining a strong market share in renal cell carcinoma treatments [11] - Exelixis announced positive results for its next-gen cancer medicine, zanzalintinib, in a phase 3 study for metastatic colorectal cancer, addressing an unmet need [12] - With these developments, Exelixis's future appears promising, with shares currently priced at $44, suggesting potential for solid returns if held for five years or more [13]

Industry Overview - The biotech industry has shown resilience amid global trade tensions, with ongoing geopolitical issues presenting challenges, yet the demand for innovative medical treatments remains strong [1] - Strategic collaborations and acquisitions are increasingly common as large pharma and biotech companies seek to expand their product portfolios and pipelines, particularly in the context of AI-driven drug discovery [2][9] - The Zacks Biomedical and Genetics industry is currently ranked 86, placing it in the top 35% of over 246 Zacks industries, indicating a decent outlook driven by consistent demand for medical advancements [15] Market Trends - The focus on high-profile drug performance and innovative pipeline development is critical, with significant R&D expenditures required to create breakthrough treatments [6] - Successful commercialization is essential for drug uptake, often leading smaller biotech firms to collaborate with larger companies for shared sales or royalties [7] - The recent emphasis on AI technology for drug discovery is expected to attract further investment into the biotech sector [11] Company Performance - Exelixis, Inc. (EXEL) is positioned well with its lead drug, Cabometyx, which is gaining traction in the oncology market, and its shares have surged 31% year to date [35][36] - Verona Pharma (VRNA) has seen a 94.8% increase in shares year to date, driven by the uptake of its drug Ohtuvayre for COPD, with further growth anticipated [24] - Alkermes (ALKS) is benefiting from strong sales of its proprietary drugs and has a Zacks Rank of 1, with EPS estimates for 2025 rising to $1.79 [26][27] - Immunocore Holdings (IMCR) focuses on TCR bispecific immunotherapies and has gained 11.4% year to date, with ongoing studies expected to enhance its market position [30][32] - Kiniska Pharmaceuticals (KNSA) is experiencing growth with its FDA-approved drug Arcalyst and has seen a 37.7% increase in shares [39][40]

Core Insights - Exelixis, Inc. (EXEL) shares increased by 7.4% following the announcement of positive results from the late-stage STELLAR-303 study [1][9] - The STELLAR-303 study demonstrated a statistically significant improvement in overall survival for patients treated with zanzalintinib in combination with Tecentriq compared to regorafenib [5][9] - Year-to-date, Exelixis shares have risen by 30.2%, contrasting with a 3.4% decline in the industry [2] Study Details - The STELLAR-303 study is a phase III global, multicenter, randomized, open-label trial involving 901 patients with previously non-MSI-high metastatic colorectal cancer [2][5] - The study's primary endpoints include overall survival in the intent-to-treat population and a subgroup without liver metastases [5][6] - Zanzalintinib is a third-generation oral tyrosine kinase inhibitor targeting receptor tyrosine kinases involved in cancer growth [4] Future Prospects - The trial will continue to analyze the second primary endpoint concerning overall survival in patients without liver metastases [6][9] - The positive results from the STELLAR-303 study enhance the likelihood of regulatory success for zanzalintinib [7] - Exelixis is actively working to diversify its oncology portfolio beyond its lead drug, Cabometyx, with zanzalintinib being developed for various advanced solid tumors [12][14] Collaboration and Market Position - Exelixis is collaborating with Merck to evaluate zanzalintinib in combination with Keytruda for head and neck squamous cell carcinoma [13] - Cabometyx remains a leading tyrosine kinase inhibitor for renal cell carcinoma, with strong demand bolstered by its combination with Opdivo [10][11] - Recent label expansions for Cabometyx are expected to further enhance sales [11]